Investment manager and real estate developer Quadrum Development Corp., which in 2016 established its hotel management platform and brand, Arlo Hotels, won the 147-room, 10-story property at an auction, almost two years after Toby Moskovits’ Heritage Equity Partners filed for bankruptcy on its flagship project.
With the Williamsburg Hotel acquisition, Quadrum now has a portfolio of nine properties, including the Godfrey Hotel in Chicago and three Arlo-branded hotels in New York.
A hearing to greenlight the sale of the hotel will be held this week.
Proceeds from the sale are expected to go toward Heritage’s debt on the hotel, which totals between $50 million and $100 million.
The property struggled with low occupancy rates and ensuing RevPAR, with Heritage defaulting on its $68 million loan on the hotel from Benefit Street Partners in 2019.
In 2012, Heritage acquired the hotel plot for $4.85 million. Construction of the hotel was completed in 2017.
In March 2019, Heritage had been receiving bids from several interested buyers for the hotel, including Brookfield Property Partners, with at least one offer reaching about $135 million. However, none of the offers materialized and Heritage lined up $76 million in refinancing from CREMAC Commercial Finance. Since the bridge loan didn’t close, Heritage filed for bankruptcy on the hotel in February 2021.