Business Week is reporting that the foreclosure rate of hotels in California quadrupled between 2008 and 2009. According to Atlas Hospitality Group, there were 62 hotel foreclosures in California in 2009 compared to just 15 foreclosures in 2008.
A possible reason for the drastic increase in foreclosures? Business travelers and vacationers have cut spending in this tough economy. As a result, hotel and lodging owners are having trouble paying their bills and keeping up with their debts. The Business Week article also states that many owners added additional rooms and square footage to their properties from 2004 to 2007, when it was easy to get financing and the economy was doing well. Now they are having trouble paying back that financing. In fact, 81% of the troubled hotel loans in California originated between 2006 and 2007.
Alan Reay, president of Atlas Hospitality Group, believes things are only going to get worse. A lot worse. As of last month, approximately 1,200 loans totaling more than $28 billion were included on a performance watch-list by Realpoint LLC.
In total, Los Angeles had six hotel foreclosures and 33 hotels in default. The Marriot Hotel in downtown Los Angeles was the largest L.A. hotel to go into foreclosure.
Counties neighboring Los Angeles also saw an increase in hotel foreclosures. Riverside had 10 hotel foreclosures and San Bernardino had seven hotel foreclosures and 30 hotels in default.
Experienced Foreclosure Defense
Hotel owners are not the only people threatened with foreclosure. Countless homeowners throughout Los Angeles have lost their homes due to foreclosure. If the bank has threatened you with foreclosure, an experienced Los Angeles foreclosure defense attorney at the Law Office of Teresa Beyers can help. To learn more about our foreclosure defense services, contact the office today at (213) 236-4400!