Sapir Organization lands $115M refi for NoMo hotel

Company received the mortgage from Goldman Sachs

TRD New York /
Jan.January 02, 2019 11:15 AM

9 Crosby Street and Alex Sapir (Credit: MTB Builders and Getty Images)

The Sapir Organization has refinanced its trendy NoMo hotel with $115 million from Goldman Sachs, according to property records.

The loan also includes a $3 million gap mortgage from the bank and $73.3 million from a Sapir-related company. The money is meant to refinance a $180 million senior loan Credit Suisse provided in 2015 for the acquisition of the hotel. A year later, Sapir purchased the note, which included a $130 million senior loan and a $50 million mezzanine loan, for $175 million.

The hotel is located at 9 Crosby Street in Soho. Sapir Organization CEO Alex Sapir and his partner Gerard Guez bought it from Deutsche Bank at a foreclosure sale in 2014 for $205 million.

Sapir consolidated ownership at the hotel last year. He paid an undisclosed sum to buy Guez’s 49 percent stake in the property, giving him 99 percent ownership of the 26-story, 264-room building. It is valued at more than $246 million.

The firm was unable to get more than $115 million because of the hotel’s finances, according to documents on the Tel Aviv Stock Exchange. Its stocks have recently taken a beating, dropping 43 percent year over year and 18 percent this month.

The original loan was set to mature in March 2017, but the due date was extended several times. The Sapir entity that acquired the loan agreed to postpone an interest-rate increase that should have kicked in with the first extension, until September 2018. At that point, the interest rose to 5.25 percent over LIBOR.

Sapir, a public company in Israel, was under pressure to replace the loans, but with the hotel operating at a loss, that proved a challenge. “The current cash flow from the hotel does not allow the taking of a loan of $180 million, but a significantly lower amount,” Sapir reported to TASE.

In the third quarter, the hotel reported a $3.4 million operating loss, which combined with $10.6 million financing expenses, resulted in a $14 million net loss. The NOI for the hotel was $5.9 million through the third quarter of 2018, slightly higher than the $5.6 million during the same period in 2017.

The interest rate on the two new loans combined is 5.24 percent, or roughly equal to the rate on the previous debt.

Elsewhere, Sapir bought a five-bedroom, 7,100-square-foot home on the Venetian Islands in March for $17 million and led a $70 million funding round with Newmark Knight Frank for Knotel that valued the company at $500 million.


Related Articles

arrow_forward_ios
With a cooling trade war, stocks perform well, including real estate. (Credit: iStock)

Real estate stocks push up this week as U.S.-China trade tensions ease

From left: Rotem Rosen, Zina Sapir, Tamir Sapir, Bella Sapir, Elena Sapir, and Alex Sapir (Credit: Getty Images)

Alex Sapir accused of mismanaging family fortune amid feud with Rotem Rosen

416 West 25th Street and Maverick Real Estate Partners principal David Aviram (Credit: Google Maps and LinkedIn)

Chelsea landlord claims “predatory” lender is charging a crippling interest rate as punishment after losing foreclosure case

Renderings of 130-02 South Conduit Avenue and Triangle Equities’ Joshua Weingarten (Credit: Terminal Logistics)

Triangle Equities lands $87M loan for massive JFK warehouse project

From left: 172 Madison Avenue, 100 East 53rd Street, Woolworth Tower, 53 West 53rd Street, 615 10th Avenue

Loan wolves: Bankers are stalking developers as debts come due

State Sen. Julia Salazar and Assembly member Harvey Epstein proposed the tax this month in an effort to disincentivize real estate speculation (Credit: iStock, Getty Images)

Experts take issue with proposed tax on mezzanine loans

Brookfield's largest-ever $15B property fund has invested in properties from New York (666 Fifth Avenue) to Bangalore (the Leela Palace hotel) (Credit: Brookfield, Getty Images, Leela)

Real estate fundraising hits lowest level since 2013

Some investors continue to find U.S. commercial real estate as attractive places to park their capital (Credit: iStock)

Brexits and Bubbles: How investors view Europe’s shaky real estate market

arrow_forward_ios
Loading...