The developers of the Cooper Square Hotel have handed the property over to mezzanine lender Westport Capital Partners as part of an “amicable” loan restructuring deal reached late last year, managing partner Klaus Ortlieb said.
The striking, 21-story East Village hotel, which was built around an old tenement building at 27 Cooper Square, debuted in late 2008 after years of delays. But it wasn’t long before the owners ran into financial trouble, and the following December, commercial lender WestLB filed to foreclose on $52 million in loans backed by the 145-room hotel. Restructuring talks had been ongoing since then.
Late last year, rumors had surfaced that the owners of the Soho Grand and Tribeca Grand hotels were “very close” to purchasing the Cooper Square Hotel outright, but were later squelched by Ortlieb and his team, who released a statement at the time asserting that the hotel would not be purchased by an outside party.
Ortlieb told The Real Deal this week that a sale to the Soho Grand and Tribeca Grand hotels owners had indeed been near at one point, but that the buyers had pulled out at the last minute. (At the time, a representative for Hartz Mountain Industries, which owns the Grand hotels, declined to comment to The Real Deal). Instead, Westport Capital took over Dec. 27, 2010 in a $70.9 million deal, property records show.
Westport Capital declined to comment, while Matthew Moss and Gregory Peck, the hotel’s co-developers, and investor Kyle Ransford, who was part of the equity group that ceded control, were not immediately available for comment.
Other than last month’s opening of the Trilby, the new bar and eatery in the hotel’s former Faustina and Table 8 space, there’s been no noticeable change in the operations since the property’s transfer, Ortlieb said.
He added that March room rates are averaging around $300 per night with 85 percent occupancy, with rates expected to rise into the mid-$300 range over the summer and $400s in the fall.