Sharif El-Gamal and MHP are now planning a Margaritaville hotel in Times Square
Some people claim there’s a mortgage to blame. But it could be Sharif El-Gamal’s fault.
Like the Jimmy Buffett song, the story of the developer’s Margaritaville Resort in Times Square starts with the substance of sponge cake and ends with a sobering admission of culpability.
El-Gamal’s Soho Properties has defaulted on its mezzanine loan on the 234-key hotel, which opened two summers ago with a concert by the “Cheeseburger in Paradise” singer. And now the lender is moving to foreclose on the firm’s equity in the 32-story property.
El-Gamal did not immediately respond to a request for comment.
Mezzanine lender Arden Group initiated a UCC foreclosure on the equity, according to a notice of the foreclosure auction. A Newmark team of Jordan Roeschlaub, Dustin Stolly, Adam Etra and Adam Spies is handling the marketing for the auction, which is set for July 10.
Arden provided a $57 million mezzanine loan in June 2021 as El-Gamal refinanced the 170,000-square-foot hotel at 560 Seventh Avenue. A source familiar with the property said Soho Properties failed to make payments on the loan in March, triggering the default.
A representative for Arden was not immediately available for comment.
El-Gamal’s Soho Properties developed the hotel with MHP Real Estate Services and Chip and Andrew Weiss at a cost of $400 million. Their $371 million refinancing in late summer 2021 was the largest for any hotel in the city through that point in the year.
As part of the project, the developers agreed to build space for the Garment Center Congregation. The synagogue sued El-Gamal in November, claiming he reneged on the deal.
It’s one of two major projects that helped to catapult El Gamal into real estate’s big leagues. The other is his Tribeca condo development at 45 Park Place, which is languishing uncompleted as El-Gamal battles with his lenders in a years-long foreclosure case.
His lenders on that property are trying to sell the debt.