Trump: Banks to Blame for Hotel Malaise

Associated Press
Donald Trump, shown here in New York in December.

LOS ANGELES — The U.S. hotel industry would be faring even better and perhaps expanding with new construction if it weren’t for banks’ reluctance to lend to the hotel industry. So says Donald Trump, long-time hotelier and television personality who flirted with a presidential run.

“Unless banks start loaning money to developers who have good projects but will never get them off the ground, you won’t see much happening,” Mr. Trump said Tuesday during a press conference at the Americas Lodging Investment Summit conference in Los Angeles. “There’s very little development because, for the most part, the banks aren’t loaning for development or acquisitions.”

Lending on commercial real estate projects indeed has fallen off, particularly from the frothy days of the real-estate boom. European banks, previously active lenders to U.S. hotels, mostly have stopped originating new hotel loans or sold their U.S. loan portfolios in government-mandated steps. Many U.S. banks remain mostly subdued in their lending to hotels, leaving relatively healthy Wells Fargo & Co. as the most active lender to the sector. Meanwhile, the market for commercial mortgage-backed securities continues to struggle to get on its feet again.

In response to questions, Mr. Trump said that many banks can’t lend due to restrictions such as capital requirements placed on them by regulators. “I know some bankers who are very good bankers and they’d like to do certain deals but they can’t because the regulators are telling them not to,” Mr. Trump said.

Mr. Trump delivered a keynote speech at the ALIS conference in which he remarked on his well-known distaste for the policies of President Barack Obama and discussed his hotel-management venture, the Trump Hotel Collection. The company manages seven Trump-branded hotels, including those in Chicago, Las Vegas and near Manhattan’s Central Park. He said the company is considering 10 deals across the globe.

Other pending hotel deals involving Mr. Trump includes his $150 million stalking-horse offer to buy the 692-room Doral Golf Resort & Spa near Miami from hedge fund Paulson & Co. and Winthrop Realty Trust, which put the resort and four others under bankruptcy protection in early 2011. Trump had lowered its offer to $150 million from an earlier $170 million, explaining that the Doral needs roughly $200 million in upkeep and renovations.

Mr. Trump declined in an interview to comment on his effort to buy the Doral. However, a person familiar with the deal said Trump must be paid $10 million as the initial bidder if a rival bidder eventually tops his price for the property.

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