Lessee retains control over the leased FF&E
Heimdahl purchases and retains title to the leased assets and then lease them to the hotel/ operator for a term which cannot exceed the useful life of assets. Hotel operators retain complete control over and assume the full risk and responsibility for the leased assets. Lessees choose their own suppliers and manage all aspects of production, delivery, installation, operations and maintenance.
Cost superior to sinking fund
Hotel Brands and Franchisors are increasingly willing to accept FF&E leasing as an alternative to costly hotel FF&E reserve sinking funds. This provides hotels and hotel operators with the opportunity to use their capital far more efficiently as deposit rates on FF&E reserve sinking funds are typically far below hotel/operator borrowing costs and return on investment target rates. Finally, leasing frees up capital for use when needed rather than leaving it tied up for years in an FF&E reserve sinking fund.