A quarter of US hotels at risk of foreclosure

A recent report compiled by Trepp and sent to Congress by the hotel industry found that almost one in four U.S. hotels are at risk of foreclosure. Citing the most recent data available, Trepp reported that the percentage of loans that are 30 or more days delinquent was 23.4 percent as of July. That’s the highest percentage on record, and an incredible 1,746 percent increase from July 2019, when only 1.34 percent of hotel loans were more than 30 days past due. Naturally, the high level of delinquency has left a gaping hole in the CMBS market, where $20.6 billion in hotel CMBS loans were 30 or more days delinquent as of July. In December of 2019, that figure was only $1.15 billion. “The highest volume of delinquent hotel loans during the Great Financial Crisis was $13.5 billion,” reads the report. “The current percentage of loans that are delinquent now exceeds the highest level during the GFC by 53%.”