Morris Moinian and his investment partner were the winning bidders at a bankruptcy auction for a Lower East Side hotel development site, and will pay $30.75 million for the property.
“People were bidding $100,000 to $200,000 a clip, and we were bidding $1 million at a time,“ Moinain, the head of the Fortuna Realty Group, told The Real Deal. “There was no ceiling at all to what we were going to pay.”
”This is how you separate the men from the boys,” he added.
Moinian partnered with Morry Kalimian of Elk Investors to put forward the winning bid for the partially constructed hotel at 139-141 Orchard Street. The winners will pay an additional 2.5-percent “buyer’s premium” for a total contract price of $30.75 million. The deal is subject to approval by the U.S. Southern District bankruptcy court, which has scheduled a hearing for Monday.
Richard Maltz, the auctioneer, confirmed the amount of the high bid.
Sources said others who were present at the auction included representatives for Hidrock Realty, Pan Equities and Adam Neumann, co-founder and CEO of co-working space company WeWork. The auction was held Tuesday at the Hotel on Rivington at 107 Rivington Street, a short walk from the stalled site.
Neumann was eyeing the site for WeWork’s WeLive co-living venture, sources said.
Valley Stream, N.Y.-based developer the DAB Group bought the site running block-through between Orchard and Allen streets in 1999 and started construction on a 16-story, 98-room hotel.
But DAB stopped making mortgage payments in 2011, at which point Manhattan-based Maverick Real Estate Partners purchased a $5.5 million note from the Brooklyn Federal Savings Bank.
During foreclosure proceedings, DAB owner Ben Zhavian reportedly made threats to the property’s unspecified new owners. Zhavian denied the claim.
Moinian, who late last year scooped up a 124-key Wyndham Garden hotel in Chelsea at a bankruptcy auction for $60 million, said he plans to complete the Orchard Street project within 12 to 16 months.
Source: Real Estate