Last call could be coming to two Cipriani locations in New York City as the hospitality company faces foreclosure in the wake of defaulting on its mortgage debt.
The Wall Street Journal reported that Cipriani has been in default on $53 million in mortgage debt since May 2020, per real-estate data firm Trepp. The loan is backed by the Cipriani locations at 110 East 42nd Street and 55 Wall Street.
Cipriani is being spared by a moratorium on commercial evictions and foreclosures, but time is ticking, as that moratorium is set to expire next month. According to the Journal, the debt was transferred to a special servicer last year and draft foreclosure documents have already been prepared.
The company is reportedly in ongoing discussions with lenders, which spokesperson Stefania Girombelli told the Journal have been “helpful and constructive.”
Midland Loan Services is managing Cirpriani’s loan on behalf of bondholders. W.P. Carey holds the mezzanine loan for Cipriani.
The pandemic wreaked havoc on Cipriani’s books as marquee money-making events like galas and holiday parties were either canceled or scaled back.
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Trepp data reported by the Journal show the two locations’ combined revenue slipped from $90 million in 2019 to $24 million in 2020. Cipriani last year lost almost $5 million at the two locations and the properties received a combined $92 million appraisal last month, down 49 percent from 2014.
Losing the Cipriani location at East 42nd Street would be a loss to historians, as the event hall has been designated a landmark by the city.
News of the potential foreclosures at Cipriani come as the East 42nd Street building Cipriani is housed in changes hands. SL Green announced the $117 million sale of 110 East 42nd Street to Meadow Partners on Monday, parting ways with the ownership interest in the office and garage condominiums; the former partly covers the ground floor, where Cipriani resides.
It’s not clear how the sale will affect the ground floor retail tenant.
[WSJ] — Holden Walter-Warner