Banks want to lend money to hotels, not own them. So some folks at Wells Fargo probably popped a little bubbly this week.
Wells Fargo sold a $51 million senior leasehold mortgage secured by a Marriott in Manhattan’s Pennsylvania Plaza, and lent $30 million to help the buyer take it off the bank’s hands.
Magna Hospitality paid a little less than $57.4 million to buy the $51 million senior loan and assume control of the 239-key Marriott Fairfield Inn & Suites at 325 West 33rd Street, Commercial Observer reported.
Wells Fargo had recently acquired the asset in a deed-in-lieu-of-foreclosure proceeding with the mezzanine lender and the previous owner, Hawaii-based The Shidler Group. The transaction closed in early December.
Shidler acquired the property in 2014 for a much loftier sum, paying just over $135 million for the 22-story hotel, which boasts views of the Hudson River, a rooftop bar and a gym. Shidler subsequently separated the ground lease interest from the fee-simple interest in the hotel, according to the publication.
A deluxe king room at the Penn Plaza Marriott now asks $89 a night, according to Expedia. The New York City’s tourism agency forecast that it may take four years for tourism to return to pre-pandemic levels, dampening the outlook for the battered hospitality industry.
One of the nation’s largest hospitality real estate investment trusts, Ashford Hospitality Trust, said it would seek bankruptcy protection this year if it does not receive new financing. About a week later, Ashford received a $350 million lifeline from Oaktree Capital — but with high interest rates and fees that could bring the total payback cost to nearly $600 million.
[CO] — Georgia Kromrei