Default danger for Westin hotel in Wheeling

By: Alby Gallun Jan. 20, 2010

(Crain’s) — A 412-room Westin hotel in northwest suburban Wheeling is in danger of defaulting on a $86-million loan taken out at the peak of the real estate market.

A senior loan on the three-year-old Westin Chicago North Shore recently was transferred to a so-called special servicer, signaling that the hotel’s owner is likely to miss loan payments. The Westin is just the latest on a growing list of local hotels drowning in debt as occupancies, room rates and property values have plunged over the past 18 months.

The hotel at 601 N. Milwaukee Ave. may be worth only half of $86 million in outstanding debt that comes due in June. That means the current owners, a group led by Marathon Asset Management LLC, and a junior lender, Five Mile Capital Partners LLC, are at risk of losing their entire investment.

“This seems like it could be a major problem,” says Kevin Mammoser, vice-president in the Chicago office of DBRS Inc., a ratings agency.

http://www.chicagobusiness.com/cgi-bin/news.pl?id=36790&seenIt=1

Group acquires Artisan Hotel, plans improvements

Amanda Finnegan

Wed, Jan 20, 2010 (5:14 p.m.)

A view of the restaurant at the Artisan Hotel. The hotel’s lounge has become a popular late-night hangout for entertainers and musicians who come to the bar after their shows.

Photo: Leila Navidi

The famed Artisan Hotel is getting a second lease on life.

Garrett Capital, an affiliate of The Siegel Group, announced today it had acquired the foreclosed, non-gaming hotel.

Artisan Hotel & Spa

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The Siegel Group acquired a promissory note secured by a First Deed of Trust from the Artisan’s lender, The Citizens Bank of Oregon in Missouri. The group assumed operational control of the property Friday.

http://www.lasvegasweekly.com/news/2010/jan/20/group-acquires-artisan-hotel-plans-improvements/

The future of new condo-hotel projects may be bleak, local Realtors say

By MICHAEL W. FREEMAN
THE REPORTER EDITOR

Published: Tuesday, January 19, 2010 at 10:24 a.m.

FOUR CORNERS – During the height of the housing boom, it sounded like a safe bet for a future investment: the mixed use facility, offering condominiums, timeshares, apartments, hotel rooms and businesses under one roof, where people could live, work, shop and play without even getting in their car.

Fast-forward to 2010, after three years of a devastating downturn in the U.S. housing market, to a time when the record high number of bank-owned foreclosed properties up for sale has driven prices down to lows that no one would have expected back in 2005.

Today, the mixed-use facility may be facing more than just competition from a backlog of unsold homes or the challenge of competitive pricing in an era when foreclosed homes sell for bargain basement prices. It could be a while, some in the real estate industry say, before the banking industry lines up financing for any new projects like this.

http://www.theledger.com/article/20100119/NEWS/100119742?Title=The-future-of-new-condo-hotel-projects-may-be-bleak-local-Realtors-say

152-year-old Florida inn closes

BY KEVIN TURNER

The Times-Union

Facing foreclosure, the owners of Fernandina Beach’s landmark 152-year-old Florida House Inn have thrown in the towel and posted a “closed” sign on the door.

The storied building, said to be Florida’s oldest surviving hotel, was built in 1857 by railroad pioneer David Yulee, who helped spearhead Florida’s statehood in 1845.

The Florida House is the third Fernandina Beach bed and breakfast to close in the last six months, leaving five in the historic city, according to Gil Langley, president and CEO of the Amelia Island Convention and Visitors Bureau.

http://www.miamiherald.com/news/breaking-news/story/1433311.html

New L.A. luxury hotels face tough debuts

By Hugo MartínJanuary 16, 2010

The glass-sheathed tower that houses the new JW Marriott and Ritz-Carlton hotels opens next month adjacent to the LA Live center. (Wally Skalij / Los Angeles Times / January 14, 2010)

//

The newest downtown hotel complex buzzed with activity this week as carpenters, electricians and gardeners hustled to put the finishing touches on the $970-million skyscraper that rises over the Los Angeles Convention Center and the L.A. Live entertainment center.

But when the glass-sheathed tower that houses the JW Marriott and Ritz-Carlton hotels opens next month, it will face one of the worst slumps in years for the hospitality business.

Hotel foreclosures in California more than quadrupled last year as business travelers and vacationers cut back spending and commercial real estate values sank, forcing owners into default. In 2009, hotel revenues took their steepest decline in more than two decades, and the occupancy rate in Los Angeles now hovers at a meager 65%.

http://www.latimes.com/business/la-fi-marriott16-2010jan16,0,7207785.story?track=rss

Downtown’s Tutwiler Hotel narrowly avoids foreclosure

Friday, January 15, 2010  |  Modified: Saturday, January 16, 2010

The Tutwiler Hotel

Birmingham Business Journal – by Lauren B. Cooper Staff

The owner of the Tutwiler Hotel has narrowly staved off foreclosure of the historic property in downtown Birmingham, the hotel’s operator said.

