Manhattan’s hotel oversupply threatens $731M in CMBS loans: Morningstar
0 people likes this
Manhattan hotel developers have overbuilt, and incomes at new and existing hotels are unlikely to hit industry projections, according to a new report from research firm Morningstar Credit Ratings.
That could mean trouble ahead for some CMBS investors, as loans worth about $731 million, roughly a fifth of the $3.68 billion Manhattan hotel-backed CMBS market, see elevated default risk over the next two years, researchers found.
Loans backed by properties such as the Flatiron Hotel at 9 West 26th Street, the Hampton Inn South Street at 320 Pearl Street in the Financial District and the MAve Hotel at 62 Madison Avenue in Nomad are among the most threatened, according to Morningstar’s projections.
Builders have created nearly 19,000 new hotel rooms in the city over since 2009, with another 10,000 set to come online in 2016 and 2017, according to the report, written by Brian Snow, Cara Costich and Edward Dittmer.