Despite a foreclosure auction scheduled next month for the former Embassy Suites tower in downtown Baltimore, its owner plans to hold on to the property and transform it into apartments.
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Steve Schwat, principal at D.C.-based Urban Investment Partners, said the firm has secured financing to prevent the foreclosure and sale of the 37-story tower at 222 St. Paul St.
“It will never make it to the auction block,” Schwat told Bisnow Wednesday.
Auction house Alex Cooper posted a notice Tuesday that it scheduled a foreclosure sale of the property for 11 a.m. on Sept. 20 on the steps of the Clarence M. Mitchell Courthouse, and bidders must provide a $300K deposit.
However, in an interview Wednesday, Schwat said he had obtained new financing that would satisfy the existing lenders, whom he called "incredibly patient," as the project has faced challenges with rising interest rates and construction costs.
“We have financing in place," Schwat said.
After the pandemic forced Embassy Suites to shutter the hotel, BIH Owner LLC, a subsidiary of Urban Investment Partners, purchased the tower in the heart of Baltimore's traditional Central Business District for $18.3M in late August 2021, according to Maryland property records.
Schwat in 2021 initially presented plans to transform the 57-year-old building into 306 apartments, the Baltimore Business Journal reported. At the time, Urban Investment Partners planned to raise $11.6M in equity to complete the overhaul of the St. Paul Street tower, the BBJ reported.
Those plans have evolved, and Schwat said he plans to convert the vacant property into 285 apartments with a top-floor lounge.
UIP has also signed a term sheet with the owners of Cafe Fili to open an eatery in the building's ground-floor retail space formerly occupied by Starbucks, Schwat said.
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