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

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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