Dana Point Resort Turned Over to Citigroup

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Owners of the 400-room St. Regis Monarch Beach resort, the site of a maligned retreat last fall for top sales performers of bailed-out insurer American International Group Inc., turned over the beleaguered property to its mezzanine lender, Citigroup Inc.

Monday’s forfeiture ends two months of negotiations between Citigroup and the property’s prior co-owners, Newport Beach-based Makar Properties LLC and San Francisco hedge fund investor Farallon Capital Management LLC.

The hotel had been set for auction after Citigroup moved in May to foreclose on a $70 million, secondary mezzanine loan. The auction was put off twice before the transfer was announced. White Plains, N.Y.-based Starwood Hotels & Resorts Worldwide Inc. is set to continue operating the hotel under its St. Regis brand.

The hotel’s daily operations aren’t expected to be affected by the ownership transfer. The change in ownership for the 400-room hotel, one of Orange County’s poshest resorts, is the most notable example of a property going back to a lender in a downturn that has battered hotels in the past year.





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