Here is a good article from Bloomberg on attempts to restructure $1.5 billion of debt on the old CNL Hotel REIT portfolio, which was bought by Morgan Stanley in early 2007, and which CNL has no current association. The $1.5 billion of debt is due on February 1 (Tuesday). One billion dollars of the debt is associated with just five trophy properties, and some of the trophy properties in the portfolio include:
The properties are the Grand Wailea Resort Hotel and Spa in Hawaii; the La Quinta Resort and Club and adjacent PGA West golf course in La Quinta, California; the JW Marriott Desert Ridge Resort and Arizona Biltmore Resort and Spa, both in Phoenix; the Doral Golf Resort and Spa in Miami; the JW Marriott Grande Lakes and Ritz-Carlton Grande Lakes, both in Orlando, Florida; and the Claremont Resort & Spa in Berkeley, California.At one point, the original CNL REIT owned the famous Hotel Del Coronado, located near downtown San Diego.
This quote could have been said about any property in any property class that was underwritten in 2005 to 2007:
The Doral, Claremont, Grand Wailea, Arizona Biltmore and La Quinta resorts have all suffered from a decline in revenue per available room and low debt service coverage ratio, according to Bloomberg data from last month.I'll try to follow what happens to the debt negotiations later this week.
“Based on operating figures for the first six months of 2010, none of the properties is performing above original underwriting,” Realpoint LLC, a Horsham, Pennsylvania-based credit-rating company, said in a January report about the five properties.