German lender forecloses on East Side Marriott hotel
Delinquent $53 million mortgage prompted action over 525 Lexington Avenue
How do you say “unhappy marriage” in German?
Frankfurt-based DekaBank moved this week to foreclose on the former New York Marriott East Side hotel at 525 Lexington Avenue.
The German lender claims a $53 million outstanding mortgage loan, which came due in July, according to court records, remains unpaid.
The Midtown property’s owner, Lexington Avenue Hotel, is a limited partnership between DekaBank subsidiary Deka Immobilien Investment GmbH, which owns an 85 percent stake, and Ashkenazy Acquisition Corp., the Commercial Observer first reported.
The hotel shuttered in March following the outbreak of the coronavirus. Hotels have been among the hardest hit by the pandemic.
“DekaBank is looking after its interests through the foreclosure proceedings,” a representative of DekaBank said in a statement. The latest legal action at the hotel follows several others.
Ashkenazy sued Marriott last October, claiming the operator had misappropriated $12 million in revenue from the hotel to shore up its pandemic-decimated balance sheet.
That followed a 2019 lawsuit in which DekaBank alleged Ashkenazy reneged on a $174 million commitment to take outright control of the hotel.
The partners put the 655-key hotel on the market in 2016 but failed to find a buyer, just one year after acquiring it for $270 million.