Loan Sale Success Story Hotel NPL

Sold at 92% to par with a zero day due diligence period and a ZERO DAY close; the winning buyer wired the full purchase price after seller’s LOI acceptance and prior to full PSA execution.

This was a sale of a non-performing commercial loan collateralized by a 110 room limited service hotel in rural Texas.

The loan was in maturity default after the borrower negotiated two forbearance agreements with the lender. The borrower indicated intent to either refinance the loan or sell the property, however there was little evidence of progress over two years of borrower negotiations. Over that time period, the hotel lost its brand flag and the property condition deteriorated significantly.

CHALLENGES

When the brand flag was lost, the borrower reduced room rates and shifted to a mostly cash business. The hotel became an attractive nuisance in town and was noted as a hotspot for criminal activity - there was video of a shooting onsite in the local news.

SOLUTION

We targeted both local & regional investors directly. This was coupled with a national online marketing campaign to hotel brokerage firms, bridge & hard money lenders and hotel owner-operators.

CONCLUSION

The winning bidder was a local, Abilene-based investor who increased his bid 55% higher than his indicative offer in the first round. He indicated that he wished to foreclose and demolish the property to clean up his credit score.