A $653 million mortgage supported by Atrium Holding's simple and leasehold interests in 15 hotel properties will collateralize a commercial mortgage-backed securities deal from the Atrium Hotel Portfolio Trust 2025-ATRM.
The mortgage is cross-collateralized and cross-defaulted, so excess cash flow from well-performing properties can supplement cash streams from properties struggling to service their debt on time. This stabilizes cash flow in the deal, according to analysts at Moody's Ratings.
Analysts at Moody's Ratings assessed the notes, finding the notes have an adjusted capitalization rate of 11.25%. The five-year, first-lien mortgage is expected to mature on Aug. 9, 2030.
There is no amortization during the entire term, and the loan calls for monthly, interest-only payments based on the one-month Secured Overnight Financing Rate (SOFR), plus a spread of about 3.74% Moody's said. Moody's sets its loan-to-value ratio at 132.2%, and it finds the underlying mortgage has an actual debt service coverage ratio (DSCR) 1.05x.
Atrium Hotel Portfolio Trust uses a REMIC structure. It will make payments other than free prepayments up to the free prepayment amount. That cash flow will be applied pro rata to the deal components, and to the principal balance certificates.
The securitized notes have a rated final distribution date of August 2042.
Trimont is the securitization servicer, and CWCapital Asset Management will be on the deal as special servicer.
Moody's also notes that the properties underpinning the mortgage benefited from about $200.2 million in capital improvements between 2015, and May 2025. The portfolio is also geographically diverse, because the 15 properties are located within distinct markets across 12 states. North Carolina has the highest concentration of properties with 509 guestrooms. This represents about 21.7% of the Moody's net cash flow, the company said.
Moody's assigned ratings of Aaa, Aa3, A3 and Baa3 to classes A, B, C and D, respectively.
