NorthStar’s Hard Rock bluff wins

While Yr. Humble Blogger is laid up with a fractured ankle, the Hard Rock Hotel & Casino caught a lucky break for once. Announcements of foreclosure auctions are sometimes brinkmanship, an attempt to get a recalcitrant borrower to the bargaining table. So it was last year with the Union Plaza downtown and so it was again with the wrangle between NorthStar Realty Finance Corp. and Morgans Hotel Group. The former’s auction of the Hard Rock was scrubbed a couple of hours ago, which means that Morgans HRH co-owner DLJ Merchant Partners made some form of concession. The lender’s main beef was that it wasn’t close enough to the front of the repayment queue if the Hard Rock went bust. There’s not much Morgans/DLJ can do about that. Although no details are available yet, I’m guessing the phrase “higher interest rate” is going to be somewhere in the mix.