Allen Gross’ GFI Capital mentioned it would miss its subsequent cost on a portion of its Israeli bonds if it can’t restructure its debt.
A British Virgin Islands firm tied to GFI disclosed in a submitting on the Tel Aviv Inventory Trade on Aug. 10 that it may not have the funds to fulfill its principal and curiosity funds on practically $60 million of bonds maturing on Dec. 1.
The corporate, which owns the historic Beekman Lodge in Manhattan, is asking bondholders to grant it a three-year extension on the bonds’ maturity date. GFI mentioned it’ll repay bondholders 50 p.c of the principal by Dec. 1 if it may possibly safe a refinance for its struggling Seville NoMad resort.
GFI disclosed the information in filings this month on the Tel Aviv Stock Exchange. The New York Metropolis-based agency grew to become the most recent American developer to run into hassle in Israel up to now few months. Simad, the proprietor of 30 summer time camps, disclosed it could miss payments and additional revealed that about $34 million from Simad was diverted to the homeowners. Kohan Retail Funding Group, an organization recognized for getting up distressed malls, just lately found that tens of millions of {dollars} in firm loans have been diverted to its CEO. Kohan has denied he misused cash.
In contrast to Simad or Kohan, GFI will not be dealing with allegations it diverted or misused bondholders’ cash. GFI’s monetary challenges stem from the poor efficiency of the Seville, previously often called the James Hotel. The corporate blames this, partially, on a decline in worldwide tourism brought on by the battle with Iran. GFI has raised cash on the Israeli bond marketplace for over a decade by means of six separate bond raises and has beforehand repaid its Israeli bond choices.
Globes first reported the information.
The Seville’s occupancy fell to 51.2 p.c within the first quarter of 2026 from 64.6 p.c within the first quarter of 2025. It posted an working lack of $1.21 million within the first quarter in comparison with a lack of $423,000 in the identical interval in 2025, based on Tel Aviv Inventory Trade filings. The corporate additionally reported a damaging working capital of $224 million within the first quarter.
However GFI mentioned in a submitting that it’s engaged in optimistic talks with its senior lender, who’s keen on extending the $136 million senior mortgage by three years. As an added incentive, GFI is providing bondholders a lien on the ritzy Beekman Lodge as collateral. GFI pays curiosity of 9 p.c semiannually to bondholders throughout the proposed extension, up from 8.75 p.c.
The market didn’t react positively to GFI’s proposed restructuring; the corporate’s bonds fell 25 p.c this month.
GFI didn’t return a request for a remark.
GFI owns a lot of resort and rental properties in NYC, together with the Ace Lodge New York and Ace Hotel Brooklyn, the ONE11 Residences at Thompson Central Park, and 144 North eighth Road in Williamsburg.
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