Auction of Hilton Hotel in downtown Minneapolis delayed

The scheduled auction of the downtown Hilton Hotel Minneapolis, previously slated for Friday morning, has been postponed.

"It's not happening [Friday]," said Doug Greene, managing partner with Fernandina Beach, Fla.-based Haberhill LLC, one of the investment partners who acquired the hotel in 2016.

The Hennepin County Sheriff's Office confirmed the delay. Greene said that he does not know when a rescheduled auction might take place.

Haberhill and Chicago-based private equity firm Walton Street Capital acquired the Hilton for $143 million in 2016.

In April 2020 the owners stopped making their scheduled monthly payments on a $180 million loan from JPMorgan Chase Bank, according to court filings. As of March 2021, the hotel owners owed more than $201 million on the loan.

On Thursday, a representative of Atlanta-based Trimont Real Estate Advisors, the special servicer for the loan, declined to comment.

Special servicers work with commercial real estate loans in default to determine if a borrower can be restored to being current. Special servicers can facilitate loan workouts or modifications that may allow a borrower to retain ownership of a property facing foreclosure.

The pandemic hit hotel owners hard with steep drops in occupancy rates.

The planned auction of the 826-room Hilton, which opened in 1992, has been high-profile because it is the largest hotel in the state and an anchor in downtown Minneapolis.

Haberhill and Walton Street completed a $13.5 million renovation of the Hilton lobby in 2017.

This is Haberhill's second stint as an owner of the Hilton. It previously owned the Hilton with Starwood Capital from 2006 to 2010.

Haberhill, in a joint venture with Starwood Capital, acquired the Hyatt Regency Minneapolis for $50 million in 2011. Walton Street has since replaced Starwood as an investor in that deal.