http://www.prismhotels.com/hoteldefaultblog.com Steve Van's thoughts on defaults Thu, 08 Jul 2010 20:44:43 +0000 http://backend.userland.com/rss092 en So its official- on the front page of today’s Journal- Banks are extending and pretending! Well we all know that. AND WE ALL KNOW WHY. No one individual or institution has any motivation to take the current 40% average write down hotel loans would require. As the Cowardly Lion ... http://www.prismhotels.com/hoteldefaultblog.com/2010/07/08/don%e2%80%99t-miss-today%e2%80%99s-wall-street-journal-article/ Where are we in the hotel default cycle? About the front left tire. A better analogy than baseball innings is the video we've all seen of crash testing a car. Slowly the bumper touches the barrier, then starts to crumple, then the hood cones, and the tire distorts..and that's where ... http://www.prismhotels.com/hoteldefaultblog.com/2010/06/15/hotel-crash-test-dummies/ Chew on this- recent hotel sales are producing a likely second asset bubble. Several recent transactions demonstrate large overpayment and potential problems later. Sales prices are 25 to 35% above what most industry veterans would pay. The buyers- private equity funds with commitments expiring (got to get the money out ... http://www.prismhotels.com/hoteldefaultblog.com/2010/06/14/emerging-double-bubble-hotel-assets-overvalued/ Shhhh…quiet ….don’t tell anyone….but…. A most important measurement of how hotels may recover just came out to silent acclamation. No one wants to talk about it. Stop reading if you are faint of heart. The plunge in RevPar started in October of ’08 after the Lehman melt down. Since then its been ... http://www.prismhotels.com/hoteldefaultblog.com/2009/11/18/the-bottom-is-dropping-out-of-the-bottom/ and the end is 26 months from now. The Fed and most lenders are driving Commercial Real Estate into a box canyon... you know the one with three tall sides and no way out...used in the old west to drive game into and ...kill...easily. And hotel loans are the lead ... http://www.prismhotels.com/hoteldefaultblog.com/2009/11/13/extend-and-pretend-will-be-bad-in-the-end/ Just when I thought I had heard all the bad news possible about hotels, I heard this from Mark Lomanno, President of Smith Travel Research, and THE most knowledgeable person in the industry about rate and occupancy.  For inflation adjusted ADR to reach 2007 levels, it could take the same ... http://www.prismhotels.com/hoteldefaultblog.com/2009/10/06/ulysses-average-daily-rate-and-diogenes/ I am sorry to report that Special Servicing just went above $50B ($50,000,000,000).  I know I will be persecuted by my hotel industry friends for "bearing bad tidings", "declaring the sky is falling" and "spreading panic” by means of this hoteldefaultblog you are reading.  (No one claims I am not ... http://www.prismhotels.com/hoteldefaultblog.com/2009/09/23/why-bad-news-is-good/ Well its only tangentially related to the hotel business, but for you overindulging grandparents or parents hoping to escape the stress of today’s hotel defaults…the Wizarding World of Harry Potter will open this Spring in Orlando at Universal Studios.  I highly recommend it.  When I watch Harry Potter with my ... http://www.prismhotels.com/hoteldefaultblog.com/2009/09/22/finally-some-good-news/ Here are some recent comments I have heard on the state of hotel defaults (and to protect the innocent and my relationships I won’t do attributions).   “Hotel owners are in a mass grave that hasn’t been discovered yet” (from a major hotel owner speaking, I guess, from the grave).   “What I, as ... http://www.prismhotels.com/hoteldefaultblog.com/2009/08/31/pundits-pithy-pontifications/ Read it today in the Wall Street Journal- top paragraph left hand side… “IF THE ECONOMY RECOVERS AS ANTICIPATED AND BERNANKE MOVES TO RAISE THE INTEREST RATES…”  If that happens then all the nightmares about floating rate hotel loans will come true.  Hotel loan recovery is a race that will ... http://www.prismhotels.com/hoteldefaultblog.com/2009/08/26/the-economic-race-hotels-will-lose/