Morgan Stanley files $44M pre-foreclosure at 122-room hotel in Chelsea

Lender Morgan Stanley filed a $44 million pre-foreclosure action this week alleging the loan secured by the 122-room Hotel Hayden at 127 West 28th Street, in Chelsea, Manhattan, was in default. Morris Moinian, who leads the Fortuna Realty Group, also known as Fortuna Hotel Collection, owns the building.

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

Case LINK

Morgan Stanley, through the entity Morgan Stanley Private Bank, filed the action on April 1, 2025, in State Supreme Court in Manhattan against Moinian’s entity Fortuna Hotel Chelsea LLC. The bank originated the $44 million loan in 2018.

According to the complaint, “On or about December 14, 2023 an Amendment and Forbearance Agreement [was signed]… whereby Borrower acknowledged, confirmed and agreed that the Borrower was in default and indebted to Lender in respect to the Term Loan in the principal amount of $44,00,000…”
The bank says there is now due $42,995,386 in principal, $1,995,712 in default interest, and $144,702 in late charges.

The property

The hotel building in Chelsea has 59,843 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 50 feet and is 98 feet deep with a total lot size of 4,938 square feet. The zoning is M1-6 which allows for up to 10 times floor area ratio (FAR) for manufacturing. The city-designated market value for the property in 2022 is $15.9 million.

Development

For the tax lot building, it received its initial certificate of occupancy on February 28, 2013.

Violations and lawsuits

According to city public data, the property has received two DOB violations, $2,500 in ECB penalties, and $12,170 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 Chelsea, The bulk, or 35 percent of the 52.5 million square feet of commercial built space are office buildings, with elevator buildings next occupying 28 percent of the space. In sales, Chelsea has the 6th highest sale turnover among other neighborhoods in the city with $1.5 billion in sales volume in the last two years. For development, Chelsea has near average amount of major developments among other neighborhoods and is the 22nd highest in Manhattan. It had 1.9 million square feet of commercial and multi-family construction under development in the last two years, which represents 4 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of 10 of the 32 commercial properties representing 959,488 square feet of the 1,556,271 square feet. The largest owner is Concord Hospitality, followed by Daniel Yi and then Ira Lifshutz. On the tax block, there were two new building construction projects totaling 142,049 square feet. The largest is a 350-unit, 112,341 square-foot hotel/dormitory/shelter (R-1) building submitted by Lightstone Group and filed by Joseph Teichman with plans filed January 10, 2014 and permitted March 28, 2016. The second largest is a 37-unit, 29,708 square-foot residential (R-2) building submitted by Hasso Gulrajaney with plans filed May 13, 2015 and it has not been permitted yet.

The surrounding

Within a 400-foot radius of 129 West 28 Street, PincusCo identified 11 commercial real estate items of interests occurred over the past 24 months. Of those 11 items, one was for major renovation including a certificate of occupancy change. It was a permit application filed on January 14, 2025 for the $5.5 million renovation of 58,039-square-foot 70 building with 176 residential units at 116 West 28th Street. Of those 11 items, three were sales above $5 million totaling $87.2 million. The most recent of the three was Raymond Chau which bought the 71,500-square-foot, one-unit hotel (H2) on 121 West 28th Street for $49.9 million from Han’s Holdings Group on March 4, 2025. Of those 11 items, seven were loans above $5 million totaling $390.5 million. The most recent of the seven was Han’s Holdings Group in which borrowed $24 million from Citibank secured by the 71,500-square-foot, one-unit hotel (H2) on 121 West 28th Street on August 9, 2024.

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