Houston’s hotels are floundering during the pandemic. Seventy-two percent of securitized lodging loans in the area are delinquent, according to securities data company Trepp, compared to 23 percent across the nation.
Trepp has predicted a "wave of foreclosures" over the next several quarters.
Social distancing measures meant to prevent the spread of COVID-19 have hit the hotel industry particularly hard. Former business travelers are meeting over Zoom instead of coffee; conventions, sporting events and festivals that once attracted visitors have been canceled; and though leisure travel has begun to return, many are opting to escape cities rather than visit them.
SHAKY DEBT: 'Wave of foreclosures' expected to hit commercial real estate market
Houston-area hotels are struggling more than its peer cities, including Dallas and Austin. While loan payments on $720 million of the $995 million in Houston-area hotel loans that have been packaged into commercial mortgage-backed securities and sold to investors are behind on their payments, only $248 million out of $1.48 billion (23 percent) is delinquent in the Dallas area and $310 million out of $886 million (35 percent) in Austin.
That's because Houston's hotel market is dealing not only with the pandemic but also an energy bust, according to commercial real estate firm CBRE. Houston is likely to take longer to recover than will the nation and other major Texas markets because of complications in energy-related industries, according to the company. It predicted Houston's hotel market may not recover to pre-pandemic levels until 2024.
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October 19, 2020 at 04:00PM
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72 percent of Houston hotel loans are in danger during pandemic - Houston Chronicle
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