Access to capital for commercial real estate investment, including for hotels, has been squeezed by the high cost of lending in a high-interest-rate environment. But it's always been challenging, especially for first-time buyers of hotels who sometimes don't know where to start.
Being turned away by the bank doesn't have to be the end of the dream of owning a hotel, said Davonne Reaves, CEO and founder of Vesterr, an alternative investment platform that relies on crowdsourcing. The platform operates in other segments of commercial real estate, but as a Black hotel owner herself, Reaves said the primary focus is to enable hotel ownership in the Black community.
In the latest episode of the Next Gen in Lodging podcast, Reaves talks with her co-host Omari Head about the vision behind Vesterr and how it solved a problem in the hotel investment space.
She said the crowdfunding platform isn't a GoFundMe, which is one of the more-known public fundraising apps. What makes it different is that it connects general partners — those who are taking the lead on a deal — with limited partners, who are perhaps looking for a project to diversify their investment portfolio but largely are hands-off. Essentially, it's connecting the people with the dream to the people with the money to make that dream come true, so that both benefit.
Head, a hotel broker, said what's equally important with a platform like Vesterr is the intellectual capital that it can provide to first-time investors.
"I find that folks that are fully capitalized, sometimes they just don't know how [to invest in hotels], because we don't hang for-sale signs on hotels," he said.
For more insights, follow Vesterr CEO and Founder Davonne Reaves and Omari Head, hotel broker and founder of the National Institute of Lodging Education, on LinkedIn.
The Next Gen in Lodging Podcast is also available to download on Apple or Spotify, where you can also subscribe to future podcast content.
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