The Hilton Portland, Oregon ($240 million 2019-PLND) SASB CMBS is facing a potential total loss.  Originally valued at $340 million at origination in 2019 when it was owned by Brookfield, the loan entered special servicing during COVID and was foreclosed on in 2023.   

One challenge is that the loan has $56 million of servicer advances against the most recent appraisal of $58 million.  The loan is deemed non-recoverable and additionally has $45 million of non-recoverable interest. The collateral consists of 782-keys in two hotels: the Downtown Hilton and the nearby boutique Duniway Hotel. This loan serves as a reminder of the risks associated with single asset securitizations.  

The largest losses in single asset securitizations have historically been concentrated in outdated office, retail, and to a lesser extent, hotel properties.  This asset also highlights the risks associated with servicer advances that, as here, have a senior claim to the CMBS bonds and can require all of the property’s remaining value to be repaid.

While unusual to face a total loss, single assets such as PLND serve as a cautionary tale for CMBS investors.