The saga of the Margaritaville Resort in the heart of New York City’s Times Square continues.
According to the PincusCo, Sherif El-Gamal’s Soho Properties filed a second bankruptcy petition earlier this month, this time for its fee owner entity called 560 Seventh Avenue Owner Primary. According to the filing, Soho Properties wants to borrow $170 million from Cirrus real estate Partners to pay off its senior debt from a 2021 loan by One William Street Capital management.
In the filing, Soho Properties said that the hotel, which has 234 guest rooms, is typically at 95% capacity, but still faces some unpaid bills from Dream Hotel Group and Garment Center Congregation, which had been promised a new synagogue on property after the building was purchased in 2013.
The group is hoping that a $170 loan will help with some of that debt and buy it time to find a way to operate in a more financially successful way. It also previously filed to refinance $309 million of secured and mezzanine debt connected with the property.
The hotel opened in 2021, debuting with 234 guestrooms, five bars and restaurants, and an outdoor pool in the heart of Times Square at 560 Seventh Ave. Its debut was part of a quasi-renaissance for the New York City hotel scene post-COVID, opening at the same time as the new Marriott EDITION Madison Park, Aman New York, and more.
But, according to Bloomberg, the hotel has yet to make money and in March, its future was put very much in the air when it was revealed that El-Gamal’s Soho Group defaulted on its mezzanine loan on the hotel.
In a statement to TMR at the time of the first bankruptcy filing, Evan Laskin, Margaritaville’s Chief Investment Officer. said that the resort's operations will not be impacted by the news.
"The current ownership group, which owns Margaritaville Resort Times Square under a license agreement with Margaritaville, has filed for bankruptcy, and the foreclosure auction has been delayed. The bankruptcy filing will not impact resort operations, the property will remain open and staff members employed. The resort continues to perform well, with outstanding satisfaction ratings. Margaritaville looks forward to delivering fun and escapism through the resort and restaurant experiences for guests and New Yorkers for a long time," he said.