W Union Square and Mondrian Scottsdale Hit New Lows
[Update: You can also add the Gansevoort South to this list as well as it heads into a foreclosure auction.]
Hotel financial woes are nothing new these days but yesterday two major hotel properties--The W Union Square and the Mondrian Scottsdale have some sad stories to tell.
The WSJ reports that the W Union Square was sold off in an auction for $2 million (plus the assumption of $212 million in debt) to LEM, a private equity firm based out of Philadelphia. What's crazier is that Dubai World's private equity arm Istithmar bought the W in 2006 for close to $300 million. Now, the word on the street is that more Dubai World properties may suffer the same fate. However, in this case, while the owners have changed, the Starwood brand of W Hotels should remain in place.
We're not so sure the same can be said for the Mondrian Scottsdale.
Morgans Hotel Group is preparing to surrender the hotel to its lenders. The AP reports:
New York-based Morgans Hotel stopped paying its $40 million mortgage and mezzanine loans on the property in June. The loans, which had been due June 1, are secured by its interests in the Scottsdale hotel.
There's still a good chance that Morgans can remain the hotel operator but nothing's for certain. Maybe the hotel needs to host a few more cougar conventions to get back on track?
Meanwhile, rates at the W Union Square were starting at $529 this weekend and the Mondrian Scottsdale had rooms starting at $165 a night.
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