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Uniondale Marriott a drag on Chase

Marriott

Marriott Photo Credit: Bruce Gilbert

The Fitch Ratings agency has singled out lower-than-expected room revenues at the Long Island Marriott and Conference Center, in Uniondale, as one of the top contributors to expected loss in some JPMorgan Chase commercial mortgage securities.

The expected loss led Fitch to downgrade some of the bank’s mortgage-backed securities.

The rated securities are based on a pool of commercial mortgage loans to a variety of businesses nationwide.

The Marriott in Uniondale is the second-largest contributor to the JPMorgan pool’s losses; the top contributor is a Westlake, Texas, office complex.

The loan is current in the Marriott mortgage, Fitch noted.

However, the Marriott’s revenue per available room (or RevPAR) as of September 2010 was $102, based on an occupancy rate of 69 percent and an average daily room rate of $148.

“The issuer originally underwrote the loan assuming a stabilized RevPAR over $130 to be achieved by January 2010,” Fitch analysts said.

The financial instruments downgraded are series 2007-LDP10, issued by JPMorgan Chase Commercial Mortgage Securities Corp.

Fitch disclosed the mortgage securities details in a January 2011 distribution. At that time, “the pool’s aggregate principal balance has decreased 1.4 percent to $5.26 billion from $5.33 billion at issuance ... [with] cumulative interest shortfalls in the amount of $20.4 million,” according to the distribution.
 

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