More High-Profile Bank Owned Foreclosures in Arizona

by Simon Lindsay on States

Foreclosure is relentlessly creating devastation in Arizona. Now, its brunt is being experienced by hotel and resort industries in Phoenix where many are being added to the growing list of bank owned foreclosures.

Panic pricing and the abundance of vacant and empty rooms are taking its toll on owners of hotels and resorts in the area, with some falling to foreclosures.

In the first six months of this year, foreclosures were filed against seven financially strapped properties. The figures represented one property less than the total bank owned foreclosures last year and twice as much in 2007.

Furthermore, major liens were also filed against resorts that have been renovated or expanded while some big projects were put on hold.
And industry experts are warning that the current foreclosure problems are just in their initial stages and the worse is still yet to come in the Phoenix area.

Robert Hayward of Warnick and Co, said that what is happening right now in the hotel and resort industries in Phoenix is just a tip of the iceberg.

According to Smith Travel Research, metro Phoenix continues to show the biggest drops in average daily rate, occupancy and other industry growth indicators. It used to be that the area was a magnet for big conventions and tourists but recession and the glut in new hotel rooms caused many resorts and hotels to become bank owned foreclosures.

Delinquent resorts in the Valley include the Mondrian in Scottsdale and the Arizona Grand Resort. Meanwhile, foreclosure auctions have been scheduled for InterContinental Montelucia and the W Scottsdale Hotel and Residences. Both these properties have short-term construction mortgages that became due just as financing became difficult and interest rates soared.

On the other hand, the Wigwam Resort and Spa was also scheduled for auction but was put into receivership when Chapter 11 bankruptcy protection was filed by its owner. Other properties in danger of foreclosures are Xona Resort in Scottsdale, the Crowne Plaza located in north Phoenix, Carefree Resort and Villas and the Embassy Suites Phoenix.

The current concerns of industry experts are who will buy these bank owned foreclosures and how much would they fetch considering lack of deals and the anemic condition of the hotel and resort market.