Oct. 26 (Bloomberg) -- Commercial real estate debt backed by four luxury hotels including the Four Seasons in New York may be downgraded by Standard & Poor’s because of a drop in cash flow from the properties.

S&P placed 15 classes of bonds backed by a $425 million loan to TY Warner Hotels & Resorts on “credit watch with negative implications” after net cash flow from the properties fell 46 percent below S&P’s expectations, the bond rating company said in an Oct. 21 note. The loan is scheduled to mature in January 2010 and has one 12-month extension option remaining.

“The loan is currently failing a debt-service-coverage hurdle that it must clear in order to qualify for an extension,” Standard & Poor’s said.

Luxury hotel owners risk defaulting on their debt as the recession cuts occupancies and the credit crunch constrains refinancing. Loans secured by more than 1,500 hotels with a total outstanding balance of $24.5 billion may be in danger of default, according to Realpoint LLC, a credit rating company that tracks commercial mortgage-backed securities.

The loan backed by the Four Seasons in Manhattan and three other properties was sent to a special servicer on Oct. 16, 2009, according to Standard & Poor’s.

Donna Snopek, chief financial officer of Ty Warner Hotels, didn’t respond to telephone messages or an e-mail seeking comment.

Net cash flow for the properties S&P placed on watch was $29.4 million in the 12 months through this past June, Standard & Poor’s said in its note. Occupancy at the hotels dropped to 58 percent from 69 percent for the year ended Dec. 31, 2008, S&P said.

In addition to the Four Seasons in New York, the three other hotels backing the loan are the Four Seasons Biltmore Resort in Montecito, California; the AAA Five Diamond-rated Las Ventanas al Paraiso in Los Cabos, Mexico; and the San Ysidro Ranch, a 38-room resort in Montecito, California.

To contact the reporter on this story: Nadja Brandt in Los Angeles at nbrandt@bloomberg.net

Last Updated: October 26, 2009 16:50 EDT