A Times Square hotel and retail property once valued at more than $2 billion is a step closer to foreclosure after a court victory for a group of lenders led by Natixis SA, Bloomberg News reported. The court granted the lenders the right to foreclose on the property, which features the 42-story Times Square Edition hotel designed by Marriott International Inc. and hospitality legend Ian Schrager. The judge also scheduled a hearing to decide how to proceed with a sale. It’s the latest setback for owner Maefield Development, which has been facing foreclosure since 2019, after construction delays and trouble filling the project’s retail space led the lenders behind a $650 million loan to file suit. A foreclosure sale would complete a startling reversal for a property viewed as a marquee development in Times Square. A 2018 appraisal valued the property at $2.4 billion, and a 2019 party to celebrate the rare opening of a luxury hotel in the neighborhood attracted a generation-spanning list of celebrities, from Kendall Jenner to Diana Ross. But Maefield struggled to fill the retail space, and the hotel failed to generate positive cash flow, according to the court ruling, leading lenders to file for foreclosure in December 2019. In the months that followed, the COVID-19 pandemic laid waste to the global hospitality industry, grounding travelers and shuttering hotels. In May, Marriott threatened to strip the Edition brand from the hotel because of cash flow shortfalls, issuing a warning to employees and union officials that the hotel could permanently close in the months to come. Marriott eventually ironed out an agreement with Maefield’s lenders, though the property remains shuttered.
