Finance  ·  CMBS

CMBS Loan Backed By 1,000-Key LAX Marriott on Servicer Watchlist

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A $130.1 million commercial mortgage-backed securities (CMBS) hotel loan backed by the 1,004-room Los Angeles Airport Marriott is on its servicer’s watchlist after a drop in debt service coverage ratio, according to an alert from Trepp.

The rate decreased mainly because of higher operating and capital costs, as well as increases in departmental room expenses and food and beverage costs, per the alert. This change in status comes shortly after a modification was needed to bring the loan current in 2022 after it was deemed delinquent for at least a year and a half, Trepp explained. 

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Ladder Capital led the financing that originated in 2017, records show. The lender did not return a request for comment. 

The hotel at 5855 West Century Boulevard was built in 1972 just outside of the property of the Los Angeles International Airport. XLD Group, a U.S. subsidiary of China-based Sichuan Xinglida Group Enterprises, acquired the asset in December 2014 for $135.4 million during a time when Chinese investment was flowing into the L.A. real estate market. According to reporting at the time, it was the biggest hotel sale of the year in L.A. County.

Trepp’s report added that the property’s appraised value fell to $182 million in April 2021, a nearly 40 percent drop from the $300.8 million valuation made at securitization.

The hotel’s occupancy was 85.9 percent in 2023, a slight increase from 83.8 percent in 2022, per Trepp

Gregory Cornfield can be reached at gcornfield@commercialobserver.com.