Best offer for EHT's struggling hotel in New Jersey was US$23.5m

EAGLE Hospitality Trust (EHT) trustee DBS Trustee on Wednesday said in a regulatory filing that the highest and best offer received for EHT's Delta Woodbridge Hotel (DW) in New Jersey, USA, was US$23.5 million.

This was following three months of marketing efforts by the engaged commercial real estate brokerage company, Eastdil Secured.

In addition, on the application of Wells Fargo National Association, the Superior Court of New Jersey entered a final judgement for the foreclosure of the DW in the amount of approximately US$37.6 million on July 23. This will be partially offset by the proceeds of the sale of the property.

The outstanding balance of the DW mortgage loan will continue to be payable by EHT.

The DW had been left in the charge of an appointed rent receiver, who was responsible for managing DW and collecting rent and profits from the tenants, occupants and hotel guests.

The trustee was informed that Wells Fargo National Association had conducted a virtual public auction on Aug 23 for the sale of the hotel's assets including machinery, equipment, furniture and software.

Given that no bids were received for DW, Well Fargo had assigned the right to credit the bid to the rent receiver, who offered US$100 for the hotel's assets.

EHT managers had received a notice of default and demand for payment in relation a US$35 million mortgage in respect of DW in 2019.

Wells Fargo sent a notice identifying multiple events of default, which included the non-payment by the borrower - an EH-Reit subsidiary - of several sums for the month of March 2020. These had fallen due on April 1, 2020.

The unpaid sums comprised the monthly interest accrued on the loan and the principal amount of the loan, the monthly real estate tax deposit, and the monthly deposit for the costs and expenses to replace and maintain furniture, furnishings and fixtures at the hotel.

Trading in EHT stapled securities has been suspended since March 2020.