Korean Investor Takes Over Land Beneath 20 Times Square, Tries To Push Natixis Into Default
Korea’s Hana Financial Group has taken control of the land under Marriott’s Times Square Edition and is preparing to declare the leasehold owner of the new hotel property in default.
French Bank Natixis has owned the leasehold on the property since a January 2022 foreclosure auction, per PincusCo, which first reported the most recent legal development at the 452-room hotel.
Last month, Hana took control of the fee interest and told Natixis its 99-year ground lease would be terminated if it didn’t clear $39M in mechanical liens within 30 days, according to a lawsuit Natixis filed this week.
Natixis asked the court for an injunction against Hana's action in an effort to keep control of the property and stop any lease termination.
Natixis argues the liens on the property, some 48 in total, are not the result of any work or services it requested, but rather were directed by the company on which it foreclosed to take over the building, Maefield Development.
“It is the Ground Lessor and/or its predecessor fee owner that are solely responsible for discharging the Mechanic’s Liens,” the suit reads.
The takeover attempt is the latest twist in the financial and legal saga that has surrounded the property the last four years.
Steve Witkoff purchased the 701 Seventh Ave. location in 2012 and knocked down an 11-story office building in order to build the 42-story luxury hotel, and construction began three years later.
In 2018, Maefield, led by Mark Siffin, took over the project with Fortress Investment Group, buying out the hotel’s other investors. Maefield and Fortress split the property into a ground lease and fee simple interest, making the joint venture both the tenant and the landlord for 20 Times Square. The hotel opened in 2019, but closed one year later because of the pandemic.
Natixis invested $1.6B in the project, backing Fortress and Maefield, The Real Deal reported. Natixis took the leasehold as collateral for a $650M piece of the debt, filed to foreclose in 2019 and then took control of the building three years later. SL Green has been serving as the property manager.
In August, a trustee representing CMBS bondholders sued Maefield and Siffin, claiming he and the firm had fallen behind on the $750M senior loan backing the ground underneath the property.
Late last month, Hana took ownership of the ground lease after foreclosing on a mezzanine loan tied to the property, per PincusCo. Representatives for Hana couldn't be reached for comment. Representatives for Natixis didn't respond to a request for comment.
