Two San Francisco Hiltons Add to Woes of Commercial Mortgage-Backed Securities. Special Servicing Rate of Hotel CMBS Spiked to 26%

by Wolf Richter
Wolf Street

Four of the six hotels that hotel-REIT Park Hotels & Resorts owns in San Francisco are still closed as convention and business travel remains at near-zero.

Two Hilton hotel properties in San Francisco – the Hilton San Francisco Union Square, the Bay Area’s largest hotel with 1,921 rooms, and the Hilton Parc 55, both in the Union Square area – owned by hotel-REIT, Park Hotels & Resorts [PK], have now been added to the huge pile of hotel properties seeking relief on their mortgages that have been packaged into mortgage-backed securities (CMBS). Both hotels are still closed, though some other hotels in San Francisco have reopened.

Tourism remains a small fraction of its former glory. Leisure tourism, which has come back a smidgen from near zero, is only part of the problem for these hotels.

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