Contact Us

$800M Hotel Portfolio Put Under Servicer Surveillance

National Hotel

Maintenance issues at some of the properties in Equity Inns' $800M portfolio have landed the lodging company on a special servicer watchlist. KeyBank Real Estate Capital, the master servicer and special servicer, reported upkeep issues like exposed wires, sunken storm drains and fire extinguishers overdue for inspection. The CMBS loan is backed by 96 Marriott, Hilton, Hyatt and Intercontinental Hotels nationwide, reports the Commercial Observer. It was securitized in June 2014 by Goldman Sachs and German American Capital Corp, with an original balance of $865M. ARC Hospitality Trust assumed the mortgage when it closed on the purchase of the portfolio for $1.81B. Trepp analyst Sean Barrie says the maintenance issues are surprising considering the properties are fairly new (1990s), but he also points out that there are so many properties in the portfolio, the borrower may have lost track. The loan holds a 67.5% LTV ratio, with the remaining collateral valued at $1.2B. MorningStar predicts it will continue performing and won't have near-term credit issues. [CO]