At Bay Street Hospitality, we offer a wide array of investment structures designed to meet the diverse needs of our investors and hospitality partners. Our approach focuses on flexibility and strategic alignment, providing customized solutions across various stages of a hotel’s lifecycle. Below are the primary investment types we utilize
Hotel Credit and Lending is a core part of our strategy, providing financing solutions that support hotel acquisitions, renovations, and developments. These loans are designed to offer security for investors while ensuring that hotel operators and developers have access to the capital they need to grow.
Bridge financing is provided to hotels undergoing a transition or redevelopment, offering short-term capital to cover operational costs, renovations, or repositioning before more permanent financing is secured. This option is ideal for properties that need to be stabilized before qualifying for long-term loans.
For new hotel developments, our construction loans provide the necessary capital to fund the building phase. These loans are structured to be flexible and often transition to permanent financing upon project completion. We closely monitor project progress to mitigate risks and ensure timely delivery.
Mezzanine financing is used to fill the gap between senior debt and equity, offering higher yields to investors. This type of loan is subordinate to senior debt but provides an attractive risk-return profile, making it ideal for projects with high growth potential. It often includes an equity conversion feature, allowing us to participate in the hotel’s success.
Preferred Equity is designed to offer priority in distributions and downside protection for investors, while still allowing the opportunity for capital appreciation. This type of investment ensures that investors receive returns before common equity holders but after senior debt is repaid.
These investments provide a fixed return to investors and are typically used in situations where a hotel operator or developer needs equity capital but is unable to take on additional debt. Preferred equity holders often have less control than common equity holders but enjoy higher priority in cash flow distributions.
A Triple Net Lease (NNN) structure places responsibility for operating expenses such as property taxes, insurance, and maintenance on the hotel operator, while the landlord receives a steady rental income. This type of structure is ideal for investors seeking low-risk, stable income, as the operating risk is borne by the tenant.
In an NNN lease, Bay Street Hospitality invests in hotel properties leased to operators under long-term agreements. The operator is responsible for the property’s upkeep and operational costs, while the fund collects a stable rental income with minimal operational oversight, providing a reliable cash flow.
Permanent Financing provides long-term, fixed-rate capital to hotel properties that have achieved stable operations. This type of financing is ideal for hotels that have completed construction or renovation and are generating steady revenue.
Permanent loans are typically used to refinance short-term construction or bridge loans once a property has stabilized. These loans offer low-risk, long-term financing options with predictable interest payments, making them suitable for mature assets in stable markets.
Each of these investment structures allows Bay Street Hospitality to provide customized financing solutions tailored to the specific needs of each hotel project. Our flexible approach helps us optimize returns for investors while supporting the long-term success of the hotels in our portfolio. Whether it’s through credit lending or structured equity, our focus remains on delivering superior, risk-adjusted returns while fostering growth across the global hospitality sector.
Bay Street Hospitality is a diversified hotel fund for allocators seeking quant-driven exposure across specific countries, operators, and hotel tiers. The fund targets a diversified portfolio in high-growth emerging markets and developed markets, optimizing for risk-adjusted returns. The leadership provides structured equity and pivotal strategic guidance to hotel-related investments. The fund establishes joint ventures with best-in-class partners, focusing on deal flexibility, currency considerations, tax efficiency, and clear exit strategies.
