Lender-Engaged Operating Oversight

Situation at Engagement

The borrower had fallen materially behind on debt service and the lender had initiated foreclosure proceedings on a stabilized-but-underperforming limited-service hotel. Operations were drifting: reservations leakage, payroll creep, inconsistent franchise compliance, and incomplete monthly reporting made it difficult for the lender to assess collateral value or chart a workout path.

SUNdhm was retained directly by the lender to step in as the operating party of record, stabilize the asset on a defined timeline, and produce the financial and operational transparency required for the bank to weigh resolution options — cure, sale, deed-in-lieu, or judicial foreclosure.

Strategic Interventions

• Operating control & cash management. Took possession of day-to-day operations, established a clean operating bank account with controlled disbursements, and rebuilt a defensible weekly cash forecast for the lender.
• Revenue management reset. Re-platformed rate strategy, OTA distribution, and brand-channel positioning. Tightened length-of-stay and segment controls; reopened distressed channels with corrected content.
• Payroll & expense discipline. Right-sized labor schedules to occupancy, renegotiated key vendor terms, and eliminated non-essential overhead inherited from the prior operator.
• Franchise & compliance cleanup. Closed open brand-compliance items, restored loyalty-program standing, and brought guest scores back into acceptable bands.
• Lender reporting cadence. Delivered monthly P&L, STR/competitive set commentary, and a capex/working-capital outlook in a format underwriting and special-assets teams could action.

Results at Stabilization

• Occupancy: 38% → 61%
• ADR: $72 → $98
• Payroll: 38% → 24% of revenue
• Stabilization Timeline: ~9 months

Outcome

Performing cash flow was restored, collateral value was protected, and the lender held a stabilized asset with audit-grade reporting and a clear set of resolution options. SUNdhm continued in an operating-of-record capacity through the resolution process, coordinating with counsel, special servicing, and prospective transaction parties as required.

Relevance to Distressed & Transitional Assets

This engagement illustrates a pattern SUNdhm sees repeatedly with regional bank and special-servicer portfolios: hospitality and mixed-use assets where the underlying property is fundamentally viable, but operating drift, weak reporting, and franchise erosion have created the appearance of a deeper problem. Hands-on operating control, disciplined financial reporting, and brand-compliance recovery typically reveal that the asset is recoverable on a 6–12 month horizon.