Greater Philadelphia hotels have been slammed by the coronavirus pandemic, and as the crisis drags on, their turmoil appears poised to worsen as hefty loan payments come knocking while travel and tourism show no sign of rebounding anytime soon.
The hospitality industry, among the first to feel the financial squeeze from the coronavirus spread, took an ominous turn last month as loan servicers began highlighting distress at dozens of properties across the country. April loan-servicer notes included repeated references to the Covid-19 outbreak that triggered a global pullback on travel and pushed many hotels across the country to near-100% vacancy.
According to loan-servicer reports filed between April 15 and April 17, at least eight Greater Philadelphia hotels were seeking concessions from lenders last month on a collective $169.8 million in mortgage debt that was securitized and sold to investors. The filings are a monthly routine on Wall Street to keep investors in commercial mortgage-backed securities informed about the underlying properties supporting that debt.
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Those Philadelphia-area hotels are now voicing their need for help in staying current on the loans during the public health crisis.
The Hilton Philadelphia at Penn's Landing, which recently underwent a $15 million property-wide redesign, is among the local properties seeking relief. The 350-room waterfront hotel is paying off a $70 million interest-only loan that originated in July 2019 after the property value was assessed at $114 million. The Hilton was on track with its loan payments until being added to its investors' watch list on April 13, according to loan servicer notes.