UPDATE, March 28, 2022, 9:20 a.m.: Chinese developer Jubao Xie faces the long descent from the top of the world’s tallest Holiday Inn.
Lending bank Wilmington Trust sought foreclosure of a $137 million loan on the 50-story hotel at 99 Washington Street in the Financial District, PincusCo reported. The 10-year, non-recourse, interest-only, fixed-rate loan to the 492-key hotel was made four years ago, but the hotel has been in trouble for some time.
Xie had previously attempted to sell the hotel in 2017, seeking over $300 million. Earlier this year, Xie tried again to sell both the hotel and the 8,500-square-foot St. George’s Tavern next door, hoping to secure $187 million for the two properties. Eric Anton of Marcus & Millichap marketed the properties.
The hotel had been facing foreclosure for some time as three loans related to the property had been past due since August 2020, according to Trepp data. As of December 2020, the building would have been over 90 days overdue on $87 million, making it one of the most distressed hotels in the entire city.
Xie developed the hotel in tandem with Sam Chang before taking full control of the property in 2014. Crain’s reported that the IHG-operated hotel had 90% occupancy when refinanced in 2018.
This is the latest sour development in New York’s struggling hotel market. Earlier this month, one of the city’s largest hotels was sold at a loss of nearly $400 million when MCR agreed to acquire Sheraton New York Times Square from Host Hotels & Resorts for $356 million. The 1,780-key hotel was last sold in 2006 for $738 million.
Elsewhere in the Holiday Inn market, Watermark Capital has explored selling the 226-key hotel at 125 West 26th Street in Chelsea. The investment firm purchased the building in 2013 from Magna Hospitality for $113 million.
The Chelsea Holiday Inn fell behind on its mortgage payments in October 2020 and the loan was transferred to a special repairer shortly thereafter. The hotel was only 54% occupied in the fall and cash flow had turned negative.
A previous version of this article incorrectly named Ladder Capital as involved in the foreclosure.
[PincusCo] —Holden Walter-Warner