A project needs the right operator.
DIH Solutions defines the operator profile, identifies suitable operators, runs the market outreach and advises on selection and negotiation.
Hospitality Real Estate Advisory
Hospitality Real Estate Advisory for hotels and serviced apartments.
DIH Solutions advises owners, developers and investors on operator selection, lease terms, investment underwriting and transactions involving hotels and serviced apartments.
Depending on the assignment, the mandate can range from a defined commercial review to managing a full operator selection or transaction process.
Mandate situations
When DIH Solutions is typically mandated.
Most mandates start with a specific question: Which operator fits the project? Is the proposed rent sustainable? Which terms should be renegotiated? Or how should a hospitality asset be prepared for financing or a sale? DIH Solutions can review one defined issue or manage the full operator or transaction process.
An operator offer or LOI needs commercial review.
DIH Solutions reviews rent, ramp-up, security package, term and the other commercial terms. The client can see which points are market-consistent and where further negotiation is warranted.
Rent and contract parameters need to be agreed.
DIH Solutions works with the owner on the commercial terms for rent, security package, term, options and other contract parameters. The appointed legal advisers then take these terms into the legal documentation.
A conversion or mixed-use development needs a hospitality concept.
DIH Solutions reviews which hospitality use fits the building and floorplate, which operators could run it and whether the concept works commercially.
An existing operator or contract structure needs to be reset.
DIH Solutions reviews the available options and shows how changes to the operator, contract or rent may affect financing, marketability and value.
An asset needs preparation for financing, buyer review or exit.
DIH Solutions prepares the operator agreement, lease terms, commercial risks and open issues so banks, committees and potential buyers can review them.
Service areas
What DIH Solutions covers within a mandate.
Scope and work products are agreed before the mandate starts. Depending on the assignment, DIH Solutions can handle a defined review or combine several workstreams within one mandate.
01Mandate leadership
Owner & Deal Advisory
Situation
In more complex mandates, operator selection, contracts, financing and investment decisions run in parallel. The owner needs one adviser to bring the commercial workstreams together and keep the process moving.
Responsibilities
- Define owner objectives and the decisions to be made
- Review documents, assumptions and risks
- Set the approach and negotiation steps
- Prepare decisions for owners and committees
Typical outcome
An agreed mandate scope with open decisions, responsibilities and next steps clearly set out.
02Operator process
Operator Strategy and Selection
Situation
Before market outreach begins, the operator profile should fit the location, product and the owner's commercial objectives.
Responsibilities
- Prepare the project and operator brief
- Build the longlist and shortlist
- Approach suitable operators
- Review covenant strength and track record
- Compare concepts and offers
- Advise on negotiations
Typical outcome
A documented offer comparison, a shortlist and, once the decision is sufficiently advanced, a preferred operator for the next stage of negotiation.
03Commercial framework
Lease and Contract Terms
Situation
Rent model, security package and term need to work with the operator's business plan, the financing and a later exit.
Responsibilities
- Compare fixed rent, turnover rent, management and hybrid models
- Negotiate ramp-up, indexation, security package and incentives
- Review capex, FF&E, options and term
- Comment commercially on the LOI and contract parameters
Typical outcome
An agreed commercial framework for rent, security package, term and risk allocation that can be taken into legal drafting.
04Investment
Investment Positioning and Underwriting
Situation
An operator offer needs to show what it means for cashflow, financing, risk and exit.
Responsibilities
- Build or review an operator-side P&L and forecast
- Derive ADR, occupancy, RevPAR, revenue and cost assumptions from market data, compsets and relevant benchmarks
- Review cashflow and sustainable rent
- Calculate lease cover and sensitivities
- Prepare operator and contract risks for banks and buyers
- Review the impact on financing, buyer profile and exit
Typical outcome
An underwriting case with transparent assumptions, forecast, sensitivities and the main risks for financing and exit. The scope depends on the mandate.
05Acquisition and sale
Transactions and Exit Preparation
Situation
A hospitality asset is being prepared for acquisition, sale, due diligence or market outreach.
