Reported by Ankur Shah

(Excerpt shared below. To read full report, go to: https://www.costar.com/article/1448830495/the-case-for-reverse-kyc-know-your-lender)

Your reverse KYC checklist

The benefits of partnering with a lender who understands the nuances of hotel investing may outweigh the basis point savings offered by a generalist. To ensure you are partnering with an experience hotel lender, consider asking potential lenders the following:

1. Portfolio consistency: What is the size of your hotel portfolio, and how has it expanded or contracted over the last decade?

2. Asset expertise: What is the specific hotel experience of the credit and asset management teams? Do they have seniority and tenure with the firm?

3. Historical behavior: Have you sold hotel loans in the past, and under what circumstances?

Conducting a reverse KYC process is about ensuring the lender and terms you sign up with will be with you throughout the life of your current project and those in the future. Conduct one to increase your confidence in your lender’s background, capabilities and approach to handling things when the winds shift. It will reveal the character of your financial counterparty.