It’s going to be a tough year to refinance commercial mortgages

Whitehall funds-owned Park Central Hotel cannot refinance

New York /
Dec.December 28, 2011 10:49 AM

Despite the historically low interest rates, commercial owners worldwide may face significant hurdles refinancing in the coming year, the Wall Street Journal reported. And most of the five-year mortgages used for commercial properties when the boom was at its height will be coming due next year.

For instance, a venture that includes Goldman Sachs’ Whitehall funds has a $203 million mortgage on the Park Central Hotel, at 870 Seventh Avenue between 55th and 56th streets, that matured in November, the Journal said. Despite being current on the mortgage, the group was unable to refinance, and is asking the lender to accept a discounted payoff on the loan, according to real estate analytics firm Trepp, which also shows the mortgage as delinquent.

Of the $70 billion in commercial mortgage-backed securities outstanding that will mature next year, $15.5 billion of the fixed-rate mortgages and $12.2 billion of the adjustable-rate mortgages have been flagged by Trepp as potentially difficult to refinance.

“The merry-go-round will stop, and they are not all going to get financing,” said Eric Thompson, a managing director at Kroll Bond Rating Agency.

Analysts told the Journal it will be hard to calculate how many commercial property loans will default. But the delinquency rate, which rose to 9.5 percent from .3 percent in the last three years, is expected to rise further, according to Trepp and other analysts. [WSJ]


Related Articles

arrow_forward_ios
Rendering of H Hotel, slated for 58 West 39th Street (Peter Poon Architects)
Heavy hangover: Air rights purchased for massive cantilever
Heavy hangover: Air rights purchased for massive cantilever
The rate of loans sent to special servicers continued to fall in March. (Unsplash)
CMBS special servicing rate declines in March
CMBS special servicing rate declines in March
Watson Hotel at 440 West 57th Street (Google Maps)
Manhattan hotel trades in biggest distressed lodging deal of pandemic
Manhattan hotel trades in biggest distressed lodging deal of pandemic
Douglas Durst with 1133 Avenue of the Americas (left) and 114 West 47th Street (Google Maps, Getty)
Durst refinances two Midtown buildings with $1.1B CMBS loan
Durst refinances two Midtown buildings with $1.1B CMBS loan
Vornado's Steve Roth. (Getty, Google Maps)
Here’s what tenants are paying at Vornado’s 909 Third Avenue
Here’s what tenants are paying at Vornado’s 909 Third Avenue
Lightstone Group CEO Mitchell Hochberg and Marriott International CEO Anthony Capuano with a rendering of The Moxy Williamsburg (Getty, Lightstone, iStock)
Marriott, Lightstone Group bet on hotel recovery
Marriott, Lightstone Group bet on hotel recovery
(iStock/Illustration by Kevin Rebong for The Real Deal)
Travel roars back — and summer rentals book up
Travel roars back — and summer rentals book up
Bolivar Development's Peter Fine and 401 West 218 Street. (Google Maps)
10 biggest new project filings in NYC
10 biggest new project filings in NYC
arrow_forward_ios

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

Loading...