By Prabha Natarajan
DOW JONES NEWSWIRES


NEW YORK -(Dow Jones)- Hotels, which for more than a year have been struggling with a drastic drop in bookings, now lead all other classes of commercial real estate in delinquencies, data provider Trepp said Tuesday.

Payments on loans to hotel properties that were 30 days late or more hit a high of 15.32% in January. That matches Fitch Ratings' estimates that nearly 15% of the $51 billion in hotel loans that are securitized into commercial mortgage bonds will turn delinquent over the course of this year.

With another few months to go before the commercial real estate market is expected to hit bottom, the deterioration in hotels is likely to worsen.

Other types of commercial real estate are also suffering, if not as much as hotels. Industry-wide delinquencies on commercial mortgages shot up to a record 6.5%, having surpassed 6% for the first time in December, according to Trepp.

Commercial real estate in the past year has deteriorated rapidly, as the number of companies and stores that rent buildings have shrunk in response to the economic downturn. In turn, this has crimped cash flow for building owners, and made it difficult for them to keep up with their mortgage payments.

However, the hardest-hit property type continues to be hotels, especially resorts and high-end properties. With company travel budgets slashed, and consumers hesitant to take vacations, particularly expensive vacations, hotels are grappling with a severe drop in their nightly occupancy rates.

In 2009, hotels averaged a 55% rate of occupancy, pushing revenue per available room down to $54, off nearly 17% the previous year, and twice its initial projections, according to Smith Travel Research.

The Renaissance Mayflower Hotel in Washington, which had such troubles, had to enter special servicing last month. That would permit the company to explore ways to make its $200 million loan current or liquidate it.

The $130 million Trinity hotel portfolio also tripped up on its payment last month.

Meanwhile, the move by the owners of Peter Cooper Village/Stuyvesant Town in New York to turn the property over to its creditors is expected to push multifamily loans into a higher rate of deliquency--13% from 9.71% in January, according to Trepp.

While the multifamily sector continues to enjoy financing of loans through Fannie Mae (FNM) and Freddie Mac (FRE), the performance of properties has deteriorated as rents have had to drop, and occupancies have nosedived.

For recovery, "job growth needs to return to the economy," said Mark Obrinsky, chief economist at the National Multi Housing Council, a Washington-based trade group.