Lenders desperate to avoid foreclosure on U.S. hotel properties

New York /
Dec.December 07, 2011 09:30 AM

As $17.5 billion in securitized loans backed by U.S. lodging properties mature in the next 18 months, lenders are quickly making agreements on distressed loans, working harder to avoid foreclosure on hotel properties than on any other commercial assets, Bloomberg News reported.

Data from Real Capital Analytics shows that workout agreements have been reached on 53 percent of distressed hotel loans since the beginning of 2008, more than on any other type of property. The reason, some experts speculate, may be that hotels are effectively rented by the night, and contracts with hotel operators may be terminated if a property is foreclosed on, making it harder to run or sell.

Hotels are “operating assets where income goes up and down overnight,” said Rick Kirkbride of Los Angeles-based law firm Paul, Hastings, Janofsky & Walker in Los Angeles. “Servicers do drag their feet with them a lot more because they aren’t sure what to do.” [Bloomberg]


Related Articles

arrow_forward_ios
Atlas Hospitality Brokerage president Alan Reay (Atlas Hospitality Brokerage)
Listen: Inside the looming distress across the hotel market
Listen: Inside the looming distress across the hotel market
Bob Ghassemieh, Ignazio and Maggio Cipriani, Mr. C Seaport at 33 Peck Slip (Getty, Mr. C Residences, Google Maps, Bob Ghassemieh)
Mr. C Seaport hotel sold to South Korean operator for $60M
Mr. C Seaport hotel sold to South Korean operator for $60M
Hotel at Times Square heads to auction
Hotel at Times Square heads to auction
Hotel at Times Square heads to auction
From left: Quadrum Development's Oleg Pavlov, Toby Moskovits, and Heritage Equity Partners' Michael Lichtenstein with the  96 Wythe Ave (Williamsburg Hotel, Getty)
UK firm to buy Moskovits, Lichtenstein’s Williamsburg Hotel for $96M
UK firm to buy Moskovits, Lichtenstein’s Williamsburg Hotel for $96M
The Moinian Group’s Joseph Moinian with 37-10 and 37-20 114th Street
Moinian sells dev site near LaGuardia for $50M
Moinian sells dev site near LaGuardia for $50M
From left: Vornado’s Steve Roth and Andrew Penson with 1601 Broadway
Crowne Plaza Times Square Hotel owners file for bankruptcy
Crowne Plaza Times Square Hotel owners file for bankruptcy
From left: BD Hotels’ Richard Born and The Jane Hotel/JK Hotel Group’s Jeff Klein with the Jane Hotel (Smart Travel, Studio Scrivo)
Jeff Klein buys Jane Hotel for $62M
Jeff Klein buys Jane Hotel for $62M
Illustration of the Belmont Hotel in Dallas (Getty, Google Maps; Illustration by Kevin Rebong for The Real Deal)
The lives and deaths of the Belmont Hotel
The lives and deaths of the Belmont Hotel
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...