Hotel acquisitions requiring renovation use a two-stage capital structure: bridge financing at 70% LTV for acquisition and PIP completion, followed by a permanent CMBS exit at 65% LTV once stabilized. The bridge provides 12-36 months of runway at 8-13% to complete renovations and build trailing NOI, then the CMBS takeout locks in non-recourse fixed rates from approximately 6.25% on the strongest stabilized deals (typical 6.75%–9%).
Written by Ed Freeman, Capital Advisory — PeerSense
Acquire and renovate hotels with 70% LTV bridge financing, then exit into 65% LTV permanent CMBS. Non-recourse permanent debt from approximately 6.25% on the strongest stabilized deals (typical 6.75%–9%) after stabilization. Full-service capital advisory.
Minimum 30-35% equity required. Experienced hotel investors acquiring properties that need renovation (PIP completion, repositioning, or brand conversion).
LTV Target
70% (Bridge) to 65% (CMBS)
Est. Rate Range
8.00% – 13.00% (bridge) / 6.25% – 11%+ typical 6.75–9% (CMBS exit)
Term
12-36 months (bridge) / 5-10 years (CMBS)
Recourse
Recourse (bridge) / Non-recourse (CMBS)
DSCR
N/A (bridge) / 1.25x minimum (CMBS)
Closing Speed
14-21 days (bridge) / 30-45 days (CMBS exit)
Min Loan Size
$3M
Loan Products
Bridge, CMBS
This two-stage approach is the right strategy when you are acquiring a hotel that needs renovation, brand conversion, or operational repositioning before it qualifies for permanent financing. The bridge loan provides the speed to close competitively (14-21 days vs 60-90 for permanent), funds the renovation budget, and gives you 12-36 months to complete the PIP and stabilize operations. Once you have 12 months of post-renovation trailing NOI showing stabilized RevPAR, you refinance into permanent CMBS at materially lower rates. The key is structuring the bridge with the conduit exit in mind — hold period, reserve structure, and renovation budget must all align with CMBS takeout timing.
If you already own the hotel and just need the permanent CMBS refinance
Learn moreIf you will operate the hotel and want SBA leverage instead of bridge-to-CMBS
Learn moreIf you are refinancing existing permanent debt rather than acquiring
Learn morePeerSense pre-underwrites every deal before presenting it to our institutional capital sources. With 500+ lender relationships and live market rate intelligence, we match your hotel deal with the right capital source — right now.
No upfront retainer · Fee at closing only · Complimentary initial consultation
Written by Ed Freeman, Capital Advisory — PeerSense. Updated March 2026.
Disclaimer: The information on this page is provided for educational purposes only and does not constitute financial, legal, or investment advice. Rates, terms, and availability are subject to change based on market conditions, property characteristics, and borrower qualifications. The rate ranges cited reflect approximate market pricing as of March 2026 and may not reflect current conditions at the time of reading. PeerSense is a capital advisory firm, not a lender. We do not originate, fund, or service loans. All financing is provided by third-party lenders subject to their own underwriting criteria and approval processes. Borrowers should consult with qualified financial and legal professionals before making any financing decisions.