Thompson San Antonio Sells for $41M as Foreclosing Lenders Finance 78% of the Deal
The lenders that foreclosed on the Thompson San Antonio in March did not dump the hotel. They sold it for $41 million, or about $253,000 a key, and lent the buyer $32 million of the price. That is 78% seller financing on a downtown luxury hotel, and it is a template Texas owners, buyers and lenders should study.
The buyer is The Loren Group, the New York hotel company founded by financier and hotelier Stephen King. The sellers were a joint venture of two lenders managed by the same group, Sunrise Realty Trust (Nasdaq: SUNS) and the private Southern Realty Trust. Sunrise announced the closing on Oct. 13. Our San Antonio hotel market coverage and the Hotel Transactions Desk logged the sale. This story looks at how the deal was built, and why that matters beyond San Antonio.
The Deal in Numbers
| Item | Figure |
|---|---|
| Hotel | Thompson San Antonio, 162 rooms, about 140,000 sq. ft. |
| Price | $41.0 million (about $253,000 per key) |
| Buyer cash | $9.0 million, including deposits and payments made before closing |
| Seller loan | $32.0 million senior loan from the selling lenders (78% of the price) |
| Planned capex | $10 million over the coming months |
| Prior loan | $44 million, foreclosed in March 2026 |
The per-key and percentage figures are our math from the disclosed numbers. (For how that price compares, see our 2026 hotel price-per-key guide.) Neither side has disclosed the new loan’s interest rate, term or covenants, the hotel’s operating results or a cap rate.
The Thompson opened in 2021 in the hotel portion of a 20-story mixed-use tower completed in 2020 at 115 Lexington Ave., in the Arts District overlooking the River Walk. It has a rooftop restaurant, a full-service spa, a gym and 5,000 sq. ft. of meeting space, according to the Sunrise release.
How the Hotel Got Here
Houston developer DC Partners opened the hotel. In February, Sunrise and Southern Realty issued a default notice alleging that the owner, Lex Avenue Hotel, had failed to repay a $44 million loan, CultureMap San Antonio reported. The lenders took over the deed in March, after exercising their foreclosure rights under the senior loan.
DC Partners blamed the market. “These factors — including opening during COVID and a broader softness in the San Antonio hotel market — created challenges that were not anticipated and challenging to overcome,” a spokesperson told the San Antonio Business Journal in February, as quoted by CultureMap. The company also cited high interest rates and a crowded field of new near-downtown hotels, including The Monarch, Kimpton Santo and the Plaza San Antonio Hotel & Spa.
The hotel’s lobby restaurant, Landrace, has been closed since July 2025, when it announced it was closing for renovations, CultureMap reported. The rooftop lounge, The Moon’s Daughters, stayed open.
Why the Lenders Financed the Buyer
Loan maturities and defaults have been a steady theme this year (see our guide to hotel loan maturities and defaults). When a hotel loan goes bad, a foreclosing lender usually has two exits: sell for cash at whatever the market will pay, or hold the hotel and run it. Sunrise and Southern Realty took a third route. They swapped most of a hotel they owned back into a loan they hold.
Sunrise owned 65% of the joint venture. Its share of the price was about $26.7 million: roughly $5.9 million in cash and a $20.8 million share of the new loan, before closing costs. Southern Realty, with 35%, reported about $14.4 million, Hotel Realtor reported. Sunrise said its share was “consistent with the carrying value of its investment.” In other words, the sale did not force a new write-down on its books.
Compare the old and new positions. The lenders had a $44 million loan on the hotel. Now they hold a $32 million first mortgage on the same building, about $198,000 a key, with $9 million of buyer cash below them and a buyer promising another $10 million of improvements. If Loren spends the full $10 million, its all-in cost will be about $51 million, and the new loan will be roughly 63% of that basis (our math).
That is the logic of the trade. The lenders moved from owning an operating hotel back to being lenders again, with less exposure and fresh equity behind them. They also kept a claim. Sunrise said it and its affiliate “continue to pursue available remedies under the former sponsor’s guarantee.”
