Robert H. Smith School of Business
The Motley Fool

Market Foolery Featured Podcasts

  • Facebook’s Growth & McDonald’s New CEO
    McDonald’s is lovin’ a new CEO.  Facebook’s mobile growth continues to astonish.  And Harley-Davidson struggles with a strong U.S. dollar.  Motley Fool Funds analyst Bill Barker discusses those stories and vast spectrum of Super Bowl snacks.
  • Apple, China & the iPhone’s Biggest Question
    Apple reports record profits, but as Motley Fool Funds analyst Tim Hanson points out, there is still one important question looming over the iPhone business.  Tim analyzes the recent elections in Greece and the investing landscape in China.  Plus he shares a key travel tip for anyone seeking good local cuisine.
  • Microsoft & Caterpillar Destroy The Dow
    Microsoft’s and Caterpillar’s lackluster earnings are enough to single-handedly take down the Dow Jones Industrial Average.  Plus we dip into the Fool Mailbag to discuss shorting stocks.
Capital Business
Posted at 06:36 PM ET, 01/30/2012

Drop in business travel threatens owner of Washington Ritz-Carltons

The owners of four Ritz-Carlton hotels — including those in Georgetown and the West End — are at-risk of defaulting on a $170.6
Both Ritz-Carlton locations in the District are at-risk of defaulting on a loan, according to Morningstar. (Andrew Harrer - Bloomberg)
million loan, according to the ratings agency Morningstar.

The loan is backed by four Ritz-Carlton hotels: the two in the District and two in New York City, at Battery Park and Central Park. The borrowers include Millennium Partners, the German insurance group ERGO Versicherungsgruppe AG and Provinzial Rheinland Lebensversicherung AG. A message left with Millennium Partners, based in New York, was not immediately returned.

Many hotels have regained momentum after the recession cut into room bookings and rates, enough so that many hotel owners are investing in multi-million dollar renovations of their properties to improve lobbies, bedrooms and bathrooms.

But industry analysts have raised concerns about whether the recovery could be sustained in the face of a still sputtering economy, diminishing demand and leveling room rates. Properties with owners who struggle to make or else miss loan payments sometimes end up on the market.

The borrowers of the Ritz-Carlton loan are at risk of defaulting and have cited an ongoing “lack of business travel” for the problems according to Morningstar and a report from Bloomberg.

“Expectations for the two Washington D.C properties have been in line with budget projections, as foreign travel was hampered by the recent appreciation of the dollar,” Morningstar wrote in its analysis of the loan.

Additionally the ratings firm added: “Management’s focus has been to keep operating expenses in check.”

The loan originated with Morgan Stanley, according to Morningstar. Wells Fargo Bank is managing the loan and C-III Capital has been named the special servicer.

Follow Jonathan O’Connell on Twitter at: @oconnellpostbiz

By  |  06:36 PM ET, 01/30/2012

Tags:  Ritz-Carlton, commercial real estate, Georgetown

Read what others are saying

    © 2011 The Washington Post Company