FORT WORTH-In its latest SEC filing, Crescent Real Estate Equities Co. is claiming that Walton TCC Hotel Investors V LLC is in default of a $175-million agreement to buy the 228-room Fairmont Sonoma Mission Inn & Spa. The asset was pulled from May’s closing of a $620-million portfolio and rescheduled to close at noon June 28.

In the July 2 filing, Crescent claims it is entitled to keep $3.5 million of earnest money that the Chicago-based Walton plunked down for the Sonoma, CA resort at 100 Boyes Blvd. Dealmakers couldn’t be reached by deadline to comment on the cratered contract.

In the SEC filing, Crescent contends the agreement was terminated because the buyer failed “to comply with its obligations under the SMI Agreement [Sonoma Mission Inn] regarding delivery of documents and information to the lender on a timely basis.” Crescent also based the default declaration on the buyer’s “failure to use commercially reasonable efforts” with the lender to assume the asset’s outstanding debt and assigning the agreement to an affiliate without the lender’s consent. Walton had assigned the contract to WTCC Sonoma Hotel Investors V LLC as its buyer of record for the historic property.

The Fort Worth seller’s June 26 decision could be a formality since the agreement was about to expire just like the portfolio did. And, that’s not to say that the deal won’t be resurrected as the buyer and seller did in April. Crescent stood to gain $147 million after payouts to partners and incentives from the Fairmont Sonoma sale.

Meanwhile, Crescent shareholders are slated to vote Aug. 1 on the REIT’s sale to New York City-based Morgan Stanley Real Estate. The $6.5-billion buyout didn’t include the Canyon Ranch assets in Tucson and Lenox, MA and certainly not Sonoma Mission Inn & Spa. To date, Morgan Stanley’s interest appears to be purely office related, but as everyone knows in the world of M&A’s anything can go.

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