Aby Rosen refuses to check out of 11 Howard hotel

10 minutes read

A luxury Soho hotel has become the latest battleground for RFR Holding, which is refusing to vacate 11 Howard as its landlord claims tens of millions in unpaid rent.

A standoff over possession of the 211-key hotel played out over a three-day trial this week in New York City Civil Court, just a few blocks south of the swanky property. German asset manager Commerz Real alleges an entity of Aby Rosen and Michael Fuchs’ company stopped paying rent on the property in March 2024 and has ignored lease termination notices.

“They’re collecting millions of dollars in revenue from the hotel and they’re ignoring all the notices,” said Anthony Coles of DLA Piper, an attorney for the landlord. “It’s really time to put an end to their possession. Enough is enough.”

Outside the courtroom, an attorney for RFR said the firm has not vacated because of a separate legal action in state Supreme Court, in which it claims Commerz is obligated to sell the property back to them. A judge dismissed the case in January and RFR appealed the decision.

“Instead of doing so, Commerz kept the property for itself and seeks to charge rent on a property that the tenant claims is not lawfully theirs,” said attorney Sean Burstyn.

RFR bought the 114,500-square-foot, 14-story former Holiday Inn from Procaccianti Group in 2014 for $89.7 million. It renovated the building and opened the upscale 11 Howard in 2016. A week after opening, Commerz bought the hotel from RFR for $170 million in a deal that included an agreement to lease the building back from the landlord for 10 years with options to extend for another 10 years and ultimately buy the building back. If RFR were to exercise its repurchase option, the Commerz investment would end up as a de facto loan.

For the past several years, the hotel has generated $25 million to $30 million in annual revenue for RFR while the company amassed $42 million in unpaid rent, taxes and other fees, a former asset manager for Commerz Real testified this week. (RFR disputes the figure.)

“They stiffed us, and it’s time for that to end,” Coles said.

At the end of the trial, Civil Court Judge Betty Lugo-Martinez ordered both sides to submit briefs and urged them to reach an agreement outside of court, citing concern for the hotel’s 108 employees. Commerz is seeking damages, which will be confirmed in a separate trial.

“I am very concerned that the employees will be affected,” Lugo-Martinez said. “Try to hammer this out because anything that happens is going to affect a lot of people. You’re talking about the livelihood of everyday New Yorkers.”