Walk it off hotel condo retail case studies

370 views

Published on

Published in: Travel, Business
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
370
On SlideShare
0
From Embeds
0
Number of Embeds
2
Actions
Shares
0
Downloads
0
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Walk it off hotel condo retail case studies

  1. 1. Walk It Off: When Workouts Don’t Work Out An Exploration of Litigation and Bankruptcy GreenPearl Midwest: Beyond Distress May 12, 2011 Chicago Station Urban Condominium Case StudyProject Background:  150 unit urban condominium development that is 75% sold.  25% of the loan is outstanding and is 12 months past its maturity.  Multiple short term extensions have been granted.  20% of the units are only framed and need to be complete.  Sales are at a standstill.  Borrowers have stopped supporting loan and are no longer cooperative despite their personal guarantees.  Taxes and condominium assessments are not being paid.
  2. 2. 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.

×