Chetrit Organization Completes Discounted Loan Payoff for 404 Fifth Avenue

The Chetrit Organization has sealed a discounted payoff for the $65 million loan on its former headquarters at 404 Fifth Avenue, Commercial Observer has learned. 

The office building’s loan is being paid down as part of a broader recap of the building, in which a new capital partner — which couldn’t be named — is also being brought in. 

The loan on the property, also known as the Stewart Building, was originated by the now-defunct Signature Bank in 2016, becoming part of the $17 billion pool of Signature loans acquired by a joint venture involving Blackstone, Canada Pension Plan Investment Board and Rialto Capital in December 2023, with Rialto also the servicer of the loans.

Iron Hound Management’s Robert Verrone and Will Forbes led the restructuring negotiations with the lenders on behalf of the Chetrit Organization.

“Over the past three months we have closed three large restructuring or discounted payoffs with Rialto; we appreciate them working with us and we look forward to turning these assets around,” Juda Chetrit said in a statement. 

Indeed, in April the Chetrit Organization also secured an extension for the $76.5 million CMBS loan on 459 Broadway and 427 Broadway in SoHo, and a month later the firm extended its loan on 393–401 Fifth Avenue. Iron Hound’s Forbes and Verrone negotiated the extensions on behalf of the firm in each instance. 

After the 404 Fifth loan missed its maturity date in June 2024, Blackstone filed a lawsuit in January and sought to foreclose to recoup the loan’s outstanding balance of $60.3 million as well as interest, late charges and attorney fees, according to Crain’s New York Business. 

With the payoff completed today, a resolution has formally been achieved and the lawsuit ends, a source familiar with the transaction said. 

The eight-story building, acquired by the Chetrit Organization in 1998, per Crain’s, is completely vacant, and the plan is now to start signing new tenants, sources said. 

Blackstone and Iron Hound declined to comment. Rialto officials weren’t immediately available for comment.

Cathy Cunningham can be reached at cunningham@commercialobserver.com.