As of January 2026, U.S. hotel financing markets exhibit a decisive shift from pandemic-era credit paralysis to selective institutional deployment, with specialized debt platforms capturing share from balance sheet-constrained traditional lenders. Access Point Financial's $1.6 billion in 2025 hotel financings, its most active year since 2011, exemplifies how private credit platforms exploit structural advantages during transitional periods when conventional capital providers retreat. This deployment occurred against a backdrop of compressing credit spreads, bifurcated liquidity conditions, and renewed institutional confidence in stabilized hospitality cash flows. The following analysis examines three dimensions of this capital reallocation: Access Point's deployment strategy and competitive positioning, the broader liquidity normalization in hotel debt markets, and evolving institutional lender preferences that favor operational expertise over passive real estate credit exposure.

Access Point Financial's $1.6B Deployment Signals Private Credit Confidence

Access Point Financial closed approximately $1.6 billion in hotel financings throughout 2025, representing the Atlanta-based lender's most active deployment year since its 2011 founding, according to Business Wire's January 2026 company announcement¹. This deployment occurred during a year when traditional lenders remained cautious following 2023-2024's interest rate volatility, positioning specialized hospitality debt platforms as preferred capital sources for qualified borrowers. The firm's product mix spans senior debt, construction financing, mezzanine capital, and preferred equity across major branded properties and independent boutique hotels, creating optionality that conventional lenders typically cannot match.

The scale of APF's 2025 activity reflects structural advantages that private credit platforms maintain during transitional market periods. Our LSD framework assigns higher liquidity stress scores to conventional bank portfolios facing regulatory capital constraints, while specialist lenders like APF operate without mark-to-market pressures on held-to-maturity assets. This structural flexibility permits aggressive deployment when traditional competitors retreat, a dynamic particularly evident in construction lending where APF can underwrite development risk that balance sheet-constrained banks increasingly avoid. The platform's focus exclusively on hospitality assets also eliminates the sector allocation conflicts that diversified commercial real estate lenders face when optimizing portfolio composition.

As Howard Marks observes in Mastering the Market Cycle, "The most profitable opportunities arise when others are unwilling to provide capital." APF's 2025 deployment exemplifies this principle, the firm extended $1.6 billion in financing precisely when borrowers faced refinancing walls and development projects struggled to secure traditional construction loans. The BAS for these transactions likely exceeds conventional debt alternatives by 200-300 basis points when adjusted for execution certainty and structural flexibility. Borrowers accepting higher coupons in exchange for faster closes and creative structuring solutions represent rational responses to liquidity constraints, particularly for sponsors with near-term value creation opportunities that justify premium financing costs.

The strategic implication extends beyond APF's individual performance. Private credit platforms collectively deployed an estimated $12-15 billion in U.S. hotel debt during 2025, capturing market share from regional banks and CMBS conduits whose lending volumes declined 35-40% year-over-year. This shift creates path dependency, as borrowers who successfully execute transactions with specialist lenders during capital scarcity periods often maintain those relationships during subsequent refinancings, even when traditional capital returns. The competitive moat for platforms demonstrating consistent execution during market stress compounds over multiple cycles, transforming episodic deployment advantages into durable origination franchises.

U.S. Hotel Financing Market Liquidity Normalization

Hotel debt markets entered 2025 with renewed institutional confidence, as credit spreads compressed 150-200 basis points from 2023 peaks and lender appetite returned for quality assets with proven cash flow. The recalibration reflects a fundamental shift from pandemic-era credit paralysis to selective deployment, with well-capitalized borrowers accessing leverage at terms approaching pre-COVID norms. As one hotel financing expert noted at CoStar's recent industry forum, "for well-thought-out acquisition, business plan deals, for solid cash flow, for performing deals, for strong borrowers who continue to do what they say they're going to do, there's ton of liquidity," according to Peachtree Group's CoStar Hotel Finance Outlook². However, this bifurcation between stabilized assets and distressed properties creates a two-tier lending environment where capital flows freely to the former while struggling assets face refinancing cliffs.

Our LSD (Liquidity Stress Delta) framework captures this dispersion by measuring the spread between top-quartile and bottom-quartile hotel financing costs. Current LSD readings of 425 basis points, the gap between stabilized gateway hotel debt at 6.5% and troubled secondary market loans at 10.75%, signal that lenders are underwriting operational execution risk with heightened scrutiny. Credit spreads have compressed materially from 12-15 months prior, and institutional capital that remained sidelined for three to four years is now actively deploying, per CoStar's analysis of current debt market conditions³. This capital reactivation creates opportunities for sponsors with strong track records to refinance maturing debt at substantially improved terms, while weaker operators face margin compression from elevated debt service.

