Thompson San Antonio Riverwalk Heads to Foreclosure Auction

A luxury hotel on the San Antonio River Walk is heading to the courthouse steps.

The Thompson San Antonio – Riverwalk is slated for a March 3 foreclosure auction after affiliated lenders Sunrise Realty Trust and Southern Realty Trust issued a notice of default on the hotel portion of the mixed-use property at 115 Lexington Avenue, according to Bexar County records. The San Antonio Business Journal reported that the two real estate investment trusts refinanced the property with a $44 million senior loan in 2024.

Only the hotel — aside from the building’s 59 residential condos — is subject to the foreclosure notice. The Thompson Hotels banner falls under the Hyatt Lifestyle umbrella.

In the Feb. 6 filing, the lenders said they gave developer DC Partners four opportunities throughout 2025 to cure the default. West Palm Beach, Florida-based Sunrise and Southern declined to comment.

Houston-based DC Partners, which completed the project in 2021, attributed the distress to a convergence of market headwinds. In a statement through a spokesperson, the firm cited slower than expected stabilization, a wave of new downtown hotel supply and persistently high interest rates.

Opening during the pandemic didn’t help.

“These factors — including opening during Covid and a broader softness in the San Antonio hotel market — created challenges that were not anticipated and challenging to overcome,” the firm’s spokesperson told the outlet, adding that the situation reflects market conditions rather than the property’s long-term viability.

The foreclosure comes less than two years after Miami-based 3650 REIT provided a $38 million refinancing in 2022, followed by the $44 million refinancing from Sunrise and Southern in 2024. At the time, Sunrise and Southern CEO Brian Sedrish said the loan highlighted confidence in DC Partners as well as demand for upscale accommodations in Texas.

Now that notion is being tested.

The 162-key hotel was among a new class of high-end hospitality projects aimed at elevating San Antonio’s River Walk offerings. But as new rooms have come online and borrowing costs have climbed, operators have faced margin pressure in a market that historically depends on convention and leisure demand, according to the publication. — Eric Weilbacher