IRVINE, CA—Auction.com is conducting a three-day online auction beginning May 7 for the note on a non-performing loan secured by the upscale Huntsville Marriott Hotel in Huntsville, AL. The starting bid for the note is $5 million, and bidders must pre-register with Auction.com and provide a deposit of $50,000.
The note has a loan balance just above $27.3 million and has a 5.86% fixed rate with a March 2017 maturity date. The most recent payment was Sept. 1, 2013.
GlobeSt.com was unable to reach Auction.com prior to deadline to discuss whether the site has seen a lot of hotel or other commercial real estate trades in the Alabama market.
According to Andrew Kern, managing director-hospitality for Rockwood Real Estate Advisors, a subsidiary of Auction.com, “This is an upper upscale property surrounded by vast profit potential. It’s a tremendous opportunity for investors seeking immediate return on a non-performing loan.”
Located five minutes from the University of Alabama at Huntsville and the 3,843-acre Cummings Research Park—which comprises 290 companies including Boeing, BAE Systems, Bell Helicopter, CSC, Johnson Controls, Lockheed Martin, Northrup Grumman, Pratt & Whitney and Raytheon—the 290-room, full-service hotel is at 5 Tranquility Base near a number of military and aerospace facilities that drive its NOI of nearly $1.3 million. Built in 1986, the hotel has 12,000 square feet of flexible meeting space, two restaurants and a lobby lounge, indoor/outdoor pool, fitness center and business center. In 2013, the occupancy was 55.9%, with an average day rate of $104.95.
The 10-acre parcel, which is leased form the State of Alabama’s Space Science Exhibit Commission, is adjacent to the US Space & Rocket Center and just north of the US Army Redstone Arsenal and NASA’s Marshall Space Flight Center. The ground lease has 50 years remaining on the term and consists of base rent and a percentage of rent components.
Meanwhile, as GlobeSt.com reported in April, the multifamily and class-A retail sectors are driving the trend of rising sale prices, according to Auction.com. The online marketplace facilitated the closing of 57 commercial assets during the month of March with a combined purchase price of $190 million, many of them apartment communities and shopping centers.
According to Eric Paulsen, EVP, general manager, commercial division, for Auction.com, “With sale prices continuing on an upward trajectory, performance across all sectors remains healthy, with multifamily and class-A retail leading the way. The Auction.com platform remains a major player in this sector, yielding above-market sales in these categories.”