Commercial
Hotels in Default on the Rise
August 22, 2009 by Elliott Robinson · 1 Comment
An increasing number of owners of hotels are walking away from their properties and turning the keys over to the bank.
More than 1,000 non-casino hotel properties and 31 casino hotels are in default with a total loan value of more than $25 billion, according to research firm Real Capital Analytics.
Unlike other commercial real estate with long-term leases, guests can abandon a hotel overnight, leaving the management with little or no cash flow.
Many of the hotels in default are publicly traded. “Pricing for hotels really got out of control in 2005 to 2008 and the public companies were aggressive in buying assets, so they piled on a lot of mortgage debt,” says David Loeb, a lodging analyst with Robert W. Baird & Co.
Source: The Wall Street Journal, Kris Hudson
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Elliott Robinson, JD – Associate Broker
Adams Realtors
458 Cherokee Ave. SE
Atlanta, GA 30312
(o) 404-688-1222 ext. 26
Blog: elliottonrealestate.com
Twitter: elliottrob@twitter.com
Elliott Robinson, Esq. combines sound marketing principles and his legal acumen when helping clients purchase and sell real estate. 
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