Hotel heads for foreclosure as owner travels a different path

The Comfort Inn at 5240 Airport Lane. (Photo by Burl Rolett).

The Comfort Inn at 5240 Airport Lane (Photo by Burl Rolett).

As it carries out an aggressive expansion plan, one of Richmond’s largest hotel owners is letting go of one of its properties near the airport.

Shamin Hotels’ Comfort Inn at 5240 Airport Square Lane is in foreclosure after the company defaulted on a $2.6 million backed by the 17-year-old property.

Shamin is giving up on the property as it pumps money into larger hotels and more upscale concepts, and because the Comfort Inn is no longer competitive in the airport hotel market, said company chief executive Neil Amin.

“It doesn’t fit our property portfolio moving forward,” Amin said. “But the bigger issue is that it’s 61 rooms, there’s no elevator and there’s no pool. There’s no way to solve those issues really; it’s not like you can invest some money and clean it up.”

An onsite foreclosure auction for the Comfort Inn is scheduled for March 21. Amin said Shamin has been checked out of the hotel for about a year, when it gave control of the hotel back to its lender. Shamin still owns the land, he said.

The mortgage on the Comfort Inn was issued in December 2005. It’s a nonrecourse loan, meaning Shamin Hotels will not be on the hook if the sale price at auction falls short of the amount owed on the mortgage. Column Financial Inc. is the current note holder, according to a foreclosure notice.

Shamin Hotels built the two-story, 25,484-square-foot hotel in 1997. The building and the 1.82 acres it sits on are assessed at almost $1.6 million.

The Comfort Inn shares a crowded airport hotel market with a Best Western, a Courtyard and a Legacy Inn all along a half-mile stretch of Airport Square Lane and Williamsburg Road. The location also lost a major draw when semiconductor giant Qimonda closed a 210-acre Sandston plant in 2009.

“That plant has 2,000 employees in 2008, and because it was a foreign-owned plant they had travelers,” Amin said. “Unfortunately they filed for bankruptcy in 2008 and 2009, and that really affected the whole market out there.”

The foreclosure sale comes as Shamin continues to pump tens of millions of dollars into buying, building and renovating hotels around Virginia.

Shamin gobbled up five Virginia properties last year at a combined price tag of more than $52 million. They included the former Holiday Inn Koger Center in Chesterfield, the Hyatt Place on South Laburnum, a Courtyard in Chesapeake, and a Newport News Residence Inn. It also acquired an 18-story downtown Richmond office building at 700 E. Main St. that will be converted into a Hampton Inn and a Homewood Suites.

It recently completed a $1.3 million renovation at its Comfort Suites in Innsbrook, which sits a few miles from two other Shamin properties — the Hilton Short Pump and Aloft at West Broad Village.

The company is also expanding its holdings in Northern Virginia with a plan to build a second dual-concept Home2 Suites and a Hilton Garden Inn in Herndon.

Shamin owns 34 hotels between Virginia, Maryland and Washington D.C. according to the company’s website.

 

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Jay Rich
Jay Rich
7 years ago

Imagine a family just “walking away” from their first home that they bought for $260k while spending $5.2 million on 5 new homes the same year and $130k renovating another of their homes.

It would seem absurd, no?