Argent Ventures buying Vornado’s Times Square hotel debt at deep discount

Argent Ventures paying about $90M for $195M mortgage, sources say

New York /
Dec.December 22, 2020 02:15 PM
Vornado's Steven Roth and 1605 Broadway (Google Maps)

Vornado’s Steven Roth and 1605 Broadway (Google Maps)

In another sign of the toll the pandemic has taken on New York City’s hospitality sector, the $195 million mortgage on Vornado’s Times Square hotel is being sold at a major discount.

Andrew Penson, the former owner of Grand Central Terminal, is buying the senior mortgage on the 795-room Crowne Plaza Times Square for about $90 million, sources familiar with the sale told The Real Deal.

That’s roughly 50 percent off the face value of the loan that Deutsche Bank, Morgan Stanley and ICBC provided Vornado to refinance the property at 1605 Broadway back in 2018.

Representatives for Penson’s Argent Ventures, Vornado and the three banks did not immediately respond to a request for comment. A team at Eastdil Secured marketed the debt and negotiated the sale. A representative for the team declined to comment.

Vornado’s 46-story hotel sits in the heart of Times Square, an area that has been hard hit this year. In addition to the hotel portion, the property includes nearly 200,000 square feet of office space and almost 18,000 square feet of ground-floor retail, where tenants include Krispy Kreme’s flagship store.

The hotel draws heavily from tourists visiting the city to see Broadway shows and other attractions. But with the Great White Way mothballed at least through June, the hotel is missing those crowds. The property’s website notes that its concierge service, in-room dining and restaurants are shut down until further notice.

Occupancy figures for the hotel weren’t immediately available, but on Vornado’s most recent earnings call in November, company CEO Steve Roth noted that hotel values have “clearly gone down.”

Penson is best known as the former landlord of Grand Central Terminal. His Argent Ventures purchased the property in 2006 in a deal that included about 1 million square feet of air rights over the train hall, and leased the terminal to the Metropolitan Transportation Authority. Argent sold the air rights in 2018 to JP Morgan, which is using them for its new headquarters at 270 Park Avenue, and sold the land under the terminal to the MTA earlier this year for $33 million.

Hotels across the city are suffering significant declines in valuations. The Surrey Hotel on the Upper East Side recently sold to London’s billionaire Reuben brothers for $65 million — roughly 30 percent off its asking price.





    Related Articles

    arrow_forward_ios
    Vornado's Steve Roth and 220 Central Park South (Credit: Getty Images, iStock)
    Free and clear: Vornado pays off debt at 220 CPS
    Free and clear: Vornado pays off debt at 220 CPS
    Vornado chairman and CEO Steven Roth, and 608 Fifth Avenue (Credit: Getty Images)
    “Negative surprises”: Vornado execs talk retail struggles on Q2 earnings call
    “Negative surprises”: Vornado execs talk retail struggles on Q2 earnings call
    Steven Roth, CEO of Vornado and 640 Fifth Avenue (Credit: Getty Images and Vornado Realty Trust)
    Bank of China issues $500M to Vornado in refi of 640 Fifth Avenue
    Bank of China issues $500M to Vornado in refi of 640 Fifth Avenue
    SL Green buys stake in 1601 Broadway for $121M
    SL Green buys stake in 1601 Broadway for $121M
    SL Green buys stake in 1601 Broadway for $121M
    Vornado leasing 77K sf to school in 825 Seventh Avenue
    Vornado leasing 77K sf to school in 825 Seventh Avenue
    Vornado leasing 77K sf to school in 825 Seventh Avenue
    478-482 Broadway and 155 Spring Street with KPG Funds founders Gregory Kraut and Rod Kritsberg (VNO, KPG)
    Office developer is buyer of Vornado’s Soho buildings
    Office developer is buyer of Vornado’s Soho buildings
    Vornado CEO Steve Roth and 770 Broadway (VNO, Wegmans)
    Wegmans to replace Astor Place Kmart
    Wegmans to replace Astor Place Kmart
    Joe Tsai and 220 Central Park South (Getty)
    Joe Tsai revealed as buyer in $157M 220 Central Park South condo deal
    Joe Tsai revealed as buyer in $157M 220 Central Park South condo deal
    arrow_forward_ios

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

    Loading...