SBA 504 Hotel Feasibility Study in New Jersey

Cape May at the top of a lodging cell

New Jersey hotel and motel lending under 504 is concentrated at the shore: Cape May County has 10 of the 37 loans, ahead of Middlesex with 4 and Atlantic, Bergen, Burlington and Morris with 3 each. The 37 loans total $94.7 million, at a midpoint of $2.2 million, or 1.10x the nation's 504 figure for hotels, while loans in the central half fall from $1.1 million to $4.6 million. Franchised loans are 48.6%. Hotels hold place 3 of 39 among New Jersey classes, though the state ranks 27 by count.

Two development companies

Trenton Business Assistance Corporation holds 26 loans worth $61.8 million, which is most of the cell. Empire State Certified Development Corporation, working across the state line, holds 9 loans worth $23.1 million. These are holders per SBA at present. The calendar shows 6 loans and $11.3 million in FY2017, 1 loan in FY2024 and 6 loans carrying $21.4 million in FY2026, the heaviest dollar year listed.

What the page cannot say

New Jersey hotels have neither a cancellation nor a charge-off rate on the page; each cohort fell short of what SBA needs. One code covers every kind of hotel and motel here, with select-service and full-service stays blended, so the figures describe no particular product. Readers should not extend the Cape May concentration to the whole state.

What a New Jersey hotel study has to show

Shore lodging has a short, peaked season, so the study must show occupancy and rate by month, the weeks of true peak and the shoulder periods, and the cash the property keeps through the winter. Away from the shore, demand comes from corporate travel, airports and the New York corridor, and the study should say which applies. Count the competing rooms and any pipeline of new ones. State the franchise's fees and renovation requirements against the rate it brings, if flagged. Cost the construction or renovation per room, with furnishings, and the carrying cost during the build. Weather risk and insurance cost at the shore should appear in expenses. The payment has to survive a weak season as well as stabilised occupancy. Give a value for the real estate without the brand.