Bloomberg News

PGA National Florida Resort Loan Sent to Servicer, Fitch Reports

July 08, 2011

July 8 (Bloomberg) -- A $132.6 million loan backed by the PGA National Resort & Spa in Palm Beach Gardens, Florida, was sent to a special servicer today because of imminent default, according to Fitch Ratings.

The master servicer is Wells Fargo & Co. and the special servicer is Situs Co., the debt-rating company said today. The loan, sponsored by closely held Walton Street Capital LLC, is scheduled to mature on Sept. 1 following three 12-month extensions, according to a July 2010 report by Fitch.

Loans secured by more than 1,540 hotels with a total outstanding balance of $39.2 billion have gone into or are at risk of default throughout the U.S., Realpoint LLC, a credit- rating company that tracks commercial mortgage-backed securities, said in April. Loans are put on the Horsham, Pennsylvania-based company’s watch list because of late payments and declining occupancies or cash flow.

The Palm Beach Gardens resort has 379 rooms, suites and cottages; a 40,000-square-foot (3,700-square-meter) spa; a 39,000-square-foot conference center; and seven restaurants and lounges. It also features five golf courses, including ones designed by Jack Nicklaus and Arnold Palmer.

A “significant” portion of the resort’s income is generated by golf and tennis operations, according to Fitch’s July 2010 report. When the loan was issued, resort activities accounted for about 38 percent of total revenue.

Eric Mogentale, a managing principal at Chicago-based Walton Street, didn’t immediately return a telephone call seeking comment.

--Editors: Daniel Taub, Josh Friedman

To contact the reporter on this story: Nadja Brandt in Los Angeles at nbrandt@bloomberg.net.

To contact the editors responsible for this story: Kara Wetzel at kwetzel@bloomberg.net


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