Hotel News: Defaults, Foreclosures, Deals & Development – February 2024
- Hotel industry is experiencing a period of recalibration, marked by loan defaults, strategic refinancing, and continued development, according to recent reports.
- February 17, 2026 – The Thompson San Antonio-Riverwalk, a prominent downtown hotel, is scheduled for a foreclosure auction after the owner, DC Partners, defaulted on a $44 million...
- DC Partners attributed the difficulties to longer-than-expected stabilization timelines, an influx of new hotels in the San Antonio market, and the prevailing high-interest-rate environment.
Hotel Investment Landscape Shifts: Foreclosures, Refinancing, and New Developments
The U.S. Hotel industry is experiencing a period of recalibration, marked by loan defaults, strategic refinancing, and continued development, according to recent reports. Challenges stemming from the COVID-19 pandemic, rising interest rates, and increased competition are contributing to a complex market environment.
San Antonio Hotel Faces Foreclosure
– The Thompson San Antonio-Riverwalk, a prominent downtown hotel, is scheduled for a foreclosure auction after the owner, DC Partners, defaulted on a $44 million loan. According to Bexar County records, Sunrise Realty Trust and Southern Realty Trust initiated the foreclosure proceedings after repeated attempts to resolve the default throughout .
DC Partners attributed the difficulties to longer-than-expected stabilization timelines, an influx of new hotels in the San Antonio market, and the prevailing high-interest-rate environment. “These factors — including opening during COVID and a broader softness in the San Antonio hotel market — created challenges that were not anticipated and challenging to overcome,” the firm stated through a spokesperson. The company emphasized that the situation does not reflect the quality of the property itself, but rather a convergence of broader economic forces.
The hotel, which opened in as the first new luxury hotel in San Antonio in five years, was built at a cost of $130 million.
Ashford Trust Defaults on Loan
Dallas-based Ashford Hospitality Trust disclosed on , that several of its hotel-owning subsidiaries received a notice of default from Wilmington Trust. The default relates to a $395 million loan secured by eight hotels, stemming from the borrowers’ failure to make required principal and extension payments and to provide a replacement interest rate cap agreement on . The trustee has accelerated the debt, demanding immediate repayment of $325 million plus accrued charges.
The affected properties include Embassy Suites hotels in Portland, Crystal City (Virginia), Orlando, and Santa Clara (California), as well as La Concha Key West (Florida), Hilton Costa Mesa (California), Sheraton Minneapolis, and Historic Inns of Annapolis (Maryland). Ashford Trust noted that the default is limited to this specific financing structure and does not trigger cross-defaults on other subsidiary loans.
New Boston Hotel Planned
In Boston, DGH Hotel Partners JV LLC, a joint venture between Hong Kong-based Global Hospitality Investment Group and a global investment management firm, is planning a new urban lifestyle hotel across the street from the Thomas M. Menino Convention and Exhibition Center. The 15-story hotel will feature 438 rooms, an indoor/outdoor lobby bar, and rooftop space.
Refinancing and Acquisitions
Despite the challenges, some companies are successfully navigating the financial landscape. RLJ Lodging Trust has refinanced all its debt maturities through , securing extensions on its revolver and term loans, adding new financing, and refinancing existing secured debt. The company intends to use proceeds to address its $500 million senior notes maturing in .
Highline Hospitality Partners has expanded its portfolio with the acquisition of the 298-key Pittsburgh Marriott North from an undisclosed seller. This marks Highline’s 17th hotel acquisition and its first in Pennsylvania.
International Developments
Pakistan has agreed with the U.S. Government to jointly redevelop the Roosevelt Hotel in New York, a century-old property owned by Pakistan’s national airline. The hotel has been closed since and is considered a key asset in Pakistan’s restructuring and privatization plans.
Hilton experienced record growth in the Caribbean and Latin America in , exceeding 300 operating hotels and expanding its pipeline to over 150 properties. IHG Hotels & Resorts is also expanding its presence in Egypt and Australia, adding new hotels to its portfolio.
Leadership Change at Sotherly Hotels
Sotherly Hotels Inc. Has appointed Zachary Schmidt as its new CEO, following the resignation of David Folsom after the completion of the company’s acquisition by Kemmons Wilson Companies (KWC). Schmidt previously held various roles at KWC, most recently as head of portfolio management.