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By: Ellen Cans
A developer has tapped his existing Upper West Side hotel to obtain an $80 million loan.
As reported by Crain’s NY, developer Ben Ashkenazy took out an $85 million mortgage this month for the Arthouse Hotel at 2178 Broadway. The loan was written by Citigroup at a 7.38% interest rate for a duration of five years. Roughly $2 million of the tapped funds will go towards fixing up the hotel facade. The remaining fortune of $79.6 million will be used at the discretion of Ashkenazy and his partner, per a report from bond-rating firm KBRA.
Ashkenazy had purchased the 291-room Arthouse Hotel in 2016 for $140 million, and he has already spent $10 million upgrading the rooms and lobby, KBRA said. The firm said the hotel has an 80% occupancy rate and charges $300 per night for a room, raking in $30 million in revenue last year and $11 million in net operating income. Centrally located near Central Park and Lincoln Center, the boutique vintage-style hotel boasts spacious rooms, three on-site restaurants and bars, a lounge, and a 24-hour fitness room.
A spokesman for Ashkenazy, Russ Colchamiro, said the loan replaces an $80 million mortgage paid off last November. He said the new mortgage was a routine refinancing. Colchamiro denied the idea that Ashkenazy has any pressing financial needs, for which he may have taken out the loan. “It’s a run-of-the-mill refi,” Colchamiro said.
Still, critics are pointing to the developers’ recent losses. Following the pandemic, Ashkenazy lost his stakes in two Madison Avenue office buildings due to foreclosure. “Mr. Ashkenazy has reported involvement in a number of foreclosures and loan defaults in recent years,” KBRA said in its report last week about the hotel loan.
Ashkenazy has been a seasoned player in real-estate since he was 17, when he purchased his first property with a little help from his father. Ashkenazy, born in Israel and raised in Lawrence, Long Island, is the founder, CEO, and majority owner of Ashkenazy Acquisition Corporation, which has a $12 billion property portfolio. It owns over 100 commercial properties, including a $70 million stake in New York’s Plaza Hotel. He also has stakes in Boston’s Faneuil Hall and South Station. In 2017, the company purchased London’s Grosvenor House Hotel for about $750 million. But the billionaire’s net worth has been declining rapidly, since 2019. As of July, his net worth was estimated to be approximately $1.6 billion, per Forbes. In February 2024, his net worth was up at an estimated $2.6 billion.
According to Forbes, his net worth has dropped some 60 percent since 2019, when commercial real estate took a big hit because of the pandemic. In the last several months, Ashkenazy lost its stakes in the illustrious office buildings at 625 Madison and 635 Madison, due to foreclosure. Also, Ashkenazy’s legal bills are piling up as a result of a four-year-long legal dispute with the owners of the Century 21 department stores.
“My long-term plan is to basically hold on to prime real estate,” he told Real Estate Weekly in 2001 in what seems to have been his last interview with the press.
