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

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

TRD LOS ANGELES /
Apr.April 22, 2020 05:00 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
Single-family and condo home sales were up sharply in L.A. County in June

“Massive release of demand”: LA County June home sales surge

“Massive release of demand”: LA County June home sales surge
Michael Rosenfeld and a rendering of Century Plaza (Credit: Presley Ann/Getty Images for THR)

Inside Michael Rosenfeld’s $1.8B odyssey at Century Plaza

Inside Michael Rosenfeld’s $1.8B odyssey at Century Plaza
An illustration of Gov. Gavin Newsom (Credit: Justin Sullivan/Getty Images)

LA County ordered to shut indoor dining for 3 weeks as Covid cases climb

LA County ordered to shut indoor dining for 3 weeks as Covid cases climb
Brookfield Asset Management CEO Bruce Flatt and Woodridge CEO Michael Rosenfeld with 101 S. Marengo Avenue, and a rendering of the building (Credit: Google Maps)

CRE investment sales in LA sank like a stone in May

CRE investment sales in LA sank like a stone in May
John Zhao and a rendering of Oceanwide Center (Credit: Rendering © DBOX; Nora Tam/South China Morning Post via Getty Images)

Coronavirus forces another delay of Oceanwide Center sale in San Fran

Coronavirus forces another delay of Oceanwide Center sale in San Fran
Gov. Gavin Newsom (Getty)

Not so fast! A week after they reopened, state orders LA County bars to close

Not so fast! A week after they reopened, state orders LA County bars to close
Douglas Elliman CEO Howard Lorber and West Coast exec Stephen Kotler

In “new world of real estate,” Elliman exits Montecito office

In “new world of real estate,” Elliman exits Montecito office
LAHSA Executive Director Heidi Marston

LA County targets $800M to house the homeless

LA County targets $800M to house the homeless
arrow_forward_ios

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

Loading...