Millennium Partners avoided foreclosure on its Four Seasons Hotel in San Francisco with the help of a capital infusion from Westbrook Partners and a restructuring of the hotel's debt by the special servicer for the mortgage. The two companies, both based in New York City, are now joint venture partners in the hotel, with Westbrook taking a two-thirds ownership and Millennium Partners remaining as a one-third owner as well as asset manager for the property. Industry sources say that the JV has already paid down $35 million of the $90 million that Millennium owed on the hotel.

The 277-room Four Seasons had been subject to foreclosure since purposely defaulting on its two-year old, $90-million CMBS loan earlier this year, with hope of renegotiating the debt with the special servicer, LNR Property Corp. A GlobeSt.com report at the time said that the hotel, once valued at $135 million, was worth less than was owed on it.

The restructuring of the Four Seasons loan has broader implications for the hotel market and troubled CMBS loans in general, says Alan Reay, founder and president of Atlas Hospitality Group in Irvine, CA. "What this is telling us is that investors are willing to value these deals on pretty rosy projections," he says.