Special Assets
REO Management & Receivership
A trusted partner to banks and special servicers for bank-owned and distressed hotels.
For more than four decades, DePalma Hotels and Resorts has been a trusted source for REO management and receivership of special assets. We understand the need to assess and secure a property, form a plan, and create value with speed and efficiency.
We give distressed assets the same focus and attention as every hotel we manage. That is why we have operated dozens of special assets nationally for local, regional and national banks and special servicers.
From evaluation to disposition
Evaluation
- Complimentary review of hotel financials, market and performance metrics to gauge overall hotel health
- Property visits to review hotel operations and condition
- Cash flow and capex projections
- Hotel value estimation
- Brand performance or change reviews
Takeover
- Hire and evaluate staff
- Secure the asset, including all FF&E, supplies and cash
- Review and fix all life-safety and guest security issues
- Transfer all vendor accounts
- Place property and employee liability insurance
- Contact and maintain key accounts
- Develop hotel budgets and marketing plans
Operations
- Full administrative, sales and marketing, accounting, food and beverage and maintenance management
- Timely financial reporting
- Ongoing hospitality training for all departments
- Scheduled corporate property inspections
- Work with the franchise and maintain brand standards
- Full human resources management as the employer of record
Disposition
- Word-of-mouth marketing through ownership and hospitality contacts
- Updates on estimated hotel value
- Assistance creating the offering memorandum
- Due diligence assistance and curation
- Property tours and real estate broker point of contact
- Property close-out and transition
Hotel REO and receivership FAQ
What does a hotel REO manager do?
When a bank or special servicer takes back a hotel, the REO manager steps in to secure the property, keep it operating and protect its value until it is sold. That means taking control of cash, supplies and systems, fixing life-safety issues, keeping staff and key accounts in place, running day-to-day operations and reporting to the lender, then preparing the hotel for sale.
What happens in the first 30 days after a takeover?
The first month follows the same pattern from one hotel to the next: secure the asset and every system login, address life-safety issues and put insurance in place, steady the staff and get the first payroll out on time, transfer vendor accounts and contact key customers, then deliver a budget, a ranked capital list, a sales plan and a first view of value. Brian DePalma walks through it in detail in What Happens in the First 30 Days After a Lender Takes Back a Hotel.
Do you work with the franchise?
Yes. We work directly with the franchise company to maintain brand standards and keep the hotel in good standing, and we can review whether staying with the current brand or changing brands makes more sense for the eventual sale.
Who is the employer of record?
DePalma Hotels & Resorts provides full human resources management as the employer of record, including hiring, payroll, training and the related insurance coverage.
Can you help sell the hotel?
Yes. We keep the lender updated on estimated value, help assemble the offering memorandum, curate due diligence materials, give property tours as the broker's point of contact, and handle close-out and transition to the buyer.
Is the initial evaluation free?
Yes. We start with a complimentary review of the hotel's financials, market and performance, including a property visit, cash flow and capital projections, and an estimate of value.