BATTLE GROUND, Wash.—Alkesh Patel, a 44-year-old immigrant from India, borrowed about $5 million to open the Best Western Plus motel on Main Street in this city of 17,500 north of Portland, Ore.
Five years later, Mr. Patel still works the front desk with his wife, chats with the housekeeping staff and helps do laundry while making the morning rounds, much as family members have done at other motels nearby for two decades.
But Mr. Patel doesn’t own the Best Western anymore. The bank that lent him the money failed in 2008, and his loan was sold to one of the many investment firms specializing in buying distressed assets from the Federal Deposit Insurance Corp. in the wake of the financial crisis. The new owners of the loan demanded $3 million in repayment. Mr. Patel didn’t have it, so the owners foreclosed.
“We just needed six months or so to tide us over,” said Mr. Patel.
Mr. Patel’s comedown from property owner to hired help is part of a commercial real-estate slowdown that has swept through the roadside lodging business in the U.S. Many commercial real-estate properties declined in value during the financial crisis. But after a postcrisis rebound, concerns about the U.S. economy have cooled the market recently in many areas of the country.
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