Hotel loan delinquencies backing U.S. commercial mortgage-backed securities are already outpacing late payment levels set during the 2008 Great Recession, new data from Trepp Analytics shows.
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Nationally, the percentage of hotel loans tied to CMBS classified as 30 days or more late hit 23.4%, or $20.6B in total loan volume, in July — the highest percentage to date, according to Trepp.
Comparatively, the hotel CMBS delinquency figures for July 2019 came in at 1.34%, or $1.15B, Trepp said.
As of last month, $30.6B in U.S. hotel loans were on Trepp's servicer watchlist, up from $12.6B seven months earlier.
When comparing the CMBS impact of the coronavirus to the Great Recession of 2008 and 2009, the recent pandemic is pushing hotel delinquencies on CMBS loans much higher and at a faster pace.
The number of CMBS hotel loans now classified as 30 days late is already 53% higher than the delinquency rate reached during the height of the Great Recession, according to Trepp.
It took two years after the start of the Great Recession for hotel CMBS loans to reach the peak of $17.6B in loans tied to special servicing. But now, only six months into the coronavirus crisis, $21B in hotel CMBS loans are sitting with special servicers.
The metros with the highest percentage of delinquent hotel CMBS loans include New York-Newark-Jersey City (with a 38.72% delinquency rate), Houston-The Woodlands-Sugar Land (66.18%), Chicago-Naperville-Elgin (53.84%) and the Dallas-Fort Worth-Arlington market (18.88%).
In Dallas-Fort Worth alone, 24 loans carrying a $289M balance are pushing the hotel CMBS delinquency rate up, Trepp reported.
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