Each issue, the staff of the Hotel Investment Barometer features a news roundup from the hotel real estate and financing sector. Included in today’s report:
Trigild takes over distressed portfolio
San Diego-based real estate firm Trigild has taken over a portfolio of five franchised hotels in Valencia, Thousand Oaks and San Luis Obispo, California. The company was appointed receiver of the portfolio—which includes three Marriott-branded hotels, a Best Western and a Holiday Inn Express that combined comprise 590 rooms—by the Superior Court of California, County of Monterey.
CMBS delinquency rates decline in December
Trepp has reported that the CMBS delinquency rate for loans 30-plus days delinquent fell by 23 basis points in December to 7.43%. “Investors had a lot to worry about in 2013,” Manus Clancy, senior managing director at Trepp, said in a news release. “Concerns included rising interest rates, the tapering of QE3, Cyprus, Syria, government shutdowns, and the debt ceiling. Despite all the potential speed bumps, CMBS new issuance was terrific, CMBS delinquency rates continued to plunge, and commercial real estate values remained firm. The results should give investors a lot of confidence going into 2014.”
Property values stable in December
The Green Street Commercial Property Price Index was unchanged in December. Green Street advisors notes that property appreciation has come to a halt during the past several months as increased interest rates weigh on values. In the hotel sector, values remained stable in December for the second consecutive month.
REITs should see liquidity availability in 2014
Carina Kalaw, managing director and head of real estate syndications at Capital One, said in an interview with REIT.com that REITs should see a positive credit environment in 2014. “There’s definitely a lot of liquidity for REIT paper. At least on the banking side I foresee a lot of pricing compression, (and) improved interest from other new lenders coming into the market, and I foresee that it will improve in 2014.”
Clark Street: Performing loans will represent majority of loan sales
While many banks have resolved their worst assets, the companies still have high levels of loans that are often stuck in workout and will remain problem assets for years to come, according to Clark Street Capital. While the risk of default is high, many are still paying as agreed, but they are not strong enough to be refinanced. Unless a default occurs, these assets will remain troubled assets. A loan sale is the most effective, and in some cases, the only way to resolve these assets. In particular, Clark Street noted that classified loan sales will comprise a larger part of the market.
Compiled by Shawn A. Turner.