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: Calculated Risk

Hotel Owner "Walking Away"

By Anonymous

"At some point, you just stop the bleeding and hand the keys back."
John Arabia, an analyst with real estate research company Green Street Advisors

From the WSJ: Sunstone Hotel Investors to Turn Over W San Diego to Mortgage Holders

Sunstone Hotel Investors Inc. intends to forfeit the 258-room W San Diego to its lenders after its efforts to reach a compromise on the luxury hotel's $65 million securitized mortgage failed.

Sunstone ... bought the W for $96 million in 2006 ... Sunstone estimates the W San Diego is worth much less than the $65 million balance on its mortgage. At the end of last year, the hotel posted an occupancy of 69% and generated revenue per available room of nearly $153.

Much less than $65 million? That means the price has probably fallen 50% or more since 2006.

Full post as published by Calculated Risk on June 07, 2009 (boomark / email).