Loan failures have hit two hotels in Santa Clara County, California, causing significant disruption to the Bay Area hotel market. The Wild Palms Hotel in Sunnyvale and Hotel Avante are facing a notice of default demanding payment in full on a $54.1 million loan from a Rialto Capital Management affiliate. This is the second time in six years that these hotels have been hit with a financial default, which led to their first seizure in June 2021. Hotel values have declined and it is difficult for borrowers to refinance their hotels, according to Alan Reay, president of Atlas Hospitality Group. The hotel sector has seen multiple foreclosures and loan failures in the past.