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North America

Waldorf Astoria Washington D.C. Faces Foreclosure

Alan Woinski and Kim Woinski

May 15th, 2024


Skift Take

Two years after buying the Old Post Office building from the Trump Organization, owner CGI has defaulted on its loan payments.

The DJIA rose 350 points, Nasdaq was up 231, the S&P 500 rose 61 points and the 10-year treasury yield fell .09 today to 4.36%. Lodging stocks were modestly higher. The biggest mover was to the downside with VCSA dropping another -8% to another new low. SHCO was down -6% on the day.

Deutsche Bank said 1Q24 earnings season for the lodging sector resulted in share prices barely moving whether there was a beat, meet or a miss. DB said this further highlights the comfort they believe investors find in the Lodging C-Corps in this current environment.

Ashford Hospitality Trust and Braemar Hotels & Resorts both put out separate announcements detailing how activist Blackwells Capital’s request for shares of AHT to withhold voting for any of the incumbent directors was a failure. AHT said seven of its nine nominees received a majority of the votes cast and the remaining two were re-appointed by the Board after the meeting in accordance with AHT’s corporate governance guidelines. Only 7% of AHT’s outstanding shares voted on the Blackwells proxy card.

STR reported US lodging data for the week ended May 11th. US hotel RevPAR rose 6.6%, led by rates up 4.4%. Group RevPAR was up 17.4%.

The Waldorf Astoria Washington DC, the former Trump International Hotel, is already facing a foreclosure auction, set for June. CGI Merchant Group defaulted on $252.7 million in outstanding debt earlier this year. The main lender, BDT & MSD Partners, filed an affidavit of nonresidential mortgage foreclosure late last week. CGI bought the leasehold on the 269 room hotel in 2022 in partnership with Hilton from the Trump Organization.

Baron Hospitality acquired the Birmingham/Mountain Brook Hampton Inn, in Birmingham, Alabama, for $7.5 million. The company plans to renovate the property by March 2025. The renovations will include exterior improvements, all-new bathrooms, revamped common areas and new furniture and technology platforms. The seller of the five-story property was Hospitality Investor’s Trust, which was represented by Hunter Hotel Advisors.

MCR has proposed two new hotels surrounding its Hilton Miami Airport Blue Lagoon. Under the proposal, MCR would build two additional hotels, each with 200 rooms in eight stories. To make up for the removal of surface parking, it would construct a five-story, 700-space garage for the existing Hilton, plus two four-story, 140-space garages to serve the new hotels. The new hotels would be select service and contain no restaurant or meeting room space.

The historic Coca-Cola bottling plant in Sacramento, California is set to become a 151-room Marriott hotel. Construction of the five-story Element Hotel is expected to cost about $22 million, with a timeline still pending. The hotel will also include a fitness center, yoga room, pool, meeting rooms, and a spacious courtyard.

Four Seasons Hotel Toronto has completed an extensive, multi-million dollar guestroom renovation, encompassing all 259 guestrooms including 42 suites within the hotel. The property is owned by Shahid Kahn.

CoralTree Hospitality announced the addition of the Austria Haus Hotel in Vail, Colorado, to its growing management portfolio. The 25-room boutique hotel is located in the heart of Vail Village. CoralTree has entered into a licensing agreement with Hyatt to manage Austria Haus Hotel under the Destination by Hyatt brand.

Fontainebleau Miami Beach announced the Q4 2024 opening of the all-new Coastal Convention Center. Spanning five stories, the facility boasts a 16,500 square foot divisible ballroom with an outdoor terrace; a 9,500 square foot junior ballroom; 15 total meeting rooms; and 15,000 square feet of pre-function space. The Coastal Convention Center is connected to Fontainebleau Miami Beach by a one-of-a-kind pedestrian bridge that links to the hotel’s famed Tresor Tower.

The Commerce Crossing business park, in Kaukauna, Wisconsin, will get a four-story, 76-room Grand Stay Hotel by the end of the year. Construction is expected to start soon on the hotel which will feature a bar, breakfast room, exercise room, meeting room, and pool. Kaukauna will pay Douglas A. Carlson Development Inc.$1.3 million as a financial incentive to bring the project to fruition. The money will be funded through Tax Incremental Finance District 5 and will be paid in three installments over the year.

Pieces are falling into place for a 2024 groundbreaking on a new hotel next door to Huntington Place Convention Center. The Detroit City Council approved $142 million in tax breaks for Hotel Water Square, a $400 million project being developed by Sterling Group. Plans call for a 25-story building with 600 guestrooms, 50,000 square feet of meeting space, three restaurants, a lobby bar, and a sky bridge to the convention center. The hotel hopes for a mid-year groundbreaking and an opening in 2027. The increased hotel capacity is critical to the city’s bid to host the 2028 NBA All-Star game. Huntington Place offers groups more than 1.2 million square feet of event space.

