Hotels & hospitality

$14.8 Million Defaulted Hotel Construction Loan

Denver, CO United States
Asking Price Contact for pricing
Area Size N/A
NOI Net Operating Income N/A
NIY N/A
Asking Price Contact for pricing
Area Size N/A
NOI Net Operating Income N/A
NIY N/A

Attributes

Loan Status Non-Performing
Property Type Hospitality

Asset Description

Jones Lang LaSalle (“JLL”) has been retained by the Seller on an exclusive basis to arrange the sale of a $14,812,399 ($103K per key) interest in a non-performing hotel construction loan (the “Loan” or “Tranche A”). Originated on September 23, 2019, the Loan was structured with an initial maturity date of November 23, 2020. The interest-only Loan carries a contractual rate of 10.00%. The Loan is senior to a $7,030,828 participation interest (“Tranche B”), which carries an interest rate of 6.00%.

On October 23, 2020, the Lender issued a notice of default for, among other things, failure to make timely payments. Currently, default interest is being charged on both the Loan (18.00%) and Tranche B (11.00%), which have total payoff amounts of $16,638,403 and $7,858,644, respectively.

The Loan is secured by a deed of trust against a partially-constructed 144-key select-service hotel and 14,352-SF restaurant/conference center located within the Denver MSA (the “Hotel” or the “Collateral). As of September 2020, the Hotel was scheduled to be opened in July 2022. Planned amenities include an indoor pool and whirlpool, a fitness room, a business center, a market pantry, a guest laundry room, and outdoor patio areas.

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Investment Highlights

POTENTIAL PATH TO TITLE - With the Loan in default, investors could potentially pursue remedies under the loan documents or a restructure with the Borrower.

GROWTH SUBMARKET - Located near the Denver International Airport, the submarket has experienced significant growth in the last few years. Large infrastructure investments provide convenient access to Downtown Denver, and there has been increased growth in retail amenities, office concentration and enhanced schools & parks.

ACCRUING DEFAULT INTEREST - Protective advances in excess of $1MM are accruing default interest since Tranche B has not funded their pro-rata share. Additionally, default interest totaling $1.267MM has accrued on the Tranche A principal balance, which can be pursued by noteholder under the loan documents.

Last Updated Date: 11 Nov 2021

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Last Updated Date: 11 Nov 2021

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