How much does a hotel PIP cost?

Hotel PIP cost varies by brand-tier and renovation depth. Economy ($3K–$15K/key): Super 8, Days Inn, Sleep Inn. Midscale limited-service ($5K–$25K/key): Holiday Inn Express, Comfort, Hampton. Branded select-service ($15K–$45K/key): Courtyard, Hilton Garden Inn, Hyatt Place, Cambria. Branded full-service ($30K–$70K/key): DoubleTree, Embassy Suites, Crowne Plaza. Upper-upscale ($50K–$150K/key): Westin, Sheraton, Hyatt Regency. Luxury ($100K–$300K+/key): JW Marriott, Conrad, Park Hyatt.

How is PIP capex financed during execution?

Three-stage capital stack. STAGE 1 — Pre-PIP: bridge debt 9–11% IO 24-month term sized to acquisition + PIP capex + closing reserves at 70% of as-completed appraised value. STAGE 2 — During PIP: in-house brand FF&E financing programs (Marriott Select PIP, Hilton Supply Chain, IHG Equipment) cover FF&E component at 8–12% via equipment-lease structure; bridge funds structural + bathroom + public area work. STAGE 3 — Post-PIP stabilization (12+ months trailing NOI): refinance into 10-year fixed CMBS conduit at 7.0–8.5% non-recourse, 65–70% LTV, 10–11% debt yield.

What's the post-PIP CMBS refi rate?

May 2026 best-execution post-PIP CMBS conduit rates: 7.0–7.5% for Hampton + Courtyard + Hyatt Place + Holiday Inn Express in Tier-1 markets. 7.5–8.5% for branded full-service. 8.0–9.0% for Choice + Wyndham branded select-service. 8.5–9.5% for branded full-service in secondary markets. 9.5–11.0% for unbranded boutique + independent without strong RevPAR penetration data. Position depends on brand-flag, market tier, sponsor strength, debt yield, and conduit pool composition at rate-lock.

What if I miss the PIP deadline?

Brand termination is the contractual penalty. The franchise agreement explicitly grants the franchisor termination rights for failure to execute PIP scope on schedule. Brand termination drops asset value 20–40%. Brands typically grant 60–180 day extensions for material progress + sponsor cooperation, but multi-year delays trigger termination. Lenders also write PIP-completion covenants into bridge + CMBS debt that mirror the franchise-agreement deadline — debt default if PIP not completed.

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Hotel PIP Cost Calculator

Brand-tier × key count × renovation depth = total PIP capex + bridge debt sizing + post-PIP CMBS refi outcome. Pre-LOI scenario testing for institutional hotel sponsors.

Your Hotel

Brand TierRenovation DepthKey CountAcquisition Price (Pre-PIP)

Branded Select-Service typical: $15K–$45K per key (refresh) · 7.0–7.8% post-PIP CMBS rate.

Capital Stack

PIP Cost / Key (with depth multiplier)

$30K

Range: $15K–$45K per key

Total PIP Capex (incl. 15% contingency)

$5.17M

Base $$4.50M + $$675K contingency

Total Project Cost

$25.18M

Acquisition + total PIP capex

Bridge Debt @ 70% LTV (as-completed)

$17.62M

9–11% IO · 24-month term · milestone draws

Sponsor Equity Required

$7.55M

~30% of project — recovered at CMBS refi cash-out

Post-PIP CMBS Rate (May 2026)

7.40%

10-yr fixed · non-recourse · 65–70% LTV · 10–11% debt yield

See the Hotel PIP-to-CMBS Strategy →

Indicative. Final terms depend on franchise scope letter, post-PIP appraisal, sponsor profile, and conduit pool composition.

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Hotel PIP Cost per Key by Brand Tier (May 2026)

Brand Tier	Per-Key Range	Post-PIP CMBS Rate
Economy	$3K–$15K	8.0–9.5%
Midscale Limited-Service	$5K–$25K	7.0–8.0%
Branded Select-Service	$15K–$45K	7.0–7.8%
Branded Extended-Stay	$20K–$50K	7.2–8.0%
Branded Full-Service	$30K–$70K	7.5–8.5%
Upper-Upscale	$50K–$150K	7.5–8.5%
Luxury	$100K–$300K	7.0–8.0%

May 2026 typical specs. Actual position in band depends on renovation depth, accumulated brand-standards drift, local construction labor, FF&E specification choices, and conduit pool composition at rate-lock. PeerSense pre-runs the 3-constraint test (DSCR / LTV / debt yield) before formal CMBS submission.

The Three-Stage Capital Stack

Hotel PIP financing follows a structural three-stage pattern. Bridge debt during the 24-month execution window. Brand in-house FF&E financing for the FF&E component. Post-stabilization CMBS conduit refi at 7.0–8.5% non-recourse 10-year fixed. The pattern works because each stage is priced to risk: bridge for the renovation-execution risk, FF&E lease for the equipment risk, CMBS for the stabilized cash flow.

Sponsor equity at acquisition + initial PIP capex is typically 25–30% of total project cost. Bridge LTV is 70% of as-completed appraised value (post-PIP). Equity recovery at CMBS refi: cash-out at 70% of stabilized appraised value typically recovers 60–80% of original equity for redeployment into the next acquisition. The capital-recycling pattern is why the bridge + CMBS strategy works for portfolio-build operators.

Why CMBS Rates Are Higher for Hotels

Hotel CMBS conduits demand 10.0–11.0% debt yield (vs. 7.5% for multifamily, 8.0% for industrial). The premium reflects three structural risks: operating-business cash flow volatility, RevPAR + ADR cyclicality, and brand-flag concentration risk. The right strategy isn't to fight the higher debt yield — it's to deliver enough post-PIP NOI growth to clear the floor at the desired loan size. PeerSense pre-runs the 3-constraint test before submission so deals go in at the right size.

Ready to structure a hotel PIP-to-CMBS deal?

PeerSense routes hotel deals across 7 brand families with brand-standards expertise + hotel-specialist conduit relationships. Pre-cleared post-PIP files close 14–28 days faster than raw inquiries.

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