A quagmire of hotel debt – Borrowers whose loans are maturing have fewer and fewer options

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Any optimism for a post-COVID resurgence in hotel lending activity has evaporated as the market stagnates in the face of the highest interest rate environment in more than a decade. Growing economic uncertainty is undoubtedly impacting the level of anxiety that many hotel owners are feeling right now. The magnitude and unpredictability of the change in loan underwriting assumptions in the last sixty to ninety days alone has significantly increased investment risk.

New debt for hotel acquisitions has all but disappeared, but a bigger issue may be the flurry of existing credit facilities of all types set to mature this year and next. From the beginning of 2022 to the end of 2023, nearly 45,000 CMBS hotel loans with a total value of approximately $30 billion were expected to come due…

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A quagmire of hotel debt – Borrowers whose loans are maturing have fewer and fewer options – Source: The Plasencia Group
A quagmire of hotel debt - Borrowers whose loans are maturing have fewer and fewer options - Source: The Plasencia Group
A quagmire of hotel debt – Borrowers whose loans are maturing have fewer and fewer options – Source: The Plasencia Group
A quagmire of hotel debt - Borrowers whose loans are maturing have fewer and fewer options - Source: The Plasencia Group
A quagmire of hotel debt – Borrowers whose loans are maturing have fewer and fewer options – Source: The Plasencia Group

Greta Hart
Senior Vice President of Marketing and Partnerships
Plasencia Group

Real Estate and InvestmentUnited States

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