According to Trepp's warning, a $130.1 million commercial mortgage-backed securities (CMBS) hotel loan secured by the 1,004-room Los Angeles Airport Marriott is on the servicer's watch list due to a declining debt-to-service ratio.
The rate drop was primarily due to rising operating and capital expenses, as well as increases in the department's room and food costs, according to the alert. This change in circumstances came on the heels of the loan being required to be modified to allow it to be repaid in 2022 after it was deemed at least a year and a half delinquent, Trepp explained.
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The fundraising, which began in 2017, was led by Ladder Capital, records show. The company did not respond to requests for comment.
The hotel, at 5855 West Century Boulevard, was built just outside the grounds of Los Angeles International Airport in 1972. XLD Group, the U.S. subsidiary of China-based Sichuan Xingli Group Corporation, acquired the asset in December 2014 for $135.4 million at a time when Chinese investment was pouring into the Los Angeles real estate market. It was reported at the time as the largest hotel sale in Los Angeles County that year.
The property's valuation fell to $182 million in April 2021, down about 40% from its valuation of $300.8 million at the time of securitization, according to Trepp's report.
Hotel occupancy rate for 2023 is at 85.9%, up slightly from 83.8% in 2022, Trepp said.
Gregory Cornfield can be reached at gcornfield@commercialobserver.com