The Sixty Beverly Hills Hotel's $40M Loan Goes Back To Special Servicing
A $40M loan issued on the Sixty Beverly Hills hotel was transferred to special servicing this month, according to a report from DBRS Morningstar. The loan was part of a CMBS package, which Morningstar tracks.
The Sixty's loan was interest-only for a five-year term. During the pandemic, it went to special servicing and was granted a forbearance that pushed its maturity date to this month, the report says. The loan's maturity is now listed as February 2024, suggesting the borrower had and used another option to extend, Morningstar reported.
"The hotel’s 2022 net cash flow has recovered from the depths of 2020 but was still 23% short of issuance underwriting," the report's author wrote.
While CMBS loans can head to special servicing for missed payments, there are other conditions that can result in a special servicer being brought in, including debt-coverage ratios not being met.
Last year, a new restaurant with a wine shop and coffee bar opened on the ground floor of the Beverly Hills hotel. The 118-room, eight-story property also features a rooftop pool and bar.
A representative for Sixty Hotels didn't immediately respond to a request for comment.
The Sixty brand of hotels was founded by hotelier Jason Pomeranc and his brothers Lawrence and Michael Pomeranc. Earlier this year, they sold the 97-room Sixty SoHo hotel for $109M, Commercial Observer reported.
Hotel sales in Los Angeles County declined nearly 53% in the first half of 2023 compared to the same time last year, a casualty of high interest rates and big gaps between buyers' and sellers' price expectations, industry watchers said.
