Joe Moinian lost his Midtown Hilton Garden Inn in a U.C.C. auction, after making a last-minute attempt to stop the sale.
MCM, a Rhode Island-based hotel investment firm that doled out $25 million in mezzanine debt on the 401-key hotel, made a credit bid of $10 million, giving it a pathway to take over the property. A spokesperson for MCM declined to comment.
Moinian tried to delay the Uniform Commercial Code auction for the equity interest in 237 West 54th Street, the largest Hilton Garden Inn in North America. In a petition filed on Monday in New York State Supreme Court, the Moinian Group founder claimed that the foreclosure documents filed by Twin Summit contain “misstatements, inaccuracies and inconsistencies” that could negatively impact the sale.
A judge denied the postponement. The auction was conducted by Matthew Mannion of Mannion Auctions.
A U.C.C. allows a lender to foreclose on the shares or interests of the company controlling the real estate rather than the actual property.
Despite “strong operating metrics” and up-to-date loan payments, the hotel’s $175 million senior loan landed in special servicing in February, according to data from Morningstar Credit. The hotel’s appraised value dropped from $251 million to $206.6 million as of April, per Morningstar, noting that a pending lawsuit had impeded efforts to refinance the loan.
Moinian and Starwood Capital Group co-developed the 34-story, 142,300-square-foot hotel between Broadway and Eighth Avenue, which opened in 2014. A year later, Starwood sold its 49.9 percent stake to investor and carpet importer Morad Ghadamian.
Morgan Stanley originated the $175 million CMBS loan in 2015, per property records. It also provided a $25 million mezzanine loan, according to court documents filed with the petition. In 2022, an entity called Twin Summit, which is tied to MCM, took over the debt, which was guaranteed by Moinian and Ghadamian. The two allegedly defaulted on the mezz loan in March.
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