Hospitality

$30.0 Million Defaulted Senior Loan

New York, New York United States

Documents

I accept the confidentiality agreement
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I accept the confidentiality agreement I accept the confidentiality agreement
Create an account on the Investor Center to save your search and investment preferences, save and share opportunities, access exclusive documents, and more. More questions? Visit our FAQ. You'll need to sign a Confidentiality Agreement (CA) to access exclusive documents in the Deal Room. Signing the CA means you agree not to divulge or release sensitive information related to this property. More questions? Visit our FAQ.

Key facts

Loan Status Non-Performing
Loan Count 1
Listing Type Hospitality

Asset Description

Jones Lang LaSalle (JLL) has been retained on an exclusive basis to arrange the sale of an approximately $30.0 million non-performing senior loan (the "Loan"). The lender originated the Loan in December 2017 with an initial balance of $31.0 million ($235k/key). The Loan is non-recourse with standard bad boy carveouts and a carry guaranty for debt service and operating expenses. The Loan was originated senior to a $15.0 million mezzanine loan made by an unrelated party.


The Loan defaulted and was accelerated in April 2020 and is currently under a forbearance agreement whereby the borrower agreed to waive defenses to a foreclosure and agreed to pay contract interest pursuant to the terms of the forbearance agreement. The situation provides a unique opportunity for an investor to acquire the Loan with a foreclosure judgment in hand, which provides a path to acquire the fee simple asset.


Collateral

The Loan is secured by a first lien mortgage on the borrower's fee simple interest in a 132-key full-service hotel located in the Midtown South in the heart of the Manhattan borough of New York, NY (the "Collateral" of "Property"). The 13-story hotel was initially constructed in 1903 and most recently renovated in 2015 and features both fitness and business centers, a leased food and beverage component (150 person seating capacity), a lobby coffee bar (30 person seating capacity), and three leased mezzanine retail spaces. The hotel offers a total of 132 guestrooms: (55) King, (32) Double/Double, (23) Queen, (11) King with Sofa, (11) Queen/Queen. The Property closed its doors in March 2020 due to the coronavirus pandemic. The Collateral is currently unencumbered by a franchise and is subject to a union labor agreement. 


Please click here to be directed to the  Confidentiality Agreement.

Investment highlights

COVID AFFECTED

The Property and Loan were performing Pre-COVID which portends to a quicker path to recovery once the hotel re-opens.


ATTRACTIVE BASIS

The Loan’s last dollar sits at an attractive basis for Midtown South at $225,394 per key. The per key basis is well below the average cost to acquire hotels in Manhattan which has been north of $500,000 over the past 20 years. 


PATH TO RECOVERY

The Loan provides investors with a potential quick path to recovery by stepping into the current lender’s foreclosure proceeding with a judgement in hand.


CHANGING MANHATTAN MARKET

NYC has consistently achieved occupancy and ADR levels far superior than the US average with an average RevPAR premium of 185% from 2009 to 2019. With the anticipated permanent hotel closures and conversions, the overall Manhattan supply is expected to decrease by over 5-10% resulting in supply compression and RevPAR growth. 

Last Updated Date: 30 Jul 2021
Sean Ryan
Sean Ryan
Managing Director, Capital Markets
Tom Hall
Tom Hall
Managing Director, Capital Markets

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Last Updated Date: 30 Jul 2021

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