LuxUrban battles GFI over James Hotel lease, seeks $10M

LuxUrban Hotels through the entity LuxUrban RE Holdings LLC as plaintiff and master lessee of a 353-key hotel condo unit at 22 East 29th Street, currently known as the James Hotel, is disputing the status of its lease with landlord GFI Capital Resources Group.

LuxUrban filed the case yesterday in New York State Supreme Court in Manhattan. Case LINK

Court filings represent the position of one party and are not necessarily accurate or complete.

The summons alleges GFI has not adhered to the lease dated January 31 and set to commence March 25, 2024. By allegedly not adhering to the lease, LuxUrban has been prevented from taking over from Highgate Hotels, and also prevented it from paying rent. GFI, the summons says, sent a lease default notice on March 29.
The summons also says, “Plaintiff also seeks a declaration that the assumption agreement proposed by the Hotel and Gaming Trades Council, AFL-CIO (the “Union”) differs substantially from the form assumption agreement provided in the Lease.” The summons seeks $10 million in damages. The parties announced the lease deal in January, saying the hotel would be rebranded as the J Hotel by LuxUrban. The James hotel website still shows Highgate.

The block

On this tax block, PincusCo has identified the owners of seven of the 16 commercial properties representing 1,152,802 square feet of the 1,764,078 square feet. The largest owner is Feil Organization, followed by Gatsby Enterprises and then Global Holdings Management Group. On the tax block, there was one new building construction project filed totaling 169,210 square feet. It is a 123-unit, 169,210 square-foot residential (R-2) building submitted by Rockefeller Group and filed by John Pierce with plans filed January 30, 2018 and permitted June 6, 2018.

The owner

The owners according to the Department of Housing Preservation and Development includes Joel Rosen, head officer and Eric Foley, officer. The business entities are GFI Management Services Inc. and 88 Madison Hotel Fee Owner Llc.

The surrounding

Within a 400-foot radius of 17 East 28 Street, PincusCo identified eight commercial real estate items of interests occurred over the past 24 months. Of  those eight items, seven were loans above $5 million totaling $252.3 million. The most recent of the seven was Rita Sklar and Michael Sklar who borrowed $23 million from Goodman Capital secured by the 146,161-square-foot, 26-unit office building (O6) on 89 Madison Avenue on February 22, 2024.

Direct link to the property’s ACRIS.