Ed Brock is an award-winning journalist who has worked for various U.S. newspapers and magazines, including with American City & County magazine, a national publication based in Atlanta focused on city and county government issues. He is currently senior editor at Asian Hospitality magazine, the top U.S. publication for Asian American hoteliers. Originally from Mobile, Alabama, Ed began his career in journalism in the early 1990s as a reporter for a chain of weekly newspapers in Baldwin County, Alabama. After a stint teaching English in Japan, Ed returned to the U.S. and moved to the Atlanta area where he returned to journalism, coming to work at Asian Hospitality in 2016.
THE RECENTLY PASSED $2.2 trillion Coronavirus Aid, Relief, & Economic Security Act may provide some financial assistance to hotels suffering from the COVID-19 pandemic’s economic shutdown, but it doesn’t cover everything. CMBS loans, or conduit loans, are not covered in the bill, according to recent AAHOA webinar.
Berk said the CARES Act provides Small Business Administration loans.
“There isn’t much that we’ve seen that helps with the CMBS loans side of it except perhaps the 2.5 times payroll loan and perhaps loan forgiveness and some accelerated depreciation,” he said. “At the end of the day I think there’s going to have to be some legislative action to deal with CMBS loans and the problems that are created.”
The government intervention is necessary because of the way CMBS loans are structured, Berk said. A loan servicer acquires multiple loans that they then sell or “securitize”.
“The loan payments from all those loans go to something called the ‘master servicer,’” Berk said.
The master server is usually a big company, like Wells Fargo or Midland that actually collects the checks and sends out statements.
“After the master servicers, there’s something called a special servicer,” he said. “There’s an agreement between the master servicer and the special servicer and the special servicer deals with bond holders.”
The group loans are converted into bonds and sold to pension funds, such as those for teachers and firefighters.
“If they granted relief, if the special servicer said ‘Hey, we’ll give you three months relief, Mr. hotel owner,’ if they did that enough, all those people who receive pensions all of a sudden would not receive their pensions, or at least would not receive their full pensions,” Berk said.
There is no one approach to communicating with servicers, Berk said.
“I don’t know under each specific situation how a special servicer is going to react, but I do know that they’re going to react differently for different people,” he said.
Overall, however, it is important to communicate with the servicers and to do all you can to maintain the loan and make payments.
Near the end of the webinar, Berk revisited the topic of the SBA and PPP loans in the CARES Act and whether they violate CMBS loan terms.
“They’re called loans, which generally would be a bad thing, but then they say they’ll be forgiven, which isn’t a loan. That’s called a grant,” Berk said. “It’s a nuance that I think the government has to clear up.”
In the end, he said, more legislation will probably be necessary.
“There’s lots of things in [the CARES Act] that weren’t addressed, lots of questions and hopefully some new legislation that I know AAHOA and their PAC are actively working on will button up a lot of this stuff and make it tighter so that all of us have a little more direction,” he said.
Sonesta launched Americas Best Value Studios, an extended-stay version of ABVI.
The model targets owners seeking limited front desk and housekeeping.
The brand meets demand for longer-term, value-focused stays.
SONESTA INTERNATIONAL HOTELS Corp. launched Americas Best Value Studios by Sonesta, an extended-stay version of its franchised brand, Americas Best Value Inn. The model targets owners seeking limited front desk and housekeeping, optional fitness center and lobby market along with standard brand requirements.
The brand aims to address the growing demand for longer-term, value-driven accommodations, Sonesta said in a statement.
"Americas Best Value Studios by Sonesta represents a strategic evolution of our trusted Americas Best Value Inn brand," Keith Pierce, Sonesta’s executive vice president and president of franchise development, said. "We are expanding our offerings to directly address the increasing demand within the extended-stay segment, providing a practical solution for travelers seeking longer-term lodging at value. This new brand type allows our local franchised owner-operators to tap into a growing market while maintaining the community-focused experience that Americas Best Value Inn is known for."
ABVI has a majority presence in secondary and tertiary markets, the statement said.
The extended-stay brand’s operational model features a front desk, bi-weekly housekeeping, on-site laundry and pet-friendly accommodations, Sonesta said. Guests can also earn or redeem points through the Sonesta Travel Pass loyalty program.
In August, Sonesta named Stayntouch its preferred property management system after a two-year review of its ability to support the company’s franchise model. The company operates more than 1,100 properties with more than 100,000 rooms across 13 brands on three continents.
By clicking the 'Subscribe’, you agree to receive our newsletter, marketing communications and industry
partners/sponsors sharing promotional product information via email and print communication from Asian Media
Group USA Inc. and subsidiaries. You have the right to withdraw your consent at any time by clicking the
unsubscribe link in our emails. We will use your email address to personalize our communications and send you
relevant offers. Your data will be stored up to 30 days after unsubscribing.
Contact us at data@amg.biz to see how we manage and store your data.