Hanover Close To Selling Hotel
Manufacturers Hanover Corp. is expected to close the sale today of a major Texas hotel, acquired in a 1988 foreclosure, to Four Seasons Hotels Inc.
The price of the hotel in Austin, managed by Four Seasons since its opening, had not been disclosed. But sources doubted that the bank will realize the property's recently appraised value of $28.5 million.
When Manufacturers extended a $113 million construction loan for the 292-room hotel and adjacent office complex, which opened in 1986 on the banks of a local lake, the hotel's appraised value was $50 million.
The bidding attracted a number of hotel chains, including Westin Hotels and Omni Hotels, which are looking for bargains in today's depressed market.
"It isn't easy to sell a hotel in this market," said David Pearson, a director of Manufacturers Hanover Real Estate.
Mr. Pearson expressed hope that the bank will recoup some of its loss by getting a better price for the office complex, which should benefit by proximity to a hotel managed by a company of Four Season's caliber.
Four Seasons, based in Toronto, rarely invests in hotels it manages, but went after the property on the theory that it could resell its equity at a higher price when the market improves, said David Mongeau, senior vice president.