Isn't Sanfransicko a paradise of liberal government?
Aaaaannnnnd the dominoes begin to fall.
Who owns that debt?
The city will acquire them at fire-sale prices and fill ‘em with illegals.
Let’s go Brandon!
Weakest euphemism I have seen.
This could all be fixed if every one of the 81,000,000 Democrats who voted for Biden would donate $10.
Hmmm, who would have thought that people wouldn’t want to stay in a hotel located in a legalized-crime zone?
It’s puzzling.
San Francisco recommends that convention attendees wear heavy leather hiking boots to protect themselves from bloody needles and human excrement in the streets.
In New York,it will be commercial real estate that fails..No one wants to go back to the office.....
Therefore, you have this situation, and the ridiculous suggestion by the Mayor of New York that his flood of "migrants" be housed in private homes instead of trying a real-world solution like deportation, which would require an excruciating admission of error.
I’ve stayed at both over 25 years ago. Too bad. Signs of the times. San Francisco is a dying city
3000 rooms total - sounds like a GREAT PLACE for Biden’s Migrants.
Commercial real estate market in the big cities is going south fast. Add crime and crap everywhere to help SF lead the pack in devolution.
Uh, those are one in the same. Conventions eschew san frasicko because of the street conditions.
Liberal politicians. The bane of civilization and capital enterprise.
There’s something seriously wrong with this story. The loans mature in 5-6 months, so why not pay it off instead of forfeiting the collateral? I would bet (even in SanFran) that the two hotels are still worth way more than the remaining loan balance!
Had to look it up. Wikipedia: Nonrecourse debt:
Nonrecourse debt... is a secured loan ... secured by a pledge of collateral, typically real property, but for which the borrower is not personally liable. If the borrower defaults, the lender can seize and sell the collateral, but if the collateral sells for less than the debt, the lender cannot seek that deficiency balance from the borrower—its recovery is limited only to the value of the collateral. Thus, nonrecourse debt is typically limited to 50% or 60% loan-to-value ratios, so that the property itself provides "overcollateralization" of the loan.A mutual gamble. Could work out "less bad" for the borrower in an inflationary environment, depending on how many other assets they can write this off against. Meantime, the bank will face escalating depreciation and taxes, and decreasing market prospects. This could possibly start another domino cascade in banking circles.The incentives for the parties are at an intermediate position between those of a full recourse secured loan and a totally unsecured loan. While the borrower is in first loss position, the lender also assumes significant risk, so the lender must underwrite the loan with much more care than in a full recourse loan. This typically requires that the lender have significant domain expertise and financial modeling expertise.
The property could take a really long time to sell in the absence of a gubmit bailout. Come to think of it, maybe both sides already received assurances from Nanzi prior to the announcement. We will know if the lender tries to sue the borrower to keep them from leaving.