The distress in the commercial real estate market continues to worsen as Hollywood's biggest retail center, the Hollywood & Highland mixed-use entertainment center in Los Angeles, faces a CMBS loan default. The $211.3 million CMBS loan secured by the property has been transferred to special servicing due to an imminent maturity default. The property, owned by Gaw Capital USA, has been grappling with occupancy and cash flow issues and was facing an August maturity date. As of 2023, the occupancy levels were at 77%, and the loan's debt service coverage was at 0.86x as of July 31, 2023. The property was appraised at $338 million when the loan was securitized in 2019. Gaw Capital USA and DJM purchased the property in 2019 for around $320 million [146ff780] [4356afb3].
In related news, AMC Entertainment Holdings, the parent company of AMC Theatres, is in confidential discussions with its lenders to reduce its debt load and extend near-term maturities. AMC has long-term borrowings of approximately $4.5 billion, with over $2.8 billion in maturities due in 2026. The negotiations are ongoing, and a final decision has not yet been made. In May, AMC raised $250 million in new equity capital to improve its gearing level [4d032df5].