.jpg)
Posted on 06/30/2009 12:03:10 PM PDT by BGHater
Hotel owners are facing the same problems as homeowners, being upside down on their properties with no good escape. Please consider Hotel foreclosures jump in California.
In California, 175 hotels are in default -- the first stage in the foreclosure process -- according to a report from Atlas Hospitality Group, an Irvine-based brokerage firm. Another 31 have been foreclosed, nearly one third of them in the Inland region.Sheraton Keauhou Bay In Foreclosure
Of those in default or foreclosure, about 75 percent obtained new loans between 2005 and 2007 for construction financing, re-financing or to buy the hotel, according to the firm. Atlas Hospitality estimates that 2,500 hotels -- about 25 percent of the state's entire hotel population -- refinanced or obtained new loans in that time meaning more defaults and foreclosures could be on the horizon.
The industry has been rattled by foreclosures before, especially in the mid-1990s, but the impact today is more widespread, hitting both low-end and high-end properties in every region, Reay said.
Those who bought hotels between 2006 and 2006 are likely sitting on properties worth at least 50 percent less than what they paid, he said. [Mish: obviously there is a typo in the date range]
Reay's firm is marketing The Block at Big Bear, a 50-room hotel that catered to snowboarders. The hotel's owner walked away earlier this year and closed the hotel, which is in default. The hotel was appraised for more than $4 million in 2006. Today, Reay's firm, working with a court-ordered receiver, is asking $2.04 million for the property.
Hoteliers will likely have to survive at least two more years of low revenues, diminishing profit margins and fewer rooms booked by travelers unwilling to spend.
Atlanta-based PKF Hospitality Research has forecast that the revenue hoteliers earn per room will reach its lowest point of the recession in the third quarter of this year.
The Sheraton [Keauhou] Bay Resort and Spa on the Big Island is going into foreclosure after the resort's owner defaulted on its mortgage, another sign Hawaii's beleaguered tourism industry is suffering during the global recession.Anyone who bought hotels in anywhere in the US between 2003 and 2007 more than likely overpaid, and by as much as 50% or more. Tourism is down everywhere and that tourism is not going to recover for years, perhaps decades as cash strapped consumers attempt to repair balance sheets.
Owners Koa Hotel LLC have defaulted on nearly $60 million remaining on their mortgage, interest and fines. Koa Hotel is owned by the New York private equity firm Brickman Associates. The property's major creditor is Lehman Brothers Holdings Inc., which filed for bankruptcy last year.
The resort's business declined amid a broader drop in visitors to Hawaii since last spring. So far this year, 15 percent fewer tourists have visited the Big Island compared to the first part of 2008.
Is this part of the coming commercial property bubble burst?
Next wave of the recession-ad-depression is rolling in as we speak.
A lot of these cities have milked the TOT taxed dry..and people are realizing that another 10-15 % added to you bill is a rip off, plus all the other charges
Welcome to the hotel california
Such a lovely place
Such a lovely face
Plenty of room at the hotel california
Any time of year, you can find it here
GOP needs to make a video of Obama criticizing business events as wasteful spending, and then show the doors closing and the jobs lost. It is time for a full on attack on this loser’s policies.
It does seem that way.
CHANGE HAS ARRIVED!!!
Those evil, rich hotel owners are just getting thier just deserts for profiting off the backs of the working man!
The Government should bail them out, then give control to the people who clean them, SEIU Members all!
HAIL MARXISM! HAIL OBAMA!!
(s/?)
How long before the acorn squaters come in?
Welcome to the hotel california
Such a lovely place
Such a lovely face
Plenty of room at the hotel california
Any time of year, you can find it here
orrr...
Put the lights out at the hotel california
Such a lonely place
A forgotten face
Plenty of gloom at the hotel california
Owner’s in arrears, foreclosure’s almost here!
All the magic is gone. Internet Bubble, Housing Bubble, what are they gonna use next?
"Renewable energy"
you can check out any time you want,
but you can never leave
Good to know.
I will never again take the “pay now” option to get a lower rate.
you can check out any time you want,
but you can never leave
Rats. I want to leave, but can’t.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.