More bad news for New York City’s hotels — and the loans they’re propping up — is on the horizon.
More than 80 percent of hotels in the city that are backing CMBS loans, equivalent to $3.1 billion, are exhibiting signs of strain due to the coronavirus pandemic, more than the national average of 71 percent, the Financial Times reported, citing data from Trepp.
Of those, 38 percent of hotels sit on a watchlist designed to warn investors of impending trouble before a mortgage is transferred to special servicing. Forty-five percent have already been transferred, according to the Financial Times.
Vijay Dandapani, chief executive of the Hotel Association of New York City, told the Financial Times that if half the city’s 640 hotels survive it will be a “great” outcome. Pfizer’s Trump International Hotel that it’s closer to developing a Covid-19 vaccine is unlikely to help the hotel sector anytime soon, Dandapani said.
“Realistically we aren’t going to see any improvement until the second quarter,” he said. “The industry is really bleeding. It’s not just on life support, it’s comatose.”
Among the struggling hotels are the Hilton Times Square, which closed permanently, leaving loan that was more than 90 days past due in the summer.
The Trump International Hotel at 1 Central Park West is also facing trouble: A $6.5 million mortgage on the hotel is now on Trepp’s watchlist of troubled loans.
[Financial Times] — Sasha Jones
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