CMBS Foreclosures Start Rising As Hotel Defaults Break 50% In Some Cities

The market for commercial mortgage-backed securities, particularly hotels and retail, continues to worsen with no sign of an imminent turnaround.

The September edition of CMBS analysis firm Trepp’s monthly report found that 26% of hotel-backed CMBS loans are in special servicing, while the same is true for 18.3% of CMBS loans tied to commercial retail properties. Both sectors’ special servicing rates are the highest on record, while industrial, office and multifamily all have below 3% of their CMBS loans in special servicing.

Luxury hotels in major cities seem to be the hardest-hit subsection of the hospitality industry because they are more dependent on business travel and large events that remain all but nonexistent across the country.

Hotels in Houston, which has also been hurt by the oil industry’s struggles, hit a 69% delinquency rate in September, according to Trepp data obtained by Commercial Mortgage Alert. Just over 50% of Chicago’s

Read More Read more

At the ‘Ratched’ Resort: the Adamson House Serves as Mexican Hotel

Love it or hate it, there is no denying that “Ratched,” Ryan Murphy’s latest foray into streaming, is a visual masterpiece! Each hairstyle, costume, and set seems to be prettier than the last! And don’t even get me started on the locations! Perhaps the most picturesque site used is the Mexican resort where Nurse Mildred Ratched (Sarah Paulson) and Gwendolyn Briggs (Cynthia Nixon) are shown living in 1950, two years after the main events of the series, at the end of the Season 1 finale, titled “Mildred and Edmund.” Cast and crew did not travel south of the border to film the resort scenes, nor did they make use of an actual hotel. Instead, a bit of Hollywood magic was employed to create the retro Mexican lodging within the Thirty Mile Zone. 

Mildred and Gwendolyn’s heavenly retreat is actually a mashup of two different locales – a historic Malibu mansion-turned-museum

Read More Read more

Grand Chicago Hotel in Foreclosure, a Symbol of Covid-19’s Toll on Hospitality Industry

The Palmer House Hilton has been one of Chicago’s grandest hotels for more than a century. Oscar Wilde was a guest. Frank Sinatra serenaded diners at its supper club. Over the past 15 years, the owner spent $173 million to overhaul the hotel, modernizing most of the 1,641 rooms.

But today, the property faces a bank foreclosure and has become one of the most potent symbols of the troubled hospitality industry during Covid-19.

Wells Fargo Bank

said in court papers last month that the hotel’s owner, real-estate investor Thor Equities, was in default on its $333.2 million first mortgage, making the property one of the first major foreclosure actions during the pandemic. The Palmer House was worth $305.5 million shortly before Wells Fargo filed its action, appraisers said.

A Thor spokeswoman declined to comment.

Most property owners and lenders at first hoped that damage from the pandemic would be limited

Read More Read more