The Hilton Richmond Hotel & Spa at 12042 W. Broad St. is headed to a public foreclosure auction Sept. 28. (BizSense file)
A Short Pump hotel’s date with the auction block is set.
The Hilton Richmond Hotel & Spa at 12042 W. Broad St. is headed to a public foreclosure auction at 1 p.m. Sept. 28 on the steps of the Henrico County Courthouse.
The auction comes nearly nine months after the 254-room hotel was placed into a receivership, triggered by owner Shamin Hotels’ default on a $45 million loan secured by the property.
Locally-based Shamin, which owns more than 60 hotels mostly around the mid-Atlantic, fell behind on loan payments on the Short Pump Hilton beginning in April 2020, as COVID-related closures and social distancing were in full effect and battering the hotel industry.
Shamin CEO Neil Amin said in December that the Short Pump Hilton had been hit particularly hard during the pandemic because of its reliance on event and conference revenue and the room bookings that come along with such large gatherings.
Shamin built and opened the hotel in December 2009. The loan in question was borrowed in 2013 from JP Morgan Chase. The note was then bundled into a package of commercial mortgage-backed securities or CMBS.
The group pursuing the foreclosure is an entity representing the holders of the CMBS loan. That group, acting as 12042 West Broad Street Holdings LLC, filed a lawsuit in Henrico County Circuit Court last December to have the court appoint a receiver to take over the hotel and keep it operational.
The receiver, Northern Virginia-based Crescent Hotel Management Services, was ultimately appointed by the court on Jan. 21, according to court records.
The hotel remains open, with room rates currently at $146-$444.
The CMBS loan is a non-recourse loan, meaning the noteholder can’t come after Shamin for the remaining balance after foreclosure. The noteholder said in its Dec. 2 filing that the loan has a balance of $46 million and that the property could be worth as little as $26 million.
Further illustrating the property’s drop in value due to a loss of revenue, Henrico County most recently assessed the hotel at $12 million, down nearly two-thirds from $35 million in 2020. Hotel assessments are based in part on their revenue.
Shamin declined to comment about the pending auction, which is being handled by attorneys Daria Ivanova and Henry Brandenstein with the Venable law firm in Tysons Corner.
Bidders at the foreclosure auction must submit a deposit of $100,000 and be able to close on the purchase in 30 days.
Shamin, meanwhile, isn’t bogged down by the loss of the Short Pump property. The company is nearing completion on construction of the nearby Home2Suites at 209 Towne Center West Blvd. It also is under construction on a Home2Suites next to its Embassy Suites property near the corner of West Broad Street and Glenside Drive, and a Moxy Hotel by Marriott at 501 E. Franklin St. downtown.
Shamin also has purchased four existing hotels this year, including three at the Virginia Beach oceanfront and one in Newport News.
The Hilton Richmond Hotel & Spa at 12042 W. Broad St. is headed to a public foreclosure auction Sept. 28. (BizSense file)
A Short Pump hotel’s date with the auction block is set.
The Hilton Richmond Hotel & Spa at 12042 W. Broad St. is headed to a public foreclosure auction at 1 p.m. Sept. 28 on the steps of the Henrico County Courthouse.
The auction comes nearly nine months after the 254-room hotel was placed into a receivership, triggered by owner Shamin Hotels’ default on a $45 million loan secured by the property.
Locally-based Shamin, which owns more than 60 hotels mostly around the mid-Atlantic, fell behind on loan payments on the Short Pump Hilton beginning in April 2020, as COVID-related closures and social distancing were in full effect and battering the hotel industry.
Shamin CEO Neil Amin said in December that the Short Pump Hilton had been hit particularly hard during the pandemic because of its reliance on event and conference revenue and the room bookings that come along with such large gatherings.
Shamin built and opened the hotel in December 2009. The loan in question was borrowed in 2013 from JP Morgan Chase. The note was then bundled into a package of commercial mortgage-backed securities or CMBS.
The group pursuing the foreclosure is an entity representing the holders of the CMBS loan. That group, acting as 12042 West Broad Street Holdings LLC, filed a lawsuit in Henrico County Circuit Court last December to have the court appoint a receiver to take over the hotel and keep it operational.
The receiver, Northern Virginia-based Crescent Hotel Management Services, was ultimately appointed by the court on Jan. 21, according to court records.
The hotel remains open, with room rates currently at $146-$444.
The CMBS loan is a non-recourse loan, meaning the noteholder can’t come after Shamin for the remaining balance after foreclosure. The noteholder said in its Dec. 2 filing that the loan has a balance of $46 million and that the property could be worth as little as $26 million.
Further illustrating the property’s drop in value due to a loss of revenue, Henrico County most recently assessed the hotel at $12 million, down nearly two-thirds from $35 million in 2020. Hotel assessments are based in part on their revenue.
Shamin declined to comment about the pending auction, which is being handled by attorneys Daria Ivanova and Henry Brandenstein with the Venable law firm in Tysons Corner.
Bidders at the foreclosure auction must submit a deposit of $100,000 and be able to close on the purchase in 30 days.
Shamin, meanwhile, isn’t bogged down by the loss of the Short Pump property. The company is nearing completion on construction of the nearby Home2Suites at 209 Towne Center West Blvd. It also is under construction on a Home2Suites next to its Embassy Suites property near the corner of West Broad Street and Glenside Drive, and a Moxy Hotel by Marriott at 501 E. Franklin St. downtown.
Shamin also has purchased four existing hotels this year, including three at the Virginia Beach oceanfront and one in Newport News.
I wonder if Shamin will bid on the property?
Assuming that (1) the CMBS lenders have an interest in re-development and (2) credit bidding is allowed in VA, the CMBS lenders should be able to win this auction without spending a dime (since the outstanding loan amount is significantly greater than the FMV). Similar situation played out recently with a south Florida mall.
oh yeah, of course, they can bid the note. Though if Shamin bids enough, they might not want to.
I wonder if Moxy will ever open; City sold it in 2016 and work started in 2017. Every time I go by you see very little activity.
Good morning Michael. We, North South Construction, are the General Contractor working with Shamin on the Moxy Hotel. The pandemic did affect supply chains but the majority of the work is occurring inside. The model room is almost complete, and we are looking forward to the opening of beautiful addition to RVA’s hospitality scene.