A Tucson-based investment firm that owns the Westin La Paloma Resort & Spa and other area hotels is on the verge of defaulting on its loan of more than $209 million, according to Credit Suisse Group AG.
Transwest Partners/NCH Corp. bought the Westin La Paloma and a second hotel in South Carolina, the Westin Hilton Head Island Resort & Spa, in December for about $310 million.
Janos and J Bar restaurants at La Paloma are owned independently by Janus and Rebecca Wilder and are not involved in the loan package.
Transwest Partners/NCH Corp. received more than $230 million in financing to purchase the hotels, including $21.5 million from Ashford Hospitality Trust and $209 million from JPMorgan.
The $209 million Westin Portfolio loan was among the 10 largest in a debt offering sold by JPMorgan Chase & Co. on April 30, according to Bloomberg data. The loans were transferred to special servicing because of "imminent default," Credit Suisse analysts said in a note to clients Tuesday citing data from the loans' servicers.
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"They are big loans and they went bad fast," said Kent Born, a senior managing director in the commercial lending group at PPM America Inc. in Chicago. "In the current market environment, any negative news is going to cause an outsize reaction."
Messages left Tuesday with Westin La Paloma and Transwest Partners/NCH Corp., were not returned.
Transwest/NCH also has defaulted on its last two debt service payments to Ashford Hospitality Trust, according to a Nov. 7 quarterly Securities and Exchange Commission filing.
The firm owns several hotels in the greater Tucson area, including La Posada Lodge & Casitas, Embassy Suites Tucson-Williams Center and the Doubletree Hotel Tucson at Reid Park, among others.
It's unclear which hotels are backing the Westin loan.
Back in December, Transwest /NCH President Michael Hanson told the Star he was excited about the purchase of Westin La Paloma, 3800 E. Sunrise Drive.
At that time, Hanson said Transwest planned to add about 15,000 square feet to the ballroom and renovate guest rooms.
But hotels and resorts are struggling in a slowing economy that has led customers to curb travel. Bookings growth at Expedia Inc., the world's biggest online travel agency, fell to 7 percent in the third quarter from 21 percent a year earlier.
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