Lender Beach Point Acquires Hotel Bossert in Auction With $120M Credit Bid

Beach Point Capital Management picked up the historic Hotel Bossert in Brooklyn Heights from the Chetrit Group at an uncontested foreclosure auction Thursday.

The lender submitted a $120 million credit bid using its existing $177 million in debt on the property to become the new owner of the 116-year-old hotel at 98 Montague Street, The Real Deal reported. The 282-room hotel garnered no other bidders, according to TRD.

Beach Point declined to comment. A representative for the Chetrit Group did not respond to a request for comment.

The auction caps a long period of distress for the historic hotel after Chetrit Group picked it up with David Bistricer of Clipper Realty from the Jehovah’s Witnesses for $81 million in 2013.

Chetrit Group became the sole owner of the 14-story property in 2019 and got a $112 million loan from Cantor Commercial Real Estate that same year, as Commercial Observer previously reported. Wells Fargo took over the loan in 2020 during the height of the pandemic.

However, trouble started bubbling to the surface for Chetrit in May 2022 when it defaulted on the loan, owing up to $126.7 million at the time, and Wells Fargo started foreclosure proceedings.

Chetrit Group hoped to turn things around at the hotel and partnered with hoteliers Ian Schrager and Ed Scheetz in February 2023 to try to rebrand the property under Schrager’s Public Hotel brand. The trio wanted to raise $26 million of additional investment to support the work — which would have added 78 rooms, a restaurant and a rooftop bar — and worked to resolve some of the financial burden on the hotel, as CO previously reported.

Despite renovation work starting in 2024, the Schrager and Scheetz endeavor fell through, and the property went into Uniform Commercial Code foreclosure in January 2024.

Beach Point purchased the $112 million note on the property in May and now has full control of the hotel’s future.

Beach Point’s plans for the hotel are unclear. Hotel Bossert was built in 1909 by lumber magnate Louis Bossert and was considered Brooklyn’s Waldorf Astoria for a spell, hosting the World Series victory party for the then-Brooklyn Dodgers in 1955, the Brooklyn Paper reported. The Jehovah’s Witnesses picked it up in the 1980s to house visiting members of the church, along with some permanent residents, until it sold the hotel to Chetrit and Bistricer.

Nicholas Rizzi can be reached at nrizzi@commercialobserver.com.