According to Trepp, the lodging delinquency rate for CMBS conduit loans in September came in at 23%, while the lodging special servicing rate came in at an all-time high 26%. Both numbers illustrate a sector that is rife with distress and has yet to find a real source of respite.
Trepp examined MSAs to determine the level of distress throughout the United States. New York, Chicago and Los Angles MSAs have the largest delinquency by dollar amount, while the Houston MSA had the largest delinquency rate by far at 72.3%. Delinquency rates in the New York, Chicago and Los Angles MSAs were 31.5%, 54.9% and 25.7%, respectively. Secondary MSAs exhibiting elevated delinquency rates include Portland (78.2%), Cleveland (58.9%) and Pittsburgh (55.7%). In addition, Portland reported the largest dollar amount of delinquency ($566.3 million).
One takeaway from the data is hotels in the state of Florida appear to be faring relatively well compared with the rest of the United States. The Miami MSA, while fourth in delinquency among top MSAs by dollar amount, has a delinquency rate of only 8.45%. Similarly, the secondary MSA of Tampa-St. Petersburg reports a delinquency rate of only 4.87%. These results support anecdotal evidence that “drive-to” leisure markets are faring far better that corporate, airport and convention hotels during the pandemic.