
Federal Agencies Finalize Policy Statement on CRE Loan Accommodations and Workouts
DebtX Team | 07/13/2023
DebtX recently executed a $95MM, four relationship sale on behalf of a large bank. This sale was deemed a huge success with high water marks set for “Covid-impaired” hospitality loan pricing (high 90’s), and buy-side yields as low as mid-high 6’s. Also evident was superior liquidity and pricing for a significantly impaired NYC hotel loan. Overall, the sale pricing for the portfolio exceeded the bank’s reserve by $7MM.
Transaction volume since July 2020 stands at ~$500MM across 61 loans. With this recent sale adding to our data set, we’re sharing the following observations about the current secondary market for hospitality loan sales.
Winners and losers in the hospitality sector have yet to be fully identified. Some are obvious; pre-Covid impaired versus those impacted solely by the pandemic, or NYC versus a select service hotel in a drive-to leisure destination. However, others are not so obvious, and this is reflected in sale results. Most “Covid-stressed” hotel loans secured by economy, limited, and select service assets price similarly as optimism abounds due to stimulus, vaccines, and upcoming summer vacations. Moving forward, hotel assets failing to catch this rising tide will be easily identified resulting in a bar belling of loan sale pricing within hotel service categories (some loan pricing will remain high while others will decline).
If you’re interested in a no cost, no obligation evaluation of your hospitality portfolio, please contact us.