Two hotels in the East Bay have tumbled into bankruptcy ahead of scheduled foreclosures, in a fresh sign that post-coronavirus maladies still afflict the feeble lodging markets in the Bay Area.
The owners of hotels in Livermore and Berkeley have filed separate petitions with the U.S. Bankruptcy Court for Chapter 11 proceedings to reorganize their finances.
University Inn & Suites, a 113-room hotel at 920 University Avenue in Berkeley, seen in a March 2025 image capture. (Google Maps)
Both hotels face loan defaults due to delinquent mortgages on the properties, according to documents on file with the Alameda County Recorder’s Office.
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The bankruptcies and loan defaults are a reminder of the severe downturn in the Bay Area hotel market.
The Bay Area lodging industry has yet to recover from the government-mandated business shutdowns to combat the spread of the deadly coronavirus.
Here are some details on the hotels and the loan delinquencies that confront the lodging properties, as revealed by Alameda County real estate records:
— Super 8 by Wyndham hotel in Livermore, a 102-unit lodging property at 4673 Lassen Road, has defaulted on a $7.7 million loan provided by State Bank of Texas in 2022. The loan default was filed on March 11 of this year.
— University Inn & Suites, a 113-room hotel at 920 University Avenue in Berkeley, has defaulted on a $10.5 million loan that JPMorgan Chase provided in 2019. The loan default was filed on Feb. 11 of this year.
The two lenders, through trustees, scheduled foreclosure auctions for both hotels.
Now, the owners of the hotels have filed separate bankruptcy proceedings to revamp the finances for the two lodging properties — and to potentially delay the foreclosure auctions.
D Lassen, an affiliate headed up by Texas-based business executive Jagmohan Dhillon, filed for bankruptcy on May 21 in connection with the Livermore hotel, court records show.
In addition to the primary $7.7 million loan from State Bank of Texas, Underground Lending provided the D Lassen group in 2023 with a secondary loan totaling $2 million, according to the Alameda County real estate files.
The Dhillon-led D Lassen affiliate might be scouting for a higher valuation for the Livermore hotel. In January 2024, the hotel’s assessed value was $11.3 million.
“The debtor is in the process of retaining an appraiser to value the property,” D Lassen stated in the bankruptcy filing regarding the Livermore hotel.
Separately, Kubera Hotel Properties, whose chief executive officer is Pradeep Kantilai T. Khatri, filed for bankruptcy on June 6 to revamp the finances of the University Inn & Suites in Berkeley, court files show. Khatri is based in Belmont.
Kubera Hotel Properties values the University Inn & Suites at $18.3 million, according to the bankruptcy filing.
These bankruptcies and loan defaults are far from the only financial woes that haunt the Bay Area hotel market.
— In Oakland, the Courtyard Oakland Downtown was purchased by Core Capital for $10.6 million, one-fourth of the $43.8 million that the seller, a Gaw Capital Partners affiliate, paid in 2016, according to documents filed in October 2024 with the Alameda County Recorder’s Office.
— Oakland’s largest hotel, the 500-room Oakland Marriott City Center at 1001 Broadway, went into default in February due to a delinquent $100 million loan.
— San Jose’s largest hotel, the Signia by Hilton, was seized by its lender through a foreclosure that valued the downtown hotel at $81 million.
— An 18-story, dual-brand hotel tower at 1431 Jefferson Street in downtown Oakland was taken back by its lender through a deed in lieu of foreclosure filing that stated the unpaid debt on that hotel was $117 million.
The hotel problems appear to be particularly severe in San Francisco.
Park Hotels & Resorts has ceased making payments on a $725 million loan that had two major San Francisco hotels as collateral: the 1,921-room Hilton San Francisco Union Square and the 1,024-room Parc 55 San Francisco.
In 2023, the historic 135-room Huntington Hotel atop San Francisco’s legendary Nob Hill was bought through a foreclosure whereby the new owner paid about $29.3 million — a price that was 67% below the hotel’s assessed value of $87.6 million at the time of the purchase.
“A lot of the hotel markets that are primarily business-oriented, such as San Francisco, Oakland and San Jose, are struggling the most,” Alan Reay, president of Atlas Hospitality Group, said in a prior interview.