How to Raise Funding to Acquire a Hotel in Florida
How to Raise Funding to Acquire a Hotel in Florida
Florida is one of the most active hotel investment markets in the U.S., with demand driven by tourism, conventions, and corporate travel. Whether it’s a beachfront resort in Miami, a branded hotel in Orlando, or a boutique property in Tampa, raising the right funding package is critical to close the acquisition and achieve the target returns.
Senior Mortgage Debt
Commercial banks, CMBS lenders, and debt funds typically provide 50%–65% loan-to-value (LTV) for Florida hotel acquisitions. Loan terms hinge on location, brand affiliation, and operating performance. Lenders will scrutinize trailing 12-month occupancy, ADR, and RevPAR, along with DSCR ratios. Properties with strong brand flags (Hilton, Marriott, Hyatt) or proven independent management attract more favorable leverage.
Mezzanine Debt and Preferred Equity
To push leverage above 65%, sponsors often use mezzanine financing or preferred equity. This layer typically covers 10%–20% of the capital stack, priced higher than senior debt but cheaper than pure equity. Institutional mezzanine lenders, real estate private equity funds, and family offices active in hospitality provide this tranche.
Sponsor Equity
Buyers are generally expected to commit at least 15%–25% of the purchase price as equity. This can come from the sponsor’s own balance sheet, co-investments from family offices, or syndications with LP investors. For redevelopment or repositioning projects, EB-5 capital is sometimes used to reduce the sponsor’s direct cash outlay.
Example Capital Stack: Florida Hotel Acquisition
| Layer | Typical Share | Notes |
|---|---|---|
| Senior Debt | 50% – 65% | Bank or CMBS loan |
| Mezzanine / Preferred Equity | 10% – 20% | Higher yield, often from PE or family offices |
| Sponsor Equity | 15% – 25% | Cash, LP syndication, or EB-5 capital |
Key Factors Lenders and Investors Evaluate
- Historical performance: Occupancy, ADR, RevPAR trends, and cash flow stability.
- Brand and management: Whether the property has a strong flag or proven independent operator.
- Location: Proximity to demand drivers — beaches, airports, convention centers, theme parks.
- Capital plan: Renovations, repositioning, or conversion strategy, with clear cost estimates.
- Exit strategy: Hold and refinance, sell stabilized asset, or roll into a larger portfolio.
Fees and Upfront Costs to Budget
- Lender application and due diligence fees: USD 50k – 200k+
- Legal and structuring: USD 100k – 300k
- Franchise or brand approval fees (if flagged): USD 25k – 100k+
- Broker or placement agent fees: 1% – 3% of equity raised
- Closing costs, title, and insurance: variable by county
Secure Capital for Your Florida Hotel Acquisition
Financely helps sponsors line up senior loans, mezzanine tranches, and investor equity to acquire and reposition hotel assets across Florida.
Contact UsFinancely is an advisory and placement firm. We are not a lender or issuer. All financing is subject to credit approval, due diligence, and enforceable documentation. Leverage levels vary depending on location, operator, asset quality, and market cycle.
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