NEW YORK--(BUSINESS WIRE)--Net operating income (NOI) for hotels continues to recover and multifamily has been stable through the recovery, Fitch Ratings says. But some regional hotel weakness may continue as the broader economy's recovery remains spotty.
NOI for Fitch-rated CMBS improved nearly 3% year over year, led by hotels and multifamily properties. Servicer-reported NOI improved by 2.7% year over year in 2012, compared with 0.8% in 2011 and a 0.9% decline in 2010.
Overall hotel NOI growth remained strong at 8.2% year over year. Hotels most notably improved in Hawaii, where NOI was up 30% for the six properties in Fitch's portfolio. The largest included the original $425 million Four Seasons Resort Maui loan (whose NOI rose by 13%) and the original $350 million senior loan on the Marriott Waikiki (NOI up 32%).
However, performances of hotels in Washington, D.C. were weaker, with NOI falling by over 7% overall. Twelve of the 16 Fitch-rated transactions with properties there experienced year-over-year NOI declines. The most notable was the $190 million Renaissance Mayflower Hotel loan, down 16% year over year and 50% below the issuer's pro forma underwritten amount.
Multifamily NOI growth in 2012 was positive in nearly all states; Illinois and Colorado led the pack, with year-over-year NOI gains of more than 10%. Three notable Chicago properties contributed to the strong NOI gains: the $325 million Presidential Towers (up 30%); the $146 million Grand Plaza (12%); and the $123 million Hyde Park Apartment Portfolio (23%).
Additional information is available on www.fitchratings.com.
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