Over 30% of Chicago-area hotels with CMBS loans missed May mortgage payments

New data from Trepp found that increasing number of retailers and hotel owners can’t make their monthly payments

TRD CHICAGO /
Jun.June 18, 2020 10:11 AM
A new report in Trepp found delinquency rates have jumped for Chicago area hotels and retailers. From left, Palmer House Hilton and Gurnee Mills mall. (Wikipedia Commons)

A new report in Trepp found delinquency rates on CMBS loans from Chicago area hotels and retailers have jumped. From left, Palmer House Hilton and Gurnee Mills mall. (Wikipedia Commons)

Chicago’s economy is emerging from the long stay-at-thome order, but for many hotels and retailers with mounting debt, the outlook looks bleak.

The delinquency rate on loans packaged into commercial mortgage backed securities jumped to 8.8 percent in May from 3.1 percent in April, according to a new report by Trepp, cited by Crain’s. And data compiled so far in June shows that late payments will only get worse, the report noted.

Overall, the national delinquency rate on CMBS loans jumped to just over 7 percent in May, from 2.2 percent in April.
While the occupancy rate at Chicago hotels has slowly climbed up past 30 percent, so, too, has delinquency rates on CMBS loans, the report noted.

Alarmingly, the delinquency rate spiked to 33.5 percent last month for area hotels, from just 2.5 percent in April, signaling potential foreclosure for many in the industry.

Most special servicers have not sought that route yet, however, according to Crain’s; they are allowing borrowers to pull from their reserve accounts to make the mortgage payments.

Meanwhile, late payments for Chicago-area retail property CMBS loans stood at 13.4 percent in May, up from 7.8 percent in April. Malls owned separately by Simon Property Group and a KKR-led venture both missed May debt payments. The retail properties, Gurnee Mills and Yorktown Center, had both been closed because of pandemic-related restrictions. [Crain’s] — Alexi Friedman 


Related Articles

arrow_forward_ios
The coronavirus pandemic led to a 35% drop in new residential projects

Residential construction starts have cratered in Chicago

Residential construction starts have cratered in Chicago
Gov. J.B. Pritzker (Getty)

These landlords are suing to toss out Pritzker’s eviction ban

These landlords are suing to toss out Pritzker’s eviction ban
The Robert De Niro and the Nobu Hotel in Fulton Market, which will open July 1. (Credit: Andrew Toth/Getty Images, and Google Maps)

Listen to me carefully: De Niro-backed Nobu Hotel will finally open

Listen to me carefully: De Niro-backed Nobu Hotel will finally open
Home sales tanked in Chicago in May, but more recent data has shown an uptick in homes under contract. (iStock)

Coronavirus sent Chicago home sales to new low in May

Coronavirus sent Chicago home sales to new low in May
Mayor Lori Lightfoot is allowing city restaurants and bars to open for indoor dining — with restrictions — a week ahead of schedule. (Getty)

Order up: Lightfoot to allow indoor dining at restaurants, bars ahead of schedule

Order up: Lightfoot to allow indoor dining at restaurants, bars ahead of schedule
Giglio’s State Street Tavern and restaurateur Bobby Hitz (Google Maps, Giglio's)

Legal strategy to get out of rent works for Chicago eatery

Legal strategy to get out of rent works for Chicago eatery
 The Chicago housing market is seeing an uptick in contracts signed and in the number of open houses, as buyers and sellers get off the sidelines. (iStock)

Chicago housing market sees uptick in buyers and those on lookout

Chicago housing market sees uptick in buyers and those on lookout
Lori Lightfoot (Credit: KAMIL KRZACZYNSKI/AFP via Getty Images)

Lightfoot’s eviction bill would force landlords to negotiate with tenants

Lightfoot’s eviction bill would force landlords to negotiate with tenants
arrow_forward_ios

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

Loading...