The former Maui Prince Hotel in Hawaii was sold at a foreclosure auction Friday to its mortgage holders for $55 million, reports The Wall Street Journal.
The 310-room property, renamed the Makena Beach & Golf Resort last year, became the target of foreclosure proceedings last summer when its previous owners missed payments on its $192.5 million mortgage. Friday’s auction puts the resort in the hands of those mortgage holders, represented by Wells Fargo Bank.
The auction represents a big loss for the resort’s former owners, Morgan Stanley Real Estate Fund V and developer Everett Dowling. The two bought the resort at the market’s peak in 2007 for $575 million. But the owners couldn’t refinance or pay the $192.5 million mortgage when it came due last July.
The auction wipes out the $227.5 million of mezzanine debt on the property held by a UBS AG fund and the $250 million in equity that Morgan Stanley and Mr. Dowling had put into it.
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