Marriott Hotel in Receivership After $45 Million Default

Marriott Hotel in Receivership After Million Default

A hotel about a half-mile away from LAX’s entrance was placed in receivership, according to court documents dated late May.

The court appointed GF Hotels and Resorts’ Jeff Kolessar as the receiver on the Residence Inn by Marriott LAX after a request from the lender and special servicer on behalf of commercial mortgage-backed securities holders. They alleged the borrower owed about $45 million on a $53.5 million loan.

Robert Alter’s Seaview Investors owns the 231-key hotel at 5933 West Century Boulevard. The debt was originated by a Cantor Fitzgerald company in 2016 and was moved to special servicing about a decade later due to imminent maturity default — after which, Seaview defaulted. The special servicer is Rialto Capital, according to Morningstar Credit.

Alter’s Seaview, the borrower, agreed and consented to a receiver, per the court documents — and according to the documents and servicer commentary via Morningstar, the borrower wants to hand the keys back to the lender.

“Borrower has expressed its intention to transfer the property to plaintiff and relinquish any further interest in or responsibility for the property as soon as possible,” the legal filings read. The unpaid debt on the hotel amounts to about $195,000 per key.

Attorneys for the plaintiff did not immediately respond to a request for comment; attorneys for the defendant, an entity connected to Alter and Seaview, declined.

The hotel’s cash flow hasn’t bounced back post-pandemic. Its 2024 net cash flow was 38 percent below the level at underwriting, per Morningstar.

Alter’s hotel isn’t the only one in distress. Los Angeles hoteliers are defaulting on debt, facing foreclosure and handing back the keys. Costs are high and revenues are flat because people aren’t visiting the area as much as they used to. Tourist spending in L.A. declined for the first time since the pandemic last year, and international air arrivals to Los Angeles County fell more than 30 percent from August to November, the Los Angeles Times reported. A lot of that has to do with would-be tourists’ perception of the area, whether that be homelessness, wildfires or ICE raids.

There are exceptions to that distress, such as a Malibu deal last year that came out to almost $2 million a room, and investors who are still betting on hotels. Plus, the World Cup and Olympics are coming.