Hilton Minneapolis hotel goes for $225M in auction

On Friday morning in a shoe box-sized room in the Minneapolis City Hall basement, Minnesota's largest hotel changed hands in a matter of minutes.

The Hilton Minneapolis sold for $225 million to its creditors in a foreclosure auction, delayed from its original date in January. A rather unremarkable turn of events for downtown's pre-eminent convention hotel, just a five-minute walk from the Minneapolis Convention Center on S. Marquette Avenue.

A Wells Fargo Bank attorney was the sole bidder in the auction, which a Hennepin County Sheriff's Office deputy conducted. The legal description reading of the Hilton's location went on longer than the actual bidding. That took less than a minute.

Wells Fargo was acting as the trustee for JPMorgan Chase, which provided a $180 million loan to the Hilton's owners in 2018.

However, in April 2020, as tourism demand plunged during the outbreak of the COVID-19 pandemic, owners Haberhill LLC of Fernandina Beach, Fla., and Chicago-based private-equity firm Walton Street Capital stopped making their monthly payments. Wells Fargo sued in October 2020 because of the loan default on the 826-room hotel.

Despite the foreclosure proceedings, the Hilton is still in operation. On Friday, Meet Minneapolis President and CEO Melvin Tennant said it continues to be "business as usual" at the Hilton.

"For Meet Minneapolis, the Hilton Minneapolis is a key partner and an important part of our city's tourism and hospitality industry," Tennant said in a statement. "The hotel helps support the wide variety of groups we bring to the Minneapolis Convention Center and the entire city. This year, we have a robust calendar of meetings, conventions and events taking place in Minneapolis, and we look forward to the Hilton continuing to welcome our guests."

Earlier this year, Haberhill's managing director, Doug Greene, said business at the Hilton was on the upswing. He said he expected the hotel's revenue this year to match that of 2018, before the pandemic downturn.

The Minneapolis Downtown Council reported downtown hotel occupancy last year improved almost 60% from 2021 to nearly 50% occupancy.

Walton Street Capital and Haberhill acquired the Hilton for $143 million in 2016. Friday's bid was more than double the $96.8 million the county lists as the hotel's estimated market value.

Walton Street Capital and Haberhill still have a six-month redemption period from when the sale enters into the court system to match the bid and pay interest as well as other costs in order to retain ownership.

Maslon LLP partner Michael Rosow, who submitted the bid, was not able to provide comment on the sale. Representatives from Walton Street Capital and Haberhill were also not available for comment.