NEW YORK CITY Dune Real Estate Partners has agreed to buy the mortgage on the 84-year-old Mark Hotel on New York’s Upper East Side. Dune will pay US$190 million for the US$300 million note, giving the firm control of the landmark hotel.
The purchase ends a bidding process that included several other contenders, including Starwood Capital Group, The Wall Street Journal reports, to acquire the debt from the struggling Anglo Irish Bank. Dune will work with developer Alexico Group to continue repositioning the aging property. Alexico has spent about US$200 million renovating The Mark, including adding a restaurant run by celebrity Chef Jean-Georges Vongerichten.
The redevelopment project ran into financial trouble after Alexico was forced to scale back plans to convert 42 of the hotel’s 160 guestrooms into luxury co-ops. After the global financial crisis, Alexico reduced the co-op plan to just 10 units, of which only two have been sold. The co-ops had been expected to generate US$308 million, but they have raised just US$15.7 million to date.
Operating as a 150-key hotel, The Mark is charging rates in the US$450 per night range.
