Bay Area hotel problems mount
Contra Costa Times reports: Bay Area hotels with a combined value that tops $1 billion fell into a morass of loan defaults, a fresh sign of the woes being unleashed by a local economy mired in recession.
At the end of 2009, seven times as many hotels in the nine-county Bay Area had tumbled into defaults on their mortgages than was the case at the end of 2008, a new survey by Atlas Hospitality Group shows.
And plenty of money is on the line. The value of the Bay Area hotels in arrears on their property loans totaled $1.1 billion, according to a report by Real Capital Analytics. That's 12 times the $90 million in delinquent loans for Bay Area hotels in 2008, Real Capital estimated.
The weak economy is the primary culprit.
"People can't get financing for their hotels when their loans come due," said Jessic Ruderman, senior analyst with Real Capital Analytics. "Sometimes the hotels can't generate enough revenue to make the loan payments."
"We will see more hotel properties become distressed," Ruderman said.
View the full article on Contra Costa Times: Bay Area hotel problems mount
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