NYC’s ‘Mark Hotel’ Seeks Refinancing After Dodging Latest Foreclosure Attempt
By: Hellen Zaboulani
The posh Upper East Side Mark Hotel is set to pay off its $115 million mortgage, following a foreclosure attempt by its lenders in 2020.
As reported by Crain’s NY, the hotel at Madison Avenue and 77th Street, which touts itself as “New York’s most boldly lavish hotel”, had closed for the pandemic in March 2020, and then had missed two subsequent mortgage payments. The building owner, Alexico Group, was threatened by the lender Ohana Real Estate Investors, who claimed default and had gone so far as to schedule an auction for the building. Alexico had dodged the foreclosure attempt by suing Ohana in Manhattan’s state Supreme Court to block the sale. The court granted Alexico a victory, with the judge deciding to delay the action. Now, with the loan’s maturity date coming up in June, Alexico is looking to refinance the loan, as per data from Trepp.
The historic hotel was built in the Renaissance Revival style 1927, and reopened in 2009 with interiors reimagined by French designer Jacques Grange, becoming one of Manhattan’s best contemporary luxury hotels. It famously housed Meghan Markle’s baby shower in 2019. The hotel is also notable for housing the most expensive hotel room in the country—a penthouse which goes for about $75,000 per night.
The pandemic was not kind to luxury offerings such as this, and the hotel’s occupancy rate was down to 39 percent. The hotel’s future was at risk, as it lost its ability to pay down its debt. The hotel finally reopened last June, and its occupancy hit 55 percent, allowing its debt coverage ratio or ability to cover its debt to significantly increase, making it easier to get a loan, according to Trepp. So it was able to made a deal with its creditors and it also raised room rates by 20 percent.
As per Crain’s, back in 2011, the landmark building also had another episode when it faced foreclosure. Alexico was looking to raise money to pay for a $200 million renovation at the hotel. It tried converting 42 of its 160 hotel units into co-ops for sale. It didn’t have much luck selling off the units, though, and was left in a dismal financial state. Dune Real Estate Partners purchased $300 million in debt on the hotel from Anglo Irish Bank for $190 million and filed to foreclose on the loans. That attempt was also averted, when the lender worked out a partnership with the hotel’s owners, as per Dune spokeswoman Renee Soto.