CMBS Loans on The Mark Hotel, Embassy Suites Hit Special Servicing
As the coronavirus pandemic rages on, more and more properties are feeling the brunt of its impact. Unsurprisingly, hotels are among the worst hit.
The CMBS loans on two Manhattan hotels recently entered special servicing, according to an alert from Trepp; the $115 million The Mark Hotel loan and the $108.8 million loan backed by the Embassy Suites in Midtown West. May loan payments were not made in both cases.
The Mark Hotel loan, which comprises the J.P. Morgan-sponsored JPMCC-2017-MARK transaction is backed by the 152-key Upper East Side asset at 25 East 77th Street. The debt transferred to special servicer Wells Fargo on April 15 due to imminent monetary default.
The borrower, Alexico Group, is cited in special servicer commentary as stating that COVID-19 caused an “unprecedented decline” and “requested certain accommodations related to their mortgage obligations so that all revenue can be used to pay for necessary property expenses,” according to special servicing notes. Negotiations are ongoing, per remittance comments cited by Trepp.
Further downtown, the $108.8 million CMBS loan backed by the 310-key Embassy Suites by Hilton New York hotel at 60 West 37th Street transferred to Midland Loan Services, its special servicer, after not making its April loan payment. The loan is behind the single-asset JPMCC 2019-EMBS deal. Midland has issued a notice of default notices to Hilton as well as the mezzanine lender, Trepp commentary notes.
The hotel is owned by Ashford Hospitality Trust. The asset’s acquisition in January 2019 marked the REIT’s first New York City purchase, with the firm paying $195 million for the Garment District property.
Officials at Alexico and Ashford Hospitality Trust didn’t immediately respond to requests for comment.