Hotel Feasibility Study in the Buffalo-Cheektowaga, NY Metro Area

Hotels and motels in the Buffalo area

Lodging is the tenth class, 10 of 39, for Buffalo-Cheektowaga, NY, and nationally the area is 93 of 807. Approvals total 25 loans and $51.3 million for FY2017 through FY2026. The location quotient of 0.57x shows lodging carrying much less weight in Buffalo-area loans than in loans nationally, while the median loan of $1.9 million is 0.87x the class's median loan nationally, a bit under the usual lodging loan elsewhere. Lodging is a smaller part of Buffalo lending, and the loans that do appear are slightly under the national size.

Programs, brands and counties

SBA 7(a) holds 19 loans and SBA 504 holds 6. Franchise brands attach to 76.0%, a high affiliation, and the hotels financed here are mostly flagged properties. Loans from $920,000 to $3.6 million fill the middle half. Erie County, NY records 15 loans and Niagara County, NY records 10. No lender is named.

FY2019 reads 5 loans and $9.8 million. FY2024 is recorded at 0 loans and $0, and no hotel was approved. Remaining years carry counts that cannot be shown. Cancellation and charge-off rates are missing: Loan Analytics will not compute a rate on fewer than 30 loans, and this base is smaller.

Limits, and what a Buffalo-area hotel study has to test

With a single code for lodging, these loans cannot be sorted into limited service and full service. A feasibility study here has to start from the weak local weight shown by the 0.57x location quotient: lodging weighs less in Buffalo's lending than in lending nationally, and a new property must show which guests it will draw that existing hotels do not already serve. It should test rate and occupancy through the weakest season, brand fees and required upgrades given that 76.0% of loans are branded, and construction or renovation cost against a typical loan of $1.9 million. Debt service should be tested with a cushion, and the appraiser should set a figure on the operating hotel as well as on the real estate. Buffalo's boundary is a set of counties taken from the July 2023 list. Seasonal swings between the strongest and weakest months should appear as a month-by-month cash flow, because that is how a lender sees whether the property carries its debt through the slowest stretch.