T
he value of the 289-room Radisson Oakland Airport hotel, owned by Oakland Alameda Hotels, has plummeted 80% to $15 million, putting it at risk of foreclosure. This drastic decline in valuation is a result of the economic landscape shift during the pandemic and marks another Bay Area hotel struggling financially. The new appraisal represents about half the hotel's $28.2 million commercial mortgage-backed securities loan exposure.

    The hotel's owner, led by Nupen Patel, had filed permits to convert the property into homes in January. This comes after a 2020 investigation revealed significant wage theft among hotel workers. With its value so low, the borrower likely has little incentive to remain involved with the property, making foreclosure more likely.

    Morningstar Credit Analytics' David Putro notes that the servicer is "dual-tracking" the loan, trying to negotiate a workout while simultaneously starting the foreclosure process. The 128,400-square-foot hotel, built in 1964, includes a conference center and was used as a temporary shelter for homeless residents during the pandemic.

    The hotel's location near Oakland Stadium, which has lost all three tenants since the loan's origination, contributes to its financial struggles. With negative cash flow last year and a number of businesses closing in the area, investors are wary of continued declines in hotel values. However, a report by Matthews Real Estate Investment Services forecasts increased transaction velocity and buyer demand will lead to higher hotel values by Q3 2025.