Sale of Eagle Hospitality Trust's Dallas hotel falls through after buyer misses deposit deadline

EAGLE Hospitality Real Estate Investment Trust (EH-Reit) will not be going ahead with the planned sale of a property in Texas, as the buyer missed the deadline for a deposit.

The sale and purchase agreement for Crowne Plaza Dallas Near Galleria-Addison (CPDG) was thus terminated on May 4, Reit trustee DBS Trustee said on Friday.

EH-Reit's wholly-owned subsidiary will hold on to initial deposits of US$1.45 million in the aborted US$18.5 million deal with buyer Lockwood Development Partners.

Now that the April agreement has fallen through, DBS Trustee said that it is working with its professional advisers to explore "all available options in respect of CPDG, and will provide further updates on any material developments as and when appropriate".

The freehold 428-room hotel is part of the portfolio of troubled Eagle Hospitality Trust (EHT), which comprises EH-Reit and the dormant Eagle Hospitality Business Trust.

Numerous EHT entities had filed for Chapter 11 bankruptcy in a Delaware court in 2021. But CPDG is not directly owned by a Chapter 11 entity, so it does not enjoy bankruptcy protection under Section 363 of the United States Bankruptcy Code.

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Amid the Chapter 11 entities' "limited ability to support CPDG", the decision was made to sell off CPDG, in the face of potential difficulty fetching a higher price in an auction, and the risk that a lender would foreclose on the property after mortgage loan defaults.

But the EH-Reit unit involved in the sale axed the agreement as the buyer did not meet the May 3 deadline for an extra deposit of US$1.05 million, DBS Trustee has now said.

The buyer and the seller have no further rights or obligations to each other under the sale and purchase agreement, except for "certain surviving provisions".

Trading in EHT has been suspended since March 2020.