Troubled Eagle Hospitality Trust’s Delta Woodbridge Hotel will be sold for US$23.5 million, compared with a New Jersey court entering a final judgement on foreclosure of around US$37.6 million, the REIT’s trustee said in a filing to SGX Wednesday.
That means the sale by the one-time operator of the Queen Mary Hotel is under water.
In March, the Superior Court of New Jersey had granted Wells Fargo, the lender to the hotel, an order allowing a rent receiver to be appointed to manage the hotel and collect rent and profits from tenants, occupants and hotel guests, the filing said.
DBS Trustee, in its role as trustee for Eagle Hospitality REIT, said the receiver had appointed Eastdil Secured to sell the hotel and after three months, had determined the best offer was a purchase price of US$23.5 million.
In August, Wells Fargo conducted a virtual public auction, but did not receive any bids for the hotel, the filing said. Subsequently, the court approved the sale to a third party for US$23.5 million, the filing said.
The US$37.6 million outstanding principal balance on the mortgage, plus other costs, will be offset by the sale price, with the remaining balance “allegedly” to be payable by EHT US1, a subsidiary of Eagle Hospitality REIT.
Eagle Hospitality Trust has had a troubled history. In Long Beach, California, the Trust’s handling of the Queen Mary Hotel had left investors nursing huge losses, according to an investigative report by The Long Beach Post.