Michael Rosenfeld Faces Foreclosure of Nob Hill Hotel

Pine & Powell Partners is poised to lose a 400-room hotel on San Francisco’s Nob Hill after defaulting on a $105 million loan and failing to fix the property’s elevators before a conference this month.

The Los Angeles-based limited liability company led by Michael Rosenfeld was sued by Deutsche Bank AG in a foreclosure proceeding for the century-old Stanford Court Hotel at 905 California Street, the San Francisco Chronicle reported.

Deutsche Bank wants the court to appoint a receiver to safeguard its interest in the property. Pine & Powell bought the hotel in 2010 for $26 million, or $65,000 per room.

The bank seeks a temporary restraining order that would prohibit the hotel operator from “commingling, hypothecating, converting, concealing, conveying, assigning, misappropriating, misusing or otherwise transferring” rental payments, insurance proceeds or other revenues for any purpose other than paying down the debt.

Deutsche Bank has accused Pine & Powell Partners of failing to “protect” the property, and of actively engaging in “conduct that constitutes waste,” according to the complaint.

Its lawsuit also says that, despite an “upcoming professional conference” set to take place at the hotel this month, the firm “frustrated” efforts to make critical repairs to its elevators.

It’s unclear which conference the lawsuit is referring to, but JPMorgan Chase’s annual health care conference, held at the Westin St. Francis hotel near Union Square this week and featuring ancillary events at other Downtown properties, was to wrap up Thursday, according to the Chronicle.

Deutsche Bank and its attorneys declined to comment to the newspaper. Multiple attempts to contact Rosenfeld were unsuccessful.

The lender lawsuit provides insight into what can happen when discussions to resolve a borrower’s default turn sour.

Deutsche Bank alleges the hotel owner has let necessary repairs at the property slide. For five months, Pine & Powell “unreasonably withheld consent” to contracts that would allow the hotel’s elevators to be repaired and receive regular maintenance, according to the lawsuit.

The estimated cost of fixing the three nonworking elevators out of five at the hotel is $60,000, according to the lawsuit.

Deutsche Bank also alleges the hotel owner wouldn’t approve a replacement insurance contract set to expire late last year, which the hotel’s property management firm, Highgate Hotels, had to sign at the last minute.

The bank said it was “forced” to make $5.3 million in advances to ensure the hotel’s continued operations, including paying real estate taxes and addressing issues with the hotel’s chiller, part of the building’s cooling system, according to the lawsuit.

Rosenfeld, CEO of Woodridge Capital Partners and Next Century Partners, has lost a major project in Los Angeles after defaulting on loan payments.

By the time Rosenfeld’s company was first accused of defaulting on its loan for the Stanford Court Hotel in 2022, he had already defaulted on some $1.8 million in loans tied to the $2.5 billion Century Plaza, a historic hotel in L.A.’s Century City redeveloped with two condo towers.

The development was ultimately acquired by billionaire brothers David and Simon Reuben, who also had debt on the property, for $1 billion at a foreclosure auction in 2023, though Rosenfeld reportedly continued to own close to 200 condos in the development afterward.

— Dana Bartholomew