Gatsby Enterprises hit with 3 LES hotel pre-foreclosures totaling $34M alleging maturity defaults

Lender JPMorgan Chase filed three pre-foreclosure actions this week totaling $34 million alleging maturity defaults at three Lower East Side hotels at 135 East Houston Street, 163 Orchard Street and 136 Ludlow Street. The hotels are owned by Nader Ohebshalom’s Gatsby Enterprises. JPMorgan Chase filed the cases in New York State Supreme Court in Manhattan on February 11, 2025.

Court cases represent the position of one party and are not necessarily accurate or complete. Many borrowers are struggling with refinancing debt obtained before the 2022 rise in interest rates, though some hotel borrowers have landed new loans recently, such as BD Hotels.

In the first case, Gatsby bought the hotel at 135 East Houston Street for $17.25 million on April 1, 2015. First Republic Bank provided an $11 million loan April 1, 2015. This is a maturity default. “A Default Notice on Matured Loan, dated April 18, 2024 (the “Default Notice”), was sent to Customers informing them of the payment default under the Loan Documents and the Loan’s maturity date of April 10, 2024.”
Case LINK

The hotel building at 135 East Houston Street in the Lower East Side has 14,383 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 28 feet and is 74 feet deep with a total lot size of 2,072 square feet. The zoning is C6-2A which allows for up to 6 times floor area ratio (FAR) for commercial and up to 6.02 times FAR for residential with inclusionary housing. The city-designated market value for the property in 2022 is $5.2 million. Direct link to the property’s ACRIS page

In the second case, Gatsby bought the hotel at 163 Orchard Street for $23.75 million on March 31, 2015 from S&H Equities, borrowing $14.5 million from First Republic Bank at the same time. This is a maturity default. “A Default Notice on Matured Loan dated April 18, 2024 (the “Default Notice”) was sent to Customers informing them of the payment default under the Loan Documents and the Loan’s maturity date of April 10, 2024.”

Case LINK

The hotel building at 163 Orchard Street in the Lower East Side has 19,024 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 26 feet and is 87 feet deep with a total lot size of 2,319 square feet. The zoning is C4-4A which allows for up to 4 times floor area ratio (FAR) for commercial and up to 4 times FAR for residential with inclusionary housing. The city-designated market value for the property in 2022 is $4.9 million. Direct link to the property’s ACRIS page

In the third case, Gatsby bought 136 Ludlow Street for $15.5 million on October 6, 2016, borrowing $8.25 million from First Republic Bank fo finance the purchase. This is a maturity default. “A Default Notice on Matured Loan dated October 14, 2024 (the “Default Notice”) was sent to Ludlow Hospitality informing them of the payment default under the Loan Documents and the Loan’s maturity date of October 10, 2024.”

Case LINK

The hotel building at 136 Ludlow Street in the Lower East Side has 13,000 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 22 feet and is 89 feet deep with a total lot size of 2,003 square feet. The zoning is C4-4A which allows for up to 4 times floor area ratio (FAR) for commercial and up to 4 times FAR for residential with inclusionary housing. The city-designated market value for the property in 2022 is $3.4 million. Direct link to the property’s ACRIS page