In one of the few signs so far of post-pandemic era shakeouts in the hotel business, the Best Western Airport Inn & Suites, 16501 Snow Road in Brook Park, was deeded to an affiliate of LNR Partners, a Miami Beach company that handles operations and dispositions of distressed properties for lenders.
Technically, the new owner is named "COMM 2015 LC23 SNOW ROAD LLC." That name that reflects the securitized mortgage that BW Cleveland Airport LLC, a company led by a hotel consultant and operator based in San Antonio, Texas, used to buy the hotel in 2015 for $2.3 million, according to Cuyahoga County land records. The deed to the 60-unit hotel was transferred to the lender on June 11.
The hotel dates from 1996, according to online real estate data provider CoStar. Occupancy in the airport corridor dropped with the rest of the lodging market last year, down 18 percentage points from 2019 to 45% in 2020, according to CoStar.
Laurel Keller, a Newmark senior vice president and hotel consultant, said most lenders when the pandemic struck in 2020 were "not really interested in jingle mail," or getting back the keys to the properties. Many chose to work out new terms with hotel borrowers and forbearance agreements.
"That kept the number of distressed properties down," she said, but that may now be waning.
However, she said operators could choose to give back properties if they feel they've "had a good run" with a property or simply want to cut their losses and move on.
A special servicer generally puts in temporary management, sometimes to stabilize a property and hold for a better market, or until the property is sold. Deeding directly to the lender avoids having to go to court to work out a problem property.
A call to BW Cleveland Airport's owner's office was not returned by noon on Friday, July 2.
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