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Hotel/Condo Retail Case Study
 

Hotel/Condo Retail Case Study

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    Hotel/Condo Retail Case Study Hotel/Condo Retail Case Study Document Transcript

    • WALK IT OFF: When Workouts Don’t Work Out- An Exploration of Litigation and Bankruptcy GreenPearl Midwest: Beyond Distress Hotel/Condo/Retail Case StudyAsset  Hotel – 200 Rooms, National Franchise, third party management, upscale property  100-one and two bedroom units with owner use restriction of 30 days per annum  Retail Space – 15,000 square feet of class A, separate building  Land – five acres, owned fee simpleLoan  Type: Construction/mini perm  Term: 36 months  Loan to cost – 70%  Loan Past Due – 12-months  No loan payments – past 6-months  Personal Guarantees  Management Contract subordinate to loanDeveloper  Limited Liability Company = 20% equity  Managing Member – Corporation  Mezzanine Investor – 10% equityOverall Project Status o Appraised value is only 90% of Loan Principal o Loan is past due 12-months o No loan payments for the past 6-months o Franchise is in default o Property taxes and transient occupancy taxes are in arrears o Hotel occupancy – 50%; ADR below projections; NOI position before debt service o Condominiums – 25% sold, owners are threatening a lawsuit related to false marketing materials o Retail – 50% leased, no cash available for tenant improvements o Notice of default has been filed o Developer is threatening to file bankruptcy if lender does not extend the loan and adjust the interest rates.