The Reuben brothers may soon be in pole position to acquire another Manhattan property.
The U.K.-based billionaires launched a non-judicial foreclosure process for the Chatwal, a luxury hotel property in Midtown West, Bloomberg reported. An auction on the defaulted debt backing the 76-room property at 130 West 44th Street is scheduled for Jan. 17.
Motcomb Estates, an entity of the billionaire brothers, filed a pre-foreclosure lawsuit six months ago after the borrower allegedly defaulted last December on a loan with a principal balance of $62.5 million; the loan originated in December 2019.
The mezzanine debt balance is expected to balloon to $79 million by the auction date, according to Newmark (which is marketing the debt), due to the high interest rates typically attached to mezzanine loans.
The hotel is linked to Adams Hotels International and the guarantor of the loan is Dubai businessman Iyer Vaidyanathan Narayan, who is being sued in New York State Supreme Court for allegedly using fraudulent funds to obtain the hotel’s leasehold in 2013 for $115 million, according to PincusCo.
The winning bidder of public auction sales under the uniform commercial code often takes control of the property, as the lender is typically the sole bidder. There is an opportunity for ownership to resolve the debt troubles prior to the auction, though the clock is ticking on that possibility.
Read more
Commercial
New York
Hyatt to acquire Dream Hotel Group for up to $300M
Commercial
New York
Reuben brothers revealed as buyer on Vornado’s $124M retail portfolio
New York
Chatwal expands hotel empire
Hyatt Hotels operates the property. A representative for the company said it will be business as usual at the hotel, where room rates run up to $1,000 a night on the weekends.
The UK-based Reuben brothers have been among the most active buyers in New York City in recent years. Over the summer, they were revealed as the buyers on a $124 million portfolio of retail properties sold by Vornado Realty Trust.
The brothers have spent billions buying and lending in the United States since the start of the pandemic.
— Holden Walter-Warner