Safehold snares ground lease under Ron Burkle’s troubled NoMad Hotel
$77M deal at 1170 Broadway, which has repeatedly faced foreclosure
Safehold, which specializes in acquiring ground leases, has once again done what it does best.
The firm has purchased the ground lease at the debt-plagued NoMad Hotel for $77 million, according to public records, adding another hospitality property to its portfolio. Hotel assets make up 17 percent of Safehold’s portfolio, according to the company’s 2020 annual report.
The seller was clothing manufacturer and distributor Haddad Brands.
Billionaire investor Ron Burkle and hotelier Andrew Zobler own the swanky hotel at 1170 Broadway, which has encountered its share of turmoil. In May, the two were facing foreclosure, The Real Deal reported. At the time, Lenders Ohana Real Estate Investors and Ellington Management Group held $102.5 million in mezzanine debt on the hotel.
That was not the first time Burkle and Zobler had issues with the NoMad. They also faced foreclosure in 2019, when they waited until the 11th hour to buy back $40 million in mezzanine debt to avoid a UCC foreclosure auction.
The hotel has also run into some other issues this year. In January, famed chef Daniel Humm claimed in a lawsuit that he was owed nearly $2 million in unpaid management fees. Then, in March, the hotel’s staff was told the hotel would close for renovations in April, Eater reported.
True to its name, Safehold tends to avoid such drama, grinding away on boring but ultimately lucrative ground-lease deals. Office assets account for 56 percent of the company’s portfolio; 26 percent is multifamily. About 40 percent of its business is in the Northeast, but it does have leases across the country.
Safehold and Haddad Brands did not respond to requests for comment.