The bankrupt owner of a 113-room hotel on University Avenue in Berkeley has struck a deal to sell the property for $14.5 million, a move that could finally ward off a looming foreclosure after nearly a year of legal wrangling with its lender. The buyer is listed as Junjian Lushan Lu, who is connected to an address in Sonoma County shared by a hotel, though the deal still must clear all contingencies before it closes.
The proposed sale price for the University Inn & Suites at 920 University Avenue works out to roughly $128,300 per room, a figure described as on the low side for regional hotel values, according to The Mercury News. Kubera Hotel Properties LP, the entity that owns the hotel, is expected to file a motion to sell it free and clear of the mortgage as soon as possible, per bankruptcy filings cited in that report.
The hotel's troubles trace back to the COVID-19 pandemic, when wide-ranging shutdowns to stop the virus's spread upended the lodging business almost as soon as Kubera had taken out its loan. The company obtained a $10.3 million loan from lender Wilmington Trust in 2019, then defaulted on that debt in February 2025 after it could no longer make payments needed to keep its La Quinta Inn franchise banner, according to the bankruptcy filing referenced by the same report.
A Sharp Drop in Value Since 2019
The financial strain reflects a steep decline in the hotel's worth. Before the default, the property's appraised market value fell from $21.8 million in 2019, when JPMorgan Chase issued the original loan, to $15.4 million in 2021, and down to $12 million by 2025 — a roughly 45% collapse that made the debt increasingly difficult to service, according to The Real Deal.
Kubera Hotel Properties officially filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Northern District of California on June 6, 2025, listing $10.2 million in total liabilities against its sole asset, per The Registry. The filing halted a scheduled foreclosure auction, but it did not resolve the underlying dispute with Wilmington Trust.
Four Failed Deals and a Lender's Frustration
Court filings show the company had a potential buyer lined up at some point during 2025, but that transaction evaporated before the year's end. The Mercury News reports this was one of several stalled efforts, part of a pattern the same paper describes as prior sales attempts that fizzled. The Real Deal's reporting details four failed sale attempts overall, including a $17 million acquisition offer from Goldfin Ventures in September 2025 that was later withdrawn, and a March 2026 proposal to convert the property into affordable housing that also did not go through.
The repeated delays tested the patience of Kubera's lender. In April 2026, Wilmington Trust filed a motion in bankruptcy court to lift the automatic stay and force a foreclosure auction, accusing the hotel owner of using the bankruptcy process as an “empty gesture” meant only to delay repayment, the same outlet reported.
Decades of Ownership Meet a Changed Market
Kubera Properties CEO Pradeep “Peter” Khatri has owned and operated the site since 1987, when it functioned as a La Quinta Inn by Wyndham before its rebranding as University Inn & Suites, according to Berkeleyside. The hotel had an earlier brush with a different kind of upheaval in May 2020, when an Emergency Occupancy Agreement between Khatri, Alameda County and the City of Berkeley to lease all 113 rooms for unsheltered residents under Project Roomkey was abruptly canceled following a clash over property access and contract terms.
That failed shelter arrangement came during the same period Berkeley was leasing and converting other University Avenue motels into transitional housing, a strategy Hoodline previously documented at a nearby Super 8 property.
A Tale of Two Berkeley Hotel Markets
The University Inn & Suites sale price stands in sharp contrast to what institutional buyers have paid for prime Berkeley lodging closer to campus. In October 2025, the University of California system purchased the 331-room Residence Inn Berkeley downtown for $175.8 million, or about $531,000 per key, according to The Real Deal — more than four times the per-room price attached to the University Avenue property.
The gap illustrates a broader divide playing out across the East Bay hospitality sector, where secondary hotels have faced foreclosure while prime downtown assets still command premium prices. In July 2025, the 500-room Oakland Marriott City Center, the largest hotel in the East Bay, sold at a foreclosure auction for $70.2 million to lender Invesco, a 51% drop from its $143 million purchase price in 2017, per The Real Deal's reporting. In April 2025, developer Hawkins Way Capital surrendered the dual-branded 276-room AC Hotel and Residence Inn in downtown Oakland to its lender through a deed in lieu of foreclosure on $117 million in unpaid debt, after operating the property for just two years, according to GlobeSt.
Industry analysts point to a shift in lender behavior as a key driver of the wave. According to research from Atlas Hospitality Group cited by SFGate, regional hotel foreclosures accelerated as commercial lenders abandoned “extend and pretend” loan forbearance strategies, leaving distressed Bay Area hotel owners with little choice but to surrender their properties. The East Bay's hospitality contractions have continued into this month, with Hoodline recently reporting on the closure of a longtime Oakland restaurant tied to the broader downturn, which also noted the January 2025 shutdown of Oakland's 35-year-old Waterfront Hotel.
For now, the University Inn & Suites deal remains unfinished business. The potential buyer is still working to clear all contingencies needed to complete the purchase, and Kubera has signaled it intends to move quickly to file a motion allowing the sale to proceed free and clear of its mortgage obligations.
-4.webp?w=160&h=400&fit=crop&crop=edges)
