Although real estate fundamentals and valuations in the U.S. hotel sector are clearly on the rise, the overhang of distressed properties remains significant.

According to New York-based Trepp LLC, the percentage of CMBS hotel loans 30 days or more past due in June stood at 13.87% — second only to the multifamily delinquency rate of 16.48%. By dollar volume, delinquent CMBS hotel loans totaled $8.4 billion in June.

The good news is that the delinquency rate for CMBS hotel loans dropped 150 basis points from May to June. Over a 12-month period ending in June, the percentage of loans 30 days or more past due has fallen from 19.01% to 13.87%.
Against that backdrop NREI moderated a panel discussion, “Cleaning Up Distress,” at the Midwest Lodging Investors Summit in Chicago on Tuesday.

Several hundred hotel industry professionals descended on the Hyatt Regency McCormick Place for the three-day event hosted by Lodging Hospitality magazine, NREI’s sister publication. What follows are some sound bites from the panel discussion on hotel distress in the Midwest.

Read the rest of the story at National Real Estate Investor.