A joint venture partnership including New York Ace Hotel owner and GFI Capital Resources Group President Allen Gross’ GB Lodging is set to purchase the Temple Court building, a nine-story city landmark at 5 Beekman Street formerly owned by the Chetrit Group and Bonjour Capital, GFI told The Real Deal today.
The acquisition is one of the private equity hotel investment firm GB’s first since it was founded last year by Gross and former Chartres Lodging Group partner Bruce Blum. GB is a division of GFI, a spokesperson for the company said, declining to comment further on the acquisition other than to say there were others involved in the deal. The price was not clear.
Hillel Spinner of Venture Capital Properties said he brokered the off-market deal on behalf of the seller. Speculating that GFI would transform the abandoned building into a hotel, he said: “The new owners have the kinds of experience necessary” to make the project successful. The deal, which is currently in contract, will likely close in the next few weeks, he said.
Temple Court, an historic brick and terracotta office building built in the 1880s, has been vacant for many years, according to news reports, and has only been used for fashion industry photo shoots and events, including a shoot for Harper’s Bazaar and for AMC television series “Rubicon,” canceled in 2010. The landmarked property is configured around a nine-story atrium surrounded by Victorian era railings.
The building was reported to be in contract to hotelier Andrew Balazs last year; but a spokesperson for Balazs, who had been interested in sprucing up the declining building and converting it into a hotel, said he had never signed on the dotted line.
“[Balazs] took a close look at it but then walked away from the deal because it didn’t make sense,” the spokesperson said.
The building made headlines in 2010 when Chetrit and Bonjour, which paid $61 million for the building in 2008 and planned to convert it into a 200-room hotel, got into a legal dispute following a foreclosure action taken against the property. As The Real Deal previously reported, Chetrit filed a $50 million lawsuit against Bonjour’s Charles Dayan, alleging the investment partner reneged on a deal to pay off a defaulted construction loan after the lender filed to foreclose on the building. Chetrit ultimately won a $2.45 million judgment.
Chetrit and Bonjour, which still own the building according to public records, put up $22 million in cash for the purchase of the building in 2008, news reports from 2010 claim, and Pacific National Bank provided $45.7 million in financing. A 2010 foreclosure action against the building indicates that the developers had stopped making interest payments. Spinner said the issue had been resolved.
Chetrit and Bonjour were not immediately available for comment.