Beanie Baby Tycoon Warner Hits Trouble With Hotels
Wall Street Journal reports: Beanie Baby tycoon Ty Warner has run into difficulty getting an extension on a $345 million securitized mortgage on four of his luxury hotels, including the New York Four Seasons, because of the hotels' declining cash flow. The servicer overseeing the mortgage transferred it earlier this month to a special servicer, Capmark Financial Group.
In addition to the 368-room Four Seasons in Manhattan, the other hotels pledged as collateral for the mortgage are the 211-room Four Seasons Biltmore in Santa Barbara, Calif., the 38-room San Ysidro Ranch in Santa Barbara and the 38-room Las Ventanas resort in Mexico's Baja California.
Mr. Warner, whose plush, bean-filled toys made him a billionaire in the 1990s, bought the hotels between 1999 and 2004. He paid $271 million for the New York Four Seasons in 1999 and spent $86 million renovating it. Other properties his hotel company owns include the Montecito Country Club and the Sandpiper and Rancho San Marcos golf clubs, all in Santa Barbara.
Mr. Warner is just the latest of many resort owners to run into difficulties in the worst hotel downturn since the Great Depression. Steep declines in occupancy and revenue in the past two years have led to many owners either defaulting on their debt or asking lenders and servicers to revise the terms of their debt to help them survive the downturn.
Securitized mortgages are just one portion of lending for commercial properties. Overall, distressed debt tied to hotels now amounts to $21.9 billion, up from $1.9 billion a year ago, according to Real Capital Analytics. The company classifies as distressed any loan that is delinquent, in foreclosure, in bankruptcy or otherwise revised to help struggling borrowers.
View the full article on Wall Street Journal: Beanie Baby Tycoon Warner Hits Trouble With Hotels
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Posted by: Matthew Stone