Torchlight took control of $77.2M debt on Sunstone’s troubled Hilton Times Square in May

The special servicer and investment firm Torchlight Investors took control of a defaulted loan valued at $77.2 million secured by Sunstone Hotel Investors’ 476-key Hilton Times Square at 234 West 42nd Street in Times Square.

Torchlight through its MSCI 2011-C1 HTS Hotel LLC acquired the debt with a value of $77.2 million from the Morgan Stanley Capital MSCI 2011-C1 bondholders. The transfer closed on May 21, 2020 and was recorded on October 16, 2020.
The property contains a total of 300,359 square feet of built space.

Sunstone controls the property as the tenant through a ground lease with landlords, including New York State’s Empire State Development. Sunstone said earlier this year that it was “engaged in conversation with our lender and the ground lessor, but don’t have anything additional to disclose at this time.”

The mortgage secured by the Hilton Times Square matures in November 2020.

Sanstone reported this year that, “the Company has not made a payment on this loan since April 2020, and is currently in default. The Company is working with the lender to explore various options in advance of the upcoming maturity, which could include a negotiated transfer of the hotel to the lender or the hotel’s ground lessors or a discounted payoff of the loan.”

Sunstone has not made a ground rent payments since March 2020..  The loan matures November 1, 2020.

Direct link to Acris document. link
Direct link to the city’s interactive property map, ZOLA. link