Finance  ·  CMBS

CMBS Loan on Hollywood’s Biggest Retail Center Hits Special Servicing

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A $211.3 million commercial mortgage-backed securities (CMBS) loan secured by the former Hollywood & Highland mixed-use entertainment center in Los Angeles has transferred to special servicing due to an imminent maturity default, according to Trepp.

The five-level property, which rebranded as Ovation Hollywood in 2022, has grappled with occupancy and cash flow issues and was facing an August maturity date in the NCMS 2019-FAME transaction originated by Natixis nearly five years ago. 

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Occupancy levels at the 462,827-square-foot retail development owned by Gaw Capital USA and DJM were 77 percent as of 2023, according to Trepp. 

The loan’s debt service coverage was at 0.86x as of July 31, 2023, a 49 percent decrease from year-end 2022 when it was 1.69, according to data from CRED iQ

The property, which is in a tourist area of L.A. next to Hollywood Walk of Fame, was appraised  at $338 million when the loan was securitized in 2019, according to Trepp. Gaw Capital USA and DJM acquired the property in 2019 for around $320 million

Gaw Capital USA and DJM did not immediately return requests for comment.

Andrew Coen can be reached at acoen@commercialobserver.com