Ownership of Dana Point’s St. Regis Monarch Beach Resort has turned over to New York-based lender Citigroup Inc., officials said early last week.
The forfeiture ends two months of negotiations between Citigroup and the property’s prior co-owners, Newport Beach-based Makar Properties LLC and San Francisco hedge fund investor Farallon Capital Management LLC.
The hotel had been set for auction after Citigroup moved in May to foreclose on a $70 million secondary mezzanine loan. The auction was put off twice before last week’s transfer was announced.
White Plains, N.Y.-based Starwood Hotels & Resorts Worldwide Inc. is set to continue operating the hotel under its St. Regis brand.
The hotel’s daily operations aren’t expected to be affected by the ownership transfer.
Including the Citigroup loan, the St. Regis has about $300 million of debt tied to it after a 2007 refinancing.
Industry watchers say the hotel’s value now is closer to $150 million.
Citigroup started foreclosure proceedings on its loan after Makar Properties and Farallon fell behind on payments.
About $230 million in senior debt on the hotel is held by Newark, N.J.-based Prudential Financial Inc. and a unit of Seattle-based Washington Real Estate Holdings LLC.
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Mark Mueller
