Allen Gross, owner of Ace and Beekman hotels, expecting $12M PPP loan

Gross’ GFI predicts that 75% of the $12M debt will be forgiven

New York /
Apr.April 22, 2020 04:25 PM
GFI Capital CEO Allen Gross with the Beekman Hotel at 123 Nassau Street (top left), Ace Hotel at 20 West 29th Street in NYC (right) and Ace Hotel & Swim Club Palm Springs in California (bottom left) (Credit: Ace Hotels; GFI; Google Maps)

GFI Capital CEO Allen Gross with the Beekman Hotel at 123 Nassau Street (top left), Ace Hotel at 20 West 29th Street in NYC (right) and Ace Hotel & Swim Club Palm Springs in California (bottom left) (Credit: Ace Hotels; GFI; Google Maps)

Another New York City real estate player is getting federal funds to help it weather the coronavirus crisis.

Allen Gross’ GFI Capital Resources Group has “completed the filing process and met the prerequisites” to receive $12 million in Paycheck Protection Program funds, the company disclosed to the Tel Aviv Stock Exchange on Wednesday. A $7.1 million portion has been approved so far, which GFI expects to receive in the coming week.

The company’s hotel holdings include the 179-key Ace Hotel Palm Springs in California, a 69-percent stake in the 286-key Ace Hotel in New York City, and a 35-percent stake in the Beekman Hotel and Residences, which has 287 hotel rooms and 67 condos.

The $349 billion PPP program, which ran out of money last week, is set to be refilled with more than $310 billion in new funds following a Tuesday deal between Congress and the White House.

GFI Real Estate, GFI’s bond-issuing subsidiary, owns stakes in 14 properties with a total worth of about $800 million, including more than 600 rental units and five hotels, according to S&P Global Ratings. The agency put GFI on credit watch with a negative outlook last month because of the coronavirus, noting that the company’s earnings are highly concentrated in the hotel sector.

The two Ace hotels and the Beekman — where operations are currently suspended — account for about 65 percent of the company’s net operating income. According to appraisals, total expenses at each hotel amounted to about $10 million per year.

The firm expects that 75 percent, or about $9 million, or the PPP funds will be forgiven, while the remainder will be paid back in two years at an interest rate of 1 percent. PPP loan proceeds spent on payroll, mortgage payments, rent and utilities within the first eight weeks are eligible for forgiveness, and borrowers are required to maintain payroll and retain employees at levels comparable to before the crisis.

GFI did not respond to a request for comment. It is unclear whether the company will reopen the hotels after receiving funds.

Last week, Rotem Rosen’s MRR Development secured a $1.7 million PPP loan for the Hotel Indigo Lower East Side at 171 Ludlow Street, which has remained open amid the slowdown.


Related Articles

arrow_forward_ios
GFI and Marx raise north of $60M apiece in Tel Aviv bond offerings
GFI and Marx raise north of $60M apiece in Tel Aviv bond offerings
GFI and Marx raise north of $60M apiece in Tel Aviv bond offerings
Legal Aid’s Judith Goldiner and REBNY’s James Whelan have teamed up. (Getty, REBNY, Legal Aid)
REBNY, Legal Aid team up to push for more rental assistance
REBNY, Legal Aid team up to push for more rental assistance
Four Points by Sheraton Midtown at 326 W 40th Street (Google Maps; iStock)
Recipe for success? Ghost kitchens cut deals with empty hotels
Recipe for success? Ghost kitchens cut deals with empty hotels
Gov. Andrew Cuomo with Assembly Speaker Carl Heastie and Senate Majority Leader Andrea Stewart-Cousins (Getty, iStock/Illustration by Alexis Manrodt for The Real Deal)
Lawmakers one-up Cuomo with commercial eviction and foreclosure bill
Lawmakers one-up Cuomo with commercial eviction and foreclosure bill
Clockwise from top left: Seattle, Boston and New York City (Photo Illustration by Kevin Rebong for The Real Deal)
Real estate prices fell more in Manhattan than anywhere else in 2020
Real estate prices fell more in Manhattan than anywhere else in 2020
(Photo illustration by The Real Deal)
Hospitality startups pick at carnage of failed rivals
Hospitality startups pick at carnage of failed rivals
AMC Theater CEO Adam Aron (Getty; iStock/Photo Illustration by Kevin Rebong)
Stream this: Cinema chain AMC secures $900M in financing
Stream this: Cinema chain AMC secures $900M in financing
Donald T. Bollinger and the Four Seasons New Orleans (Getty, Four Seasons)
Big sale in Big Easy: Four Seasons penthouse breaks record
Big sale in Big Easy: Four Seasons penthouse breaks record
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...