Rialto Capital Advisors has dropped a foreclosure suit it filed against the owners of a suburban Chicago hotel near O’Hare International Airport.
Attorneys for the Miami-based loan servicer filed notice on Jan. 23 to voluntarily dismiss a suit it had brought against Schiller Park Hospitality, a group of local investors that owns the 295-room Four Points by Sheraton at 10249 West Irving Park Road in the suburb of Schiller Park.
Rialto had sued on Dec. 5 on behalf of the bondholders in a $11.5 million commercial mortgage-backed securities loan issued against the property in 2013. Neither Rialto nor the law firm representing the loan servicer in the case responded to requests for comment on why the suit was filed and withdrawn.
Naheed Amdani, an attorney representing Schiller Park Hospitality, said in an email that she was not sure why the lawsuit was filed and that the ownership group was in the process of refinancing. A new mortgage has not yet been recorded on the property in public records.
While this case is not proceeding, several other Chicago hotels have been entangled in legal issues related to unpaid debts following a poor performance due to the pandemic, including another attempt at a mid-market hotel foreclosure filed by Rialto. The servicer has also filed a complaint on behalf of CMBS bondholders against the owners of the 231-room South Loop Hotel at 11 West 26th Street in Chicago, a case still proceeding.
The Schiller Park property was appraised at $19.3 million in March, up from $17 million when the loan was issued in 2013, according to ratings agency DBRS Morningstar.
The ownership group’s members are Amin Amdani, Fouzan Memon, Waqas Akuly, Bimal Doshi, Paul Busching and Satya Mehta, according to Illinois business records.
While the Chicago area hotel market is recovering, the metrics haven’t reached pre-pandemic levels. Year-to-date occupancy hit about 60 percent in the Chicago market in the third quarter of 2022, according to the latest report from Newmark.
Though that’s up from about 45 percent for the same time period in 2021, it’s still down from about 75 percent for that period in 2019, before the onset of the pandemic.
Revenue per available room for Chicagoland hotels has been on a similar trajectory, rising to about $95 in the third quarter from about $55 during the same time period in 2021.