From Hotel Law Blog
The number of hotel defaults or foreclosures in California has jumped 125% in the last 60 days. California now has 31 hotels foreclosed on and 175 hotels in default.
Approximately 2,500 California hotels were either financed or refinanced between 2005 and 2007.
California hotel values today are estimated to be 50-80% lower than at market peak in 2006-2007.
Alan Reay says that this means that there is no equity left in virtually any of the 2,500 hotels financed in 2005-2007.
It’s the usual suspects here. Inflated values for properties fueled by cheap money and companies taking on massive amounts of debt. It’s like what happened in home housing. Expect bankruptcy filings.