Chetrit Group Sells 850 Third Avenue to Its Lender at $156M Loss
By Mark Hallum March 28, 2023 5:28 pm
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The Chetrit Group is finally severing ties with 850 Third Avenue and has offloaded the building to its lender, two years after struggling to keep the building out of foreclosure, PincusCo first reported.
Chetrit sold the building to HPS Investment Partners earlier this month for just under $266 million, a far cry from the $422 million it paid for the 617,000-square-foot Midtown East office building in early 2019, according to property records made public Monday.
The sale follows Chetrit refinancing the property with a $342 million loan from HPS in October 2021, according to property records.
The Chetrit Group and HPS did not respond to requests for comment.
A year after acquiring the building, Chetrit lost its top tenant, Discovery Inc., after a rent dispute, as Commercial Observer previously reported. The property ended 2020 with only a 57 percent occupancy rate, a huge drop from the 91 percent rate it had in 2019, according to Trepp.
By June 2021, the $177.2 million commercial mortgage-backed securities loan that was still owed was near default and on its way to special servicing. Chetrit saved the property from hitting a UCC foreclosure auction after securing the financing from HPS, The Real Deal reported.
The 21-story property between East 51st and East 52nd streets was previously owned by MHP Real Estate Services in partnership with ATCO Properties & Management and Chinese conglomerate HNA Group.
Tenants in the building include Hall Capital Partners, which signed for 27,000 square feet near the top of the building in 2018 with a lease that expires in 2031, CO previously reported. Chase Bank also operates a retail branch on the ground floor.
Mark Hallum can be reached at mhallum@commercialobserver.com.
