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Mirae Asset Global Investments failed to close on its $5.8 billion purchase of a luxury US hotel portfolio, according to sources cited in a Wall Street Journal article.

Now the South Korean financial-services company is being sued by the seller, Anbang Insurance Group, to force the sale.

The 15 high-end asset portfolio includes such properties as Essex House Hotel in Manhattan, the Four Seasons Hotel in Jackson Hole, and San Francisco’s Westin St. Francis.

The sources told the WSJ that Mirae’s reason for not closing the deal by the deadline was in part due to the hotels operating outside the ordinary course of business amid the coronavirus pandemic.

Hospitality’s Grim Outlook

There is no doubt that hotels are under siege in the current coronavirus-driven economy. As of April 8, nearly 8 out of 10 hotel rooms were empty across the country per STR. Hotels are currently on pace to lose more than $500 million in room revenue per day based on current and future reported occupancy rates, according to the American Hotels and Lodging Association. This pace translates into a loss of $3.5 billion every week with most hoteliers reporting projected revenue losses of greater than 50% for the first half of the year.

Another Luxury Hotelier Taps PPP

Luxury hotels are not immune to this downward trajectory, as Mirae Asset Global Investments and one luxury hotel owner show.

Ashford Inc., the external advisor to both Ashford Hospitality Trust and Braemar Hotels & Resorts, recently explained why it was tapping the small business Payment Protection Program for funds.

It was responding to the backlash that has formed against larger companies that are taking out these loans, with many feeling pressured to return the loans.

Ashford said that the Covid-19 pandemic has been devastating to its company and employees, with 32 of its 130 hotels closed. “Our hotels that remain open are operating with cash flow shortfalls even before debt service and also require funding,” it said.