W
estbrook Partners is facing the loss of its Four Seasons San Francisco hotel at a foreclosure auction, set to begin on October 10. The Florida-based investor defaulted on a $72.5 million loan tied to the 155-room luxury hotel six months ago. Westbrook bought the property in 2019 for $126.6 million and invested an additional $32.1 million in renovations.

    The lender, Waterfall Asset Management of New York, listed the delinquent loan in May, seeking a new buyer for the hotel. The debt was originally borrowed from HSBC Bank USA but was sold to Waterfall in 2022. The hotel's financial struggles are compounded by a lawsuit filed by its landlord, who claims Westbrook owes nearly $400,000 in rent and fees.

    Westbrook is still negotiating with its lender to settle its debt, but the upcoming auction suggests that Waterfall Asset Management is unwilling to extend the loan terms. The credit bid at the auction may be set below the value of the loan due to declining property values in San Francisco. Alternatively, the auction could be postponed indefinitely until market conditions improve.

    Westbrook's equity in the hotel has likely been wiped out, and the company may attempt to acquire the loan at a discount, allowing it to continue owning the property debt-free. This would not be the first time Westbrook struggles with its San Francisco properties; the company also owns the troubled Four Seasons Private Residences condo tower and listed another Four Seasons hotel in South of Market for sale earlier this year.