A perfect storm of rising interest rates, higher operating costs and unstable cash flows in the hospitality sector has dramatically increased the breadth of ownership defaults and foreclosure risks nationwide.
In this environment, more than ever, the importance of a tightly negotiated subordination, nondisturbance and attornment agreement, or SNDA, is vital for hotel operators and lenders, as more commercial real estate loans reach maturity with no viable path to satisfy loan extension tests or qualify for refinancing at economically feasible pricing.
This article will provide a brief overview of the structure and purpose of an SNDA, along with tips and considerations for negotiating an SNDA in connection with a hotel management agreement, or HMA.
