Home News River North’s Hotel Felix loan sold for big discount

River North’s Hotel Felix loan sold for big discount

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The sale allowed Monarch to complete the foreclosure process and gain control of the 12-story building. It’s a gamble that it can survive the recovery of the downtown hotel market hit hard by the public health crisis.Downtown hotel performance improved dramatically this year Leisure travel is on the rise and group meetings and events are back, but business travel still makes up a bigger portion of hotel stays in Chicago than in most cities, but whether it will be as strong as it was pre-COVID. remains questionable.

This uncertainty has caused hotel property values ​​to plummet, resulting in heavy losses for bondholders of the Hotel Felix loan. The loan was packaged with other mortgages and sold in 2013 to a commercial mortgage-backed securities investor. Bloomberg data linked to a venture CMBS loan for Chicago-based hotel investor Oxford Hotels showed that Andresorts and Gettys Group had lost its original $68.6 million at the time its assets were valued at $68.6 million. executed a $47 million loan of The 2013 loan replaced debt borrowed by Oxford Gettys Ventures when it purchased the hotel for his $24 million in 2007.

The pandemic has reduced travel demand, driving property valuations down to just $23.5 million in July 2020. That put him at $24.1 million, most recently at $28.2 million in August, according to Bloomberg loan data, according to valuations in December 2021.

LNR Partners, a special servicer based in Miami Beach, Florida, oversees loans on behalf of CMBS bondholders. An LNR spokeswoman declined to comment.

A spokeswoman for Monarch also declined to comment. The firm, which specializes in bad debt and real estate purchases, is now in a position to acquire ownership of assets from Oxford Gettys Ventures, subject to court approval. The next hearing is scheduled for December 12th.

Oxford President and CEO John Rutledge said in an August statement to Crain’s The ownership venture had already generated “attractive returns” from its 2013 refinancing, and the venture was unable to come to an agreement with the lender on a plan to continue to own the property.

“Even after years of trying to create solutions to overcome the[pandemic-related]challenges at this hotel, including identifying the social service agency that occupies the hotel, as we have done at many other hotels, Regardless, the lenders did not agree to any of our proposals,” the August statement said. “Therefore, we and our partners reluctantly but voluntarily agreed to an amicable settlement with the lenders.”

Founded in 2002, Monarch manages approximately $9.4 billion in assets, according to a recent press release from the company.

Hotel Felix is ​​one of several downtown hotels whose owners were hit by foreclosure lawsuits early in the pandemic.Other major damaged hotels include the Palmer House Hilton Chicago, whose owner made a judgment of foreclosure Cook County Court in July. JW Marriott Chicago Hotel in the Loop submitted the sole bid to the auction to manage the property.

CoStar News was the first to report that Monarch has purchased a loan for Hotel Felix. Paramount Lodging Advisors brokers Brent Clemens, Andrew Macluff and Mike Schlictman put the property up for sale last month through his online auction.

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