The 1,004-room Los Angeles Airport Marriott hotel, located at 5855 West Century Boulevard, is facing financial challenges, with its $130.1 million commercial mortgage-backed securities (CMBS) loan being placed on the servicer’s watchlist.

The hotel, which was built in 1972 just outside the Los Angeles International Airport (LAX) property, has seen a drop in its debt service coverage ratio, leading to its placement on the watchlist. According to an alert from Trepp, the decline is mainly due to higher operating and capital costs, as well as increases in departmental room expenses and food and beverage costs.

This comes shortly after the loan was modified in 2022 to bring it current, as it had been delinquent for at least a year and a half prior. The loan was originally led by Ladder Capital in 2017.

The property was acquired by XLD Group, a U.S. subsidiary of China-based Sichuan Xinglida Group Enterprises, in December 2014 for $135.4 million, during a time when Chinese investment was flowing into the Los Angeles real estate market. This purchase was reportedly the biggest hotel sale in L.A. County that year.

However, the hotel’s appraised value has since dropped significantly, falling to $182 million in April 2021, a nearly 40% decrease from the $300.8 million valuation made at securitization.

Despite the financial challenges, the hotel’s occupancy rate has seen a slight increase, rising from 83.8% in 2022 to 85.9% in 2023, according to Trepp’s report.