FAQs

MBA’s experienced team of Brokers and Associates can work more deeply with qualified individual buyers that we attract through our extensive national marketing.  Buyers on any auction platform expect a bargain.  The auction terms also tend to drive the final price down, not up, because the buyers must post NON REFUNDABLE deposits if they win the auction, and that means greater risk for the buyer, and the buyer must have their capital to buy in place before the auction.  All of this means that in almost every case, MBA can deliver a higher value for your hotels through our brokerage process than it will fetch at an auction, and do it with equal certainty.

Hotels, once opened are almost exclusively valued by their revenues, with formulas for both Gross Revenue Multiples and a Capitalization Rate of the Net Operating Income, and other metrics.  Replacement Cost is  generally not as relevant to the market value.

Ideally, the best time to sell a hotel is when revenues are at peak and interest rates are low.  Obviously, no one has a crystal ball to predict the future, so the best time to sell, that can be controlled, is when the owner would be better served by liquidating the asset.

Once a prospective buyer has met the minimum buyer qualifications a site tour may be arranged.

PIP’s vary a great deal by brand, age, and current condition of the hotel.  The PIP for a new owner/buyer may be larger than the current PIP for the seller.  MBA Hotel Brokers recommends addressing the PIP in a clause in the contract which creates a contingency for the buyer to accept the PIP requirements, or void the contract within the time specified.  The buyer, once under contract, then applies for a PIP inspection and report with the franchise.

If a PIP is required, it is the buyer’s responsibility.

Most franchise agreements outline the steps necessary to exit the current brand; however, there may be monetary penalties, called liquidated damages, for the seller. Any inclination to exit the current brand should be discussed as part of the Agreement of Sale.

MBA’s commission fee varies based on the sale price, and other factors.  Discuss this with your MBA Hotel Broker.   

All interested prospective buyers must sign and submit a Confidentiality Agreement to MBA Hotel Brokers to receive the Offering Memo for the hotel which may contain these documents. 

Normally the procedure is to complete a Confidentiality Agreement to receive the hotel’s offering memo, review that, speak with the broker, and then  make an appointment to visit the hotel.  Then ask the broker to send you a written Letter of Intent.  

While most hotels sold by MBA result from seller listings, MBA has offered its services for buyer representation.

The listed price is based on current market conditions and the past and present performance of the hotel. Ultimately the seller is free to accept any price, and while the price in many cases is somewhat negotiable, we typically do not see a huge difference between the list price and final selling price.

Most hotel sellers do not offer seller financing, however, on a case by case basis if the buyer qualifies and the seller is willing, some form of seller financing may be available.  Talk with your MBA Hotel Broker about that if needed.

Yes, we offer hotel mortgage brokerage services through MBA Capital Funding, with over 25 years of successful capital markets advisory specifically for hotels and working relationships with hundreds of local, regional and national banks, many non bank lenders, and with deep experience in SBA, USDA, and all loan programs available and applicable to hotels.