Hotel on Rivington Owners Still Seek a Buyer at $69M

Posted on: February 16th, 2021 at 5:01 am by

The Hotel on Rivington, last courted by Kushner Companies two years ago, remains on the market for a princely sum.

Longtime hotel owners (and developers)  Paul and Rena Stallings continue the search for a buyer willing to shell out $69 million, which is $1 million less than the last price tag. The difference this time around, though, is the wild card of coronavirus affecting the bottom line. “Before the pandemic [the hotel] netted $3,651,962.74 and can net more when the new owner adds more value to the hotel,” recent marketing materials state. “The food and beverage can be made bigger and better, the rooms can be updated for today’s in style models.”

It’s certainly not an easy road to sale for the Hotel on Rivington.

Photo: Clayton Patterson

Kushner Companies, led by Trump’s son-in-law Jared Kushner, initially entered into contract to acquire the twenty-story glass eyesore for $65 million back in November 2018. Six months later, though, the firm backed out and demanded refund of the $2.2 million deposit due to an alleged breach of the purchase agreement.

Back to the broker-babble in the listing:

The structure of the deal presents an opportunity for the investor to purchase the hotel with much less money.

1. The buyer must assume title by taking over existing LLC. This is not a fee purchase, the seller’s preferred equity for assuming existing entity. The owner will maintain existing 4 am liquor license.

2. The buyer must assume the $36.5 million mortgage at 4.96%. They must also pay the $449,000 assumption fee. The purchaser can also pay off the mortgage there is a $7 million defeasance fee.

3. The seller will give the purchaser $16.8 million mez financing in the form of pref equity at 6%. The seller has no interest in any profit of the hotel just 6% return on the mez financing. There is no requirement to pay it off unless they refinance and have excess proceeds. Than the balance of pref one-half of refinance-increased proceeds reduce equity, but obviously 6% obligation on pref equity is reduced as well.

4. The buyer must come up with $16.8 million in cash to complete the deal.

The Hotel on Rivington arrived in 2005 – developed at a cost of roughly $32 million – and was the talk of the town. In the latter part of the last decade, it became a hot potato, so to speak, given its contentious relationship with the surrounding Lower East Side community. Something not mentioned in the listing. In years past, the lodge has led the 7th Precinct in overall 311 noise complaints

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