Sheraton Phoenix Crescent in limbo as buyer for hotel sought
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A buyer still hasn't been found after two unsuccessful auctions for the Phoenix Sheraton Crescent hotel. Photo: Jeremy Duda/Axios
The attempted sale of the Sheraton Phoenix Crescent hotel near the soon-to-be-redeveloped Metrocenter Mall is in a holding pattern after a scheduled auction ended without a buyer.
The big picture: The hotel closed nearly two years ago due to an electrical fire and has since been placed into court-ordered receivership.
- Receivership is a process in which control of a property is transferred to a neutral third party who manages it and assists creditors in recovering money they're owed.
- A judge scheduled an auction for late September, but GF Hotels and Resorts, the receiver, postponed it to get additional time to market the property and solicit offers, according to a motion the receiver's attorney filed in the case.
State of play: About five people put in bids at the second auction on Nov. 6, but no one met the minimum bid established by lenders, according to Gerald Shelley, an attorney for Stok Investment Group, one of the bidders.
- Shelley told Axios, "There's obviously a big difference between what the lender thinks the property is worth and what the market is telling the lender the property's worth."
- Maricopa County Superior Court Judge Dewain Fox wrote in an order last month that the receiver could cancel or postpone the auction after it began if the highest bid wasn't sufficient to satisfy the total amount of the liens against the property, or if the plaintiff consents.
- "Maybe there's some more negotiations, maybe there's some softening. Eventually the property's going to have to be sold and we want to buy it," Shelley said.
What's next: A status conference has been scheduled for Feb. 12.
Between the lines: The Sheraton is directly across Interstate 17 from Metrocenter Mall, which is in the process of being demolished and redeveloped into an "urban village" that will include more than 2,600 apartments and restaurants, bars, retail and entertainment.
- Steve Betts, senior director for Concord Wilshire, one of the redevelopers, said the Metrocenter project will create opportunities for nearby properties like the Sheraton.
The intrigue: Stok was under contract to buy the property before it went into receivership and was scheduled for auction.
- Shelley said Stok is still under contract, and if the hotel is sold to someone else, it will assert its claims in court and seek a portion of the proceeds.
- Stok had previously considered redeveloping the hotel for an adaptive reuse project, and Shelley said the company remains interested in buying and redeveloping it.