Eddie Yu, Partner and Head of Acquisitions at Ohana, talks about the space Ohana fills in hotel lending and why he thinks more deal activity is coming in 2026.
LOS ANGELES — There are newer assets and older assets, but what if the asset is somewhere in between? That’s where the specialists come in.
“Hotel is a great sector for specialists,” said Eddie Yu of Ohana Real Estate Investors, when discussing the sweet spot of services the hotel lender provides.
Yu was recently promoted to partner and head of acquisitions at Austin-based Ohana. He joined the company in 2018 as a founding member of the investments team and spoke with Hotel Investment Today at the Americas Lodging Investment Summit (ALIS) by Northstar, a conference in Los Angeles, about the current state of hotel lending and why he’s optimistic about the acquisition market in 2026.
Yu said Ohana really leans in when it feels like it has an edge, generally during a transition with the asset.
“Sometimes it’s a displaced cash flow. That’s where we live, and that’s where other lenders, who are generalists, can’t compete,” he said. “Most lenders are very strict on trailing cash flow being their metric and they don’t necessarily even know if that cash flow is going up or down, but that’s how they feel protected.
“We can make the same observation, but we can go several levels deeper and take on that kind of risk when those cash flows are displaced. We’re getting paid to do that because there’s a lot less competition and a lot fewer people who can do it. We’re able to underwrite what’s going to happen to that asset several years in the future.”
A perfect example of when this happens, Yu said, is an area where Ohana excels — when a newly constructed asset still needs to ramp up.
“People don’t understand that it can actually be harder for a lot of folks to understand than the older assets,” he said. “It’s almost like you would expect a newer asset to be worth more than an older asset. But in hotel-land, because people are so uncomfortable with the lack of data or don’t have the experience, they don’t know. They are very reliant on trailing cash flows or historical cash flows.”
Lacking cash flow data will scare many lenders off, Yu said. But not Ohana.
“We know what the hotel across the street did… what the hotel in a very similar but different neighborhood did and I can patch that together just with the data. Then we also go in and talk to everyone, and we look at their books, and then we’re able to figure out what the potential of this asset is,” he said.
“You can go on STR and buy a bunch of top-line data. You can’t buy that P&L or that expense data, but we have it because we might even be in those markets with our own hotels. So we know a lot,” he said.
While Ohana owns many hotel assets, Yu said the company’s 2025 hotel activity was almost entirely lending. The company has learned a lot over its 17 years and can now lend across the capital stack that an owner might need. It also specializes in preferred equity, with average deal sizes typically ranging from $20 to $ 60 million.
“It really depends on where we have the best opportunities,” he said. “There’s still a big hesitancy to sell assets right now, but there are real liquidity issues in the market, and you can’t not sell assets forever. Then you also layer on if there’s any hiccup in performance, whether that’s because… you just finished your renovation, or something negative, like the market has pulled back a lot and you over-leveraged the asset. We will selectively do pref equity, where we really believe in the trajectory of the asset over the long term, and we think very highly of the sponsor.”
Yu said Ohana has buckets of capital for a wide range of investments right now, which gives them flexibility when talking to owners.
“We can go to all of our counterparties and say, ‘If you want to sell the asset, we would buy it at this price. If that doesn’t work and the market doesn’t give you what you want, we have other things that you need,’” he said, noting that it often comes with a conversation about what’s really driving a potential sale. ”Now I can have a really good conversation about what you guys need to do next to achieve your goal?”
That kind of conversation can often happen with owners of newly constructed assets, Yu said.
“They often are dealing with loan maturities and you usually get a break when you do your construction loan. People will believe the dream, and once you finish your construction, it’s time to prove it. That’s where we always come in. A lot of lenders will say, ‘I can’t, because I need the cash flow,’” he said. “We’ll say, ‘We looked at all your plans and we agree. We’re going to lean into that.’ We’re often a lot more right than we are ever wrong on that.”
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