Why You Shouldn't Snub Receivership Sales
Receivership sales can be complicated and require a deep understanding of the court system. (Paying speeding tickets in traffic court doesn't count.) But the results can make the effort worthwhile.
An example is Trigild's sale of two hotels in Valencia—the 118-room Holiday Inn Express on Championship Way and the 120-room Best Western on Wayne Mills Place—for $21M. CEO Bill Hoffman (with president and spouse Judy Hoffman) says Trigild was appointed receiver last November for five LLCs that owned the two north LA County hotels plus three other properties in a family trust. The company received court approval (over the objections of a beneficiary of the trust) to sell the Valencia hotels. Atlas Hospitality's Alan Reay was the broker on the sale.
Bill says the deals demonstrate the benefits of receivership sales, which often bring faster results and a higher recovery for the lender. During the eight months that Trigild operated the hotels, the Best Western's (above) revenue grew 17% and its net operating profit rose 39%. The Holiday Inn Express achieved revenue and NOI gains of 10% and 8%, respectively. He's not done yet. The other three hotels held in the trust—a Courtyard by Marriott and Marriott TownePlace Suites in Thousand Oaks, and another Courtyard by Marriott in San Luis Obispo—are under contract and approved for sale.