The Greenwich, Conn., investment manager bought the 693-room property from LNR Partners, special servicer for its $73.4 million CMBS loan, which was securitized through GS Mortgage Securities, 2005-GG4.
The sale is a rarity in that CMBS bondholders received a windfall from the liquidation of a troubled loan. The property’s sale generated $10.5 million of excess proceeds after a variety of fees and servicer advances, according to analysis by Barclays Capital.
The sales price compares with the $108 million value pegged to it by an appraisal conducted this past August.
The property, at the intersection of Canal and Bourbon streets, was offered for sale last year, but was ultimately taken off the market when it couldn’t fetch a buyer. It was repaired and a new marketing campaign got underway earlier this year through Eastdil Secured.
The property, then comprised of two hotels, the Astor Crowne Plaza and the Alexa Hotel, had been owned by Decatur Hotels, which bought it in 2002 for $61 million and embarked on a massive renovation.
Soon after the CMBS loan was originated in 2005, the property was damaged by Hurricane Katrina. Nonetheless, it continued to perform well, largely because government and aid workers were housed there. But when those contracts expired, the hotel’s occupancy plunged and it struggled to stay current on its mortgage. LNR filed to foreclose.
In 2007, a venture of Loeb Realty Partners and Deutsche Bank’s Rreef Global Opportunity Fund III bought the hotel for $93 million and assumed the CMBS loan, which they soon made current.
The loan soured again in May 2009 as a result of a renovation that impacted occupancy. It was again transferred to LNR. Hospitality Management Corp. of Dallas was hired to operate the hotel and Pyramid Hotel Group of Boston was brought in as the asset manager.
The property is being operated under a short-term franchise agreement with Intercontinental Hotels Group, which owns the Crowne Plaza brand. So the thinking is that Starwood would be able to quickly re-brand the property.
The Astor Crowne Plaza is comprised of the Astor tower, with 502 rooms that was constructed in 2002 by Decatur, and the Alexa tower, with 191 rooms in a building that was built in 1900, but redeveloped in 2002. The property includes 32,000 square feet of meeting space and 12,000 sf of ground-level retail space along Canal and Royal streets.