"This is the first CMBS hotel loan that I know of in California that has been marketed for sale from a special servicer," Reay says. "We've seen portfolio offerings of a mixed bag of assets, but this is the first time that we know of that they have listed a note for sale from an individual hotel."

The property is the 182‐room Ramada Plaza Hotel located at 2151 Hotel Circle South in San Diego, which includes an outdoor heated pool and spa, a fitness center, valet services and an on‐site restaurant and lounge. The hotel was purchased in August 2000 for $15.96 million and the loan, now in default, matured in January 2009.

"This loan was originated in 1998, and the buyer assumed it in 2000, so to have a loan this seasoned be in trouble speaks volumes about how deep and how far this market has fallen," Reay says. He notes that most of the distressed hotel loans that Atlas is tracking were from the period 2005 through 2007, representing about 81% of the troubled hotel loans in California."

Although this is the first CMBS hotel loan in California that Atlas is aware of that is being marketed widely and publicly, Reay says it's possible that some others are being marketed quietly. The Ramada loan is one of about 850 CMBS hotel loans in California, he says.

The Ramada loan is being marketed without an asking price. The face amount on the $12.75 million loan is about $10 million now. "It's hard to believe that you could put a loan on a property in 1998 and 12 years later not have any equity left," Reay says.

San Diego is a strong market, historically, but has suffered along with others markets during the downturn, the Atlas president says. "It's a market with a lot of product, but it's a strong tourist and business market, so it is very desirable from the long-term standpoint, It always come back," he says.