Aareal Capital files $60M pre-foreclosure at Garment District hotel

Aareal Capital filed a $60 million pre-foreclosure action in New York State Supreme Court in Manhattan this week alleging a maturity default at the hotel building at 960 Sixth Avenue, that has an alternate address of 71 West 35th Street, in the Garment District, Manhattan. The building owners, Victor Tawil of BX Capital and Elyahu Cohen, are battling their main tenant in the building, LuxUrban Hotels, alleging it was behind in rent payments for its hotel, The Herald, which occupies the upper floors of the building.

Case 805379/2025 LINK

Aareal Capital filed the suit on August 25, 2025, alleging the loan was not paid off by its maturity date, August 15, 2025. Tawil and Cohen signed for the $60 million loan in 2018. On June 2, 2022, they signed a lease with LuxUrban for the upper portion of the building. Two years later, they alleged LuxUrban stopped paying rent.
Tawil and Cohen alleged in a landlord and tenant court suit filed in December 2024, LT-322870-24/NY, that LuxUrban had not paid its monthly rent, $265,225, since June 2024, at the time totaling $1.6 million. The owners won a default judgment and warrant of eviction, but LuxUrban is fighting those decisions and remains in possession of the building and is taking reservations.

In 2010, Hidrock Properties acquired ownership of what was then an office building through a foreclosure auction, then converted it to a hotel. In 2013, Hidrock borrowed $75 million from Aareal. Although there was no deed or other type of transfer recorded between 2013 and 2018, in 2018, only Tawil and Cohen signed as the borrowers, and there was no longer any mention of Hidrock.

The Real Deal reported in 2015 that Hidrock Properties sold its controlling interest to a “foreign investor,” in a deal that valued the building at $132 million.

The property

The hotel building in Garment District has 100,738 square feet of built space according to a PincusCo analysis of city data. The parcel has two buildings with frontage of 74 feet and is 100 feet deep with a total lot size of 7,430 square feet. The zoning is C6-6 which allows for up to 15 times floor area ratio (FAR) for commercial and up to 10 times FAR for residential with inclusionary housing. The city-designated market value for the property in 2022 is $38.2 million.

Development

Over the past five years, there has been no NYC Department of Buildings new building, demolition, or alteration permit application valued at more than $20,000 filed for this parcel.

For the tax lot building, it received its initial certificate of occupancy on June 5, 2013.

Violations and lawsuits

According to city public data, the property has received $8,970 in OATH penalties in the last year.

There were no lawsuits or bankruptcies filed against the property for the past 24 months.

The neighborhood

In Garment District, The majority, or 69 percent of the 52.3 million square feet of commercial built space are office buildings, with hotel buildings next occupying 13 percent of the space. In sales, Garment District has the 10th highest sale turnover among other neighborhoods in the city with $1.2 billion in sales volume in the last two years. For development, Garment District is the 5th most active neighborhood among other neighborhoods. It had 11.8 million square feet of commercial and multi-family construction under development in the last two years, which represents 23 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of 18 of the 33 commercial properties representing 987,399 square feet of the 1,436,912 square feet. The largest owner is Aju Hotels Investments, followed by Kiamie Properties and then Tony Park. There are no active new building construction projects on this tax block.

The surrounding

Within a 400-foot radius of 962 Avenue Of The Americas, PincusCo identified 10 commercial real estate items of interests occurred over the past 24 months. Of those 10 items, one was for major renovation including a certificate of occupancy change. It was a permit application filed on May 28, 2025 for the $299,967 renovation of 108,875-square-foot 56 building with zero residential units at 45 West 36th Street. Of those 10 items, two were sales above $5 million totaling $46.5 million. The most recent of the two was Landry’s and Tilman Fertitta which bought the 16,000-square-foot, one-unit mixed-use building (K4) on 72 West 36th Street for $30 million from Keens Steakhouse on November 21, 2024. Of those 10 items, seven were loans above $5 million totaling $294.5 million. The most recent of the seven was Magna Hospitality Group in which borrowed $112 million from Wells Fargo secured by two condo units in the 151,789-square-foot, 314-unit hotel (RH) on 60 West 37th Street on June 9, 2025.

Direct link to the property’s ACRIS page and link to DOB NOW portal.