- Client: Single Family Office
- Type of Property: High-end hotel development in Germany
- Value of Property: €62 million
- Loan-to-Value Ratio: 70%
A private company approached Hectocorn to help secure significant investment for a €62 million hotel development in Germany. Hectocorn used its network of niche international lenders to secure development finance from a large bank, which offered the most favourable agreement for this project.
This case involved an experienced developer with several decades of experience in hotel development and a well-known global hotel operator, which enabled Hectocorn to secure favourable terms with the bank. However, the sheer size of the deal meant the developer needed to secure a large loan that most lenders wouldn’t normally consider.
Agreeing Terms For A Significant Loan
Hectocorn began by securing a term sheet within two weeks as the potential deal involved a vast amount of documents. A term sheet is used in the early stages of a development venture to outline the key elements, including the business model and deal structure, to help the various parties assess the objectives of the proposed venture.
In this case, the term sheet identified the parties involved, the project for which the venture was being formed, and the amount of equity each party would contribute. It also outlined the investors’ funding conditions and details of the venture’s management, including control events and removal mechanisms. Hectocorn fully managed this process, enabling all parties to quickly agree on terms for an unusual and complex agreement.
Negotiating The Finer Points Of Hotel Finance
Hectocorn has demonstrable experience helping clients finance significant hotel developments around the world. Our team has a deep understanding of the documents hotel developers must complete and the information they need to look for to secure the best deal possible. Our network is crucial, given that the hospitality industry has very few specialised lenders and they tend to be difficult to discover.
This expertise proved crucial in assisting the developer and hotel operator with negotiating and structuring a deal for the high-end €62 million hotel. The process included:
Hotel overview and development: Hectocorn helped the developer nail down the finer points of the project, including the location and site specifics, the number of rooms and suites, and additional amenities and facilities. We also provided market insights, such as target market and customer demographics, competitor analysis, market trends, and projected demand and occupancy rates. This information was crucial to creating a development plan, which included the construction timeline and phases, architectural and design plans, approval and permit status, and compliance with environmental and zoning regulations.
Financial insights: Hectocorn’s hotel development expertise was vital to the client providing the necessary financial information. This included a detailed breakdown of costs, such as construction, land acquisition, pre-opening expenses and contingency funds, and breaking down the total finance required, debt and equity financing and investor contributions. Hectocorn’s team also assisted with estimating the average daily rate, occupancy rates, revenue per available room and additional revenue sources, and formulating potential operating expenses and financial projections.
Risk assessment and exit strategy: The hotel purchase had to be backed up by analyzing potential challenges like economic downturns, construction delays and regulatory and environmental risks. Hectocorn also advised the client on potential exit options, such as a sale, public offering or refinancing, their expected return on investment and an exit timeframe.
Operational strategies: Hectocorn’s hospitality expertise allowed us to advise on the importance of operational approaches. This included outlining the organisational structure and the experience and qualifications of key personnel like the development and management team. Additionally, we helped the client formulate a management and staffing plan, a marketing and sales strategy and a plan for guest services and operations.
Legal and compliance: A significant hotel development project relies on having legal and compliance issues front and centre. Hectocorn assisted the client with completing the necessary legal documents, including partnership and shareholder agreements, contracts with contractors and suppliers, and licensing and franchising agreements, and obtaining insurance coverage across construction and liability.
Sustainability plan: The proposed project’s impact on the environment and sustainability are also vital considerations. Hectocorn helped the client detail a thorough environmental impact assessment, obtaining sustainability certifications and initiatives, and ensuring appropriate community impact and engagement.
Unlock High-Value Hospitality Funding in Germany Now
Securing High-Value Hotel Finance
This deal involved a single family office, a private, standalone business entity that manages the financial and personal needs of a wealthy family. We’ve seen a rapid increase in single family offices in recent years, yet banks and lenders often don’t fully understand their commercial and financial needs.
That was the case for this client, who had struggled to secure the finance required for such a sizeable hotel deal. They’d struggled to secure favourable rates and agreements for the project through lenders they had access to and agree on terms with local lenders in Germany, who had restrictive criteria and wouldn’t consider foreign assets as collateral.
However, they turned to Hectocorn’s expertise to introduce them to a large bank with experience in handling high-value hospitality investments. We enabled the client to secure development finance, which offers lucrative long-term returns on building and developing a hospitality property. The funds were released in stages to align with the project’s progress, reduce interest costs and improve cash flow.
We helped the client maximise its borrowing potential by negotiating a high loan-to-value ratio of 70%. The agreement allowed the client to develop a more extensive project scope than it could have achieved through traditional financing. We also secured favourable terms that met the client’s unique financial requirements, including a bespoke repayment structure and drawdown structure aligned with the project’s expected revenue generation.
Our team led the negotiation from start to finish, from the first consultation and project assessment to the loan and terms agreement. This approach delighted the investor as it minimised the amount of work required, enabled them to focus on other investment opportunities, and offered a clear exit strategy.
Secure Significant Project Investment With Hectocorn
Hectocorn helps ultra-high-net-worth individuals and companies secure substantial financing packages for developing the most desirable properties. Our established relationships with niche lenders enable us to secure the most favourable terms and structure debt on your portfolio to maximise your borrowing power.
Discover how Hectocorn can help you fund significant projects like hotel development by getting in touch.
Frequently Asked Questions
Financing a €62M luxury hotel project in Germany often requires working with specialist lenders experienced in hospitality finance and large-scale development projects.
A term sheet outlines key deal elements—such as equity contributions, funding conditions, and management structure—helping all parties agree on terms before final contracts.
Yes. With the right hospitality finance broker, single family offices can access high-value development loans, often with bespoke repayment and drawdown structures.
Lenders review project scope, market analysis, financial forecasts, risk assessment, sustainability plans, and operational strategies before approving hotel development finance.
An FCA-regulated broker ensures compliance, credibility, and access to niche international lenders, securing better terms for high-value hospitality investments.