Sapir Corp has placed its Nomo Soho hotel into Chapter 11, the latest development in the ongoing collapse and liquidation of Alex Sapir’s Israeli-backed real estate company.
Alex Sapir’s firm filed a petition Tuesday in bankruptcy court in Manhattan, seeking to run a court-supervised auction for the 26-story boutique hotel at 9 Crosby Street. The move is designed to cement a sale and pay down Sapir Corp’s $155 million in bond debt across two Israeli bond series.
The filing comes three weeks after Sapir Corp entered insolvency proceedings in Israel, where the company told the Tel Aviv-Jaffa District Court that it could no longer meet bond payments or cover operating costs. All of its directors resigned and a trustee is now overseeing the company as it winds down.
“Facing the ongoing challenges in the market and slow recovery from two years of Covid, during which the operation was supported with significant equity, we chose to support a process that is the most likely to result in the full payment of the debt to the bond holders,” a Sapir spokesperson said.
Amidst the turmoil, Sapir has lined up a buyer for the 264-key hotel. Dan Hotels, one of Israel’s largest hospitality chains, is in contract to acquire the property for $125 million. Bondholders approved the stalking-horse contract and now Sapir Corp will hold an auction, setting an initial overbid of $129.25 million, according to the bankruptcy filing. If no higher bidder materializes, Dan Hotels’ $125 million offer will prevail.
The sale represents a long-awaited exit from a property that has faced a years-long debt struggle. Sapir and partner Gerard Guez bought Nomo Soho in 2015 for $208 million after a foreclosure sale by Deutsche Bank. Sapir later bought out most of Guez’s stake and refinanced the property multiple times, including an $89 million Israeli bond-market loan in 2022 that replaced a Goldman Sachs mortgage.
But by 2024, the company was seeking maturity extensions and higher-cost fixes as debts came due. In July, Sapir failed to make a $3 million payment, triggering default.
The stylish, vine-covered hotel was hit hard during the pandemic, with occupancy plunging to 1.9 percent in April 2020. Sapir Corp put the property on the market last year, cut management fees and explored strategic options. The hotel currently employs 133 workers and is operating at a loss of about $1.3 million for the current year, per the bankruptcy filing, which was first reported by PincusCo.
Nomo Soho is one of only two assets left in Sapir Corp’s portfolio. The other — an undeveloped site near Miami’s Wynwood district — is listed for $41 million and in active sale talks, according to a filing with the Tel Aviv Stock Exchange.
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