Ashford Hospitality Trust Gets Forbearance To Work Out 17-Property CMBS Loan
Ashford Hospitality Trust is in talks to extend the maturity date for a $409.8M CMBS loan secured by 17 hotels that matured last week.
The Dallas-based hotel REIT announced Tuesday that the company negotiated a 90-day forbearance with the holder of a Morgan Stanley pool loan that was originally set to mature on Nov. 9.
The company's release said it expected to reach a multi-year extension agreement within the forbearance window.
"We are currently in active discussions with lenders regarding extensions and refinancings on several of our loans,” Ashford CEO Stephen Zsigray said in a statement. “While it continues to be a challenging environment, we are working diligently to achieve attractive outcomes with our financings and maximize the value of our assets for our shareholders.”
The loan was originated by Morgan Stanley in 2017 for $427M and has since been paid down to $409.8M. It was securitized into the single-asset, single-borrower MSC 2017-ASHF CMBS pool. That loan was transferred to special servicing in August due to imminent monetary default, according to Morningstar.
Other than a late payment in September, Ashford has been current on the loan through October, according to the Morningstar Credit database. Hotels that serve as collateral in the loan pool include the 154-room Courtyard Atlanta Alpharetta, the 272-room Courtyard Arlington Crystal City hotel, the 220-room Embassy Suites Las Vegas Airport, the 242-room Hilton Houston NASA Clear Lake Bay and the 333-room Hilton St. Petersburg Bayfront hotel, according to Morningstar.
Trimont Real Estate Advisors is listed as the special servicer.
Since February, Ashford has focused on selling and refinancing assets to eliminate $2.7B in debt that is set to mature in 2026. Ashford has been trying to pay down the balance by the end of this year.
If Ashford could pay down the balance to $50M or less by Nov. 15, it would receive a discounted exit fee, CoStar previously reported. Zsigray said in the release Tuesday that Ashford reduced the balance to $48.6M, triggering the reduced fee.
The REIT has sold more than $310M in hotels since the start of the year and raised another $173M from the sale of non-traded preferred stock, CoStar reported.
Among its most high-profile dispositions, Ashford sold Hilton Boston Back Bay for $171M in April and the One Ocean Resort and Spa in Atlantic Beach, Florida, for $87M in June. It has also handed more than a dozen hotels to lenders to reduce its outstanding debt.
But during a Nov. 6 earnings call, Zsigray said the firm has seen a rise in interest in buying its marketed hotel assets and those it isn't putting up for sale as the bid-ask spread tightens and financing markets loosen up again.
“Certainly post the rate cut in September, I think we’ve seen an uptick in interest, particularly from institutional buyers,” Zsigray said. “We’ve certainly seen more interest in a number of our assets.”
