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An Analysis of Future Delinquency for Hotel CMBS Loans

Author
Corgel, John B.; Walls, Aaron
Abstract
The hotel industry seems to be recovering from its recent abyss, but the financial damage to many properties from many months of decline will continue for some time. In particular, the hotel industry faces the prospect of heavily leveraged properties submerged by delinquencies and defaults. An analysis of debt coverage ratios for 365 hotel properties with commercial mortgage-backed security loans shows considerable deterioration from 2008 to a nadir in 2010. Starting in 2011, net operating income and debt coverage ratios should gradually improve, with noticeable improvement in 2012.
Date Issued
2010-11-01Subject
CMBS; debt; delinquency; loan portfolios; debt coverage
Rights
Required Publisher Statement: © Cornell University. Reprinted with permission. All rights reserved.
Type
article