Four Seasons San Francisco in default
Four Seasons San Francisco in default
Four Seasons San Francisco is the second hotel on its debt payment after withholding by Millennium Partners payment of debt on its two-year $90 million loan last weeks according to developer. Renaissance Stanford Court Hotel is in default on a $89 million loan where funds are controlled by JER Partners according to Barclays Capital.
The action was made purposely to start renegotiating the debt with LNR Property Corp., the special server on the loan. According to Alan Reay, president of Irvine-based Atlas Hospitality Group, this is the only way for Millennium Partners to renegotiate debt with the special server. He said it is not a good sign seeing both hotels going into default in the early of this downturn. He continues "this is going to be deep, it's going to be long, and this is going to affect everybody."
In California, 231 hotels have been in default in the last 60 days, 184 percent up in the last two months. The majority of hotels which were financed with loans that turned down the commercial mortgages market between 2005 and 2007 will be in defaults as well accroding to Reay's predictions. This number may account up to 2,000 only in California.
SF Business Times -7/8/2009