The deal was announced in February and hotels are worth a lot less today than they were two months ago – enough so that it made sense to walk away from a $2 million deposit. Whether the unnamed buyer no longer wanted to do the deal (reasonable) or was unable to get financing (also a challenge now) is unclear.
The group which owns the property, Xenia Hotels & Resorts, said that the Renaissance was “a legacy asset” that had been pulling lower revenue per room and earning less than their other hotel properties, and that it needs a lot of investment to bring up to par.
Now, however, it looks like they’re stuck with it – although don’t expect capital investment any time soon.
The hotel industry has been looking for a federal bailout, with their main lobby shop also seeking to allow hotels to obtain paycheck protection loans without having to spend the money on payroll. Their priority is mortgage payments, and they argue that defaults will become a financial crisis (so they want taxpayers to pay their mortgages). While there will undoubtedly be losses there’s little discussion of how those losses would turn into a halting of the financial system, the argument that justified government bailouts during the 2008 financial crisis.