Friday, August 21, 2009

Hotel Burnham defaults

Crain's reports (sorry no link) that the Chicago Hotel Burnham missed it's July and August payments.

“We’re not in a desperate situation here,” Mr. McCaffery says. “There’s no intention on my or Barry Mansur’s part to let this hotel go.”

The problem, according to Mr. McCaffery, is that he can’t start restructuring negotiations until the loan falls into default. A CMBS borrower typically can seek relief only after a loan is transferred to a so-called special servicer hired to work out problem loans in the pool. That hasn’t happened yet with the Hotel Burnham loan.

The hotel could cover its monthly payments if necessary, Mr. McCaffery says, but “you can’t get their attention until you default.”

The loan is in GG10 and has a 0.81x NCF DSCR (despite what the story says about the "Bloomberg data" where the property is cash flowing) - the NOI DSCR is 1.01x for the 1Q 09 TTM.

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