German bank lists $342M U.S. loan portfolio backed by Ace Hotel

TRD New York /
Jul.July 21, 2011 08:38 AM

German bank WestLB AG is marketing a $342 million portfolio of loans backed by hotels and resorts that include the Ace Hotel in Manhattan and a beach resort in Miami, according to the Wall Street Journal. The portfolio might attract bids of 60 to 70 cents on the dollar, experts said. Jones Lang LaSalle is managing the sale.

“The mix of hotels may make it harder to find one buyer who wants the whole portfolio,” said Tom McConnell, senior managing director of global hospitality at Cushman & Wakefield.

WestLB, like a number of European banks, lent aggressively to U.S. developers during the property bubble, but, unlike others, it provided financing even for more speculative resort projects. The bank is owned by the German state of North Rhine-Westphalia and regional savings banks.

“Some of the overseas banks got into markets they didn’t know as well as the urban markets,” said John Fox, a hotel analyst at Colliers PKF Consulting.

The offering memorandum terms six of the 10 loans as performing. Some of them are part of a lending syndicate, which would make it much more difficult for a new debtholder to wrest control of a property, the Journal said. [WSJ]

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