Ashford Hospitality Offers $32 Million for Distressed Property

A major Dallas-based hospitality player wants to pick up a beleaguered San Antonio downtown property and transform it under the Autograph Collection Hotels banner.

Monty Bennett’s Ashford Hospitality Trust offered a cash purchase of $32 million, according to an Aug. 20 filing in federal bankruptcy court, the San Antonio Business Journal reported. The building at 145 Navarro Street is the former headquarters of CPS Energy. An affiliate of Houston-based Blueprint Hospitality, which had planned an office-to-hotel conversion project, filed for bankruptcy in February.

The lender behind the fraught conversion, Riverwalk Reposition Partners, an LLC affiliated with Austin-based WM Capital Partners, holds a $14.4 million note on the building. The lender asked a bankruptcy judge to take the project out of the owner’s hands in a March court filing, citing mounting debt, mold damage and “a pipe dream” of a business plan.

The lender accused the borrower of failing to meet basic financial obligations, including paying 2024 property taxes, maintaining insurance and covering utility bills, which has left the building without electricity. Contractors and suppliers have filed about $8 million in liens, while a flooded basement has led to mold growth, which has yet to be remediated.

The Blueprint affiliate defaulted shortly after refinancing the building, which it bought in 2021 for $19 million with plans to convert it into a 243-room Marriott Autograph Collection hotel called El Portal. Blueprint said in the filing that the sales agreement would include the existing contract with Marriott International and principals of Blueprint’s 145 Navarro entity would retain ownership interest.

Blueprint would separately convey the garage portion of the property, which is connected to the building via a sky bridge, to ERC Acquisitions.

The settlement would include all secured claims against the building’s ownership entity. Blueprint teed up roughly $168 million in potential loans to carry out the conversion work.

Bankruptcy Judge Christopher Lopez might consider and sign off on the deal next week.

— Eric Weilbacher