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The Real Estate Wonk
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Owner of stalled Charles Street hotel site looks for buyer

A historic Charles Street building -- which survived the Great Fire of 1904, but struggled more recently as plans for a hotel stalled during the recession -- is up for sale, again.

The owner, Rialto Capital Management, a Miami-based investment firm focused on distressed properties, is hoping an upswing in the hotel market will make the 101 N. Charles Street site appealing to buyers interested in redevelopment, said Kyle Stevenson, senior vice president of Hunter Hotel Advisors in Tysons Corner, Va. , which is marketing the property. 

“Nationally Baltimore’s seen as an attractive market for hotel investors and we’re hoping to capitalize on that with this offering,” Stevenson said. “In general, not just in Baltimore, but nationally, investors are coming back to hotels,” he added.

The former Jefferson building, which dates to 1884, was purchased in 2006 for $5.7 million. It was slated for conversion to a 100-room Staybridge Suites hotel but work stopped in 2009 as the recession took hold.

The original developer, which owed money on a $12.1 million loan, entered bankruptcy in 2010 to try to avoid foreclosure on the property, according to court documents. As the case wound its way through court, the lender transferred the note, along with others, to RL BB Financial, LLC, a Rialto affiliate, which in 2011 scheduled the site’s first foreclosure auction.

Another Rialto affiliate, RL BB-MD CSM LLC, became the formal owner of the property in October last year for $3 million, according to land records.

Rialto Capital Management is a subsidiary of the national homebuilding firm Lennar Corp.

Its focus is loan service, not development, Stevenson said. The firm not asking for a specific price and does not have an estimate of how much it would cost to complete the hotel, he said.

“Our mission here is to show it widely and give everybody an opportunity to make an offer on it and then it’s up to the client to decide what’s acceptable,” he said, adding, “There’s been a really strong response so far."

Copyright © 2014, The Baltimore Sun
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