Joshua Zamir’s Capstone Equities is continuing to mop up Manhattan’s distressed hotels.
The investment firm recently took control of the shuttered 98-room Life Hotel in Midtown after its owner defaulted on the property’s mortgage, Zamir told The Real Deal.
Capstone bought Deutsche Bank’s $47 million loan on the hotel at 19 West 31st Street, Zamir said, then did a UCC foreclosure.
The previous owner, investor David Mitchell, had put $30 million into renovating the boutique hotel near Herald Square, which Capstone plans to reopen it later this year. The company will operate the hotel under its in-house management brand, Rebel Hospitality.
Mitchell, who purchased the hotel for $41 million in 2015, was not immediately available to comment. Aaron Jungreis at Rosewood Realty Group advised Capstone on the purchase.
It’s Capstone’s third deal for a distressed Midtown hotel since the start of last year. Last January, the company took control of the 172-room Renwick Hotel at 118 East 40th Street after buying its $46 million non-performing loan at a “substantial discount.”
Capstone also acquired the defaulted loan on the Gregory Hotel in the Garment District and completed a foreclosure sale early last year to investors Denis Xhari and Vlash Pepa.
The city’s hospitality industry has bounced back from the depths of the pandemic shutdown, but still isn’t at full strength. Average occupancy last year was reportedly at 75 percent, below the pre-Covid average of 86 percent.
In Manhattan, the all-important revenue per available room metric surpassed pre-pandemic levels for the first time in the second half of last year, according to PwC. But hotels are still falling into distress as business travel has yet to fully recover and staffing remains difficult.
Barry Sternlicht noted on Starwood Property Trust’s March earnings call that hotels are performing well, but with a smaller workforce the service was not as good as what guests were used to.
“You should bring your own sheets to a hotel today, because we’re not going to change them for you,” he said.
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