[Smoking crater Biden economy...] Hotel REIT Says It Will 'Likely' Return 19 Properties to Lenders

[Leroy N. Soetoro]

https://finance.yahoo.com/news/hotel-reit-says-likely-return-
214720507.html

(Bloomberg) -- Ashford Hospitality Trust Inc. expects to return 19 hotels
to lenders in cities including Las Vegas and Atlanta, declining to pour
more cash into the properties, which are part of a $982 million mortgage
pool that missed a repayment deadline in June.

Keeping the hotels would have required a paydown of about $255 million to
extend the financing and $80 million in capital expenditures through 2025,
Dallas-based Ashford Trust said in a statement Friday. The equity in the
properties is already negative, based on comparable sales and brokers
opinion of value, according to the statement.

“At this time, it appears that the most likely outcome will be a
consensual transfer of these hotels to the respective lenders,” the
company said in the statement.

Ashford Trust worked out deals to extend debt on 15 other hotels in the
portfolio by providing a total of $129 million in paydowns, according to
the statement.

With higher interest rates and falling property values, many lenders are
requiring borrowers to pay down part of the debt or provide additional
capital for property expenses in exchange for extending a loan that comes
due.

Braemar Hotels & Resorts Inc., whose ultimate parent — Ashford Inc. — is
the same as Ashford Trust, agreed to make a roughly $121 million payment
in June to extend a mortgage on four hotels, reducing the outstanding
mortgage debt by 33% to about $249 million.

Through June, hotel values were down 3% from a recent peak compared with a
16% drop for all commercial property types and a 31% plunge for offices,
according to Green Street.

Most of the hotels Ashford Trust expects to return to lenders “are located
in markets that have experienced significant headwinds throughout their
post-pandemic recoveries, and a number of these markets are not forecasted
to reach pre-pandemic topline levels until 2025 or 2026,” Ashford Trust
said in the statement.

Hotels that will likely be returned include properties with brands such as
Residence Inn, SpringHill Suites, and Marriott.

The company said that after the situation is sorted with these hotels, the
next upcoming debt maturity is a Morgan Stanley loan pool that’s secured
by 17 hotels and matures in November.

“We currently believe that loan should be able to be extended with no
paydown required,” Rob Hays, Ashford Trust’s president and chief executive
officer, said in the statement.

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