Recent news suggests that a rise in foreclosures and the hotel receiverships as a result of these actions could jump next year. Banks and lenders have been able to extend loans in the last 12 to 24 months that will now come due. However, the volume of loans due is expected to rise in 2012. Reports for CMBS loans maturing and not paid off last month are one example.According to these separate reports: Trepp LLC stated that less than “42% of the loans due” were paid off in October. The firm also warned “Refinancing conditions are sure to remain challenging…many five-year loans originated in 2006 and 2007 will mature over the next year. The volume of loans that matured in October was the largest in memory, the New York analytics firm said. That was due to a preponderance of five-year loans that were written in 2006 and had come due.” Read more here on what other issues may affect potential foreclosures pending hotel receiverships. At the Bloomsberg Commercial Real Estate Summit it was reported that “There will be a “huge increase’” in U.S. hotel foreclosures next year as debts come due and little financing is available, said Robert Sonnenblick, a hotel developer. More is here if you are contemplating foreclosure alternatives for distressed hotels. Given the state of the lodging industry improving over the next couple years based on many forecasts, banks and lenders may consider a court appointed hotel receiver as a solution to ride out the default and sell the asset. This maneuver may allow the lender to keep the asset on its books and avoid any drastic write down as a result of foreclosing. Still, inherent costs could outweigh the wisdom of longer term hotel receiverships if the lodging property will be on the market too long to get a preferred sale price. What do you say?
Perry Group
Hotel & Restaurant Experts For The Hospitality Industry