The building was set to be sold on Jan. 8 on the courthouse steps in a foreclosure sale, according to public records.

But negotiations between the Tutwiler’s owner, investor Harold L. Rosbottom Jr., and Highland Capital Management halted that process. The two are restructuring the hotel’s recently matured short-term debt from the more than $6 million renovation done in 2006, said Bill Murray, whose Integral Hospitality Solutions operates the hotel.

http://birmingham.bizjournals.com/birmingham/stories/2010/01/18/story3.html?b=1263790800^2730561

Bay Area hotel problems mount

By George Avalos
Oakland Tribune

Updated: 01/15/2010 09:07:57 AM

Bay Area hotels with a combined value that tops $1 billion fell into a morass of loan defaults, a fresh sign of the woes being unleashed by a local economy mired in recession.

At the end of 2009, seven times as many hotels in the nine-county Bay Area had tumbled into defaults on their mortgages than was the case at the end of 2008, a new survey by Atlas Hospitality Group shows.

And plenty of money is on the line. The value of the Bay Area hotels in arrears on their property loans totaled $1.1 billion, according to a report by Real Capital Analytics. That’s 12 times the $90 million in delinquent loans for Bay Area hotels in 2008, Real Capital estimated.

http://www.insidebayarea.com/timesstar/localnews/ci_14193776

Hotel Foreclosures Soared in California as Travel Declined

By John Cutts | 14 January 2010 @ 11:28 am EDT

Hotel foreclosures in the state of California soared in 2009 as travel declined, according to a report released by hotel sales specialist Atlas Hospitality Group.

A total of 62 hotels went into foreclosure in 2009, a jump of more than 400 percent from only 15 hotel foreclosures in 2008. The number of hotels in default also climbed up sharply, soaring by nearly 600 percent to 307 hotels.

According to Atlas analysts, a lot of hotel owners are now using their personal money to pay their loan payments because of the extremely low levels of occupancy. During the boom years of 2004 through 2007, owners were able to build a lot of hospitality properties and added a lot of rooms largely because of the easy availability of loans. During those years, lenders had incentives to make a lot of loans as investors were demanding for more mortgage-backed securities.

http://www.ibtimes.com/contents/20100114/hotel-foreclosures-soared-california-travel-declined.htm

Foreclosed hotel will remain open despite sheriff’s sale

Filed by Lisa Roberson January 14th, 2010

ELYRIA — The Elyria Holiday Inn is open and will remain that way indefinitely despite a foreclosure case that is making its way through the county court system.

The Holiday Inn near Elyria’s Midway Mall is going up for sheriff’s sale soon. (CT file photo.)

Since mid-2009, the hotel has been in receivership with Tom Pratt of BBP Partners serving as the court-appointed receiver. Pratt said the goal is for the bank holding the mortgage, Beal Bank based in Plano, Texas, to eventually take legal control of the hotel until it can be sold at near or above market value.

“They want to wait until they can get the right and proper value for the property,” he said. “They are fully aware that could take them five months or two years.”

In the meantime, Pratt said the hotel is operating as normal.

“We are operating and maintaining the property on a day-to-day basis, which includes paying the bills, taxes, franchise fees, and salaries and wages of the employees,” he said. “My firm and I will continue to do so until the bank either sells the property or brings in a professional property manager to replace us.”

While the hotel is in receivership now, it eventually will be sold at sheriff’s sale. A sale date has not yet been set. But when it does occur, the sale will include all furniture, furnishings and property inside the building at 1825 Lorain Blvd.

http://chronicle.northcoastnow.com/2010/01/14/foreclosed-hotel-will-remain-open-despite-sheriffs-sale/

Hotel Foreclosure Watch: The Four Seasons Turns Cold in Dallas

By Kris Hudson

Dallas Four Seasons’ Web site

It looks like the gamble taken by commercial-property owner BentleyForbes Holdings LLC last October in defaulting on its mortgage on the Four Seasons Dallas might not pay off. The lenders who hold the 431-room hotel’s mortgage filed this week to foreclose.

BentleyForbes skipped its October payment on the Four Season’s $183 million securitized mortgage in a bid to get the mortgage’s special servicer, CWCapital Asset Management, to revise the loan’s terms. In doing so, BentleyForbes explained that the hotel’s cash flows no longer covered its $10.9 million of annual interest payments.

http://blogs.wsj.com/developments/2010/01/14/hotel-foreclosure-watch-the-four-seasons-turns-cold-in-dallas/