Minibar and Loan Market Update from Bridge, July 2026

My name is Rohit Mathur (still typing these myself). I’m the co-founder and CEO of Bridge, a direct lender and marketplace for hotel loans. Before founding Bridge, I spent 10+ years at Citi in capital markets.

This month: why “LTV” is the most misleading number in your term sheet, where the momentum is building across the market, the latest from the Fed, and a look at how we’re using AI to build full deal summaries.

TLDR: What’s Moving in the Loan Market

1. Marketing LTV vs. Real LTV. We ran one real deal past four lenders. Everyone quoted a “leverage” number. The cash check you write ranged from $2.4M to $6.0M for the exact same hotel. Leverage is a vanity stat. Your cash equity check and your total debt are what matter.
2. Positive momentum building. Extended-stay demand just hit a 4-year high, growing ~9x faster than the rest of the industry while new supply dries up. And the World Cup crushed the RevPAR forecasts. The recovery is real and it’s spreading.
3. A deal memo, built with AI and data. We built the first hospitality-focused AI platform that turns your deal into a full lender memo in minutes. We’ve been using it to screen our own fund deals. Now it’s free for you too.
4. Rates & the Fed. The Fed held in June, but the dot plot flipped: their own 2026 forecast went from a cut to a hike. If your deal needs a rate cut to work, you don’t have a deal.

Marketing LTV vs. Real LTV

Why “70% leverage” tells you nothing, and the two numbers that actually decide your deal

Over the past year I keep hearing “LTV” used as a reason to walk away from a deal. Owners pass on entire lending options because “I can get better LTV somewhere else.” Nowhere is this worse than SBA 504, where I hear “but I can get 80% from SBA” almost every week. So we decided to translate it, using real quotes from a deal we’re reviewing right now.

Before you come at me: yes, every bank is different, and yes, there are banks doing 75% or even 80% LTC deals. Those are incredible. Nobody can compete with them. Go grab them. My team has closed about 4 this year. But for everyone else: most banks aren’t touching hospitality ground-up right now.

Here’s the other thing. A lot of our sharpest developers deliberately pick private debt. Not because it’s cheap, it isn’t, but because they’re running several deals at once and want to keep the cash check on each one as small as possible. Smaller check, bigger return, more deals.

The problem with “LTV” is that it’s a ratio, and both the top and bottom move depending on the lender. Two lenders can both say “70%” and hand you completely different equity checks and completely different total debt. So we ran the actual quotes from one deal, a new-build extended-stay hotel, through four structures on the same budget: SBA 504, private debt, a conventional bank, and USDA. Here’s what came out.

Look at private debt versus USDA. Both say 75%. Same number on the term sheet. But USDA makes you write a check $1.8M bigger for the same hotel. Two reasons: USDA only credits the land at what you paid for it, not what it’s worth today, and it gives you no credit for the developer fee. Same “75%,” $1.8M more of your cash.

Now the “conservative” 65% bank. It needs the biggest check of the four, $5.95M. That’s $3.5M more cash than private debt, on the same deal. And on total debt, the number you refinance or pay off at exit, SBA and USDA are actually the highest at around $15.25M each. Why? Because the programs pile on mandatory line items, SBA’s 15% contingency and 2% lender fee, USDA’s 3.15% guarantee fee, which inflate the project cost by $1M to $2M. A bigger cost basis makes the leverage percentage look better and quietly leaves you holding more debt.

And one cost that never shows up anywhere on a term sheet: banks almost always want a deposit relationship. Usually 10% to 20% of the loan, parked with them for the life of the deal, at whatever rate they feel like paying you. That’s your working capital, locked up, and it’s nowhere in the “65%.”

So next time a lender hands you a term sheet, ignore the leverage headline and ask these five questions:

1. What value are you giving me for the land? Cost, or today’s appraised value? This one answer can move your check by seven figures.
2. Do I get credit for money I’ve already spent? Entitlements, pre-development, developer fee. If not, all of it comes back as fresh cash at close.
3. What is my cash equity check at close? In dollars, not a percentage. This is the number that actually leaves your account.
4. What’s your timeline to close? A 75% quote that closes in 90 days beats a “better” one that drags six months while your rate lock and construction window slip away.
5. Any deposit requirements? Deposits, compensating balances, a debt service reserve. All real money, none of it on the leverage line.

