Hyatt lays off hundreds in Seattle with some properties on CMBS 'watchlist'

More than 700 employees at three Hyatt properties in downtown Seattle will be laid off by month's end, with about a quarter of the the job losses permanent, according to notices the state issued Thursday.

Some of the properties are secured by commercial mortgage-backed securities and are now on the CMBS "watchlist." Loan servicers use that label to indicate concerns over a borrower's ability to remain current on their mortgages, with issues ranging from minor maintenance to monetary default.

Layoffs and watchlists underscore the precarious state of the hotel industry, which is banking on a huge addition to the Washington State Convention Center in Seattle to spur demand, though that project is in peril as previously reported.

The Hyatt properties, owned by Seattle-based R.C.Hedreen Co., did not make their May debt service payments. Hedreen President David Thyer said that unlike other lenders, such as banks and life insurance companies whom borrowers can reach out and talk to actual people, CMBS trusts are opaque.The only way to get their attention is not pay.

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