The ground lease for the Time Hotel, the 192-room boutique Theater District property formerly owned by playboy hotelier Vikram Chatwal, is set to hit the foreclosure auction block, now that discussions between the young billionaire’s Hampshire Hotels and special servicer LNR Partners have collapsed.
Hampshire owes nearly $55 million to lenders for the property, at 224 West 49th Street, according to data from PropertyShark. A foreclosure judgment was issued against Hampshire in July.
Hampshire will bid on the property at the auction to try to retain ownership, said Jay Stein, CEO of the hospitality company. The hotel is known as a celebrity hotspot and has hosted models like Naomi Campbell and Kate Moss.
“We tried to negotiate with [LNR] but they have to do a public auction to ensure they’re getting the most they can get [for the asset,]” Stein said of the special servicer.
The auction will take place October 23 at 60 Centre Street, according to PropertyShark. An attorney for LNR was not immediately available for comment.
Hampshire took out a $43.1 million mortgage against the property from Lehman Brothers in 2005 and then another $11.9 million gap loan shortly after. The loans were later combined into one major loan and were transferred to LaSalle National Bank. The borrowers first defaulted on the debt in November 2009 and then reached a forbearance agreement that lasted until November 2011.
Hampshire struggled to meet the loan payments thanks to increasing competition in the market from new hotels like the W NY Times Square, it was previously reported.
The company had better luck with its Dream Hotel at 210 West 55th Street. In March, Ladder Capital, the commercial real estate finance company, provided $100 million to refinance the formerly distressed property.
Meanwhile, Chatwal’s personal life has featured heavily in the press in recent months. The 41-year-old recently became engaged to Spanish supermodel Esther Canadas and was busted on a drugs charge in Florida in April.