XLD Group has hit a snag on a $130 million loan linked to the Los Angeles Airport Marriott hotel next to LAX.
The loan to the Pasadena-based unit of Sichuan Xinglida Group Enterprises, based in China, was put on a servicer’s watchlist for the hotel at 5855 West Century Boulevard, in Westchester, the Commercial Observer reported, citing an alert from Trepp.
The commercial mortgage-backed securities loan was placed on the watchlist after a drop in debt service coverage ratio for the 1,004-room hotel, built in 1972, according to the alert.
The ratio fell because of higher operating and capital costs, plus a rise in departmental room expenses and food and beverage costs, Trepp said.
The change in status follows a modification needed to bring the loan current in 2022 after it became delinquent for at least a year and a half, according to Trepp. New York-based Ladder Capital led the financing for the hotel in 2017.
XLD Group, led by Jun Zhang, bought the hotel in December 2014 for $135.4 million, or $134,861 per room, at a time when Chinese investments poured into the L.A. real estate market.
It was the biggest hotel sale of the year in Los Angeles County, according to the Los Angeles Times. A year earlier, XLD bought the 487-room, 17-story Torrance Marriott South Bay hotel in Torrance for $74 million, or $151,951 per room.
In April 2021, the appraised value for the 18-story hotel near LAX fell to $182 million, a nearly 40 percent drop from the $301 million valuation made at securitization, according to Trepp.
Occupancy at the Los Angeles Airport Marriott was 85.9 percent last year, compared to 83.8 percent in 2022.
— Dana Bartholomew
