A week ago we shared two conflicting stories about the potential rising need for a hotel receiver due to foreclosures versus separate predictions that workouts will prevail instead. Added is the latter should prove true as other lenders have said. According to the latest in Bloomsburg Businessweek: “Special servicers, who negotiate with landlords on behalf of investors in commercial mortgage-backed securities, typically install a receiver or hire a broker to sell an office, apartment or industrial building with multiyear leases. Hotel rooms, on the other hand, rent by the night, and contracts with such operators as Marriott International Inc. may be terminated if a property is repossessed, making it harder to run or market.” Read more if you are considering a hotel receiver or other foreclosure action here. Still, smaller, community banks may not have the same ability to hold off on foreclosure proceedings if they must get their balance sheets in order. Also, and given that many bankers believe the economy is improving, this means that hotel real estate prices will continue to rise and put the lender in a better position to sell and recoup the full amount of the loan either in hotel receiverships or as REO’s. As further support is a report by STR that new hotel development is down over 6%, this may encourage using a court appointed receiver or foreclosure to sell as well. Are you a bank, lender or special servicer with hotel loans in default and do you plan to extend the loans or use a hotel receiver or foreclosure to sell instead? Please share your comments with our readers.
Perry Group
Hotel & Restaurant Experts For The Hospitality Industry
