As the coronavirus pandemic rages on, more properties are taking the full brunt of its impact. Not surprisingly, hotels are among the most affected.
CMBS loans on two Manhattan hotels recently entered special duty, according to an alert from Trepp; the $ 115 million The Mark Hotel and the loan of $ 108.8 million backed by the Embassy Suites in West Midtown. The May loan repayments were not made in either case.
The Mark Hotel loan, which includes the JP Morgan-sponsored JPMCC-2017-MARK the transaction is backed by the assets of 152 keys from the Upper East Side to 25, 77th Street East. Debt transferred to Special Duty Officer Wells Fargo on April 15 due to an impending monetary default.
The borrower, Alexico Group, is quoted in a special service commentary as stating that COVID-19 has caused “unprecedented decline” and “called for certain accommodations related to their mortgage obligations so that all income can be used to pay for necessary real estate expenses,” according to special memos. Negotiations are ongoing, according to the disbursement comments cited by Trepp.
Further downtown, the $ 108.8 million CMBS loan backed by 310-key Embassy Suites by Hilton New York hotel in 60, 37th Street West transferred to Midland Loan Services, his special duty officer, after failing to make his April loan payment. The loan is behind the single asset JPMCC 2019-EMBS OK. Midland has issued a notice of default to Hilton as well as the mezzanine lender, Trepp notes.
The hotel belongs to Ashford Hospitality Trust. The acquisition of the asset in January 2019 marked the REIT’s first purchase in New York City, as the company paid $ 195 million for the Garment District property.
Alexico and Ashford Hospitality Trust officials did not immediately respond to requests for comment.