The Lexington Hotel is set to close next week due to foreclosure proceedings after being open less than 20 months.
This is a shame, because it may be the nicest hotel in the Valley (not that the competition for that honor is real tough). They say the hotel is viable and I think that is credible. The problem is the condos. The top 3 floors of the 7 story structure are condos, not the hotel. Not a single condo was sold. Zip. And all the extra debt to build those luxury lofts is putting them under. They should have stopped building after 4 floors!
In a grand statement of how screwed up finance and real estate lending was a few years ago, designing the structure to be nearly 1/2 condos was key to financing. There was zero market for those condos even during the boom, but there was a tremendous appetite for lending to residential development.
I suppose it could be worse. In Fort Myers, FL (which now has higher foreclosure rates than Stockton), this 32 story condominium high-rise has only 1 tenant.