By Roland Li
The estate of Lehman Brothers Holdings has taken control of a luxury hotel at 2170-2178 Broadway for just over $191 million, according to city records.
Kimberly Macleon, a spokeswoman for the estate, confirmed the transaction.
“The strategy of the estate has been to maximize the value of its properties – not to fire sale them,” she said.
Atlanta-based firm Trimont Real Estate Advisors represented Lehman in the transaction. Officials at Trimont didn’t return requests for comment.
The previous owner, Ota Hotel Owner LP, controlled by Texas-based Highgate Holdings, purchased the building for just over $201 million in August 2007 from Rockpoint Fund II Acquisitions LLC, according to city records.
Lois Weiss of the New York Post first broke the news.
(Rockpoint and Highgate also acquired the 20,000 s/f Milford Plaza Hotel at 700 Eighth Avenue for $230 million last November in a joint venture.)
Highgate took a $37 million mortgage in 2007 from Lehman, and had a total debt of $95 million on the property at the time, according to city records.
Lehman appears to have been involved in the property for at least a decade prior to that deal – according to city records, it had a $31.7 million mortgage in 1997 with 2170-2178 Broadway, LLC, a previous owner.
Lehman’s path to acquiring the property is not completely clear. There was no recent lis pendens – the first step towards foreclosure – filed against the building, according to PropertyShark. But the sale could have been a deed in lieu of foreclosure, said Macleon, the spokeswoman for Lehman.
Officials at Highgate didn’t return requests for comment.
Known as On the Ave, the 169,664 s/f hotel at 77th Street has rates starting around $150 per night. It also houses a Fatty Crab Bar & Restaurant, a Malaysian eatery.
The building, built around 1911, was original known as the Wellsmore, a 12-story apartment house that was sold for $1.3 million in one of the largest transaction of 1913, a deal that “furnished another illustration of the willingness of investors to buy well managed properties in favorable locations,” according to the New York Times. At the time of its 1913 sale, it had 48 residential apartments and five retail spaces, with a rent roll of $120,000.