By Brad Berton for Urban Land Magazine
Perhaps nothing illustrates the lofty peak and precipitous fall of the U.S. destination resort sector as starkly as the long-running, complex saga that ultimately put a quartet of household-name properties under the control of Singapore’s deep-pocketed sovereign wealth fund.
The story culminated earlier last year with Government of Singapore Investment Corp. (GIC) taking control through a $1.5B bankruptcy court–administered transaction. Arguably, the story began with a $1B bond.
The deal securitized a senior mortgage against five high-profile resorts totaling nearly 3,300 rooms that were owned by CNL Hotels & Resorts at the time. Four of the hotels were in Hawaii and Florida, with two in California and the 740-room Arizona Biltmore Resort and Spa in Phoenix.
Between additional acquisitions, a sale, and more bond financing, the ultimate owner was not able to hold on during the recession. In early 2011, it sought protection in the U.S. Bankruptcy Court’s Manhattan district from foreclosure-minded creditors.
The Florida resort was sold by the court to Donald Trump’s companies.
But it was ultimately Singapore’s GIC, which by then had come to hold some $360 million in subordinate mezzanine debt, that emerged as the owner of the remaining four resorts.
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