Mezzanine Lender's Affiliate Wins Interests in Dubai Unit-Owned 'W'

The winning bidder has been named in a foreclosure sale of certain ownership interests of the W New York-Union Square, a hotel trophy property that combined news reports indicate Dubai World's private equity unit had originally bought in 2006. The bidder, identified as 201 Park Avenue South PEH LLC, called the winning bid a "step to assume equity ownership" of the hotel. The limited liability company is an affiliate of Philadelphia-based private equity fund LEM Mezzanine, which in 2007 bought a mezzanine loan backed by the W New York-Union Square's property owner. The W New York-Union Square's foreclosure sale proceedings had been initiated in November. Near the end of that month, combined news reports indicated Dubai World, the United Arab Emirates' investment vehicle, was delaying some of its payments on debt in a move that briefly shocked world markets. The current owner of the aforementioned interests in the property attributes the foreclosure largely to the recent downturn in the hotel industry. Despite the downturn, it indicated it sees some value in the hotel's brand and location. It said its goal is to maintain the W New York-Union Square's operational strength and ensure it is well positioned for any market recovery that may occur.