Midtown Dream Hotel loan troubled

By Adam Pincus | May 06, 2009 11:40AM

A $100 million loan secured by the Dream Hotel at 210 West 55th Street in Midtown was put on a special servicer status, indicating the possibility it may become delinquent, according to loan tracking agency Trepp.
The loan payment was late in April but the note was not in default, Trepp determined.
A loan packaged in a commercial mortgage backed security is transferred to a special servicer when there is a possibility of default.
The 220-room Dream Hotel was opened by Hampshire Hotels & Resorts in 2004 in an 1895 building at the southeast corner of Broadway and 55th Street.
The London-based company owns the hotel but not the underlying property, which it controls through a long-term lease, said Jay Stein, vice president at Hampshire Hotels. He would not comment on the special servicer transfer.
The loan was transferred to special servicer LNR Partners April 13, the Trepp report said.

The hotel was less profitable in 2008 compared to the year before. Net operating income fell 11 percent to $8.4 million last year as expenses increased 5 percent to $15.4 million, the report shows.
The Dream Hotel was offering rooms for as low as $113 per night this month.

Though the special servicer status is worrisome, very few loans have gone from special servicer status to default in New York City. There were just nine delinquent securitized loans in New York City totaling $272 million from a total of 1,886 loans valued at $58.6 billion as of the end of April, Trepp data showed.
The largest delinquent loan in the city, which is the only securitized city loan in foreclosure, is the $225 million note on the Riverton Houses in Harlem, which is also the highest value delinquent loan in the country, the Trepp data showed.