Lubert Adler Affiliate Buys the W New York Union Square at Foreclosure Auction
The winning bid was $2 million, but LEM Mezzanine must bring current an additional $97 million in secured debt.
Palm Coast, FL – December 18, 2009 – LEM Mezzanine, an affiliate of Lubert Adler Partners, purchased the trendy W New York Union Square at a foreclosure auction for $2 million. LEM must also bring current an additional $97 million in secured debt. Lubert Adler is Palm Coast real estate developer Bobby Ginn’s financial partner.
The W was purchased by Dubai World’s private-equity arm, Istithmar, for $285 million in 2006. It defaulted on $117 million in junior debt in October. The default triggered the foreclosure auction. LEM will not have to lay out any cash to complete the purchase. As a subordinate debtor, they went into the auction with a $20 million credit.
Analysts believe the bargain purchase is only the beginning of a wave of luxury hotel purchases by opportunistic buyers.
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Deja Vu
Reminds me of the Resolution Trust back in the 80’s when it packaged lemons with qulity real estate at rock bottom prices.
RTC
I wish we would go back into a RTC scenario. The problem is that the government is SO concerned about people amassing wealth through a RTC type program so they won’t do it. The sad thing is that this Country was built on capitalism and people creating large amounts of wealth for themselves is a by-product of capitalism. The government needs to get out of the way and let the markets take control. If that means RTC then so be it. People are going to make money and not everyone will be or should be "equal" in the financial sense.