CHICAGO-In a new report, Jones Lang LaSalle Hotels says transactions involving large portfolios of hotel notes, along with increasing sales of bank real estate owned hotel properties, will take center stage in 2012. The collections, in excess of $150 million or collateralized by multiple select properties, will be in greater demand as investors look to put capital to work in search of higher returns, according to the company.

In 2009 to 2010, notes that were not good candidates for restructuring were put on the market by special servicers or lenders as the best way to dispose of a transaction in the absence of financial liquidity from borrowers. Mathew Comfort, EVP with JLL Hotels, tells GlobeSt.com that in many cases the servicers’ only choice was to liquidate via a note sale, which frequently happened at a deep discount due to uncertainty in operating performance and a lack of experienced note buyers.

Now, nearly $21.7 billion of hotel CMBS loans are maturing in 2012 and many of these loans have already been extended at least once. "Lenders are seeing an opportunity to bring these non-performing assets that have been weighing down their balance sheets to market," Comfort said. "Many of the 2006 and 2007 vintage loans have undergone workouts, giving them extensions of 12 to 24 months. However, banks and special servicers are realizing the time is right to divest these assets as the discount to par is not as significant as it's been over the past two years."