The Real Deal New York

Lower East Side hotel sued for defaulting on loan

Property was listed for sale for $21 million in 2011
April 14, 2015 10:00AM

A 42-key hotel on the Lower East Side is facing a lawsuit for defaulting on more than $2.5 million in loan payments.

Connecticut-based Knighthead SSRE REIT is suing the owner of the East Houston Hotel at 151 East Houston Street, the New York Observer reported. The owner, Soho New York Lodging LLC owes default interest, costs and expenses in addition to the $2.5 million in loan payments.

The owner bought the site in 2005 for $4.5 million, according to the newspaper, and built the 14,554-square-foot boutique hotel there in 2007. The property includes six floors of guest rooms and a rooftop terrace.

The lawsuit states that, “despite demand, defendants have failed and/or refused to pay indebtedness which they owe plaintiff.” Soho New York Lodging borrowed $2.4 million from the REIT. The hotel owner allegedly also owes more than $118,000 in property taxes.

The hotel was listed for sale for $21 million in 2011. Eastern Consolidated’s David Schechtman, Gary Meese, Philip Huang and Marion Jones — now at Ackman-Ziff — had the listing at the time. [NYO] — Claire Moses