$17.5B in Hotel Loans Come Due, Foreclosure Looming?
Wednesday, December 07, 2011
Source: Bloomberg
Bloomberg reports: As $17.5 billion in securitized loans backed by US hotels come due in the next two years, lenders are doing more to avoid foreclosure on lodging properties than on any other type of commercial real estate.
Workout agreements have been reached on 53 percent of distressed hotel loans since the start of 2008, the highest among six commercial-property categories, according to data from Real Capital Analytics Inc. a global commercial property research firm.
Special servicers, who negotiate with landlords on behalf of investors in commercial mortgage-backed securities, typically install a receiver or hire a broker to sell an office, apartment or industrial building with multiyear leases. Hotel rooms, on the other hand, rent by the night, and contracts with such operators as Marriott International Inc. may be terminated if a property is repossessed, making it harder to run or market.
Among hotel loans being worked out is $1.44 billion in financing backed by 355 La Quinta Inns & Suites owned by a unit of New York-based Blackstone Group LP. It will mature on July 9, 2012, after three one-year extensions. The loan was transferred in September to the special servicer, Bank of America Corp., after the borrower requested modification.
View the full article on Bloomberg: $17.5B in Hotel Loans Come Due, Foreclosure Looming?
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Posted by: Nina Turner