Manhattan’s troubled Flatiron Hotel has found a life boat in Premier Equities.
Premier is paying down the debt on the hotel, which was facing foreclosure, and becoming its majority owner, according to Commercial Observer. Tel Aviv-based Israeli Discount Bank provided Premier with $30 million in financing to cover the remaining balance.
The entity that owned the hotel, which is tied to Jay Vaswani, had taken out a $25 million CMBS loan from Rialto Capital in 2015 on the historic building. But Vaswani ran into problems after a conflict arose between him and his partner, Robert “Toshi” Chan. After Vaswani fired Chan, Rialto and Wells Fargo filed a lawsuit alleging mismanagement and selling liquor without a license. Last month, the hotel’s mezzanine lender, Colony Capital, filed for a Uniform Commercial Code foreclosure on the property.
Premier stepped in to offer debtor-in-possession financing to shield the hotel from creditors who were ready to foreclose. Wilmington Trust, the Flatiron’s CMBS special servicer, transferred both the junior and senior mortgage debt to Delshah Capital.
Chan, who has overseen the hotel’s food and beverage operations, told CO that he will not continue at the hotel. Vaswani will stay on as a partner.
[Commercial Observer] — Georgia Kromrei