How much does a hotel PIP cost?

Hotel PIP cost varies by brand tier and renovation depth. Economy ($3K to $15K/key): Super 8, Days Inn, Sleep Inn. Midscale limited service ($5K to $25K/key): Holiday Inn Express, Comfort, Hampton. Branded select service ($15K to $45K/key): Courtyard, Hilton Garden Inn, Hyatt Place, Cambria. Branded full service ($30K to $70K/key): DoubleTree, Embassy Suites, Crowne Plaza. Upper upscale ($50K to $150K/key): Westin, Sheraton, Hyatt Regency. Luxury ($100K to $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 to 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 to 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 to 8.5% non recourse, 65 to 70% LTV, 10 to 11% debt yield.

What's the post PIP CMBS refi rate?

May 2026 best execution post PIP CMBS conduit rates: 7.0 to 7.5% for Hampton + Courtyard + Hyatt Place + Holiday Inn Express in Tier 1 markets. 7.5 to 8.5% for branded full service. 8.0 to 9.0% for Choice + Wyndham branded select service. 8.5 to 9.5% for branded full service in secondary markets. 9.5 to 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 to 40%. Brands typically grant 60 to 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 to $45K per key (refresh) · 7.0 to 7.8% post PIP CMBS rate.

Capital Stack

PIP Cost / Key (with depth multiplier)

$30K

Range: $15K to $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 to 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 to 70% LTV · 10 to 11% debt yield

About these figures

Rate, spread, leverage and term levels shown here are indicative. They reflect general conditions among direct capital sources as of October 1, 2026 and describe what the market has recently supported, not an outcome available to any specific borrower.

Actual pricing, leverage and terms are determined by the lender through underwriting, once full transaction materials have been reviewed. Nothing shown here is a quote, a commitment, an offer of credit or a guarantee.

PeerSense is a capital advisory firm. We source capital through a curated network of commercial lenders and capital sources. Every credit decision belongs to the lender.

Market conditions move. Figures may change without notice, and a level that cleared last quarter may not clear today. What these terms mean.

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 to $15K	8.0 to 9.5%
Midscale Limited Service	$5K to $25K	7.0 to 8.0%
Branded Select Service	$15K to $45K	7.0 to 7.8%
Branded Extended Stay	$20K to $50K	7.2 to 8.0%
Branded Full Service	$30K to $70K	7.5 to 8.5%
Upper Upscale	$50K to $150K	7.5 to 8.5%
Luxury	$100K to $300K	7.0 to 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 to 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 to 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 to 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 to 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 to 28 days faster than raw inquiries.

Read the Hotel PIP to CMBS Strategy