Reay tells GlobeSt.com that a few small hotels throughout California have gone into foreclosure in recent years, but this is the first of such size and institutional quality to go into foreclosure in years. He says that the foreclosure, by an affiliate of Chicago Title called Village Resorts LLC, resulted from cost overruns on the part of the developer.
The developer spent $72-million building the property, which opened in November 2006, and nearby casitas that were sold to individual owners. In addition to its 146 suites, the hotel generates lease income from three retail parcel pads and 122 privately owned condominium units that were designed to Embassy Suites standards. Its nine-acre site includes 10,000 sf of meeting space and the 6,000-sf Spa Hibiscus.
Reay tells GlobeSt.com that the property has already generated strong interest from prospective buyers, including locally based hotel groups, owners of other Embassy Suites hotels and a number of REITs. He says that prospective owners are interested in the Embassy Suites flag as well as the location near Highway 111 and Interstate 10, which is close to venues like the Indian Wells Tennis Garden, Empire Polo Fields and the PGA West golf course.
The bidders' interest also stems from the growth in the Coachella Valley, the quality flag and the availability of financing in today's market. Reay tells GlobeSt.com that Atlas is "probably about a month or six weeks away" from calling a deadline for offers.
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