Sapir asks for more time to sell distressed Soho hotel 

Alex Sapir’s Sapir Corp is seeking to buy time to sell its debt-ridden NoMo Soho hotel. 

The development firm put its 264-key hotel at 9 Crosby Street on the market earlier this year to pay off debt held by Israeli bondholders. Sapir has been unable to sell the hotel because of the hotel’s “perceived distress,” according to a filing in the Tel Aviv Stock Exchange. 

Sapir hopes bondholders will accept a $6 million partial payoff and an interest rate increase from 6 percent to 8.5 percent. Alex Sapir has agreed to use a line of credit to fund the partial payments.

In exchange, Sapir Corp wants to push back the outstanding debt of $34 million that’s due next month until 2025. 

Broader issues plaguing commercial real estate have hindered the hotel’s sale. Mainly, higher interest rates, which have lowered valuations: Sapir bought the hotel for $208 million in 2015, but the hotel’s value recently dipped to $179 million. 

In March, the hotel reported an operating loss of $1.4 million, according to the filing. Sapir Corp said it had in-person meetings with over 100 prospective investors and hosted 40 tours. It hopes to close on a deal before July. 

In its filing, the company said that it sees a light at the end of the tunnel as revenue per available room, a metric of measuring hotels ability to generate revenue, is expected to grow at 3 percent in 2024. 

In 2019, Goldman Sachs provided a $115 million refinancing for the hotel which partly refinanced a $180 million senior loan from Credit Suisse. In 2022, Sapir then refinanced again with an $89 million loan from the Israeli bond market. 

Sapir Corp is one arm of Alex Sapir’s real estate companies. The only remaining properties in Sapir Corp are the Soho hotel and an undeveloped property in Miami near Wynwood. 

Outside of Sapir Corp, Alex Sapir, who is son of the late Tamir Sapir, a Georgian-born billionaire, owns office buildings at 260 and 261 Madison Avenue. Those properties hit the market in 2022 for $600 million, but have yet to sell. Last year, Sapir sold a four-story mixed-use building at 218 Madison Avenue for $12 million to Rybak.

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