The owner of a former 100-key hotel is handing over another key — to the building itself.
Merchants Hospitality sold the building at 11-01 43rd Avenue in Long Island City to a creditor, Taconic Capital, for roughly $38.4 million. Crain’s first reported the sale.
Merchants paid $32.25 million for the property in 2018. Taconic refinanced $30 million of debt on the building in 2019, adding an $8 million loan on top of that amount.
Neither Merchants nor Taconic returned requests for comment.
The building was previously home to the Z NYC Hotel, which closed last summer. Hospitality startup Sonder had agreed to lease the entire 100-room property before the pandemic, but ended up walking away from its lease. Last August, Merchants filed a lawsuit against Sonder for $2.5 million, alleging its tenant breached the lease agreement. The suit is ongoing.
While many hotels have closed due to the pandemic, fewer than expected have sold for reasons of financial distress, thanks in part to low interest rates keeping debt markets alive.
Among those that have sold include the 600-room Watson Hotel at 440 West 57th Street, which Isaac Hera’s Yellowstone Real Estate Investments acquired for $175 million.