Saturday, March 20, 2010

Whale Hunting in Maui

WSJ reports that MSD is defaulting on the Four Seasons Maui mortgage - trouble should be expected given their partnership with Rockpoint on a number of properties at the peak.

MSD Capital LP, the private investment firm of Dell Inc. founder Michael Dell and his family, skipped the February payment on the debt as it seeks to restructure the loan, according to credit-rating company Realpoint LLC. The 380-room hotel's debt is split between two securitized mortgages, one of $250 million and one of $175 million.

Meanwhile, Beanie Baby tycoon Ty Warner's Ty Warner Hotels and Resorts reached a deal this week to extend by two years its mortgage on several resorts, including the 368-room Four Seasons New York, according to a person familiar with the talks. The mortgage had come due last January, but the four resorts pledged as collateral for the loan weren't generating enough cash flow to qualify for an extension.

Other Four Seasons hotels are working on compromises with their lenders. Mixed-use developer Millennium Partners LLC this month saved its Four Seasons San Francisco from foreclosure by bringing in Westbrook Partners LLC to pay $35 million of the hotel's $90 million securitized mortgage.

Four Seasons Dallas owner BentleyForbes LLC is negotiating with the special servicer overseeing the hotel's $183 million mortgage to revise the loan's terms. In the interim, the two entered a forbearance pact in which the special servicer has agreed not to foreclose as they try to work out a compromise.

In Hawaii, MSD Capital bought the Four Seasons Maui for $280 million in 2004. It then refinanced the property in 2006 with the two mortgages totaling $425 million.

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