In Times Square, another hotel isn’t doing all that well. Despite a big dream, it got tripped up by timing and couldn’t keep up with the mortgage payments.
The Gallivant Times Square at 234 W. 48th St. is on such shaky ground that, on Aug. 15, the lender is conducting a foreclosure sale of its mortgage, backed by its ground lease, which runs through 2115.
The 334-room hotel was once the Best Western President, before morphing into the TRYP New York Times Square by Wyndham in an earlier bid to forestall foreclosure.
The servicer, LNR, modified the $80 million loan at the end of 2014 but now it’s déjà vu all over again — and this time the debt sits at more than $79.65 million plus more interest and costs.
According to the New York State Supreme Court judgment, that interest accrued at $22,226.16 per day from Oct. 1, 2017, through May 24, 2018, when the judgment was entered, and then continued at 9 percent after that. You can do the math.
The hotel’s value was cut to $47.2 million in September 2017, and now the special servicer expects the loan will lose $38.54 million — and sell for around $42 million, according to Manus Clancy of Trepp, the real estate financial analysis company.
“They could offer up a discounted payoff and buy the note,” Clancy said of Investcorp. “That’s one option that gets them out.”
The auction was already adjourned once, said the court-appointed referee, Steven E. Weiss, counsel to the law firm Scheichet & Davis, which means they could be negotiating already.
Anyone else buying the note would have to complete the foreclosure to obtain the keys.
Another buyer or even Investcorp might then reinvent the property that sits on a prime area block between Broadway and Eighth Avenue, where Bruce Springsteen strums every night and “A Bronx Tale” completes its run with the Sunday matinee at the Longacre Theatre.
Investcorp did not return an email seeking comment.
