Following a 10-month marketing and sale process, including four months pursuing Chapter 11 bankruptcy reorganization, the sale of 14 Eagle Hospitality Trust properties is nearing a conclusion.
Four buyers made bids for two dozen properties that have received bankruptcy court approval. The sell-off of the portfolio, which now awaits final closing, was the likely outcome when Eagle filed for Chapter 11 bankruptcy protection earlier this year.
Not included with the properties was Eagle’s control of the Queen Mary, a former ocean liner converted into a hotel in Long Beach, California. The city has warned the iconic tourist attraction may be in danger of sinking.
The warning was included in filings by the city of Long Beach in a bankruptcy case involving the parent of the ship’s former operator, Urban Commons, which Long Beach officials claim owes the city more than $40 million for overdue repairs, rent and other unpaid fees under a lease agreement.
Eagle’s entity that owns the Queen Mary filed a motion in the bankruptcy case for the recovery of funds from two former directors who resigned from the real estate investment trust a year ago. Prior to April 2020, the two directors, Howard Wu and Taylor Woods, controlled Eagle as well as Los Angeles-based Urban Commons, which holds the master lease on the Queen Mary, according to bankruptcy court documents.
Urban Commons did not respond to requests for comment from CoStar News.
Regarding bids for the 14 Eagle portfolio hotels, the REIT filed its notice of approval of bids for the properties, as did a committee of creditors and the firm’s financial adviser.
The only entities objecting to the sales, according to court filings, are Wu, Woods, Urban Commons and Constellation Hospitality Group, a Dubai-based developer of luxury hotels. In a combined objection, the group asked for additional time to revise bids for some of the properties.
The bankruptcy court did not extend the bidding and approved asset purchase agreements with the winning bidders.
The bids are expected to result in the following transactions:
- An affiliate of New York-based Marathon Asset Management is the presumed buyer of Holiday Inn Resort Orlando Suites Waterpark, Holiday Inn Denver East Stapleton, Renaissance Denver Stapleton Hotel, Holiday Inn Hotel & Suites Anaheim Disneyland, Holiday Inn & Suites San Mateo, Sheraton Pasadena Hotel, Crowne Plaza Danbury, Westin Sacramento and Embassy Suites Palm Desert. Marathon bid $326.5 million for the group of hotels.
- Separately, Marathon submitted a bid of $33.1 million for Embassy Suites Anaheim North.
- New York-based Solid Rock Ventures looks to be the buyer of Sheraton Denver Tech Center with a bid of $9.2 million.
- An entity known as BPEHT placed a bid of $41.1 million for Four Points San Jose Airport and $33.8 million for Double Tree Salt Lake City Airport.
- Toronto-based FullG Capital bid $38.2 million for Hilton Atlanta North.
“The sale transactions represent a tremendous result for the creditors of the debtors’ estates — albeit, unfortunately, the proceeds are not sufficient to provide a recovery to unitholders,” Eagle said in its support of the results.
“As the court will recall, the debtors began these Chapter 11 cases in the middle of a global pandemic with the majority of the hotels closed and no sources of potential liquidity other than [debtor in possession] financing available to them, a state of affairs that continues up to the present,” the company said.