Hotel Feasibility Study in the Seattle-Tacoma-Bellevue, WA Metro Area

Seattle-area hotels at a $2.8 million median

Hotel and motel loans in the Seattle area number 132 for FY2017 to FY2026 and total $396.0 million. The area is eighth of 807 for the class, though hotels are only eleventh of 39 in the local mix, and the location quotient of 0.75x puts lodging under its national share of lending. The median loan of $2.8 million is 1.29x the nationwide class midpoint, with the interquartile edges at $1.7 million and $4.6 million. In short: not many hotel loans for the size of the market, but big ones.

Programs, flags and holders

Programs divide the 132 loans into 108 on 7(a) and 24 on 504, and a third of the loans, 33.3%, are flagged franchised, a minority of the loans, which leaves room for independent and boutique properties. Evergreen Business Capital leads the 504 table with 10 loans worth $32.7 million, followed by Ameritrust CDC and Northwest Business Development Association at 7 loans each, worth $28.1 million and $27.9 million. In 7(a), Bank of Hope is credited with 30 loans worth $92.9 million, PCB Bank with 11 worth $28.7 million, Mountain Pacific Bank and Open Bank with 10 each, worth $30.4 million and $23.8 million, and US Metro Bank with 7 worth $32.0 million. The names reflect who SBA records as holder, which is not an assessment of anyone.

King, Pierce and Snohomish

King County has 50 loans, Pierce 43 and Snohomish 39. Volume has sagged from the start of the series, when FY2017 brought 26 loans and $77.8 million, to 7 loans and $16.3 million in FY2025 and 9 loans and $32.9 million in FY2026, so recent hotel lending in this area is a fraction of its early pace. A lone code serves hotels and motels alike, so select-service inns and full-service properties are inseparable; a study has to define the product.

Cancellation floor and the study

Among loans approved in FY2017 to FY2024, 14.7% or more were cancelled, which is a floor. Seattle's ceiling for cancellations and its charge-off rate are suppressed on thin cohorts, and neither is zero. A study of a hotel in the Seattle area has to test demand drivers such as business travel and tourism against new supply, the brand's fees and improvement plan, construction or acquisition cost at this ticket, seasonality in cash flow, debt service coverage, and an appraisal separating the real estate from the operating business.