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Pandemic puts NYC Hotels on the brink

Viceroy Hotel (Credit: Arden Group)

New York City’s hotel industry is in crisis, with four out of five properties underpinning commercial mortgage bonds now showing strain, according to the Financial Times. The effects of the coronavirus and overbuilt supply is hitting the nearly $4 billion of hotel mortgages that are bundled into CMBS deals hard.

  • By the numbersTrepp reports that 44.7 percent of loans underpinning CMBS deals backing NYC hotels have already been transferred to special servicers, and an additional 37.7 percent now sit on a watchlist designed to warn investors of impending trouble. 
  • Heard on the Street: Hotel Association of NYC’s Vijay Dandapani: “If half the city’s 640 hotels survive it will be a great outcome.” Occupancy rates in September remained 20 percent lower than for the same month in 2019, despite recovering from their worst point in April where occupancy was down more than 60 percent year on year. [FT+SRT+Trepp]

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