Recent reports of hotel defaults declining suggest that the need for hotel receivership services in California will drop as well. Compared to last year, there appears to be less default filings by hotels in the first quarter across the Golden State. However, coupled with this news are reports that CMBS loan delinquencies are rising as well. Just out today and according to the Atlas Hospitality Group May 2012 Lender News, which we follow as part of our work as court appointed receivers, “California hotel default notices fell 21% in the first three months of this year. Eight counties, including Los Angeles and San Diego, reported that the number of filings were down 50%. However and in the same period, hotel foreclosures rose 50% with the largest amount across the five secondary and tertiary markets of Placer, San Joaquin, Humboldt, Imperial and Kern counties.” In a separate article by Howard Matthews with National Hotel & Motel Brokers and published in Hotel Interactive, it also suggests the demand for hotel receivership services by lenders may fall. It reported that “defaults of lodging properties in California are continually decreasing and in the six months ending March 31, 2012 only thirty lodging properties in California had received NODs (Notice of Defaults) filed against them. While that number is a significant increase from the normal amount of ten to fifteen defaults, this is a far cry from the 2,500 defaults that were previously predicted by others in the lodging community.” Still, the news is not all that positive in the CMBS world. According to a report in Commercial Real Estate Direct, which may trigger more hotel receiverships among larger lodging properties and small hotel portfolios, it said that “master servicers have 12,318 loans with a balance of $140.8 billion on their watch lists. That’s up from $138.6 billion a month earlier. A total of $20.8 billion of those loans are backed by hotels. That’s more than 30 percent of all securitized hotel loans.” In summary, the need for hotel receivership services appears to be on the decline, at least in most major cities here in California and elsewhere. This is not unexpected as hotel industry fundamentals, such as room occupancy and average room rate, have improved in several major U.S. markets. Or is it? Please share your comments and insight here.