The shuttered Maxwell hotel in Midtown is facing foreclosure, the second big hospitality property to suffer that fate in as many days.
Real estate private equity firm Yellowstone Real Estate Investments filed Tuesday to foreclose on the 697-room hotel at 541 Lexington Avenue, court records show.
Joshua Roshanzamir’s Capstone Equities and Highgate Hotels bought the hotel for nearly $183 million in 2018, according to property records. Yellowstone’s lawsuit, however, lists Dune Real Estate Partners as a defendant that guaranteed the $140 million acquisition loan made at the time by LoanCore Capital.
Yellowstone bought the debt from LoanCore in March and said it’s owed more than $182 million.
The hotel shuttered its doors in April 2020 and the borrowers failed to repay the loan at its May 2021 maturity date, according to the lawsuit.
Representatives for the involved parties did not immediately respond to requests for comment.
The Maxwell is the latest in a series of Manhattan hospitality properties to fall into distress.
On Monday, Wells Fargo filed to foreclose on David Werner’s fee position at the 1,331-room Row Hotel.
The bank, which acts as the trustee for bond investors who hold the $275 million mortgage on the property, said Werner started missing payments on the loan in May 2020.
Earlier this month, Bank Hapoalim filed to foreclose on Hidrock Properties’ development site in the Financial District, where the developer planned to build a 286-key hotel.
Isaac Hera’s Yellowstone has been active in New York’s distressed hotel market. The company last year bought the 600-room Watson Hotel at 440 West 57th Street for $175 million.