CONSTRUCTION
227 | Mass Appeal: Crowdfunding for hotel development mines new sources of cash
CONSTRUCTION
When it launched five years ago, crowdfunding for real estate development was a hot topic, especially among hotel developers seeking new ways to pay for their projects.
Though it’s not creating the same level of buzz as it did when it first became a federally sanctioned option in 2014, crowdfunding remains a viable tool in attracting a wide range of investors and sourcing new streams of cash.
Basically, crowdfunding is a campaign for small amounts of money from a large number of people. It is friends and family financing gone viral.
We talk to hotel developers who are using the alternative financing method to raise cash for their projects.
The projects are vastly different, as are the fundraisers’ goals, and target investors.
One is a boutique property in a resort market, and the developer plans to raise the entire construction cost via crowdfunding. The other is a midscale branded hotel in a technology park, and the firm is selling shares to close a funding gap.
Featured in today’s report is Nathan Kivi, founder of HotelierCo, an online fundraising company targeting hotel development; and Bhavik Dani, founder of EquityRoots, another fintech venture that’s raising capital for one project while about to break ground on another.
We also explain the evolution of crowdfunding, and why the federal government gave the technology its nod of approval as part of a national economic recovery program.
Anyone considering raising money for a project over the internet, or investing money via an online program, should first consult a professional adviser.
Resources and Links
- Nathan Kivi, founder of HotelierCo
- Bhavik Dani, founder of EquityRoots
For more information on crowdfunding visit:
The SEC study mentioned in this report is titled “Capital Raising in the U.S.: An Analysis of the Market for Unregistered Securities Offerings, 2009‐2017” and can be accessed here.
CONSTRUCTION
-
346 | Repositioning For Recovery: Hotel conversions to outpace new builds
Lodging Econometrics has tracked the hotel industry since 1998. Its global database includes new-hotel pipelines as well as renovations and brand conversions. Hotel franchisers once eager to launch new brands are focused on converting existing hotels because it’s a faster way to recover revenue lost to the COVID-19 pandemic than through new construction. In Episode 346, Lodging Leaders explores the increasing number of conversions in the U.S. hotel industry and what owners and operators need to consider before repositioning an asset.
-
345 | ‘Rosy View of Future’: Hotel industry sees unleashing of pent-up investor demand
In the first few months of the COVID-19 pandemic in the U.S., financiers anticipated a swell of distressed hotel businesses. Some raised rescue funds to respond to what they thought was a pending crisis. Though there are financial rescues taking place, the level of such activity is far below what industry advisers and fund managers expected. Commercial real estate investors positioned to act in the early days of the pandemic held off and are now just beginning to unleash their cash hoards totaling billions of dollars. Episode 345 of Lodging Leaders podcast explores the state of capital investment in the hotel industry.