Lady LUX

LUXies, this economic condition is taking a toll on one of the most LUX environments in downtown San Diego, The W Hotel.

Once the ‘in’ place back in 2002 when it first opened its door’s, has now become just one of the many LUX opportunities!!

Best known for its sand-covered Beach rooftop bar and skylight views, the W Hotel has been faced with several challenges, including decreased tourism and the increase in competitive high-end hotels in the area. This combination has proven too difficult and the owners, Sunstone Hotel Investors Inc, has been forced to return the property to the lenders. Although, they have tried to get a lower interest rate to lower the payments, this story is similar to many present day Americans as they forced to take the last resort of defaulting on the loan.

In 2006, the property was purchased for $96 million and is currently estimated at $65 million, but due to the type of loan on the property there is no compensation for this loss in value. From an investment stand point this loan payment is sinking the hotel and it makes more business sense to return the deed.

“While [Sunstone] maintains more than adequate liquidity to support or repay this mortgage, we believe a conveyance of this hotel in settlement of the debt would be in the best interest of our stockholders,” Sunstone chief financial officer Ken Cruse said in a statement. –nbcsandiego.com

So what does this mean for all us W Hotel travelers? Well, at this point it’s unsure. It seems the Starwood will continue to manage the hotel and take care of all of its clients and guests! The ‘owner’ of the property is changing hands and it looks like all of us LUXies obsessed with the W Hotel will still have the opportunity to stay there while in San Diego!! Bad news for Sunstone Hotel Investors, but good news for W Hotel Faithfull’s!!

Live.Travel.LUX.

Tagged in: economic condition, default loan, downtown san diego, financial trouble, w hotel, starwood management, sunstone hotel investors, inc,