San Francisco Four Seasons averts foreclosure
The Four Seasons Hotel San Francisco has escaped looming foreclosure as owner Millennium Partners and a new equity partner have paid down a significant amount of the debt on the property. Millennium and private equity group Westbrook Partners have paid down the mortgage on the Four Seasons San Francisco from $90m to $55m. Under the agreement Westbrook becomes two-thirds owner of the hotel while Millennium holds on to a one-third ownership interest in and continues to asset manage the hotel. The deal comes nearly a year after Millennium Partners started strategically withholding payment of debt service in order to initiate discussions with the debt holders of the hotel. Millennium Founding Principal Christopher Jeffries said the decision was driven by the fact that occupancy rates at the Four Seasons had tumbled to 50% and it was unclear if or when the luxury end of the hotel market would bounce back. While Millennium was public in its decision to stop making mortgage payments, from the beginning the developer was determined to hold onto the hotel, Jeffries said. “If you are going to play in the market and play on a consistent basis, you have to really be there when there are problems and survive them. We are so happy about (the agreement) because we survived, fixed it, and now we can move on,” said Jeffries.