The terms had been on the table for a while. An August filing by Sunrise disclosed the agreed $41 million price and the proposed $32 million loan, according to StockTitan’s summary of the release. The deal took about two months to close after that.
Who Bought It, and What Comes Next
The Thompson is the fourth hotel for The Loren Group, CultureMap reported. The company opened The Loren at Pink Beach in Bermuda in 2017 and a hotel on Austin’s Lady Bird Lake in 2022, and it has a Turks and Caicos property under development that is expected to open in 2027, according to the release.
Loren said it will spend $10 million on improvements “over the coming months” to “enhance the guest experience.” The release did not say where the money will go. The closed lobby restaurant is the obvious first question for anyone watching downtown San Antonio’s food-and-beverage scene.
Part of a Texas Pattern
The Thompson is the only one with a disclosed price among several Texas hotel sales by lenders, receivers and credit funds announced in October:
- El Paso: A court-appointed receiver sold the 175-key Holiday Inn El Paso West–Sunland Park to a local hotelier, Alchemy Real Estate Advisors announced on Oct. 16. Alchemy represented the receiver. No price was disclosed.
- Midland: A private credit fund sold the 79-room Baymont by Wyndham at 5011 W. Loop 250 N., a former Hampton Inn, to Icon Lodging, Marcus & Millichap said on Oct. 19. Terms were not disclosed.
In each case the creditor side is getting out through a sale rather than holding on. The Thompson is the one where the terms are public, and they show what a lender may give up to get a deal done: a high-leverage loan to the buyer.
What This Means for Texas Owners, Buyers and Lenders
- Buyers: ask the lender for the loan. When a lender owns a hotel it foreclosed on, seller financing may be on offer, even when bank debt is not. A 78% loan from the seller can make a price work that would not pencil with a 55% to 60% bank loan. Ask about the rate, the term and the capex requirements before you treat the price as cheap. Our Texas hotels for sale listings are a place to start.
- Owners in trouble: the guarantee does not go away. The Thompson’s lenders sold the hotel and are still pursuing the former sponsor’s guarantee. If you signed a guarantee or recourse carve-outs, a sale by your lender may not end your exposure. Talk to counsel early.
- Lenders: carrying value is the floor. Sunrise sold at a price consistent with its carrying value and kept most of its money at work as a performing loan. Owners should expect other lenders holding foreclosed hotels to try the same structure rather than take a cash loss.
- Brokers and appraisers: separate the price from the financing. A $253,000-per-key sale with 78% seller financing is not the same comp as an all-cash or bank-financed deal at that price. Note the terms whenever you cite it.
- Everyone: watch downtown San Antonio supply. The owner blamed new competition and a soft market. Any buyer underwriting downtown San Antonio should model the hotels that opened since 2021, not just the ones still in the pipeline.
The Bottom Line
The Thompson San Antonio is not a fire sale. It is a lender recycling a hotel back into a loan, at a price that protected its books, with a buyer adding cash and capex. For Texas buyers, that means the best financing on a distressed hotel may come from the lender that took it back. For sponsors, it is a reminder that losing the hotel and settling the debt are not the same thing.
Sources and further reading
- Sunrise Realty Trust Announces Closing of the $41 Million Sale of the Thompson San Antonio Hotel — Sunrise Realty Trust release via StockTitan, 2026-10-13
- New Thompson San Antonio owner eyes $10M in improvements — CultureMap San Antonio, 2026-10-13
- Loren Group adds Thompson San Antonio — Hotel Realtor, 2026-10-14
- Thompson San Antonio hotel sale — San Antonio Express-News (subscription)
- Alchemy Announces Sale of Holiday Inn El Paso West – Sunland Park — Alchemy Real Estate Advisors, 2026-10-16
- Marcus & Millichap Arranges Sale of 79-Room Baymont by Wyndham Hotel in Midland, Texas — Marcus & Millichap, 2026-10-19
- Texas Hotel Market 2026 — The Hotelier Times
- Hotel Transactions Desk — The Hotelier Times
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