Heritage Equity’s Williamsburg Hotel, Brooklyn Files for Bankruptcy

Main Photo: The rooftop bar and pool at The Williamsburg

Date: June 2021

Location: Williamsburg, between North 10th and 11th streets, Brooklyn, New York, NY, USA

Name: The Williamsburg Hotel

No. of Keys: 147

Seller/Owner: Heritage Equity, headed up by Toby Moskovits, bought the site between North 10th and North 11th streets for the eight-story hotel in 2012 for $4.85 million. In 2017, Heritage landed a $68 million loan for the development from Benefit Street Partners.

However, the hotel struggled with low occupancy and revenues per available room, an important lodging-industry benchmark, and Heritage defaulted on the loan from Benefit Street Partners in 2019.

Heritage started Chapter 11 proceedings for the 147-room hotel at 96 Wythe Avenue in Williamsburg, Brooklyn, under the 96 Wythe Acquisition LLC with between $50 million to $100 million in debt, according to court records.

Buyer/Manager: Moskovits fielded offers from bidders in 2019 to buy the hotel for around $135 million, but Moskovits emphatically denied at the time she’d put the hotel up for sale, as reported by Commercial Observer.

Heritage nearly lined up a $76 million refinancing to cure its default in 2019, but the deal appears to never have closed, per property records. In October 2019, the hotel was thrown into receivership over the default, The Real Deal reported.

The Williamsburg Hotel isn’t the only troubled asset for Heritage in recent months. In July, Heritage started Chapter 11 proceedings at its under-construction, 144-hotel room hotel at 232 Seigel Street in Bushwick.

And Moskovits is facing a slew of lawsuits and foreclosures for different projects around Brooklyn, including the office development at 215 Moore Street, The Real Deal reported.

Lender Fortress Investment Group sued the LLC tied to the 232 Seigel Street development, which filed for bankruptcy in July, to foreclosure on the property after the LLC defaulted on its $5.25 million loan, PincusCo Media first reported.

Representatives for Fortress did not immediately respond to a request for comment. Moskovits declined to comment.

As part of the dismissal of the bankruptcy case, a judge ruled that Heritage Equity would pay off the $3 million mezzanine loan and allow Fortress to move forward with the foreclosure procedure, claiming Heritage Equity now owes $8.2 million for the default, including late charges and interest, according to court documents.

Heritage Equity, led by Moskovits and business partner Michael Lichtenstein, bought the lot at 232 Seigel Street with 15 other nearby plots of land for $28.5 million in 2015, The Real Deal reported. It filed plans later that year to build a hotel, designed by Morali Architects, with a gym and a restaurant.

In November 2019, Moskovits sued her original lender, Bridge City Capital, to stop default and acceleration notices on the $5.25 million loan. Fortress bought the debt in January 2020 and Moskovits refiled her case, accusing Fortress of “predatory tactics” and only buying the loans to try and take over the project, TRD reported.

THPT Comment: Oh dear all is not well down in Brooklyn….so another hotel now available to acquire…if there’s interest, please contact us at THPT.

First Seen: Commercial Observer

The Hotel Property Team (THPT) is a small group of highly experienced business professionals. Between us, we provide a range of skills and experience which is directly relevant to those involved in the hotel property market.

For more information – Visit www.thpt.co.uk or email info@rrh.hmf.mybluehost.me.