Bain Capital Special Situations and commercial real estate debt company Smith Hill Capital have set up a new $1bn (€948.4m) private lending platform to support the US hospitality sector.

The two firms have launched the platform to originate debt and preferred equity to serve the financing needs of companies and assets in the hospitality sector.

Smith Hill is the commercial real estate debt investment management business of Procaccianti Companies, a US real estate investment and services firm. Investment firm Bain Capital has experience in the sector supporting the growth of global hospitality companies like Apple Leisure Group, Hard Rock Hotel Marbella, Hotel Don Carlos and Marriott International’s EDITION brand.

The joint venture will initially focus on new loan originations and debt refinancing exclusively in the hospitality space within primary and secondary markets throughout the US, the companies said. On specific occasions, Bain Capital and Smith Hill Capital will aim to acquire debt and provide rescue funding to reputable borrowers.

The companies said the new venture plans to deploy a billion dollars of gross capital over the next several years.

David DesPrez, a managing director at Bain Capital, said rising interest rates coupled with lender pullback in the real estate debt capital markets has created a significant opportunity to deliver flexible financing solutions to high-performing, growth-oriented hospitality borrowers.

“We believe our joint venture with Smith Hill Capital is tailor-made for this moment in hospitality because it combines decades of industry and capital markets experience with a highly attractive market opportunity.”

Brendan McCormick, managing principal of Smith Hill Capital, said: “We are appreciative of the opportunity to partner with Bain Capital, and together look forward to executing on our strategy to originate loans and provide liquidity to investors of institutional quality hospitality assets in demand-driven growth markets throughout the US.”

James Procaccianti, CEO of Procaccianti Companies, said: “This relationship augments our decades of hospitality management and development expertise, resulting in a fully integrated approach designed to help ownership groups overcome the financing and liquidity challenges currently facing the hospitality sector.”

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