News for the Hospitality Executive
Hotel Equities Appointed Receiver of 80-room Fairfield Inn & Suites
Atlanta, GA–March 28, 2011 – Atlanta-based Hotel Equities was recently appointed receiver of the 80-room Fairfield Inn & Suites by Marriott hotel located on I-95 at the Savannah/Hilton Head International Airport.
“Hotel Equities (www.hotelequities.com) is a strong operator of hotels with a solid reputation of integrity and is particularly qualified to stabilize and improve operations in these distressed CMBS mortgage situations,” said Andrew Pace, Director of Development for Hotel Equities.
“Special servicers have been patient for two years as they have weighed their options, including modifying loans and appointing a receiver in an effort to foreclose,” continued Mr. Pace. “Now, in 2011, an increasing number of these same lenders are making decisions to foreclose in an attempt to recover their positions. An improving economy in many markets and new sources of equity and debt are providing the necessary liquidity for more selling opportunities.”
Mr. Pace went on to explain that in addition to the more traditional foreclosure remedy, lenders are now frequently seeking the appointment of a receiver to protect the hotel property and related business that is securing the loan. The lender may not only benefit from the appointment of a receiver but may, in fact, be compelled to take such action in order to protect its future rights. The protective remedy of a receivership action is not new, but it was not often used until recently.
“Because many attorneys and judges are inexperienced in making receiver appointments, lenders should familiarize themselves with the process and related issues with help from their attorneys,” said Mr. Pace.
The typical hotel loan is secured by a mortgage or trust deed on the property itself. In addition, the lender usually has the right to exercise some control over the income of the hotel in the event that payments are in default. This right is typically part of the "rents and profits" clause of the promissory note. In order for the bank to exercise its rights to such income before a filing while avoiding claims of lender interference, the bank may ask the court to appoint an impartial third party to "receive" the property and its income. The receiver is not an agent for the lender, rather the receiver is an independent third party hired to protect the property for all the stakeholders.
The Fairfield Inn & Suites by Marriott-Savannah Airport, only a short drive from Historic Savannah, features a business center, a cardiovascular fitness center and a heated indoor pool and spa. A complimentary breakfast buffet is available each morning in the breakfast room off the lobby. Guests may use the complimentary shuttle service operating to and from the airport daily from 6 a.m. until 11 p.m.
Hotel Equities (HE) is an Atlanta-based full-scale hotel management, receiver, development and consulting firm. Frederick W. Cerrone, CHA, serves as President and CEO. HE presently has 44 properties in its portfolio.
For more information, visit www.hotelequities.com.
Margaret M. Jones
Director of Public Relations
Director of Business Development,
678.578.4444, x. 16
Director of New Development
678.578.4444, x. 23
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