OHLA CMBS Sign-On

Despite the many helpful steps that have been taken to help American businesses in general and the hotel & lodging industry specifically, one massive problem is looming for a large portion of our industry – imminent payments, deadlines, and negative actions in the CMBS lending market.
 
Recent steps which included the issuance of federal regulatory guidance to traditional lenders, and the Order by the Governor of the State of Ohio requesting forbearance, have not had a significant impact on CMBS lenders. Businesses like mine, and many others in Ohio and across the nation, continue to face CMBS demands, referrals to Special Servicers, and the risk of default.
 
If not addressed quickly and definitively, Ohio and the entire United States face a series of events that will permanently damage the economy. The triggering event of a wave of foreclosures and lenders being forced to take ownership of distressed hotel properties on a large scale will lead to the permanent loss of jobs of hundreds of thousands of hotel workers and closure of those properties. This result will crash through the commercial real estate market and the overall economy like a tsunami.
 
As a member of the industry most severely impacted by COVID-19, I join my colleagues and counterparts to urge our elected officials and policymakers to recognize this urgent problem and to take necessary steps, including:
 
 - Federal regulatory guidance specifically to CMBS Servicers giving them the direction they need to provide flexibility to borrowers
- Creating a fund at the federal level to provide relief to the businesses in our industry with $86 billion in CMBS debt
- Amending existing Chapter 1319 on Nonrecourse Mortgages in the Ohio Revised Code to include additional borrower protections
 
The negative economic impacts of COVID-19 are in many ways continuing to work their way through our businesses and the financial system. We are a long way from seeing business return to normal in our industry. Decisive action on CMBS lending issues will allow many businesses and employers to help lead our state and our nation back to economic recovery.

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