First Hospitality Starts Distressed Hotel Program

"We saw a real need within the industry for a partner to assist with the many questions and difficulties faced with during hotel takeovers," says president Robert Habeeb. "We created this program to leverage our comprehensive understanding of the entire process and to be just that, a partner from start to finish. We provide all-inclusive management of distressed properties with an efficient and effective program that garners results."

FHG officials cite recent statistics that show more than 5% of national hotels are now in default, a number that is likely to grow to 20% by the end of 2010. The new distressed arm will focus on the lenders that are dealing with management of repossessed assets and companies trying to make payments on their holdings.

"These assets present a host of unforeseen and unexpected challenges for those unfamiliar with the hotel management process, including liquor licenses, bonding, insurance, inventories, personnel, and franchise agreements. FHG's program provides step-by-step assistance with a team of experienced industry professionals to guide the process from takeover to sale," FHG officials say.

Testing the waters in the last couple months, FHG has assisted in three distressed hotel takeovers. The company was named receiver of the Hotel & Conference Center in Gurnee, IL. It is presently working to improve performance in order to prepare the property to sell.

Additionally, FHG purchased the Residence Inn in Grand Rapids, MI. The purchase deal was part of a cooperative agreement between the borrower and the bank, according to company officials. FHG also assisted in the management takeover of the Fuego Mexican Grill in Arlington Heights, IL. FHG is now working to reconfigure the operations with the hopes of improving performance.