In the world of commercial real estate, we don’t use the clever residential phrase ‘Jingle mail;’ Rather, the preferred term is “Default & Forfeiture.”

The WSJ:

hotel-20090814‘Jingle mail” isn’t just for homeowners anymore. From San Diego to Dearborn, Mich., an increasing number of hotel owners in the U.S. market are simply walking away from money-losing properties and forfeiting them to lenders.

The rise in hotel forfeitures is the product of the worst hotel market since the early 1990s, with revenue declining by double-digit percentages. That has pushed the value of many hotels to less than the balance on their mortgages. Just like homeowners who mail their house keys back to the bank — so-called jingle mail — hotel owners see no hope in renegotiating their loans . . .

To be sure, a delinquency doesn’t immediately or always translate to foreclosure. It often takes several months for a lender to foreclose on a property with a delinquent mortgage. And some delinquent borrowers manage to negotiate with lenders to avoid foreclosure or file for bankruptcy protection to thwart it.

What is striking about the current trend is that several of the companies forfeiting hotels are publicly traded.“    (emphasis added)

This is completely unsurprising . . .

>

Source:
Hotels Deliver Some ‘Jingle Mail’
By KRIS HUDSON
WSJ, AUGUST 15, 2009

http://online.wsj.com/article/SB125029276280433451.html

Category: Credit, Real Estate

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

16 Responses to “‘Jingle Mail’ Comes to Hotels . . .”

  1. call me ahab says:

    “an increasing number of hotel owners in the U.S. market are simply walking away from money-losing properties and forfeiting them to lenders.”

    you see people- if the big guys can do it – why can’t you-

    on another note- it saddens me that my 20 yr old refrigerator has collapsed in the line of duty- it turns on- but alas- its frosty chilliness is no more-

    so with much remorse- i must invest in the economy and buy a refrigerator-

    and it pains me

  2. Moss says:

    @ahab

    It could be repairable.. Take off the back and see what beckons.

    When people do it they are irresponsible ‘losers’. Is that what Rick Santelli called them?
    When corporations do it; it is good business practice, maximizing shareholder value.

  3. V says:

    Never-mind the REIT index will keep rallying on through!

  4. call me ahab says:

    moss says-

    “When corporations do it; it is good business practice, maximizing shareholder value . . .When people do it they are irresponsible ‘losers’.

    of course- but- people should take heed and follow their lead- no shame- especially in today’s economy- people will understand and might in fact put their fist in their air in a sign of solidarity against the man-

    i will take your advice and have a look- but i am not hopeful

  5. so with much remorse- i must invest in the economy and buy a refrigerator-

    On the bright side at least the GDP will go up a point ;)

  6. Bruce in Tn says:

    Going for a long hike this morning…but good morning all.

    I thought that the Statistical Recovery, Part Two, that is in the think tank had one very sobering chart about foreclosures in general…(the last chart)…

    It appears the foreclosure rate next year will be higher than this year, and that 2011 will be at least as bad as 2009…if that occurs, no matter how many 70′s of billions we give to GM, or how many Prius’s are sold to Americans under the cash for clunkers…industry will not revive…

    Look, these government programs don’t work out like they are envisioned…

    Social securtiy…seemed like a good idea…funded in a way, that looking back, has now turned it into an albatross…

    Medicare…seemed like a good idea…funded in a way, that looking back, has now turned it into an albatross…

    Bailouts…seemed like (partially) a good idea…funded in a way, that in the future looking back….and yada yada yada…

    Beautiful day here in east Tennessee!

  7. Greg0658 says:

    I believe President Obama’s Team is on the right track pushing “Energy Jobs” to replace the over built “Buildings Industry” and cease the outflow to foreign oil fields (I don’t care if they are US Corp Headquarter owned) we need to be into the “Green” fledgling industries.

    Altho .. since I am an “anti-cash-er” the “Cap n Trade” plan is not favored (as I understand it), since it sifts money thru marketeers fingers and that has not worked out well recently.

  8. Winston Munn says:

    Shame of the predatory borrowers for taking advantage of the honest, hard-working banksters, whose only concern is that we – the American public – get a good night of sleep and a mint on our pillow.

