NEW YORK--(EON: Enhanced Online News)--Kroll Bond Rating Agency (KBRA) today released a report summarizing its views on the greater Miami lodging sector.
The performance of the Miami lodging market continues to decline after posting record RevPAR levels in 2015. Visitation levels were impacted in 2016 by several factors including additions to supply, economic and political woes in Latin America, a strong US dollar, and concerns about the Zika virus.
There were 3,296 keys under construction in the Miami area as of October 2016, which will result in an increase of existing room supply of 6.0%. This is the seventh highest amount within the top 25 markets, as defined by Smith Travel Research, after New York, Seattle, Denver, Dallas, Nashville and Houston.
KBRA expects that the Miami lodging market will continue to be negatively impacted over the next one to two years due to the aforementioned factors including additions to supply coming online, the continued strength of the US dollar, economic pressure in Latin American feeder markets, macroeconomic and political uncertainty, potential concerns about the Zika virus, and the partial closure and renovation of the Miami Beach Convention Center.
The total exposure to the CMBS market in Miami is $1.6 billion, spread across 29 loans. None of the loans were identified as a KBRA Loan of Concern (K-LOC), loans that are either in default or at a heightened risk of default in the near term. Since the last publication in June 2016, 13 loans have paid off. Of those, KBRA was only able to identify one that was refinanced in a CMBS transaction. The $18.5 million, 10-year loan was securitized in JPMDB 2016-C4 (KBRA rated), and is secured by the Beacon Hotel South Beach that is located on Ocean Drive between 7th and 8th Streets.
Please click here to access the report.
Related Publications: (available at www.kbra.com)
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KBRA is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (NRSRO). In addition, KBRA is recognized by the National Association of Insurance Commissioners (NAIC) as a Credit Rating Provider (CRP).