hotels in trouble

Mansion at Peachtree Faces Foreclosure

It is one of Atlanta's grandest new developments but the Mansion on Peachtree may be in deep financial trouble. According to the Atlanta Business Chronicle, the project is facing foreclosure. The project developer has said that a 30-day foreclosure notice is expected tomorrow unless something else happens. Last week Clark Butler, president of City Centre Properties LLC and Mansion Centre Development LLC said that he was in discussion with lenders to work out a deal. If no deal is reached iStar Financial, the primary lender, would receive the property. First Citizens Bank is a secondary lender holding the mezzanine debt. The Atlanta Business Chronicle article reports a total debt of $187.4 million which is above the original estimated price of the project, $165 million.

The Mansion at Peachtree is home to luxury condos and a five-star hotel operated by Rosewood Hotels & Resorts. The building also includes NEO, a contemporary Italian restaurant, the fourth location of Craft from restaurateur Tom Colicchio. Craft Atlanta and the 29 Spa. The project was announced to great fanfare back in 2006 but by the time it opened in 2008 the Atlanta real estate market was already mid-slump. Some people who wanted to get into the project couldn't sell the homes they already owned and the high prices of the condos dwarfed the prices of some homes in the area. Last June a penthouse in the mansion sold for $4 million but it was originally listed at $10.2 million. Tourism continues to be fairly sluggish in Atlanta so the project has been hit from two angles. The developer insists that its a great project, just one that launched at an unfortunate time.

Tags: atlanta, buckhead, foreclosure, hotel foreclosure, HotelForeclosure, hotels in trouble, HotelsInTrouble, mansion on peachtree, MansionOnPeachtree

Artisan Hotel In Las Vegas Faces Foreclosure

by Deidre Woollard (RSS feed) —

The Artisan Hotel & Spa in Las Vegas has become the latest to succumb to foreclosure. The modest 64-room property is an off-the-beaten-track favorite with locals and is known for its framed art and hip decor. It does not have a casino and is located at Sahara Avenue and Interstate 15.

The Las Vegas Sun reports that the hotel had filed for Chapter 11 back in December 2008, listing assets of $18.3 million (mostly the value of the hotel real estate) and liabilities of $7.85 million. The main creditor was the Citizens Bank of Oregon, Mo. The hotel struggled to turn a profit and later the bankruptcy case was combined with another bankruptcy case for the co-owner's other Artisan hotel in El Paso. Texas. Earlier this month the IRS asked that the Chapter 11 cases become Chapter 7 cases forcing a liquidation because the company failed to file federal employment tax returns and tax deposits since the bankruptcy cases were filed. A receiver will be appointed to operate the property until the foreclosure sale.

The hotel has many fans but has also had an ongoing problem with service. Reviews on travel website Trip Advisor are very polarized, people either loved this place or had serious issues with the service and room standards.

Tags: artisan hotel, ArtisanHotel, hotel foreclosure, hotel foreclosures, HotelForeclosure, HotelForeclosures, hotels in trouble, HotelsInTrouble, las vegas, LasVegas

Sahara Hotel Closes Rooms In Vegas Hotel Room Surfeit

by Deidre Woollard (RSS feed) —

Filed under: Luxury Travel & Hotels

More bad news out of Las Vegas for the tourism industry. The AP reports that the Sahara hotel-casino on the Las Vegas Strip is closing rooms in two of its towers over the winter season. Sam Nazarian's SBE Entertainment owns the property now and a publicist has said that the two towers will stay shut until business improves. The casino and the main Tangiers tower will remain open. It's not known if the hotel will lay off staff. Several other hotels recently opened on the Strip at the City Center complex so there is no shortage of places to stay in Las Vegas.

