The Broker Package That Gets a Term Sheet in 72 Hours

We received two hotel packages on Monday. One was 41 pages, arranged in the order the borrower created them. The other was 23 pages, arranged in the order an underwriter needs to make a credit decision.

The shorter package got read first. It had the current operating data, the business-plan evidence, the capital stack, and the sponsor’s support in nine labeled sections. We could see the requested loan, derive the key tests, and list the diligence items in one pass.

A 72-hour term-sheet target applies only to a complete package. It does not mean an underwriter can invent a PIP scope, reconstruct a sources-and-uses statement from a slide deck, or choose among three different pro formas. It means the file is decision-ready when it arrives.

Send the operating case first

Put the sponsor and property at the front, but lead with evidence rather than biography. The first three sections should let us decide whether the operating case is believable.

1. One-page deal summary. State asset type, key count, location, request, loan purpose, purchase price or total cost, proposed loan amount, term, exit, and the three reasons this lender is being called. One page is enough.
2. Sponsor bio and track record. Show comparable hotel ownership, renovation, conversion, and operating experience. Include current liquidity, net worth, and any partners who will guarantee completion or carry obligations.
3. Current STR report. Provide the property’s current report and the competitive set, not a market screenshot from last year. If the plan depends on a rate premium, show the current ADR, occupancy, RevPAR, and rank against the set.
4. Pro forma STR or comparable support. Tie each material ADR or occupancy change to a changed input: flag, rooms renovation, group demand, management, or competitive supply. A pro forma that simply grows faster than the market is not support.
5. T-12 and T-3 operating statements. Include revenue by department, payroll, undistributed expenses, franchise charges, property tax, insurance, management fees, and any nonrecurring items. T-3 tells us whether the most recent three months match the T-12 story.

Hotel revenue is improving nationally, but the underwriting still begins at the property. STR and Tourism Economics’ August forecast called for 4.4% U.S. RevPAR growth in 2026, including 3.1% ADR growth and 1.7% demand growth (CoStar). That does not validate a single hotel’s 15% ADR assumption. It tells us exactly why the package must separate market growth from the asset’s planned lift.

Put the capital stack in the middle

Sections six through eight answer a different question: can the plan be funded through the period before the new operating case is proved?

6. PIP scope and timing. Include the franchisor’s written scope, cost estimate, timing requirements, and whether work affects room availability. If the renovation creates a revenue disruption, show it in the monthly model.
7. Sources and uses. Use one reconciling table. Show price or existing debt payoff, renovation, closing costs, financing fees, interest reserve, working capital, contingency, sponsor equity, and any seller credit. Do not place a reserve in a footnote.
8. Construction or renovation budget. Break out hard costs, soft costs, FF&E, contingency, GC fee and general conditions. For major work, include the GMP, bid tab, schedule, and procurement log. Identify long-lead equipment and allowances.

Then put the monthly model behind those documents. We should be able to trace the use of every dollar to the month it is needed. The model needs opening cash, draws, interest, room displacement, operating revenue, expenses, debt service, and reserve balance. A single annualized NOI number cannot perform that job.

The reason is mechanical. A lender may evaluate a hotel against leverage, coverage, and debt-yield tests. In the second quarter, average commercial loan-to-value was 59.6%, average debt service coverage was 1.43x, and average debt yield was 10.2% (CBRE). A broker does not need to predict each lender’s exact threshold. The package does need to give each lender enough clean inputs to calculate its own answer without rebuilding the file.

Close with diligence and ownership

The final section should make diligence easy to launch.

9. Appraisal, entity chart, and document index. Include the latest appraisal if it is current, title and survey status if available, a simple ownership chart, management agreement, franchise documents, debt schedule, and a one-page index that names the attachment and its date.

The order matters. The index lets us find the document. The entity chart lets legal identify parties before the term sheet goes out. The appraisal tells us what has already been tested. If it is more than 12 months old, label it that way rather than presenting it as current. None replaces the operating file, but all keep the process from stopping after credit has done its work.

Four omissions stall a package more often than the rest:

• No T-3. We cannot tell whether a seasonal month, a renovation disruption, or a new manager has changed the run rate.
• No current STR or competitive set. We cannot test the ADR premise against actual competitors.
• No reconciled sources and uses. We do not know whether sponsor equity, reserve, contingency, and PIP are all funded or merely named.
• No post-closing liquidity. We cannot tell who funds a delayed ramp, a cost overrun, or a required repair after the equity is wired.

A broker can avoid all four with a 10-minute check before sending the link. Label the files, use dates, and make the monthly model agree with the sources-and-uses table. That is not administrative polish. It is the first credit test.

The box this week

• Loan size: $5M floor, with a $20M–$100M sweet spot
• Asset focus: hotels, resorts, and mixed-use hospitality; bridge and construction
• Package standard: nine labeled sections, current operating data, and one reconciled sources-and-uses table
• Timing: term sheet in 72 hours when the initial package is complete
• Structure: proceeds sized to the operating case, reserve, and sponsor support shown in the file

Send the package in this order. If an item is not ready, say so on page one and state when it will be available. We can underwrite a disclosed gap faster than a hidden one.