At a recent joint Bay Area and Sacramento Chapters California Receivers Forum, the need for hotel receivership services was one of the topics. The program titled “2012 Nor Cal Commercial Real Estate Forecast,” which was held at The City Club in San Francisco on February 29th, focused on the office, industrial, hotel and agriculture sectors of real estate. I was one of the panelists invited to talk on the state of the hotel industry, including potential foreclosures and receiverships. Several of the key issues I addressed included what is potentially in store for hotels in Northern California given the national economy and hotel loans that are coming due in 2012 as a result of refinancing five years ago. As to the need for hotel receivership services, I shared these key points as part of the speaker panel at the CRF program: The top 25 hotel markets in the USA, which include the San Francisco Bay Area and Sacramento, are projected to continue improving hotel fundamentals (i.e. occupancy, average daily rate) albeit modestly this year. Sacramento will improve to a lesser degree than San Francisco because of its reliance on government business from the State Capitol. Prevailing wisdom on hotel default actions by banks and lenders going forward is mixed. Some experts predict widespread foreclosures while others surveyed said that a large number of workouts, especially by special servicers, will continue. The combination of the potential of less banks and lenders foreclosing and more loan extensions suggests that the need for a court appointed receiver may slow down as well. Hotel receivers will be in less demand across the major hotel markets. However, expect that receiverships could rise in secondary and tertiary cities and locations where community banks hold the loan notes. Have a need for hotel receivership services as a result of hotel loan defaults or disputes? If you are a bank, lender or attorney representing creditors or investors of distressed hotels and want to learn more, submit a request below for a no-cost specialized webinar presentation for 10 persons and more.
