A lender took control of a distinctive 19-story Crowne Plaza hotel in Central Houston after years of receivership and loan default, according to public records.
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Jefferies LoanCore LLC foreclosed on the Crowne Plaza Houston Med Ctr-Galleria Area this month after lending $27.8M for it in 2014, Harris County records show.
The borrower, an LLC tied to San Diego-based Pacifica Host Hotels, began missing payments in 2020, according to Morningstar Credit data.
A newly created LLC bid $24.2M at the Feb. 4 foreclosure auction to take control of the 354-room hotel at 2712 Southwest Freeway, according to online records. The bid was about $3.6M less than the original loan amount.
While the LLC has no identifying information, special servicer comments provided by Morningstar Credit indicate that the lender, a joint venture of Jefferies Group and LoanCore LLC, took the title to the property on Feb. 4. A court-appointed receiver will transfer the title to a trust and continue managing the hotel under the IHG franchise agreement.
Special servicer comments indicate that the hotel has struggled with occupancy since 2018, conditions that were exacerbated by the pandemic and led the hotel to temporarily close in 2020. A receiver appointed in May 2021 completed “critical deferred maintenance repairs and life safety issues” to reopen the hotel in December 2021, this time with just 155 borrower-renovated rooms, comments indicate.
Also in 2021, a neighboring comic book store sued the hotel for negligence, alleging it allowed guests to throw items such as plates, luggage racks and ladders from their balconies onto the shop's roof.
Over the past few years, the hotel's receiver went on to renovate the remaining 200 rooms and remedy Hurricane Beryl damage, which led to an increase in group bookings last year, special servicer comments indicate. Meanwhile, Jeffries LoanCore considered various options for the asset, including a receiver sale and foreclosure.
The Crowne Plaza was built in 1983 and appraised at $12M last year, according to public records. The LLC tied to Pacifica Host Hotels had owned the hotel since 2006.
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