Soho Properties seeks to block $57M UCC auction for Margaritaville hotel

Sharif El-Gamal’s Soho Properties filed a lawsuit in New York State Supreme Court June 28, 2023, seeking to block a UCC auction set for July 10, 2023 to sell a $57 million mezzanine loan secured by the Margaritaville Resort Times Square at 560 Seventh Avenue in the Garment District in Manhattan. The original notice for the auction was published in April. The complaint alleges the sale is commercially unreasonable. The court has not yet responded to the action.

The Real Deal reported on the court filing yesterday.

Case LINK
Marketing setup Margaritaville UCC sale setup

According to the complaint, “The Margaritaville Resort is a hotel which has 234 rooms to rent and 34,271 square feet of retail space. It has been appraised as recently as May 2023, as having a value of between $266 million and $350 million, and employs approximately 75 people.”

Soho Properties signed a $57 million mezzanine loan with lender Arden Group September 13, 2021.

The complaint says, “On or about April 10, 2023, Newmark & Company, on behalf of the defendant, published a Notice of Secured Party Auction (the “”Newmark Notice””), a copy of which is annexed as exhibit 3, stating that a foreclosure sale via public auction of inter alia, 560 Secondary’s membership interest in 560 Primary (which would include the ownership of the Margaritaville Resort) would be held on July 10.

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