A Holiday Inn near LaGuardia Airport is facing foreclosure, a signal of looming distress for New York’s battered hospitality market.
A mezzanine lender tied to Moinian Group is planning a UCC foreclosure sale of the equity interests in the 217-key hotel at 37-10 114th Street in Corona, Queens. The loan has a balance of $7.2 million.
The sale is planned for June 7, according to a notice that lists Brock Cannon and Daniel Fromm at Newmark as leading the sale. The winning bidder in the auction will still have to pay the senior mortgage of about $21 million.
The property is owned by Samcom 48 LLC, which was previously controlled by Wing Fung Chau and Aiyun Chen of Sun America Realty Group. In 2020, a memorandum of contract was signed by Chau and Chen to sell the hotel to Sam Strulovitch of Brooklyn.
Chau and Chen did not agree to sell the parking structure next door, where they planned to build an eight-story, mixed-use apartment building.
In 2016, Sam Chang’s McSam Hotel Group paid $37.6 million for the hotel property.
Hotels have been decimated by the pandemic. Tourism and business travel remains a fraction of what it was a year ago. Lenders allowed many hotel owners to extend their loan payments, preventing defaults, but pockets of distress are increasingly showing up.
Mack Real Estate recently gained control of a seven-hotel portfolio in Manhattan. The firm initiated UCC foreclosure proceedings against the owners of the properties, Hersha Hospitality Trust and Chinese investment firm Cindat Capital Management, after their joint venture defaulted on a mezzanine loan.
UCC foreclosures, which can bypass the court system, are becoming more common as borrowers run into trouble on their loan payments. Traditional commercial mortgage foreclosures are temporarily barred under state law.
Attempts to reach Chen were not successful.