Stake in W Hotel building on auction block

By Michelle E. Shaw and Leon Stafford

The Atlanta Journal-Constitution

A Chicago real estate investment firm is preparing to auction off its stake in the building that houses the downtown W Hotel and Residences.

Capri Select Income II, a fund of Capri Capital Partners, hired real estate services firm Jones Lang LaSalle Hotels to handle the public sale of the interest in the 28-story tower on Ivan Allen Boulevard. The auction is scheduled for March 29, according to a notice published Wednesday. Unless developer Hal Barry can work out a deal, the move could spell the end of his ownership in the building.

Hotel officials said the auction will not affect the W's operations.

The tower is one of several buildings in Barry's massive multi-block Allen Plaza project, which has fallen on hard times because of the slumping economy. Earlier this year, BB&T started foreclosure proceedings on a lot that was to be the site of a 46-story office building in Allen Plaza.

The hotel/condo building was financed in part through Atlanta-based Silverton Bank, the state's biggest bank failure when it collapsed in May 2009.

The building has been in limbo since the bank's collapse, said Uri Vaknin, a senior vice president of business development and sales at the Marketing Directors LLC , which used to market the condos.

Only one residence in the building, a penthouse, has been sold, Vaknin said. Contracts have been drawn on a handful of others, but potential buyers have not been able to secure financing, he said.

Opened in 2009, the building has 237 hotel rooms and 74 condos. It is also home to BLT Steak, a swank restaurant.

Scott Fisher, a partner in the real estate group of law firm Arnall Golden Gregory, said the condo market continues to struggle.

"My impression is that the only things that are selling are condos that are deeply discounted where financing is available," he said.