Lloyd Goldman Extends Gurney's Montauk Loan

Time is money and in the world of CMBS debt, an extra year to maturity doesn’t come cheap.

To extend the Gurney’s Montauk Resort and Seawater Spa loan — a $217M mortgage that landed in maturity default late last year — Lloyd Goldman wrestled up $9.4 million to pay down the debt and agreed to a $3.1 million personal guarantee, according to Morningstar Credit.

The paydown helps Goldman, head of BLDG Management, reach the deal’s debt yield hurdle — a measure of asset health that weighs revenue against the loan amount. And the $3 million is extra cushion. If income slips and Goldman can’t meet the benchmark, his lender can pursue him personally for the commitment.

“The paydown + the guarantee just reduces the denominator in the debt yield calculation so they can exercise the [extension] option,” Morningstar Head of CRE Analytics David Putro wrote in an email.

Goldman had an extension baked into the loan but needed to hit a debt yield hurdle to secure it, according to Morningstar. When the loan transferred to special servicing “it did not appear that the debt yield hurdle … had been met” a Morningstar Newsflash about the extension detailed.

The loan now comes due in December 2025 and Goldman has funded “additional reserves” as part of the workout, Morningstar said, noting the mortgage would likely move out of special servicing soon.

A spokesperson for BLDG did not comment in time for publication.

On the heels of the December default, BLDG’s COO Justin Kleinman described the 20-acre property as “thriving,” chalking up the special servicing transfer to an “administrative issue.”

The resort closed for renovations in early December and reopened in the first week of February, the New York Post reported. The property’s facelift is ongoing and will culminate with the launch of Gigi’s Montauk, a flagship Mediterranean restaurant this spring, Kleinman told the Post,

But loan data provided by Morningstar and Trepp show cracks in the foundation. Trepp’s Commercial Real Estate Direct said the asset had “substantially underperformed expectations.”

The Montauk Resort, nestled on Long Island’s beachfront, is a seasonal retreat, subject to winter doldrums. But even performance data from June showed revenue was covering less than half of monthly mortgage payments on the floating-rate loan, compared to 2.6 times when the mortgage was made, according to Morningstar.

Occupancy, meanwhile, suffered after pandemic foreign travel restrictions loosened, slipping to 62 percent in mid-2024 from 71 percent in 2021, Morningstar shows.

It’s unclear what the property is currently valued at. But transfer to special servicing typically triggers a reappraisal, so a new figure is likely coming soon, servicer commentary noted.