Owner of Westin La Paloma, other hotels on verge of default
Staff and wire reports
Tucson, Arizona Published: 11.19.2008
A Tucson-based investment firm that owns the Westin La Paloma Resort & Spa and other area hotels is on the verge of defaulting on its loan of more than $209 million, according to Credit Suisse Group AG.
Transwest Partners/NCH Corp. bought the Westin La Paloma and a second hotel in South Carolina, the Westin Hilton Head Island Resort & Spa, in December for about $310 million.
The $209 million Westin Portfolio loan was among the 10 largest in a debt offering sold by JPMorgan Chase & Co. on April 30, according to Bloomberg data. The loans were transferred to special servicing because of "imminent default," Credit Suisse analysts said in a note to clients Tuesday citing data from the loans' servicers.
If the Palmoa has to close, that will be another blow to our local economy and we're not alone. Atrios found this report:
Commercial Mortgages With Poor Forecasts Roil Bonds (Update1)
By Sarah Mulholland
Nov. 20 (Bloomberg) -- Mortgages on offices, shopping malls and hotels that were based on projections of soaring income during the real estate boom are roiling the bond market.
A $209 million loan made by JPMorgan Chase & Co. to finance the Westin La Paloma Resort & Spa in Tucson, Arizona, and the Westin Hilton Head Island Resort & Spa in South Carolina, is near default after cancellations sapped revenue, according to Standard & Poor’s. In southern California, the owner of the Promenade Shops at Dos Lagos missed two payments, according to analysts at Deutsche Bank AG.
“These kinds of loans written during the height of the real estate boom could be the first to have problems,” said Christopher Sullivan, who oversees $1.3 billion as chief investment officer at United Nations Federal Credit Union in New York. “They were underwritten with outlandish expectations on rents and property appreciation that will turn out to be fiction.”
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