Canyon Capital Realty Advisors (CCRA) and its affiliates, including the Canyon Johnson Urban Funds (CJUF), are intensifying their investment activities in the hospitality sector, the Los Angeles-based firm says. The efforts are being steered by Managing Director Richard Bosworth, who joined CCRA 18 months ago.
Bosworth says he foresees a high level of activity in the hospitality sector for Canyon over the next two to three years in markets including New York, Chicago, Southern California and Washington, D.C., as well as cities in the Pacific Northwest, the Northeast and the Southwest.
‘We're actively evaluating hotel properties that are in need of recapitalization, especially in markets that enjoy a mix of room demand from both commercial and leisure travelers," says Bosworth. "We have established a focused hospitality team in response to a higher frequency and volume of opportunities in this arena. As part of this effort, we are underwriting the numerous repositioning and reflagging opportunities that have recently emerged.’
Canyon provides debt and equity on transactions. The firm's hospitality portfolio includes the Washington Hilton, Hotel 71 in Chicago, W Austin Hotel and Residences, and the Cal Neva resort in Lake Tahoe.
Since the mid-1990s, Bosworth has been heavily involved in originating and structuring both hotel debt and equity investments, and managing nonperforming hotel and gaming assets.
Bosworth's experience includes assisting special servicers with their nonperforming hotel and casino loans following the travel industry downturn in 2001.
"We are seeing many excellent hotel assets and repositioning opportunities that are currently over-leveraged,’ he says. ‘Oftentimes, the underlying asset is perfectly capable of successfully performing in today's economic climate with the right capital structure. In some cases, we envision infusing equity. In others, we see opportunities to issue debt and assist borrowers in refinancing their existing loans.’