Hard Rock Hotel Financing…?

Posted on December 1, 2011 | by Denny Oh

San Diego’s Hard Rock Hotel is getting a lot of attention these days.  Investors are picking up units as quickly as they come on the market and tourists and locals are spending lots of time and money at the hotel.  If you’re not familiar with the Hard Rock Hotel, click here, or here, or here.   Currently, there is only one lender that I’m aware of that will provide buyers with loans there – Independent Bank.  However, IB will only provide limited financing(short term ARMs with 30% down) on properties that already have loans with them.

Most purchases have been in cash and I don’t think that will change for a long time.  When I looked to see how many more short sales/foreclosures there might be, I was surprised at the number of people who had paid cash for these condos when they purchased them from the developer.  From what I could tell, there were 109 condos that were purchased with cash, prior to 2009(the first closings were in late 2007 and almost all units were sold by mid 2008).  So for the most part, about 25% of the hotel(there are 420 condos total) was purchased by cash buyers!

Since those “original” purchases, there have been 113 more transactions that have resulted in a zero loan balance: I state it this way because some of these “transactions” were a result of the bank foreclosing on the owner and some were new cash purchases(all of which eliminated any debt on the property).  So now, there are 222 properties in the Hard Rock Hotel that are owned free and clear. This also means that there are 198 condos that still have loans.  The majority of these properties have between a $350-450K loan.

Will all 222 of these condos end up short selling for foreclosing?! Doubtful.  My guess is that some of these owners have so much money, they don’t care they they’re upside down and they’ll just hold on to them forever, or at least until they want to sell and get out(without short selling).  Then there are others who don’t necessarily have endless amounts of money, but enough to cover the loss they’re experiencing (my guess is between $500-1500/mo depending on the loan amount and unit).  Some owners will choose not to short sell or foreclose becuase they don’t think it’s morally acceptable and some won’t becuase they can’t afford to let their credit scores go down.

All in all, my guess is that we’ll see another 100 or so condos come up for sale as a short sale, or REO(mostly as a short sale though).  Seeing how there have been about 30 sales this year,  100 more short sales doesn’t sound bad at all.

For those of you who own at the Hard Rock and are thinking about selling it, please let me know.  I’ve completed several short sales there with JP Morgan Chase, Independent Bank and Waterstone.  I’m currently negotiating sales with East West Bank and Bank of America. I’d be happy to explain the process and give you my honest opinion.

You can contact me, Denny Oh, at 858-243-2092 or [email protected] Thanks.

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  1. Brandon says:


    I’ve been looking at purchasing a unit at the Hard Rock for about 8 months now. Can you send me a list of units that already have loans with them? I’ve been talking to a few banks about financing and I’m going to contact Independent Bank. Thanks!



  2. David F says:

    Dear Denny:

    I noticed from your web site that there are 3 studios for sale, and 2 of them have been on the market for ever.

    If you look at the sales in the past 2-3 months,
    studios have gone for 150K and some even lower than that.

    None of the studio units listed are for 150 K. They
    are asking 175K.

    Do you know if there are more studio units in the pipeline, and approximately what prices they are likely to go for and when they will come to the market? Can you provide me a list of units
    in the pipeline like you did for Brandon above?



  3. Denny Oh says:

    David – I’m not aware of any more studios coming up, but I assume there will be some more soon. Pricing depends on who the short sale is through and the realtor/seller. I’ll email you a list of current and recent activity. Thanks.

  4. Scott S says:


    Sorry I had to repeat this post. I put it once against an earlier article of yours.

    You had told me a month ago that you had many buyer clients for Hard Rock and don’t want to take any more buyers.

    If so, why is the one real listing for unit 552 for which you are the listing agent still on the market after 6 days? Are your buyer clients not bidding for this unit? Is anything wrong with this unit 552?

    I am trying to get a feel for how many bidders I will have to compete with when I make an offer. I had bid for 1 unit before but without luck.

    So please answer the following questions for me if you will:

    1) Are your buyer clients not bidding for unit 552? If so , why not? Explain why it is still on the market after 6 days.

    2) Is there anything wrong with this unit 552 for which you are the listing agent?

    The answers to the above questions will help me decide to bid for this unit. If you are now interested in being the buyer’s agent, please indicate.



  5. Denny Oh says:

    Hi Scott,

    I do not see anything wrong with this unit. I have multiple offers on this and anticipate more. Part of the reason why it’s still active, is because I have not been able to get anyone into the unit (the room has been occupied) and also in part to allow buyers to think about what they want to offer. More market time allows more interest and hopefully, more offers.

    I do have interested clients, but I will not be representing them. Instead, I am having other agents represent them so there can be no argument about unfair representation, or anything like that. The last listing I had at the HRH unit (944) had several offers and we are under contract above the asking price. As I’m sure you’ve noticed, this is the only active unit on the MLS (aside from the over priced 802) and every single listing gets multiple offers. Please let me know if you have any other questions. Thanks and good luck.

  6. Scott says:

    Thanks for your reply Denny.

    I am trying to get a feel for what kind of offer I should make for unit 552. So maybe you can answer the
    following questions for me.

    1) Do you have offers over the asking price? When I
    made offers in the past, I have been discouraged by how competitive it was.

    2) Can you give me an idea about what kind of offer will make the cut? Lower nineties, upper nineties, over 200K?

    3) Till what date are you likely to keep it open?

    If you would like, please send the reply directly to my e-mail address instead of posting here.