Sleep Inn Lake Norman sold in online auction
by Staff Writer
HUNTERSVILLE – The Sleep Inn & Suites Lake Norman was sold during an online auction held June 10 through Auction.com.
The closing is still underway, and details of the sale, including the winning bidder and amount, remain confidential, according to Steve Leslie, a Jones Lang LaSalle analyst who worked on the Auction.com sale.
Officials with Carolina Hotel Associates LLC, which owned Sleep Inn, at 16508 Northcross Drive, could not be reached for comment.
The Huntersville Sleep Inn had an occupancy rate of 44.6 percent in 2010 and last made a mortgage payment Jan. 1, 2010, according to Auction.com. Auction.com posted the sale of Sleep Inn on its website for about six weeks before bidding began June 6, Leslie said.
Mecklenburg County real estate records show Carolina Hotel Associates took out a $4.25 million loan on the Sleep Inn & Suites on June 14, 2007. That’s the same amount listed as the existing mortgage on Auction.com.
According to Mecklenburg County property records, the loan has changed hands several times. RealtyTrac.com reports that Bank of American began the foreclosure process in March, but the hotel remains in “pre-foreclosure.”
County records indicate U.S. Bank transferred the mortgage to BACM 2007-3 Northcross Drive, LLC, on Feb. 24. No one with BACM could be reached for comment by phone or email.
According to Auction.com, the site was not auctioning the Huntersville property itself but the bank note on the property. The mortgage’s new owner steps into the lender’s shoes. The winner takes “significant legal and tax” risks in buying a non-performing loan like the Sleep Inn’s, according to Auction.com’s disclaimer.
But the buyer also has the potential for big profits. Although the mortgage on the Sleep Inn remained at $4.25 million, according to Auction.com, the minimum bid on the mortgage was $600,000, an 86-percent markdown.
Given the steady decrease in occupancy rates, a number of hotels nationwide have struggled, the New York Times reported in December.
Online auctions have become increasingly popular in the hotel industry, Leslie, the analyst for Jones Lang LaSalle, said. “We’ve done a lot of them over the past year and a lot more of it is coming in the next year or so,” he said. “It’s been very successful.”