Monday we told you about Sunstone Hotel Investors Inc., a San Clemente-based real estate investment trust, walking away from its mortgage for the swanky, 258-room W Hotel in downtown San Diego. R. Scott Reckard and Roger Vincent over at the Los Angeles Times report today that one of Orange County's upper-crustiest inns is on the ropes: St. Regis at Monarch Beach.
Yes, that's the infamous resort where American International Group (AIG) sponsored a luxury retreat just days after accepting a federal bailout.
The companies that own the resort are in default on a $70-million loan from Citigroup Global Markets Realty Group, people knowledgeable about the debt said Tuesday.
Negotiations continue in an effort to avoid an auction, according to those sources. But unless something is worked out, the St. Regis will go on the block July 7, to be sold to the highest bidder, according to a "terms of public sale" document obtained by The Times.
We've dragged our Motel 6-worthy knuckles over the keyboard to type this before and here we go again: things are tough all over. The St. Regis blamed its precarious financial position on the recession and credit crunch depressing room rates and occupancy levels and making loans all but impossible for hotel owners to get. Sunstone could not get a lower interest rate on its mortgage of the trendy W, which was also suffering from a "significant and continuing deterioration in demand for luxury lodging."
Now why would there be no demand at a time like this for rooms at the St. Regis? Let's take a look at the room rates, shall we?
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For one adult, one night, in a room with a king-sized bed:
$345 for a garden view.
$375 for a resort view.
$775 for a pool view.
$875 for a luxury view.
$1,075 for a deluxe, cone-of-silence chamber with a view of lines of cocaine on a top-of-the-line hooker's ass.
Okay, that last one was made up. And it's not like the St. Regis wasn't aware of these belt-tightening times. For a second night, they'd knock 50 percent off the room rate and a third night was free.
Plus, all the shampoo and conditioner samples you could stuff in your bag.