|By Steve Brown, The Dallas Morning
NewsMcClatchy-Tribune Regional News
September 22, 2010 --Business and tourist travel is picking up, but the number of Dallas-Fort Worth hotels facing foreclosure this year has more than tripled.
So far in 2010, 94 North Texas hotel foreclosure filings have been recorded. There were 30 filings for the same period in 2009, according to Foreclosure Listing Service Inc.
"Among D-FW hotels, the threat of foreclosure has skyrocketed over the past two years," said George Roddy, president of the Addison-based foreclosure-tracking firm. "For the upcoming foreclosure auctions on Oct. 5, eight postings have been filed, threatening hotel projects within the area."
The hotels threatened with forced sale include the Crowne Plaza in Addison, the Radisson Hotel and Suites near Love Field and the Element Hotel on LBJ Freeway near Dallas/Fort Worth International Airport.
Hotels with more than $120 million in debt are up for auction next month by the lenders, Foreclosure Listing Service reports.
"The vast majority of the hotel foreclosure postings involved smaller, class B and C projects," Roddy said.
Some of the biggest local foreclosure filings this year have been for hotels. The foreclosure of the 431-room Four Seasons Resort and Club Dallas at Las Colinas with $175 million in debt was the largest such mortgage default in North Texas in about two decades.
Hotel market analysts say the surge in hotel foreclosures is typical for the economic times.
"People are hanging on by their fingernails, and just as things start to get better, they run out of fingernails," said longtime Texas hotel market consultant John Keeling. "The recession has just gone on too long."
Keeling, who is with Houston-based Valencia Group, said the hotel business is finally turning the corner.
"Occupancies are improving, and it looks like the individual business traveler is coming back," he said.
But many owners have exhausted their resources.
"They have done everything they can to keep the property going -- they've used reserves and deferred maintenance," Keeling said. "The ones most in trouble are the properties that were refinanced in 2007 or 2008 with high debt or people who purchased a property just as we were going into recession."
Keeling said some lenders are using forbearance with hotel operators and owners.
"A lot of lenders are really working with borrowers because they don't want hotels back," he said. "If it looks like the borrower can recover soon enough and they can get caught up, lenders will work with them."
Of course, it's not just hotels that are threatened with foreclosure in the D-FW area in October. For next month, 231 commercial properties with almost $840 million in debt are scheduled for sale.
Usually about a quarter of the commercial properties set for foreclosure each month are actually sold. In most cases, the lender delays the foreclosure or works out a new deal with the borrower.
Other big commercial properties currently up for foreclosure in the area include the One Telecom Center office building in Richardson's Telecom Corridor, a three-building office and industrial park at 2000 Westridge Drive in Irving and the Heritage at Lakeside apartments in Plano.
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