NEW YORK CITY-The bankruptcy cases related to the W NewYork—Union Square have been settled, with LEM Mezzanine agreeing tosell the hotel property to a new venture in which its former owneris a minority member. Terms of the deal were not disclosed; anaffiliate of LEM had bought the W this past fall in a foreclosureauction for $2 million and the assumption of $212 million indebt.

Led by Host Hotels & Resorts LP, the new venture will buythe 285-key hotel, the first mezzanine loan in favor of seniorlender DekaBank Deutsche Girozentrale will be repaid and LEM willreceive current and future payments on its original mezz loan.Istithmar World Capital, the Dubai World unit that bought the20-story property in 2006 for $285 million but later defaulted onloans, is a minority member of the Host-led venture.

Meanwhile, W Hotel Management, an affiliate of Starwood Hotels& Resorts Worldwide, will continue to manage the hotel underits existing management agreement. In a joint statement, theparties to the settlement say the Union Square hostelry “ispositioned to continue its role as a leading hotel in the New YorkCity luxury hotel market.”