The investors who rescued the bankrupt Flatiron Hotel from foreclosure four years ago are now looking to cash out.
Uzi Ben Abraham and Yaron Jacobi’s Premier Equities, which bought the struggling hotel at 1141 Broadway in 2019, then partnered with short-term rental company Sonder to reopen it during the pandemic, is seeking around $60 million for the 10-story NoMad property, marketing materials show.
Premier Equities is highlighting the property’s steady cash flow and an average of nine years left on its tenants’ leases. A Newmark team led by Adam Spies and Marcella Fasulo is marketing the property. A representative for Premier Equities was not immediately available to comment.
Floors two through 10 are leased to Sonder, while the building’s retail spaces are divided among three tenants: Anita Gelato, skin care brand Malin + Goetz and Apotheke Mixology, which operates a cocktail bar on the roof.
Premier bought the hotel for about $40 million after its previous owner, Jagdish Vaswani, defaulted on a mortgage and put the property into bankruptcy. Vaswani claimed in court that the property had been grossly mismanaged.
The hotel was at the center of a separate legal dispute a decade ago, when its owners including Vaswani fended off a takeover attempt by Michael Shah’s DelShah Capital.
Shah had acquired the defaulted mortgage on the property and then struck a deal to buy the hotel for $31 million. But the deal hinged on a judgment against one of the hotel’s other owners, Ibrahim Saleh, who fled the country following a conviction on an unrelated fraud case.
Vaswani argued that the judgment could not be enforced and that Saleh was not authorized to make decisions for the property. Both sides eventually came to a settlement.
Sonder, meanwhile, has been having a rough go of its own lately.
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Nasdaq notified the San Francisco-based company last month that it was in danger of having its stock delisted after its average share price fell below $1 for 30 consecutive days. The company has until Oct. 18 to get its shares back up to at least $1 for a minimum of 10 consecutive days. Sonder’s stock opened at $0.31 on Monday.
Executives said on the company’s first-quarter earnings call last week that Sonder is unlikely to meet a previously stated goal of being cash-flow positive this year.