Monarch Alternative Capital Buys Two Non-Performing Hotel Loans

Monarch Alternative Capital has purchased non-performing mortgage loans on the Hotel Felix in Chicago and the YOTEL San Francisco and took ownership of those two properties through a settlement of the debt.

Both hotels are located within emerging submarkets of their respective greater metropolitan areas. The Hotel Felix is a 228-room boutique hotel located in the heart of the River North submarket of Chicago and the YOTEL San Francisco is a newly-converted 203-room micro-hotel located in the Mid-Market submarket of San Francisco.

Though the hotels vary in service offerings, both assets are located in neighborhoods frequently visited by tourists and locals alike and also have a strong corporate presence, and a ramp up of convention center activity. On top of the innate demand drivers of each locale, Monarch is further encouraged by the continued recovery of business and group travel nationally, in addition to the increasing demand of leisure travelers.

While urban markets like Chicago and San Francisco have only recently started to normalize, Monarch believes that both properties present an opportunity to capitalize on the continued dislocation in the hospitality market caused by the pandemic and would be overlooked by other institutional investors. Furthermore, the ongoing market disruption has put pressure on capital structures of properties, making it difficult for previous ownership groups to refinance their legacy debt. Through realignment and new ownership by Monarch, these properties are now financially situated to focus on improving operations and capitalize on improving fundamentals.