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Tags: hotel, hotels in trouble, HotelsInTrouble, las vegas, las vegas strip, LasVegas, LasVegasStrip, sahara

Gansevoort South Hotel Facing Foreclosure Auction

by Deidre Woollard (RSS feed) —

Filed under: Luxury Travel & Hotels

Miami's beautiful Gansevoort South hotel is the latest hotel in trouble. The Miami Herald is reporting that Credit Suisse has announced a January 28 auction for the ownership stake that was once used to obtain $89 million mezzanine loan on the hotel. Developers William and Michael Achenbaum got their financing at the top of South Florida's real estate bubble, hoping to make a fortune on condo units. But sales were sluggish for the condos in the residential tower and the Achenbaums decided not to convert some of the hotel rooms into condo-hotel units. Because of the real estate downturn the developers were forced to rely on hotel revenue to pay back their debt at a time when tourism has been experiencing some of its worst numbers ever.

The 334-room oceanfront hotel hasn't been empty. The enviable location and sharp design have attracted a lot of attention. It has been used as a backdrop in the Bravo reality show Miami Social and was reportedly a hot spot during the recent Art Basel Miami Beach show. The hotel remains open and busy as the winter season begins.

The Miami Herald article says that the Achenbaums hope to find a way to buy back the loan at the auction and retain ownership. The $89 million loan was backed by the Achenbaum ownership stake not the Gansevoort property itself so the auction is not a traditional foreclosure proceeding. The hotel also has a separate $314 million mortgage. Any winner in the auction would also have to take on that mortgage.

Before it was the Gansevoort South, the building was the Roney Palace and the adjoining Roney condo complex. That project went through bankruptcy in 2004 and Chicago developer Joseph Chetrit paid about $150 million for the property months after the Chapter 11 filing, eventually selling his company's interest to the Achenbaums after a failed joint venture between the two groups.

Gallery: Gansevoort South

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Tags: ganseevort hotel, ganseevort south, GanseevortHotel, GanseevortSouth, hotel, hotel foreclosure, HotelForeclosure, hotels in trouble, HotelsInTrouble, miami beach, MiamiBeach

Ty Warner Is The Latest To Face Hotel Mortgage Trouble

by Deidre Woollard (RSS feed) —

Filed under: Luxury Travel & Hotels, Wealth

All those who bought Beanie Babies in the hope that they would only go up in value might enjoy a bit of schadenfreude with the news that Ty Warner, who made a fortune on selling those plush toys, is facing a cash crunch of his own. The Wall Street Journal reports that Warner is struggling to get a extension on his $345 million securitized mortgage on four of his luxury hotels because of, what else, a lack of cash flow.

The servicer overseeing the mortgage handed it off to a special servicer, Capmark Financial Group. The four hotels haven't been able to generate the $44.6 million in annual cash flow necessary to qualify for a one-year extension of the loan according to debt-rating company Realpoint LLC. The four hotels are the Four Seasons in Manhattan, The Four Seasons Biltmore in Santa Barbara, the San Ysidro Ranch in Santa Barbara and Las Ventanas in Baja. Occupancy in the four hotels has declined around ten percent over the past six months.

Warner bought the hotels between 1999 and 2004 after amassing his Beanie-infused fortune. He now must struggle to reach a compromise with the special servicer to revise the mortgage and get an extension. This is something that may be in the best interest of the mortgage holder in a time when more and more hotels are facing difficulties. All the hotels remain open during the crisis. And you can still rent the Ty Warner suite, shown at right, in the New York Four Seasons for around $35,000 a night.

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Tags: four seasons biltmore, FourSeasonsBiltmore, hotels in trouble, HotelsInTrouble, las ventanas, LasVentanas, ty warner, TyWarner

Borrego Ranch Resort & Spa Up For Sale, May Close

by Deidre Woollard (RSS feed) —

Filed under: Luxury Travel & Hotels

Could we be seeing another Southern California hotel in trouble? The LA Times is reporting that the Borrego Ranch Resort & Spa, which re-opened last November under the Borrego Ranch name after a major renovation, might be closing down. Officials at the Borrego Ranch Resort & Spa and Montesoro Golf & Social Club have told employees the hotel could shut down as early as November 30. There is still a chance that the project may find additional investors or new funding and stay afloat. The LA Times quotes Sasha Itzikman, senior vice president for Borrego Ranch who says the company is looking for investors but is also open to a full sale. The Borrego Springs area in San Diego County has tried to style itself as a resort community similar to Palm Springs.

