Zelig Weiss Makes All-Cash Offer on William Vale Hotel
By Chava Gourarie October 27, 2021 2:37 pm
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Zelig Weiss, a part owner of the much-contested William Vale hotel in Williamsburg, Brooklyn, made an all-cash offer to buy the debt on the hotel for $163 million, or $180 million in two installments, according to documents on the Tel Aviv Stock Exchange.
The William Vale complex, one of Brooklyn’s swankiest hotels, is part of the collapsing All Year Management empire and in the midst of a protracted battle in both Israel and the United States. Weiss’ offer comes as bondholders in Israel, who have rights to the hotel, are negotiating a rival proposal from a joint venture between Monarch Alternative Capital and Madison Capital to buy the debt for $155.2 million.
The bondholders did not appear impressed by Weiss’ offer, choosing not to bring it to a vote at their last meeting held Monday.
The William Vale, located at 111 North 12th Street, was used as collateral for a $180 million bond offering raised by All Year’s Yoel Goldman on the Tel Aviv Stock Exchange in 2017, putting Israeli bondholders first in line for the property. Because of All Year’s financial and legal troubles, the hotel is now held by Mishmeret Trust Company as a stand-in for the bondholders. Weiss and Goldman — who are 50-50 partners in the project — are also embroiled in a lawsuit over missing rent and a host of other issues.
In the Monday meeting, the bondholders voted to move forward with the offer from Monarch and Madison, and plan to negotiate a final offer before voting on it, according to a summary of the meeting. The bondholders chose not to raise the Weiss proposal to a vote at the meeting, though he had not yet upped the offer at the time the decision was made.
Weiss first offered $156 million for both the equity and debt last week, then upped it to $163 million on Oct. 25, documents show. In his second letter of intent, Weiss made the case that as a developer of the property, he needs no time to do due diligence and could complete the deal quickly and without litigation.
The deal would be financed by Ohana Real Estate Investments, which has previously provided financing for the hotel, according to The Real Deal, which first reported the Weiss offer.
A key question here is how much the bondholders can recoup. All of All Year’s bonds ceased trading in December 2020, and the Series C bonds — those that are secured by The William Vale — last traded at roughly 62 cents.
Weiss offered two alternatives. Pay back 87 percent of the outstanding balance in one upfront payment, totaling $156 million — which he later upped to $163 million to include accrued interest. Or, they can cover 100 percent of the outstanding balance in two payments, with the second one scheduled for 2024, totaling $180 million. The JV between Monarch and Madison would cover 86 percent of the outstanding balance, according to their latest offer filed on Oct. 5.
A recent appraisal of the property commissioned by All Year valued the hotel at $165 million with a cap rate of 5.5 percent.
Monarch, Madison, and counsel for Zelig Weiss did not immediately reply to requests for comment. All Year was not immediately reachable.
Chava Gourarie can be reached at cgourarie@commercialobserver.com.
