The Westin Tempe Hotel in the Phoenix area faces foreclosure

CAI Investments, a Las Vegas developer, is in trouble with an $87 million debt and is looking to unload the property. The property in question is the Westin Tempe, a 290-room hotel in Tempe, part of the Phoenix metropolitan area, which is on the verge of a foreclosure auction after CAI Investments defaulted on the loan.

The 18-story Westin Tempe is scheduled to be auctioned this week after its developers failed to meet the loan obligations tied to the property at 11 East 7th Street, located nine miles east of Phoenix, according to a major local news outlet.

The lender, Hall Structured Finance from Dallas, issued a trustee sale notice in January, and it was initially scheduled for April 25 at the Arizona Superior Court in downtown Phoenix. The foreclosure auction has been postponed six times, finally taking place on May 17.

Craig Ganz, an attorney at Ballard Spahr in Phoenix, commented on the situation, calling it a rather unusual sale due to the unexplained delays. “Lenders and borrowers typically enter settlement negotiations even after a trustee sale is announced. At this last step, a negotiation can prevent the borrower from facing bankruptcy and at the same time can save the lender from having to manage a hotel.”

According to the same local outlet, the Westin Tempe, located near the Arizona State University campus, was marketed as a prime spot for business travelers heading to Tempe, one of the fastest-growing business areas in the Phoenix metropolitan area.

CAI Investment acquired the 0.85-acre site in 2017 for $8 million, and construction began a year later, according to Maricopa County records. Two years later, CAI secured an $86.5 million construction loan from Hall Structured Finance. Its president, Mike Jaynes, commented at the time that the hotel’s prime location and Westin and Marriott’s loyalty programs made the project an excellent fit for their lending program.

CAI Investments modified its loan agreement with Hall several times last year. As stated in the trustee sale notice, on December 15, CAI missed a $5 million payment deadline, failed to pay a $600,000 modification fee, and did not make a tax escrow deposit payment of $87,347.

The Westin Tempe owner has yet to respond to local media inquiries about the impending foreclosure sale. After the trustee sale notice was filed, CAI began searching for a potential buyer. The hotel is listed with a valuation of $115 million.

According to CAI Investments’ website, it was founded in 2011 by Christopher Beavor and, as of July 2022, had over $1 billion in assets under management in key U.S. markets.

Available foreclosures:

Tempe: 1 home available.

By Elias DaSilva | October 9, 2024.