Magna Hospitality Group has acquired the Hilton Garden Inn hotel in Midtown Manhattan out of foreclosure after Joseph Moinian failed to pay off a $175M loan at maturity.
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The privately held, Rhode Island-based hotel real estate investment firm bought the $25M mezzanine loan tied to the building prior to a June 10 UCC foreclosure auction, PincusCo reported.
Its affiliate then won the auction with a $10M bid, a transaction first reported by Crain's New York Business. But a deed transfer filed with the city this week valued the 401-key hotel at 237 W. 54th St. at just under $144M. Magna will have to service the existing senior debt, which matured in March, along with other financial obligations.
Magna and a representative for Moinian didn't immediately respond to requests for comment.
Moinian developed the 34-story building with Starwood Capital Group for $131M, bringing it online in 2014.
Morgan Stanley first financed a $200M debt package with a $175M senior CMBS loan, consisting of three pari passu notes totaling $155M and a $20M B note, and a $25M mezzanine loan in 2015. The debt matured in March, causing it to be sent to special servicing, according to commentary in the Morningstar Credit database.
Moinian requested an extension on the debt because the developer struggled to find financing due, in part, to a pending civil lawsuit, according to the commentary.
One day before the auction, an attorney for Moinian requested that the sale be postponed because potential buyers hadn't been informed of a $10M judgment against the hotel related to a guest being injured, Crain’s reported.
The judge didn't rule on the request prior to the auction but later denied the motion.
Magna emerged as a prominent buyer of distressed New York City hospitality properties after the onset of the pandemic, which shuttered many hotels. Within just a few weeks in late 2020, the firm scooped up 800 Manhattan rooms at significant discounts, The Real Deal reported at the time.
Magna has more than $5B in hotel real estate under management and development, according to its website. It focuses on value-add hotel investments.
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