Photo: Andrew Lichtenstein / Corbis via Getty Images
Even in times of the pandemic, the Standard Hotel has remained one of the city’s most popular party spots: you may remember that Madonna’s Pride party in the Boom Boom Room was so full that People peed in cups because they couldn’t reach the toilets. But despite the nightly rush, this is standard faces foreclosure.
The 338 room hotel founded by André Balazs was Bought in 2017 from Gaw Capital, a Hong Kong-based private equity firm headed by Goodwin Gaw. Gaw bought the Standard for $ 340 million, $ 60 million less than it was signed a few years ago, and recorded it a $ 170 million acquisition loan from Natixis, a French investment bank that was optimistic about hotels at a time when other lenders were pulling out. “The hospitality industry in New York is a little out of favor right now,” said Gaw said Forbes back then. But in the past year and a half, the hospitality industry has fallen more than a little out of favor as a global pandemic and travel bans make Airbnb and market oversaturation seem relatively minor issues. In June of this year, the Standard saw decent traffic on the weekends, but “remains sluggish during the work week when business travelers would normally make up for the slack”. according to a Bloomberg article.
Gaw stopped paying his mortgage on the hotel in May 2020 and now owes $ 187 million, according to a lawsuit Wells Fargo filed in federal court suing on behalf of the bondholders (the loan was broken into four separate promissory notes) . . Gaws loan agreement also has an acceleration clause, according to Real Deal, which meant that one year after Gaw’s default, the entire outstanding principal of the loan, along with any accrued interest and default interest, was due immediately.
The standard get a paycheck security loan at the start of the pandemic and it seems likely that, like all New York hotels, it will continue to struggle for some time (New York’s hotel bookings were just 60 percent this June). Still, it would be surprising if Gaw Capital just left the standard. Gaw has more than enough capital – Forbes lays the network of the Gaw family valued at $ 1.6 billion – and the standard is a trophy trait. Gaw is also a veteran hotelier who turned the Hollywood Roosevelt Hotel in Los Angeles around and ran it successfully for decades. Goodwin Gaw bought the historic LA hotel out of bankruptcy for $ 9.5 million in 1995 and turned it into a place where Kirsten Dunst and Lindsay Lohan celebrated and Courtney Love was once famous left lying on a stretcher after one night. Still, the Standard may not be the easiest place to run right now. In addition to empty rooms, the building itself also seems to be in trouble: In January an 8 foot piece of cement and fiberglass fell from the facade.
