Hollywood DoubleTree’s $59M CMBS loan enters special servicing

South Florida’s hotel industry has $4.2 billion in CMBS debt

Miami /
Apr.April 24, 2020 11:30 AM
Dave Folsom, president & CEO of Sotherly Hotels, and the DoubleTree Resort by Hilton Hollywood Beach at 4000 South Ocean Drive (Credit: Google Maps)

Dave Folsom, president & CEO of Sotherly Hotels, and the DoubleTree Resort by Hilton Hollywood Beach at 4000 South Ocean Drive (Credit: Google Maps)

As shuttered South Florida hotels lose revenue and lay off employees due to coronavirus, they face debt payments that may be difficult to restructure.

A $59 million commercial mortgage-backed securities loan for the 311-room DoubleTree Resort by Hilton Hollywood Beach at 4000 South Ocean Drive is the latest loan to enter special servicing. The loan has a balance of $55.8 million and has been delinquent for less than a month, according to the data provider Trepp.

The property is owned by Williamsburg, Virginia,-based Sotherly Hotels. It has 10,000 square feet of meeting space, a resort-style pool, a bar and seafood restaurant. The loan is a refinancing originated in 2015.

Dave Folsom, president & CEO of Sotherly Hotels, did not immediately return a request for comment.

CMBS loans are secured by a mortgage on a commercial real estate property. The loan is accumulated into a pool of loans and sold as bonds to investors. When the borrower misses a payment or requests modifications, CMBS loans are taken over by a third-party firm known as a “special servicer.” By entering special servicing, the CMBS loan can be reworked or restructured, or the special servicer can find another operator to take over the property. Industry experts say that modifying CMBS loans can take months or years, and during that time the borrower cannot refinance or take on additional debt.

CMBS loans are often deemed riskier than conventional loans because of the difficulty in modifying them due to obligations that the borrower has with bondholders.

South Florida’s hotel industry has $4.2 billion in CMBS debt, according to Trepp.

Last week, a $975 million CMBS loan for Jeffrey Soffer’s Fontainebleau Miami Beach entered special servicing. The loan is the largest CMBS hotel loan in South Florida.

Brett Mufson, president of Fontainebleau Development, said the hotel is in talks with its lenders, bondholders and servicers regarding modifying the hotel’s loan documents. He said the loan is not in default on its payments.

For weeks, South Florida’s hotels have been suffering from the impact of coronavirus.

Broward County ordered all non-essential businesses to shut down effective March 23. With this order, hotels were not allowed to accept new reservations with the exception of “essential lodgers,” such as first responders or healthcare workers. Since then, hotels have laid off thousands of employees.

On Tuesday, Visit Florida President and CEO Dana Young said on a conference call with members of the state’s re-opening task force that statewide hotel revenue was down more than $1.6 billion between March 1 and April 11 compared to the same period last year.


Related Articles

arrow_forward_ios
Foreclosure lawsuit targets DoubleTree hotel near Miami International Airport
Foreclosure lawsuit targets DoubleTree hotel near Miami International Airport
Foreclosure lawsuit targets DoubleTree hotel near Miami International Airport
(Facebook via Hotel Astor Miami Beach)
Shuttered Hotel Astor in Miami Beach gets a new owner
Shuttered Hotel Astor in Miami Beach gets a new owner
Miami allegedly granted improper height increase for Design District hotel project: lawsuit
Miami allegedly granted improper height increase for Design District hotel project: lawsuit
Miami allegedly granted improper height increase for Design District hotel project: lawsuit
The Fairwind Hotel and Joseph Chetrit (Getty, Fairwind)
Chetrit Group sells Miami Beach hotel for $42M
Chetrit Group sells Miami Beach hotel for $42M
Renderings of the project Courtesy of Pebb Capital
JV plans high-end offices at old Bancroft Hotel in South Beach
JV plans high-end offices at old Bancroft Hotel in South Beach
JHSF's Fábio Auriemo with Como Metropolitan Miami Beach hotel (Susan Gale Group / One Sotheby’s International Realty)
Brazilian real estate giant JHSF buys oceanfront Miami Beach hotel, plans first Fasano
Brazilian real estate giant JHSF buys oceanfront Miami Beach hotel, plans first Fasano
The Variety Hotel (Getty)
Lender acquires Variety Hotel in Miami Beach following foreclosure suit
Lender acquires Variety Hotel in Miami Beach following foreclosure suit
Branden Muhl, James Vosotas and Hotel Greystone at 1920 Collins Avenue, Miami Beach (Google Maps, Mahaska, Trans Inns)
Hotel Greystone to reopen in September amid partnership break-up
Hotel Greystone to reopen in September amid partnership break-up
arrow_forward_ios

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

Loading...