New Firm to Help Hospitality Companies with Credit Crisis
- Jan 23, 2009
Seizing upon a market that demands investors create focused strategic plans, James O’Connell, principal of O’Connell Hospitality Group, and Robert Crawford, president of Hospitality Resolutions Inc., have formed a new venture called Collateral Strategies Inc. Collateral Strategies will provide lenders, loan servicers, borrowers and investors with focused strategic plans designed to assist with portfolio and single asset credit recovery. CS’s credit strategies will identify the maximum recoverable value for both the asset and the collateral debt. CS’s team will assist its clients in achieving optimal values for troubled hospitality loans and investments. “Bob and I created the group because of the timing,” O’Connell (pictured) told CPN. “Where we are in the real estate and credit cycle is exactly where we were in 1990. We came together in 1990 to assist people in evaluating and reviewing debt, credit and strategic plans. The reasons we got here are different, but the fundamental crisis with confidence in credit and capital are exactly the same.” “We’re frozen in time right now, which is similar to 1990,” he added. “People need help with their portfolios, so we got together and decided it was time to do it again. We’re meeting with our clients and reviewing portfolios as we speak.” Crawford and O’Connell worked together at the Bank of New England in the early 1990s as leaders of the BNE Hotel Group. There, they provided internal strategic assistance to lenders and workout officers as they negotiated resolutions for troubled loans. Their in-depth knowledge of the work-out process allows them to assist borrowers facing critical maturity dates as well. With $700 billion of commercial paper maturing in 2011 and 2012, the credit crisis of 2008 and beyond will have to be resolved upstream, O’Connell said. While foreclosures will still occur, early credit resolutions typically lead to far greater recovery values, he said. The goals of CS are to identify critical paths to achieve appropriate recoveries with cost-effective strategies. O’Connell Hospitality Group is a Boston-based national real estate advisory firm specializing in hotel and resort transactions. The firm provides assistance with real estate transactions, consulting, finance, operations, food service, and project development particularly with hospitality objectives.