The Critical Role of a Capital Advisor in Securing Refinancing Success
By Ryan Bosch, Principal, Arriba Capital
For hoteliers, refinancing is an essential part of doing business. It could be that a loan has matured, or that you’re looking to extract capital from an asset to invest in new projects. And while it is something that most hoteliers are at least a little familiar with, refinancing can be a very complex process requiring a special sort of expertise.
Hoteliers looking to make the most out of an upcoming refinance should consider partnering with a capital advisor. Capital advisors not only offer a wealth of financial knowledge, they also have a deep bench of lender and capital connections that can help facilitate even the trickiest refinance situations.
And that’s just scratching the surface. Let’s break down exactly what a capital advisor can offer in a refinance.
Market Intelligence Advantage
Capital advisors bring a wealth of market knowledge to the refinancing process. There are exceptions, but the average hotelier doesn’t spend the majority of their time closing financial deals. A capital firm, on the other hand, engages with their markets daily. They pitch deals every week, and every pitch results in market feedback. No one knows a market better than a capital advisor because we are immersed in it.
Further, when the focus of your business is doing deals, you do what you can do to ensure you have all the data you need to make good ones. For example, at Arriba Capital, we invest hundreds of thousands of dollars a year tracking debt transactions in the hotel space, including refinances, construction, and acquisitions. This leads to better terms for clients, as we’ve got a very good pulse on who is actively lending on hospitality, who has buckets of capital available for different types of situations, geographies, and even flag preferences.
Expert Deal Packaging
Beyond market knowledge, capital advisors also have substantial experience getting complicated deals approved in a competitive market. They take their time underwriting and modeling the deal, making sure the pro forma is correct and that the numbers are defendable. They also have a depth of resources unavailable to the average borrower. Access to proprietary market data allows them to conduct performance analyses, as well as offer clear explanations of historical issues with an asset or a particular market.
These factors all contribute to a capital advisor’s ability to put together a comprehensive presentation on why a refinance makes sense – key for securing the approval of a lender.
Creative Capital Solutions
Not every property will hit their desired metrics in the first few years. Everything from a slow ramp-up period to factors out of the developer’s control (e.g., extreme weather, local business dynamics, a pandemic) can disrupt a developer’s plans. That doesn’t mean a property is a failure – it just might require some creative capital strategies to be an asset that lenders want to continue to invest in. During a refinancing, it is critically important to match unique situations with the right capital source, and a capital advisor will be able to connect those dots for their clients.
Selecting a Partner
Hoteliers looking to engage a capital advisor ahead of a refinancing should be looking for a true partner – someone who can leverage their market knowledge, deal expertise, and creative problem-solving into a deal that suits all involved parties. The good capital firms spend time, money, resources, and energy fostering relationships that improve their clients’ business and assets. When refinancing, you can rely on them and their expertise.
Ryan Bosch Principal, Arriba Capital
Ryan Bosch, principal at Arriba Capital, is a seasoned expert in hospitality debt and structured finance, managing a portfolio exceeding $2 billion across 140 deals. He has vast experience structuring various scenarios within the capital stack, leveraging his deep understanding of market trends, underwriting principles, and risk management.
Before joining Arriba Capital, Ryan spent years leading consumer goods manufacturing companies in the United States and Asia. During this time, he collaborated with industry giants, such as Best Buy, Philips, Verizon, and Samsung, on private-label manufacturing and product development. Earlier in his career, he successfully sold his sporting goods business to a private equity firm.
Ryan’s achievements have earned him recognition from reputable real estate media outlets, with GlobeSt hailing him as a finance, debt, and equity rainmaker in 2022. Outside work, Ryan enjoys spending time with his family and is actively involved in volunteer work that assists displaced families from the war in Afghanistan.
