$137M foreclosure on 492-room FiDi hotel

A special servicer representing bondholders of a securitized debt package, Midland Loan Services, filed to foreclose on a loan with an original principal of $137 million, provided in 2018, and secured by the 50-story, 492-room hotel in the Financial District at 99 Washington Street, according to the documents filed in New York State Supreme Court yesterday. The property was developed by Jubao Xie along with one of the city’s most active hotel developers, Sam Chang of McSam Hotel Group.

The originator of the loan in 2018 was Ladder Capital, but the debt is now owned by bondholders and Ladder is not involved in the foreclosure suit.

Chang filed plans for the 142,236-square foot project in 2006, and they were permitted in 2008. In 2014, the city issued the initial temporary certificate of occupancy.

Xie took complete control of the property that year, according to The Real Deal. The property was on the market for sale in 2017 for $300 million, The Real Deal reported, but it did not sell and instead Xie obtained the refinancing from Ladder Capital. That loan paid off a $135 million loan from Bank of China.

Many hotels have struggled during the pandemic, selling for steep discounts or to lenders in lieu of foreclosure.

Correction: An earlier version of this story identified Ladder Capital as the party bringing the suit. However Ladder is not a party to this action.

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