Eagle Hospitality Trust’s Delta Woodbridge property sells for less than mortgage

U.S. one-dollar currency notes; taken September 2018.U.S. one-dollar currency notes; taken September 2018.

Correction: On 27 December 2021, DBS Trustee told SGX that the purchase price for the property was US$22.3 million. The figure has been corrected in the article. 

The Delta Woodbridge (DW) property, once part of troubled Eagle Hospitality Trust, has been sold in foreclosure for less than the mortgage held by Wells Fargo, according to a filing to SGX Thursday.

The receiver, Eastdil Secured LLC, determined the highest and best offer for the property was US$22.3 million, which the Superior Court of New Jersey approved, and the sale was completed on 8 December, the filing said.

The net proceeds will be used to offset the mortgage loan and related sums due, including advances made by Wells Fargo, interest and attorneys’ fees, of around US$37.6 million, the filing said.

“The REIT Trustee understands that the net proceeds of the DW Disposal is insufficient to cover the whole outstanding principal balance of the DW mortgage loan. As such, there is a remaining outstanding balance of the DW mortgage loan which will allegedly continue to be payable,” the filing said. Wells Fargo may still have claims related to the loan, the filing said.

The seven-storey hotel is located in Iselin, New Jersey.

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.

The trust at one point had as many as 18 hospitality properties dotted around the U.S. and a portfolio valuation of as much as US$1.27 billion before it collapsed amid allegations of mismanagement, running into trouble even before the Covid-19 pandemic dealt a blow to the entire hospitality industry.

The property may also have recently been the scene of a shooting, with four suspects arrested.