Texas Buyer Found for Adero Scottsdale Resort in Receivership

Article originally posted on KTAR News on February 20, 2024

The Adero Scottsdale resort in Fountain Hills, Arizona. (Adero Scottsdale Photo)...

After being placed in a receivership following its ownership’s failure to make mortgage payments, a buyer has been lined up to acquire the Adero Scottsdale resort.

The 177-room property in Fountain Hills, which used to be the CopperWynd Resort before a massive renovation and expansion took place in the late 2010s, is set to be sold for $66.5 million, according to documents filed earlier this month with Arizona Superior Court in Maricopa County.

If the deal is approved, the hotel will be bought by Cabo Resort Development Partners LLC – a Wyoming limited liability company owned by Texas-based GRMM Hotel Investment Fund. GRMM is a hotel acquisition fund that acquires and operates “exceptional hotels around the world,” according to its website. The company could not be reached for comment.

Palisades Resorts in 2021 received a $55 million refinancing loan for Adero Scottsdale from a subsidiary of Värde Partners. The loan was then sold to VMC Finance, a commercial mortgage-backed securities trust that was organized by and affiliated with Värde. At the time, the resort was valued at $92.4 million for tax purposes.

During a Dec. 6 hearing, legal counsel for Palisades did not object to the allegations in the complaint or for the appointment of a receiver.

According to the February court filing, back in September 2023 – prior to the appointment of a receiver – Adero’s ownership and GRMM had signed a purchase agreement for the property, but the deal was not able to close before the receiver was put in place.

After Chris Neilson of Trigild IVL was appointed as the receiver and charged with overseeing the property, he circled back with GRMM and determined the investment fund was still interested in acquiring Adero on similar terms and conditions. Neilson then “fully negotiated the sale” of Adero, according to court documents.

The lender consented to the sale, according to the motion filed with the court, and the proceeds will go toward the outstanding balance on the loan.

A hearing is set for Feb. 20, where Judge Christopher Coury is expected to approve the sale. According to the sale agreement filed with the court, GRMM will be ready to close on the deal within five days of the judge’s approval.

In the sales documents, GRMM agreed to keep all current employees at the Adero property and it will continue under the franchise agreement with Marriott International Inc. (Nasdaq: MAR). When the property changed from the CopperWynd to Adero, the new branding came with an agreement with Marriott to put the property in the company’s Autograph Collection.