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Flatiron Hotel loan is now in foreclosure
Mortgage was for $22.5M and part of a CMBS transaction
A $22.5 million loan that was backed by Manhattan’s Flatiron Hotel has fallen into foreclosure.
The loan for the hotel at 9 West 26th Street makes up 2 percent of a set of securities called WFCM 2015-C28. The transaction included 96 other loans as well, none of which are delinquent.
The hotel has 64 rooms, and its annual cash flow is 1.7 times its annual debt service expenses, according to the Commercial Observer. It ran into problems with flooding in 2015, when a pipe burst in the building’s air conditioning system.
Occupancy dropped to 67 percent the year after the flood, but was back up to 85 percent in 2017 between January and September.
Jagdish Vaswani is the majority owner of the hotel, while Robert “Toshi” Chan owns a minority stake. Chan was in a legal battle over the hotel years ago with Michael Shah’s DelShah Capital, which was trying to take over the property after acquiring a defaulted $8 million mortgage debt on it, but DelShah withdrew the case in 2014. The hotel also faced a lawsuit in 2011, when Berkley Acquisitions sued for $30 million claiming the owners, led at the time by investor John Mei, reneged on a deal to sell them the property. [CO] – Eddie Small