Like most properties, the Hotel del Coronado has seen revenue decline during the prolonged economic downturn, which has also caused the value of the 757-room hotel to fall since loans were secured just a few years ago.
Strategic Hotels and Resorts, part of a joint venture that has owned the property since 2006, is banking on an upswing in the tourism industry to eventually restore the iconic property to economic health. When the joint venture took out $630 million in loans in January 2006, the local economy and tourism industry were far more robust than they are today.
“The expectation was to repay debt by 2011,” said Diane Morefield, chief financial officer for Strategic, which has a 45 percent interest in the hotel. “The leverage then was reasonable and based on projections, (the debt) would have been refinanced at maturity. No one expected the depths of the recession we’ve lived through in the last two years.”
Read the entire Union Tribune article here.