My two cents: two numbers decide your deal. The check you write at close, because that drives your return. And the total debt you carry, because that’s what you have to refinance or pay off. The leverage percentage is noise. Put your term sheets side by side like this and the “best LTV” is almost never the best deal.

Chart of the Month

The same deal through all four lenders. Read left to right: the actual leverage climbs from 65% to 75%, but your cash check goes the other way, from $5.95M at the bank down to $2.42M with private debt. And that “80%” SBA and USDA get pitched at? On this deal it sized to 73.6% and 75%. What they market and what hits your account are not the same thing.

Positive momentum building

After eighteen months of “cautious optimism” that mostly meant cautious, we’re ready to say it out loud: the momentum is real, and it’s building. Two data points from the last few weeks make the case better than any forecast.

First, extended-stay is on a tear. The Highland Group’s May bulletin showed extended-stay demand up 6.2% year over year, far outpacing the 0.7% gain for comparable conventional hotels. That’s not a rounding error. It’s the highest year-on-year demand growth in more than four years, and it drove gains in occupancy, ADR and RevPAR all at once. Occupancy now sits at 76.7%, more than 12 points above comparable hotel classes. And here’s the part that matters for anyone deciding whether to build: new supply is decelerating, under 4% growth for three years and projected below the 5% long-term average for 2026, as high interest rates and construction costs keep starts down. That sets up a demand-supply imbalance that could hand operators real pricing power by 2027. Demand accelerating, supply thinning. That’s the whole ballgame, and it’s exactly why the deal in our LTV section above is an extended-stay ground-up.

Second, the World Cup delivered, just not the way most people expected. Before the tournament, CoStar and Tourism Economics projected only a 1.7% national RevPAR lift across June and July, with widespread worry that high room rates and visa hurdles would cap international demand. What actually happened in host cities blew past that. In the first full week, the 11 U.S. host markets posted a 20.1% RevPAR increase, supported by a 21% rise in ADR. Miami was the poster child: ADR up 51.1% and RevPAR up 51.6% for the week ending June 27, on the back of three World Cup matches.

But read past the headline number, because this is the same lesson as the LTV section. During the final week of the group stage, host-market RevPAR rose 16.7% even as hotel demand fell 2.9%. The gains came from charging more, not filling more rooms; most host cities actually saw occupancy decline. As CoStar put it, this was always going to be an ADR event, not an occupancy event. The World Cup traveler paid up and, in a lot of markets, displaced the business traveler who would have paid less. Only once the knockout rounds and the July 4th holiday hit did occupancy finally turn positive, up 1.1 points the week of June 28 to July 4, the strongest demand gain since April.

My two cents: the marquee RevPAR figure is the possession stat again. The real signal isn’t the World Cup spike, it’s the steady, structural extended-stay story underneath it: demand running roughly 9x conventional hotels while the supply pipeline dries up. One’s a six-week party. The other’s a multi-year setup.

Deal Memo Leveraging AI and Data

Here’s something we don’t talk about enough: how you present a deal to a lender is often the difference between a “yes” and a “pass.” Same deal, same numbers, but a clean, complete, well-organized package gets taken seriously, while a messy one gets pushed to the bottom of the pile. Presentation is a real edge, and most borrowers don’t have the time or the tooling to build an institutional-quality memo.

Everyone is talking about AI right now, but often the question is, how does AI help you? Bridge is the first and only hospitality-CRE-focused AI platform that turns raw deal data into a full lender memo: sources and uses, market analysis, underwriting proforma, DSCR and debt-yield sensitivity, all in minutes instead of days. Below is a real example (we made up the deal) for a ground-up Tru by Hilton in Tampa.

