Debts could force early hotel check-outs


From the South Florida Web site:
If the South Florida winter seems chillier for hoteliers this year, it’s because they face not only low temperatures but also fierce competition for guests and loan default risks linked to king-sized collateral valuations. “The hotels that will go sour are the ones that over-leveraged,” said Michael Cannon, executive director of real estate consulting and valuation firm Integra Realty Resources in South Florida. Condominium-hotel construction and conversion projects, in particular, attracted money from lenders based largely on their condo profit potential. As the condo market collapsed, that potential evaporated. But some condo-hotel ventures that borrowed based on forecasts of flipped units have flopped under heavy debts the hotels alone can’t carry. Prominent among floppers is Chicago-based developer Robert Falor, who lost control of the Royal Palm, Breakwater and Edison hotels in South Beach after failing to transform them to condo-hotels.

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