Rethinking the Capital Stack: Smarter Financing for Hospitality & Multifamily Projects

In an environment where borrowing costs are rising and investors are more cautious, the structure of your capital stack can make or break a deal. For hospitality and multifamily developers, getting the right balance of equity, debt, and alternative financing is no longer just a financial exercise — it’s a strategic advantage.

Why the Capital Stack Matters

Many investors underestimate the impact of financing structure on long-term returns. A project with strong fundamentals can still underperform if the debt burden is too heavy or if equity is diluted. The right capital stack:

Protects downside risk in uncertain markets.
Enhances cash flow stability for operators.
Positions assets for smoother refinancing or sale.

Hospitality Projects: Flexibility Is Key

Hotels and serviced apartments face unique challenges — demand is seasonal, operating costs fluctuate, and guest preferences evolve quickly. For these projects, flexible financing that accommodates working capital needs, FF&E reserves, and repositioning capital is critical. We help clients explore not only traditional loans, but also mezzanine financing, preferred equity, and management agreements that reduce upfront risk.

Multifamily Developments: Long-Term Resilience

Multifamily investments remain attractive, but today’s deals require sharper structuring. Debt coverage ratios are under pressure, and interest rate risk must be factored into every exit plan. By stress-testing DSCR, modeling rent growth scenarios, and optimizing loan-to-value ratios, we ensure projects remain financeable and profitable even when markets shift.

PeakStay Advisory’s Approach

At PeakStay Advisory, we specialize in aligning financing structures with project strategy. Our team develops capital plans that:

Balance equity and debt for optimal returns.
Integrate value-add and repositioning scenarios.
Mitigate refinancing and interest rate risks.
Provide transparency for investors and lenders alike.

Final Thought

The right capital stack doesn’t just fund a project — it defines its future. In today’s environment, financial clarity and creative structuring are essential to unlocking long-term value.

At PeakStay Advisory, we bring the tools, insights, and discipline needed to turn complex capital challenges into strategic opportunities.