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