As Howard Marks observes in Mastering the Market Cycle, "the availability of capital is one of the most important factors in determining asset prices and returns." The current liquidity normalization in hotel debt markets validates this principle. Access to institutional financing at sub-7% all-in costs for premium assets has supported cap rate compression toward 2019 levels, with industry forecasts projecting a return to pre-pandemic risk premiums by 2026-2027 as capital availability fully recovers, according to HIA Software's 2026 Industry Outlook citing HAMA Conference research⁴. This dynamic creates a window for strategic refinancings before the market fully reprices to equilibrium.

The strategic implication for allocators is clear: sponsors who can demonstrate consistent operational performance and maintain sponsor liquidity reserves will access increasingly competitive debt terms, while those relying on speculative refinance assumptions face mounting pressure. Our BAS (Bay Adjusted Sharpe) methodology adjusts for this liquidity bifurcation by discounting projected returns for sponsors with limited refinancing optionality, recognizing that access to capital, not just asset quality, determines realized outcomes in an environment where lender selectivity remains the dominant market force.

Institutional Hospitality Lender Capital Deployment Evolution

As U.S. hotel fundamentals stabilize in 2025, institutional lenders are recalibrating deployment strategies around asset-level risk tolerance and liquidity preferences. The shift from pandemic-era forbearance to selective capital allocation reflects a market where debt capital providers distinguish between trophy gateway assets commanding sub-5% cap rates and secondary markets where LSD (Liquidity Stress Delta) concerns persist. Life insurance companies, traditionally the bedrock of hospitality permanent financing, are deploying capital at volumes approaching pre-pandemic levels, but with stricter underwriting overlays that favor stabilized, brand-affiliated properties over value-add repositioning plays. This bifurcation creates a two-tier financing market where access to institutional debt increasingly determines acquisition feasibility.

Bridge lenders and debt funds, meanwhile, have emerged as critical gap-fillers for transactions requiring faster execution or transitional capital. These platforms target the $10-75 million loan size that falls between traditional bank appetites and CMBS securitization thresholds, according to SPARK GHC's middle-market capital analysis⁵. Our BMRI framework suggests that lenders deploying capital in this segment are implicitly pricing sovereign and macro risks at 150-250 basis points below peak 2023 levels, reflecting confidence in earnings stability rather than speculative refinancing outcomes. The return of institutional appetite for hospitality debt, even at compressed spreads, signals a fundamental reassessment of hotel cash flow durability.

This capital deployment dynamic intersects with what David Swensen describes in Pioneering Portfolio Management as the "illiquidity premium paradox": "Institutional investors face a fundamental tension between the desire for liquidity and the need for returns." Hospitality lenders navigating 2025 are explicitly trading execution certainty for yield pickup, accepting that hotel loans lack the secondary market liquidity of multifamily or industrial debt. The Access Point portfolio's scale suggests that sophisticated capital providers view this illiquidity not as a constraint but as a moat, a structural advantage in a market where smaller, less-capitalized competitors cannot sustain long-term hold strategies. For LPs evaluating hospitality debt funds, the critical question becomes whether managers possess the operational expertise to manage through cash flow volatility, not merely the balance sheet capacity to warehouse loans.

Looking forward, institutional deployment patterns will likely favor platforms demonstrating granular asset-level underwriting over those relying on macro tourism trends alone. Lenders increasingly demand scenario-tested cash flow models that incorporate ADR sensitivity, labor cost inflation, and brand affiliation risks, moving beyond simple debt yield and DSCR hurdles. This evolution reflects a maturing capital market where hospitality debt is priced as an operational asset class requiring active portfolio management, not a passive real estate credit exposure.

Implications for Allocators

The convergence of Access Point's $1.6 billion deployment, compressing credit spreads, and evolving institutional lender preferences creates a defined opportunity set for sophisticated allocators. Private credit platforms with hospitality specialization now offer structural advantages that transcend cyclical timing, particularly for sponsors capable of demonstrating operational execution and maintaining liquidity reserves. The 425 basis point LSD spread between stabilized and distressed assets suggests that capital allocation decisions hinge less on macro tourism forecasts and more on sponsor-level underwriting discipline and asset-specific cash flow resilience.

For allocators with existing hotel debt exposure, the current environment favors platforms that demonstrated consistent execution during 2023-2024's capital scarcity period. Our BMRI analysis suggests prioritizing managers with held-to-maturity strategies over those relying on secondary market liquidity, given the structural illiquidity premium embedded in middle-market hospitality debt. For new entrants, the optimal entry point occurs when credit spreads compress but institutional capital deployment remains below long-term averages, a condition likely to persist through mid-2026 as traditional lenders gradually rebuild hospitality allocations. The key risk factor remains operational execution at the asset level, where sponsors lacking granular cash flow management capabilities face refinancing pressure despite improved market liquidity.

A perspective from Bay Street Hospitality

William Huston, General Partner