One of the debt holders on the foreclosed St. Regis Monarch Beach Resort has become the sole owner of the Dana Point luxury resort.
Seattle-based Washington Real Estate Holdings LLC said Tuesday it acquired the St. Regis for undisclosed terms.
Washington Real Estate Holdings had held part of $230 million in primary debt on the hotel along with Newark, N.J.-based Prudential Financial Inc.
“We believe in the long-term viability and success of this resort,” Washington Real Estate Holdings Chief Executive Craig Wrench said in a statement. “Needless to say, it has been a challenging time for all real estate asset classes, including hospitality, but the hotel industry is in a very different place today than a year ago and there is strong evidence that hotel fundamentals are beginning to rebound.”
Last year, New York-based lender Citigroup Inc. foreclosed on the St. Regis after the prior owners fell behind on payments for $300 million in debt from a 2007 refinancing.
Citigroup held a $70 million secondary mezzanine loan on the resort.
The foreclosure came after months of negotiations between Citigroup and prior owners Newport Beach-based Makar Properties LLC and San Francisco hedge fund investor Farallon Capital Management LLC.
White Plains, N.Y.-based Starwood Hotels & Resorts Worldwide Inc. has continued to run the St. Regis since the foreclosure.
Reports put the total value of the St. Regis sale at $235 million in cash and debt.
Washington Real Estate Holdings now has a $165 million mortgage with Prudential and a $40-million secondary loan with another source.
The deal cut the debt on the hotel to $205 million from $300 million.
Washington Real Estate Holdings owns office, industrial and other types of real estate as well as debt. Most of the company’s holdings are in Washington, including the Four Seasons Seattle.
