Alex Sapir’s Sapir Corp has filed for insolvency, saying it can no longer meet its bond payments or cover operating costs.
The Israeli company that owns the Nomo Soho hotel in Manhattan filed a petition in Tel Aviv-Jaffa District Court requesting to open insolvency proceedings and the appointment of a trustee to manage it. All the directors of the company have resigned, according to a filing with the Tel Aviv Stock Exchange, which names Alex Sapir as the controlling shareholder.
As the company faces collapse, Sapir has lined up a buyer for its troubled Soho hotel. Israeli hotel chain Dan Hotels is in contract to buy the Nomo Soho for $125 million, according to the filing. The deal, which still requires court and bondholder approval, would mark Dan Hotels’ first step into the U.S. market following its recent international expansion in India, where it opened The Den hotel in Bangalore.
“In coordination with our lenders, and following the successful sale of Sapir Corp’s final asset … we have decided to exit the Israeli market,” Sapir said in a statement. “This decision took into account many factors including negative hotel market headwinds, a high-interest rate environment and an increasingly strong shekel compared to the US dollar.”
Dan Hotels plans to renovate the 264-key hotel at 9 Crosby Street following the purchase, The Jerusalem Post reported. Eastdil Secured advised Sapir Corp in the deal.
The sale represents a long-awaited exit from a property that has faced a years-long debt struggle.
Sapir and partner Gerard Guez bought the Nomo Soho from Deutsche Bank for $208 million in 2015, following a foreclosure sale. Sapir later bought out Guez’s 49 percent stake, taking nearly full ownership. Over the years, the hotel has undergone several refinancings — including a $115 million loan from Goldman Sachs in 2019.
Sapir refinanced the hotel in 2022 with an $89 million loan from the Israeli bond market, just in time to pay down the previous loan from Goldman Sachs.
But as an outstanding $34 million debt came due in 2024, Sapir requested to push it back in exchange for a $6 million partial payoff and an increased interest rate. In July, Sapir Corp failed to make a $3 million payment, putting the firm in default. Last year, the hotel’s value dipped to $179 million.
A sleek boutique hotel known for its vine-covered entrance and modern design, Nomo Soho struggled during the pandemic, when occupancy plummeted to just 1.9 percent in April 2020. To shore up finances, Sapir Corp put the hotel on the market last year and replaced its management company in February, cutting management fees in half.
Sapir Corp is one arm of Alex Sapir’s real estate companies. The Nomo Soho appears to be one of only two remaining assets held by Sapir Corp. The other is an undeveloped site near Miami’s Wynwood area that the company recently re-listed for $41 million. That property is in sale discussions, according to the filing.
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