BH Hospitality is constructing a 94-room Holiday Inn Express at the northeast corner of Highway 59 and South Loop 224 in Nacogdoches, Texas, and work on a second hotel is expected to begin later this year.

The first Airbnb-style hotel in Northwest Arkansas is coming to SpringdaleThe Star on Spring is expected to open in early 2025 with 13 rooms including 3 suites. Pink Door BNB will manage the property. The Airbnb-style includes a virtual concierge service where guests can check in through their phone and come and go as they please.

A hotel near Louisville Muhammad Ali International Airport, in Louisville, Kentucky, will be sold next month. The former Fern Valley Hotel and Conference Center will go to online auction June 24, with a starting bid of $2.25 million. Gilezan Global is the listing agent. The six-story, two-building complex hotel has 155 guestrooms and 25,000 square feet of banquet space. The site is approved for a Marriott Delta Hotel and the seller has provided all drawings, specs, and blueprints to begin development. The Marriott franchise agreement can be assumed or canceled. HRS Hotels Group Inc., the owner of the property, was planning a complete renovation to the site but the president of the company, Hiten Timbawala, is moving back to his home country.

CBRE arranged the sale of Hotel Versey, a 137-room hotel located in Chicago, Illinois. The company represented the seller, Lincoln Park Hotel PropCo LLC, in the transaction. REIT 644 LLC purchased the hotel for an undisclosed amount.

JLL Capital Markets arranged financing for the 218-key Hyatt Centric Buckhead Atlanta in Georgia. JLL represented the borrower, a joint venture between Songy Highroads LLC and an affiliate of Hyatt Hotels Corporation, in securing the loan from a global bank. Hyatt Centric Buckhead Atlanta is an 18-story hotel featuring diverse food and beverage options, a fitness center, pool and more than 5,000 square feet of flexible meeting and event space.

DSH Hotel Advisors arranged the sale of the 78-room Red Roof Plus Palm Coast, in Palm Coast, Florida, for an undisclosed price. DSH Hotel Advisors represented the seller, SVP Palm Coast, LLC and the buyer, RRPC, LLC.

Hall of Fame Resort & Entertainment Co. continues to work to close on agreements that would finance and its Gameday Bay Waterpark and a Hilton Tapestry hotel at its Canton, Ohio resort property. The company has spent years completing the financing, which it calls the “capital stacks” for building the last two assets in the second construction phase of its emerging resort, called Hall of Fame Village.

Pyramid Global Hospitality announced the launch of their new brand, Hospitality@WORK, dedicated to creating and managing curated office communities. Hospitality@WORK elevates the workplace culture with a range of management services including in-office concierge, cultural programming, leadership training, property management, tech support, F& B services and more.

Hyatt’s popular Secret’s all-inclusive brand is expanding again in the Caribbean, with plans for a new resort in Saint Lucia next year. The new Secrets St Lucia Resort and Spa is targeting an expected opening in 2025. The adults-only resort will be the second property on the island that is part of Hyatt’s Inclusive Collection.

Europe Highlight

The historic Cathedral Quarter Hotel in St. Mary’s Gate Derby city center in the UK has been purchased by Lavendish Leisure, a firm owned by Dedigama Group. The hotel, previously owned by The Finesse Collection, has 38 individually designed ensuite bedrooms. This is the second UK hotel purchased by Lavendish Leisure, which has purchased eight hotels since 2005.

Alan Woinski and Kim Woinski

May 15th, 2024

Companies: Ashford Hospitality Trust, Baron Hospitality, BH Hospitality, Blackwells Capital, Braemar Hotels & Resorts Inc., Delta Hotels & Resorts, Element, Fontainebleau Resorts, Four Seasons, Hampton by Hilton, Hilton, Hilton Hotels & Resorts, Holiday Inn Express, Hospitality@Work, Hyatt Centric, Hyatt Hotels Corporation, JLL, Marriott International, MCR, Pyramid Global Hospitality, Red Roof Plus+, Secrets Resorts & Spas, Soho House and Co Inc., Tapestry Collection by Hilton, Vacasa, Waldorf Astoria Hotels & Resorts

Locations: Alabama, Atlanta, Chicago, Florida, Louisville, Miami, Ohio, St. Lucia, Texas, Toronto, Vail, Washington DC, Wisconsin

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