  9. call me ahab says:

    greg-

    please expand on the “energy jobs” you speak of- what are they- where are they- and how mush is the USG investing-

    they need to get that message out a bit better if in fact it is as you say- because i was unaware

  10. call me ahab says:

    common man says-

    “On the bright side at least the GDP will go up a point”

    that is what pains me- i am trying my best to be a do my part in a non-violent protest by buying no disrectionary purchases-

    all Americans should be paying down debt or walking away if necessary-bleed the banks of their “bogus profits”- I refuse to be part of any attempt by the USG to get “back to business as usual”

  11. Greg0658 says:

    disclosure .. I dont get paid by the WH to blog for that branch of government .. 1 of 3 (or better)

    Progress
    - The American Recovery and Reinvestment Act included more than $60 billion in clean energy investments that will jump-start our economy and build the clean energy jobs of tomorrow:
    .. $11 billion for a bigger, better, and smarter grid that will move renewable energy from the rural places it is produced to the cities where it is mostly used, as well as for 40 million smart meters to be deployed in American homes.
    .. $5 billion for low-income home weatherization projects.
    .. $4.5 billion to green federal buildings and cut our energy bill, saving taxpayers billions of dollars.
    .. $6.3 billion for state and local renewable energy and energy efficiency efforts.
    .. $600 million in green job training programs – $100 million to expand line worker training programs and $500 million for green workforce training.
    .. $2 billion in competitive grants to develop the next generation of batteries to store energy.
    - Increasing, for the first time in more than a decade, the fuel economy standards for Model Year 2011 for cars and trucks so they will get better mileage, saving drivers money and spurring companies to develop more innovative products.
    - The President issued a memorandum to the Department of Energy to implement more aggressive efficiency standards for common household appliances, like dishwashers and refrigerators. Through this step, over the next three decades, we’ll save twice the amount of energy produced by all the coal-fired power plants in America in any given year.
    - Supporting the first steps of a legally-binding treaty to reduce mercury emissions worldwide.
    - On Earth Day 2009, the President unveiled a program to develop the renewable energy projects on the waters of our Outer Continental Shelf that produce electricity from wind, wave, and ocean currents. These regulations will enable, for the first time ever, the nation to tap into our ocean’s vast sustainable resources to generate clean energy in an environmentally sound and safe manner.

    visit for more notes:
    http://www.whitehouse.gov/issues/energy_and_environment/

  12. call me ahab says:

    thx greg-

    that’s a start i guess- wish the admin would have funneled more $ that way-

    it can’t be soon enough that we are rid of foreign oil- energy independence has been talked about since Nixon-

    to no avail- this country is addicted to cheap oil- and our living patterns are based around it- like i said-

    it can’t happen soon enough

  13. Moss says:

    @ahab,

    I think energy independence is not realistic in our lifetime. What we must do is mange the situation.
    As u say cheap oil has skewed a rational strategy on energy. Much like what cheap money has done to foster debt. Denial is a powerful force.

    There are many innovative and cost effective solutions to assist in the necessary transition. One of the best innovations I have seen is whats known as vertical wind power technologies. A few noteworthy companies are Helix (public) and Maglev Wind Turbine Technologies. (private).

  14. Mannwich says:

    My wife received this email today from Ivy Hotel & Spa in Minneapolis. More of these to come, I imagine. Many more……

    Valued Ivy Spa Club Guests –

    Greetings! I wanted to let you know about some changes taking place on The Ivy property. At this time, a court-appointed receiver has been assigned to Hotel IVY. Throughout this transition, Ivy Spa Club will continue to be open for business and operate without interruption. Ivy Spa Club will continue to be a completely separate business entity from Hotel IVY, with independent ownership and management. These changes at Hotel IVY will not diminish the superior spa services, membership or amenities that Ivy Spa Club provides to its members and guests.

    The official press release with complete details can be viewed on our website.

    We are excited about the changes at Hotel IVY and know they will only serve to enhance our delivery of Simply Beyond™ world-class spa and fitness service to you. If you have any questions or concerns, please don’t hesitate to contact myself or Ryan Jensen, Spa Manager, at ryanj@ivyspaclub.com or 612.343.3131.

    Warmest Regards –

    Pamela Margolis
    Owner, Ivy Spa Club
    612.343.3131
    pammargolis@ivyspaclub.com

  15. Bruce in Tn says:

    Back from my long hike…magnificent country…one observation.

    Went to the Big South Fork…this is a horseman’s, canoer’s, hiker’s paradise in East Tennessee…today the highway there is absolutely littered with for sale and foreclosure signs…it has been several months since my wife and I have been to this area, but just as an observation, the vacation cabin business ain’t what it used to be….

  16. Mike in Nola says:

    Didn’t notice this posted on other threads. Joel Klein on visits Vegas, the epicenter of the bubble. Amazing mindset:

    http://www.time.com/time/nation/article/0,8599,1915962-1,00.html