New York
Cheers: Soho Properties secures $317M refi on Times Square Margaritaville
Arden Group wins foreclosure auction for El-Gamal’s Margaritaville Hotel
Lender uses credit bid to acquire equity interests in property
Arden Group CEO Craig Spencer, Soho Properties’ Sharif El-Gamal, and the Margaritaville Hotel (Georgia State, Getty, Google Maps)
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Oct 16, 2023, 12:57 PM
Arden Group won the long-awaited UCC foreclosure auction for Sharif El-Gamal’s Margaritaville Hotel.
The lender used its existing debt to submit a credit bid of $1,000 to acquire an equity stake in the Times Square hotel, putting it on a path to control the property. Arden was the only bidder at the auction on Monday.
Arden Group provided a $57 million mezzanine loan on the property and has sought to foreclose since Sharif El-Gamal’s Soho Properties defaulted on the debt earlier this year.
Matthew Mannion of Mannion Auctions was the auctioneer. Newmark’s Jordan Roeschlaub and Dustin Stolly brokered the UCC foreclosure sale.
Soho Properties sought to delay the foreclosure, arguing that Arden did not give bidders enough time to analyze the property and that Arden was seeking to seize control of the property and benefit from El-Gamal’s work. A New York state judge allowed the foreclosure to proceed.
El-Gamal bought more time by putting a company tied to his equity stake into bankruptcy in July. That gave him a last chance to refinance the debt on the property, which totaled $309 million.
El-Gamal’s group claimed in court papers that it was close to a refinance, but Arden alleged El-Gamal was cold-calling lenders and was nowhere close to a deal.
El-Gamal’s Soho Properties developed the hotel with MHP Real Estate Services and Chip and Andrew Weiss at a cost of $400 million. In the summer of 2021, they scored a $371 million refinancing, which included El-Gamal’s $57 million mezzanine loan.
David Sherr’s One William Street Capital Management provided the senior loan. In May, the property was appraised for between $226 million and $350 million, according to court filings.
Attorney Larry Hollander, who represents Chip and Andrew Weiss, said, “This is the first step in a possibly long haul and my clients are taking it under advisement.”
Arden declined to comment. Soho Properties did not immediately return a request for comment.
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