Under the new agreement, Capri assumes the primary ownership interest in the 28-story mixed-use hotel and condo property, which opened in January of 2009. Although Capri spokesman, Trish Hoffman, says that Barry Real Estate will "continue to participate in the economics of the hotel," she did not explain what that would mean.

Capri gave Barry Real Estate Companies a $43.5 million mezzanine loan to develop the $155 million project, says Hoffman. The Capri loan was in addition to the financing the company received from Atlanta-based Silverton Bank, which was taken over by the FDIC last May.

Yesterday, the Wall Street Journal reported that the FDIC had accepted sealed bids on a $416 million portfolio of loans on 60 hotels originated by the Silverton Bank. Included among those loans is the debt owed by Barry Real Estate.

Barry's Allen Plaza, of which the W Atlanta Hotel & Residences is a part, is a planned nine-block complex of offices buildings, residential condominiums, retail space, and restaurants. Several phases of the project have been completed, including the W Hotel & Residences, which has 237 hotel rooms and 74 condominiums, and two office buildings housing the headquarters for the Atlanta-based Southern Co., an energy company, and the Atlanta office of Ernst & Young.

Hoffman declined to describe the recent events which led up to Capri's assuming an ownership in the hotel and condominium property, but she did offer prepared statements by Marty G. Alston, partner/chief administration officer at Capri Capital Partners, on the current situation:

In one of these statements, Alston says: "No money exchanged hands in the restructuring plan. In consideration for its equity, Capri released Barry Real Estate Companies from various obligations."

With regard to Barry Real Estate's Silverton Bank debt, Alston says: "The restructuring of ownership will not have any immediate impact on the FDIC's loan sale of Specialty Finance Group's loan on the hotel, but we hope this is a step toward the facilitation of an orderly restructuring of the senior debt."

Guy Trusty, president of Lodging & Hospitality Realty, based in Coral Gables, is not privy to the situation at the W Atlanta Hotel & Residences, but he is familiar with similar ones in other locations. He says that, while the first mortgage is superior to the mezzanine loan and, it is usually expected that those not in first lien position will be wiped out when the property gets into financial difficulty, situations like the one at the W are not unusual today.

If mezzanine lenders have the resources to take care of the first mortgage and can invest in the property, says Trusty, "they go in and protect their investments," by doing a "friendly foreclosure emanating from the second mortgage and reach an agreement with the entity that owes them money." Mezzanine lenders are more likely to do this, he says, if they believe that the market is recovering.