Mack Real Estate Group has taken over control of seven limited- and full-service hotels totaling 1,087 rooms in New York City through a loan foreclosure, according to public property records. The value of the ownership transfer was listed at $315.8 million.
A Mack affiliate provided an $85 million mezzanine loan as part of a 2017 refinancing of the portfolio put on the commercial mortgaged-backed securities market. The hotels had been owned by a joint venture of China’s Cindat Capital Management and Hersha Hospitality. The venture's portfolio had been hit particularly hard by the pandemic, which reduced tourism in the city.
The $300 million CMBS mortgage backing the hotels was transferred to special servicing the month after the pandemic broke in the United States. Three of the seven hotels have since been idled, but the other four reopened.
As of mid-December, the loan was delinquent for the payment due Dec. 1, according to CMBS servicer notes.
In the third quarter, Hersha reported it had written down the value of its 30% share in the joint venture to zero dollars.
Officials with Hersha and Cindat were all contacted for additional information. None responded. Mack declined to comment.
The hotels in which control was transferred are as follows:
- Holiday Inn Express Times Square, 210 rooms.
- Candlewood Suites Times Square, 188 rooms.
- Hampton Inn Times Square, 184 rooms.
- Hampton Inn Chelsea, 144 rooms.
- Hampton Inn Herald Square, 136 rooms.
- Holiday Inn Wall Street, 113 rooms.
- Holiday Inn Express Wall Street, 112 rooms.