Veracity Fights Foreclosure as Nolita Hotel Auction Pushed

A landlord battered by the pandemic-era collapse in tourism is scrambling to hang on to a boutique Nolita hotel as a long-running foreclosure inches forward.

Veracity Equities, the lower Manhattan-focused firm run by Edmond Li, is facing a $35.3 million judgment tied to a defaulted mortgage at the Nolitan, a 55-key hotel at 153 Elizabeth Street. The nine-story building on the corner of Kenmare Street had been slated to go up for auction this week, Crain’s reported.

Instead, the auction has been pushed — again. Li and lender Silverpeak Real Estate Finance agreed Monday to delay the sale until Feb. 4, a move that appears aimed at buying the borrower more time to secure a refinancing and pay off the debt.

The delay marks the third time the court postponed an auction of the property, underscoring how messy and drawn-out pandemic-era hotel workouts can be.

Li bought the Elizabeth Street site in 2006 for $5.4 million and redeveloped it into the Nolitan, which opened in 2011. Today, rooms start at around $300 a night. The property is also home to the Japanese-Italian restaurant Kimika on the ground floor.

Silverpeak, a Midtown-based lender, issued a $24 million loan on the property in 2016 that was later securitized and sold to investors. After Covid shutdowns destroyed hotel revenue, Li stopped making payments in 2021, prompting the lender to launch foreclosure proceedings later that year, according to court records.

Li has argued that the lender and a court-appointed receiver undercut his efforts to stabilize the asset, including blocking plans for a rooftop bar that could have generated roughly $68,000 a month in rent and preventing repairs to address water leaks.

Manhattan Supreme Court Justice Francis Kahn ultimately sided with Silverpeak, ruling that Li remains liable for roughly $35 million, including principal, interest and fees.

If the foreclosure goes through, it would be the latest blow to Veracity’s downtown portfolio.

The firm is also facing foreclosure on a $32 million loan tied to three nearby rental buildings at 137 Thompson Street and 26 and 29 Prince Street. Last year, Li sold a mixed-use walkup at 146 Mulberry Street for $12.7 million, below the $13.3 million he paid in 2015.

Silverpeak’s attorney declined to comment. Li and his counsel did not return calls.

— Holden Walter-Warner