In the latest debt trouble for a San Francisco hotel, lender Deutsche Bank AG just sued the owners of the Stanford Court Hotel for allegedly missing payments on their $105 million mortgage, and for supposedly allowing elevators to go unrepaired.
You know it’s bad out there for SF luxury hotels when even the Four Seasons is defaulting on its loans, and could be foreclosed upon. That foreclosure bug has spread to yet another storied SF hotel, as the Chronicle reports that Nob Hill’s Stanford Court Hotel is being sued over missed mortgage payments, and its lender is seeking to foreclose upon the place.
The lender here is Deutsche Bank AG. They’re suing the hotel’s owner Pine & Powell Partners (which is based in LA, despite the street-crossing name that references the hotel’s location), and that company’s founder, real estate investor Michael Rosenfeld. The suit claims Pine & Powell Partners has failed to make payments on its $105 million mortgage to the bank, though it is not mentioned much the bank is supposedly owed.
Interestingly, there is also a busted-elevator subplot to this legal conflict.
“If the elevator modernization work is not completed before an upcoming professional conference that will be taking place at the property in mid-January — which has historically been a significant revenue generator for the property — the technician will be required to work double shifts each day, simply to service the property’s elevators,” the lawsuit claims. “Defendants are aware of these issues, yet still refuse to consent to the elevator maintenance contract.”
This is clearly a reference to the JP Morgan Healthcare Conference, which just wrapped up Thursday. The suit was filed Wednesday, per the Chronicle, so the lawyers clearly wrote this prior to this week.
The lawsuit seeks to hand over the Stanford Court Hotel to an appointed receiver, presumably so Deutsche Bank can sell the place. But San Francisco luxury hotels for sale are a dime a dozen these days, so this may not be as lucrative of an endgame that Deutsche Bank is hoping for.
Related: Now the Proper Hotel on Mid-Market Appears to Be In Financial Distress [SFist]
Image: Stanford Court