Responsibilities
- Review hospitality-specific due-diligence issues
- Prepare operator, lease and risk information for the data room
- Approach buyers or operators where mandated
- Coordinate the process and the commercial negotiation
Typical outcome
The documents and open issues are prepared for due diligence, buyer discussions and negotiation.
06Development
Conversion and Development
Situation
For an existing asset or development, the hospitality use, operating model or commercial viability may still be open.
Responsibilities
- Prepare a feasibility study and market / location analysis where required
- Review relevant compsets and market benchmarks
- Assess hospitality use and operator viability
- Bring floorplate, product, operating model and economics together
- Build an operator-side P&L and forecast based on market and compset assumptions
- Define requirements for planning and technical teams
- Consider financing, capital markets and exit
Typical outcome
A hospitality concept covering market position, use, floorplate, commercial assumptions, forecast and operator profile for the next stage of planning and market outreach. The analyses included are agreed within the mandate.
Mandate process
How a mandate typically runs.
- 01
Definition
Clarify the project, owner objectives and open decisions. Review the existing information and identify what is still missing.
- 02
Analysis
Review operator, market, lease and investment matters. Define the commercial parameters and room for negotiation.
- 03
Market outreach or negotiation
Depending on the mandate, approach operators, buyers or other relevant parties, compare offers and advise on negotiations.
- 04
Decision and implementation
Agree the findings with the client and take the preferred option or party through to the next binding step.
Depending on the assignment, this may be a defined review or a complete operator or transaction process.
Concrete work products
What the client receives.
The work products depend on the assignment. They are prepared so owners, financing partners and internal committees can work with them directly.
01
Operator decision
- Project and operator brief
- Operator longlist and shortlist
- Operator and concept comparison
02
Offer, rent and commercial review
- Offer and LOI matrix
- Operator P&L and forecast
- P&L and rent underwriting
- Lease-cover and sensitivity analysis
- Market, location and compset analysis
03
Negotiation and contract
- Risk and security matrix
- Commercial rent and contract parameters
- Negotiation strategy and decision memo
04
Investment, feasibility and process
- Hotel / serviced-apartment feasibility study
- Investment and exit-readiness assessment
- Materials for management, financing or investment committee
- Process and negotiation documentation
Clear mandate role
The role DIH Solutions takes within a mandate.
Before the mandate starts, the role of DIH Solutions, the agreed scope and the fee arrangement are set out clearly.
Strategic and commercial advisory
DIH Solutions reviews operator offers, lease terms, feasibility, P&L, underwriting and investment matters and prepares decisions and negotiations.
Operator outreach and placement
Where mandated, DIH Solutions approaches operators, manages the selection process and advises on the commercial negotiation.
Hospitality transaction support
For selected acquisition or sale mandates, DIH Solutions handles the hospitality-specific review, market outreach and the commercial side of the transaction process.
Depending on the assignment, DIH Solutions brings in external specialists for legal, technical and planning questions. The commercial lead stays with DIH Solutions.
Experience and focus
Personal mandate leadership backed by hospitality transaction experience.
Daniel Derilov leads DIH Solutions mandates personally and remains the direct point of contact.
- €615m+
- project and transaction volume advised
- > 11 years
- hospitality investment and transaction experience
- Hotels / Serviced Apartments
- specialist real-estate focus
Mandate entry points
Start with the specific project question.
Select an operator and negotiate the terms
Define the operator profile, approach suitable operators, compare offers and advise on the negotiation.
Discuss the situation confidentiallyReview a rent offer or LOI
Review rent, ramp-up, security package, term and open negotiation points before the next step.
Discuss the situation confidentiallyPrepare a project for financing or exit
Prepare the operator agreement, lease terms, risks and supporting information for review by banks, committees and buyers.
Discuss the situation confidentiallyConfidential first discussion
What does your project need next?
The mandate scope depends on the specific assignment. In some cases a defined review is sufficient. For operator or transaction processes, DIH Solutions can also advise throughout the full process.