Shamin Hotels avoids foreclosure auction for Short Pump Hilton

The Hilton Richmond Hotel & Spa at 12042 W. Broad St. (BizSense File)

A last-minute deal saved a local hotelier from losing ownership of one of his flagship Richmond properties.

Shamin Hotels confirmed on Thursday that it had reached an agreement with the lender on its Hilton Richmond Hotel & Spa located at 12042 W. Broad St. in Short Pump, which avoided a foreclosure auction that was scheduled for the 28th. September on the steps of Henrico County. Court.

Neil amin

“We are delighted that we were able to come to an agreement with the lender last week,” Shamin CEO Neil Amin said in an email to BizSense. “This was not a financial decision, but a decision based on the personal connection we have with the community where we live and to ensure that the hotel continues to be a first class facility for the Richmond area. While the pandemic continues to challenge our industry, we will continue to reinvest in our people and hotels. “

Amin did not want to discuss the terms of the deal.

Attorney Henry Brandenstein of the Venable law firm, which was handling the foreclosure process, also confirmed that the auction was called off at the noteholder’s request.

In addition to allowing Shamin to continue to own the hotel, the agreement calls on the company to take over the day-to-day operations of the property, which for the past 10 months had been managed by a court-appointed receiver.

The 254-room hotel went into receivership in January after Shamin defaulted on a $ 45 million loan guaranteed by the property.

Shamin has fallen behind on loan payments on the Short Pump Hilton from April 2020 as COVID-related closings and social distancing have hit the property hard – especially its event business.

Among the region’s largest hoteliers with over 60 hotels primarily around the Mid-Atlantic, Shamin built and opened the hotel in December 2009 as the anchor for the Towne Center West development. The defaulted loan was borrowed in 2013 from JP Morgan Chase and was subsequently consolidated into a set of commercial mortgage backed securities or CMBS.

The foreclosure group is a representative entity of the CMBS loan holders. The group, operating as 12042 West Broad Street Holdings LLC, filed a lawsuit in Henrico County Circuit Court last December to have the court appoint a receiver to take over the hotel and keep it operational.

The receiver, Crescent Hotel Management Services, based in Northern Virginia, was finally appointed by the court in January. He continues to operate the property until this new agreement is commemorated by the court.

The CMBS loan had a balance of $ 46 million before receivership. The original loan was a non-recourse loan, meaning the noteholder cannot sue Shamin for the balance remaining after foreclosure.

The Hilton property is among dozens of hotels in Henrico County that have seen their values ​​drop due to lost revenue from the pandemic. The county recently valued the hotel at $ 12 million, down nearly two-thirds from $ 35 million in 2020. Hotel reviews are based in part on their revenue.

Shamin nevertheless remained busy. The company is close to completing construction of the nearby Home2Suites at 209 Towne Center West Blvd. It’s also under construction on a Home2Suites next to its Embassy Suites property near the corner of West Broad Street and Glenside Drive, and a Moxy Hotel by Marriott at 501 E. Franklin St. downtown.

The company also bought four existing hotels this year, including three on the Virginia Beach waterfront and one in Newport News.

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