Lender Arden Group won a Uniform Commercial Code foreclosure auction for the Margaritaville Resort Times Square Hotel as the lone bidder last week, three months after its owner, Sharif El-Gamal’s Soho Properties, filed for Chapter 11 bankruptcy protection.
Arden Group used existing debt for its bid of $1,000 to acquire an equity stake in the hotel that sets it up on a path to control the 34,271-square-foot property, The Real Deal reported.
Soho Properties defaulted on the 234-key hotel in March after missing a debt service payment on the $57 million loan originated by Arden Group in July 2021. The auction was previously scheduled for July 10 but was postponed because of Soho’s bankruptcy filing.
The July bankruptcy filing showed that Soho Properties was seeking to refinance roughly $309 million of total debt connected with the project. The property, comprising 34,271 square feet, was appraised between $266 million and $350 million in May 2023, reflecting challenging economic conditions faced by the hotel since its opening in June 2021 and exacerbated by the impact of the COVID-19 pandemic on the industry, reports Traded.
El-Gamal said in 2018 when plans were unveiled for Margaritaville Resort Times Square that the hotel would “undoubtedly be a top destination” as the brand’s first New York location. The developer told Commercial Observer in December 2021 that he believed the development would become the “anchor of Times Square” given its location at the corner of 40th Street and Seventh Avenue.
Soho Properties, Margaritaville Resorts & Hotels and the Arden Group have not made a statement about the transaction.