We rolled this out only a few weeks ago, and borrowers and lenders are already using it heavily. A few of the notes we’ve received:

• “Your memo gave me enough; I can actually issue terms based on this.” – USDA lender
• “Great looking memorandum.” – Community bank lender
• “We’re going to do our internal review based on the memo you provided. Very good!” – SBA lender

We’ve already been using this memo internally for our own direct fund lending screening, and now we’re making it available to everyone. The cost to you for us to prepare it? The same as the number of goals Argentina scored in the final: zero. It’s free.

My two cents: the tools are only going to get better, but the winners will be the borrowers who show up with a lender-ready package on day one. Want us to build one for your deal? Reply to this email.

Rates & the Fed

June FOMC and where 2026–2027 is headed

For two years the whole market has been waiting on one thing: rate cuts. I think we may have now flipped to rate hikes again.

The Fed held on June 17, keeping the range at 3.50% to 3.75%. Fourth hold in a row, and the first meeting with Kevin Warsh running it. The hold wasn’t the story. The dot plot was. That’s the chart where each Fed official marks where they think rates end the year, and the 2026 median jumped to 3.8%, up from 3.4% in March. In March the Fed’s own median implied a cut this year. By June it implied a hike. Nine of the 18 now see at least one hike in 2026, and 17 of 18 say inflation risk is to the upside.

Warsh also cut the statement down and pulled out the old language that hinted at future easing. The message isn’t subtle. The bar to cut is high, and the next move is just as likely up as down.

What changed? Inflation came back. The Iran conflict and the Hormuz disruption that kicked off in March drove energy prices up, and it flowed straight into the numbers, CPI ran 4.2% year over year in May. That’s not a backdrop that produces rate cuts.

Here’s where the rates that matter to your deals sit today, against a month ago and a year ago:

Sources: Federal Reserve H.15, NY Fed SOFR, CME FedWatch.

Look at the shape of it. The short end, Prime and SOFR, is flat, pinned by the Fed on hold. But the 5- and 10-year, which is what your fixed-rate perm and takeout debt price off of, actually went up over the last month, more than 20 bps, on the same inflation fears. So the person waiting for a cut is losing on both ends: the Fed isn’t moving the short end down, and the long end is drifting up.

So where does 2026 and 2027 go? The market now prices a possible hike this fall and basically no cuts through 2027. The Fed’s own long-run number sits around 3.1%. Nobody, not the Fed, not the market, is calling for a return to cheap money. This is the environment. Underwrite to it.

My two cents: stop underwriting to a cut the Fed just erased from its own forecast. If your deal only works with a lower rate next year, that’s not a deal, it’s a bet on the Fed. The deals that pencil at today’s rates, roughly 6.5% on bank and SBA takeout, 11% on private construction, are the ones to do. Everybody waiting for relief has now been waiting two years. The sponsors who kept moving own finished, cash-flowing hotels today.

About Bridge

We are the first fintech focused on Hospitality loans and partner with Hilton, Hyatt, AAHOA, Choice, Red Roof, Wyndham, Kalibri Labs, M3 and others.

We closed and funded $500.0 million+ in loans in 2025 (our first full year of Hotel Lending) and we only have one goal:

Simplifying access to competitive financing for your hotel loan.

Where You Can Find Bridge

• NABHOOD Conference: July, Miami, FL
• 2026 AAHOA South Central Texas Hotel Owners Conference & Trade Show: July, San Antonio, TX
• 2026 AAHOA Arkansas Hotel Owners Conference & Trade Show: July, Little Rock, AR
• 2026 AAHOA Georgia Hotel Owners Conference & Trade Show: August, Duluth, GA
• LendingCon: August, Orlando, FL
• The Lodging Conference: October, Phoenix, AZ
  

If you’re planning to attend:

BOOK TIME WITH THE TEAM

Bridge Minibar Update

With the Knicks winning and the World Cup over, our minibar needs re-stocking.

Our new NYC office has been buzzing for the past few months with clients coming in.

We’re in the office 5 to 7 days a week now, come visit us!

– Rohit