Commercial real estate distress in Texas is seeing a shift as more hotels face foreclosure. Le Meridien Dallas, located near the Dallas Galleria mall at 13402 Noel Road, is the latest major hospitality property to be affected. The hotel is owned by NB Holdings, managed by Aly Nadir Badruddin. According to Roddy’s Foreclosure Listing Service, the ownership defaulted on a $42.8 million loan that was provided by Morgan Stanley in 2019.
NB Holdings purchased the 11-story, 258-room hotel in 2015. The building was constructed in 2002 and renovated in 2009 when it became a Le Meridien-branded property. In April 2022, the hotel’s ownership filed for Chapter 11 bankruptcy protection with court documents indicating it had fewer than 100 creditors and both assets and liabilities between $50 million and $100 million. The bankruptcy process concluded in March 2024.
The hotel previously received media attention in 2016 after an incident where a guest was found dead in one of its rooms.
There are other Le Meridien hotels in the area, including Le Meridien Fort Worth Downtown at 811 Commerce Street, which Blueprint Hospitality developed from a former parking garage into a hotel with 188 rooms. Another local property, The Stoneleigh at 2927 Maple Avenue in Uptown Dallas, will leave the Le Meridien brand following extensive renovations and transition to Marriott’s Autograph Collection under Brookfield’s ownership.
In recent years, most foreclosures across Texas have involved apartment complexes and office buildings within major metropolitan areas such as Dallas, Houston, San Antonio, and Austin. However, there has been an increase in distressed hospitality properties coming to auction. In January alone, almost $170 million worth of loans secured by hotels were listed for foreclosure across these cities.
Read more about this trend at https://therealdeal.com/texas/2024/01/10/new-year-same-distress-troubled-debt-tops-826m-for-january-auction/.
Additional details about changes involving Le Méridien properties can be found at https://therealdeal.com/texas/dallas/2024/01/12/the-stoneleigh-hotel-in-uptown-dallas-drops-le-meridien-amid-renovation/ and about new developments at https://therealdeal.com/texas/dallas/2023/07/19/developer-blueprint-plans-le-meridien-fort-worth-hotel/.
