So Hip, So Troubled: W Union Square Trades
A hotel chain has purchased the hip, but troubled W Hotel in Union Square for well below the price it fetched at the height of the market.
Host Hotels and Resorts, based in Bethesda, Md., has purchased the hipster vacation paradise for $185.2 million, city records show.
The W features a two-story Mediterranean restaurant with curtained alcoves and a seductive basement bar. But it was hit hard when travelers cut back on such luxuries, and it defaulted on $117 million in junior debt in October 2009, The Wall Street Journal reported at the time.
The W Union Square has been in foreclosure since last year, when Dubai World, a private equity arm of the Dubai government, was forced to sell the hotel, a prized asset for which it paid $282 million in 2006. A private equity firm, LEM Mezzanine, paid $200 million for the hotel in a foreclosure auction.
In August, LNR Partners, the special servicer for the hotel’s $115 million mortgage, asked a judge to block the transfer of the hotel’s ownership to HHR. The proceeds of the sale are intended to satisfy the hotel’s sole secured creditor, the Wall Street Journal reported.
An HHR spokesman was not immediately available for comment.