CMBS Loan on Flatiron Hotel Falls Into Foreclosure
By Matt Grossman April 24, 2018 11:21 am
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A loan backed by the Flatiron Hotel in Manhattan, wrapped into the WFCM 2015-C28 CMBS transaction, is now in foreclosure, according to a report from Trepp. The loan was first sent to special servicing last August.
The $22.5 million loan on the hotel, located at 9 West 26th Street between Broadway and Avenue of the Americas, makes up 2 percent of WFCM 2015-C28, a set of securities that closed in May, 2015. None of the transaction’s 96 other loans is delinquent.
At the time of the deal’s underwriting, the 64-key hotel’s net annual cash flow was 1.7 times its yearly debt service expenses. But after a burst pipe in the building’s air-conditioning system flooded the hotel’s lobby and restaurant in April 2015, according to Trepp, cash flow fell to just two-thirds of debt service responsibilities the following year.
Occupancy dipped to just 67 percent in the year after the flood, but recovered to 85 percent between January and September 2017, the most recent period for which data were available.
Saturday night reservations in May for a standard room were available for between $270 and $300 on the hotel’s website.
The property also features two nightlife venues, Toshi’s Living Room and Toshi’s Penthouse, the former of which once featured a schedule of live music. But its calendar of public events has gone dark.
Those venues were named for Robert “Toshi” Chan, the owner of a minority stake in the hotels. Jagdish Vaswani is the majority owner. Chan declined to comment, and Vaswani could not immediately be reached.