For now the resort remains open. It has 44 rooms and 19 casitas. The casitas range in size from one to four bedrooms and most have a wood-burning fireplace and private pool or spa and all include a wet bar, compact refrigerator and microwave. The spa offers massage, skin care, hair care, manicures and pedicures. The resort has an impressive amount of activities to keep you busy from golf and tennis to fitness classes, hikes, swimming and bicycle and horseback riding. There is also life-size chess, shuffleboard, bocce ball, a putting green, an archery range and championship croquet courses. The resort is currently offering the Borrego Ranch Experience starting at $295 per person, per night (2 night minimum, double occupancy required) which includes accommodations, a spa treatment of golf and all meals (excluding room service or alcohol).

Gallery: Hotels In Transition

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Tags: borrego ranch resort, borrego springs, BorregoRanchResort, BorregoSprings, hotels in trouble, HotelsInTrouble, southern california, SouthernCalifornia

The Shore Club Goes Delinquent On Its Mortgage

by Deidre Woollard (RSS feed) —

Filed under: Luxury Travel & Hotels

Could we be seeing another hotel in trouble? The WSJ's Developments blog says that The Shore Club in Miami Beach has gone delinquent on its $111.5 million securitized mortgage. The mortgage has a special server Cerberus Capital Management LP's LNR Partners Inc. which has reported that father and son developers Philip and Michael Pilevsky had withdrawn a threat to close the hotel after the mortgage server agreed to fund basic expenses including payroll from the mortgage's reserves. According to credit-research company Trepp LLC, the Shore Club's mortgage is 30 days delinquent this month. The hotel also owes another $11.5 million in separate debt besides the mortgage.

A renovation of the hotel is in progress and a spokesperson for Philip and Michael Pilevsky said there is a disagreement between the owner and the loan servicer about what the servicer is responsible for funding. The hotel went through a renovation in 2001 and was appraised for $176 million in 2005, when the owners mortgaged it at the peak of South Florida prices. That number might be a bit lower now. The Shore Club has 322 rooms and a spa but is more famous for its Nobu sushi restaurant, several night clubs and its enviable beachfront pool area. Tourism has been down in Florida overall and the hotel has seen occupancy fall this year. The hotel remains open and is currently offering a deal that includes overnight accommodations, priority seating at Skybar and a bottle of either Perrier Jouet Grand Brut or SKYY Vodka on arrival for $325.

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Tags: hotels in trouble, HotelsInTrouble, miami, shore club, ShoreClub

Nikki Beach Turks and Caicos Closes

by Deidre Woollard (RSS feed) —

Filed under: Luxury Travel & Hotels

Say farewell to another luxury resort. Leeward Resort Ltd. the owner of the Nikki Beach Resort & Spa in Turks and Caicos, has been placed into receivership. The resort, which offered 48 rooms and suites with luxury amenities, has been closed after being open less than tow years. The Nikki Beach brand remains afloat with resorts around the world including Miami, New York and Thailand. The British Caribbean Bank will manage the 430-acre resort and 110-slip mega-yacht marina and is hoping for a buyer. Since the Four Seasons Exuma was recently snapped up by Sandals there's reason to believe that their might be another hotel company willing to make a deal and pick up a resort which has been widely regarded as one of most exclusive in the Caribbean. Expansion plans for the resort had included condominiums, a spa, casino and new restaurants.

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Tags: hotels in trouble, HotelsInTrouble, nikki beach, NikkiBeach, receivership, resort, turks and caicos, TurksAndCaicos

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