An investor group that included developer Yair Levy has officially closed on the $500 million sale of an office and retail complex 620 Sixth Avenue to RXR Realty on Tuesday, and the troubled investor deposited $8.1 million in proceeds into an escrow fund to repay his former Rector Square condominium. [more]
A state Supreme Court judge today agreed to lift a temporary restraining order on developer Yair Levy to allow the $500 million sale of 620 Sixth Avenue, pending the immediate deposit of about $8 million in proceeds into an escrow fund for his former Rector Square condominium project.
The sale of the 700,000-square-foot retail complex is scheduled to close on Friday, and funds will immediately be transferred to an escrow account, according to lawyers for the Battery Park City condo.
Judge Joan Lobis continued to block the sale or transfer of any additional assets from Levy or his family, however, which lawyers for the Battery Park City condo say was done to illegally circumvent a judgment after the troubled developer was banned from the real estate industry for raiding the Rector Square reserve fund.
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Rector Square condominium this past Friday obtained a temporary restraining order on the $500 million sale of the Chelsea building home to Bed Bath & Beyond and other real estate assets connected to Yair Levy, in order to collect on a $7.4 million judgment against the embattled developer.
The suit, filed Dec 16 in New York state Supreme Court, alleges the Levy sold off or illegally transferred his real estate holdings after a court found that he illegally raided the Battery Park building‘s reserve fund.
In June, Attorney General Eric Schneiderman banned Levy from selling real estate in New York after a judge ruled that he illegally spent Rector Square reserve fund money on personal expenses. [more]
RXR Realty CEO Scott Rechler and 620 Sixth Avenue
RXR Realty will take control of 620 Sixth Avenue from a partnership of Joseph Chetrit, Yair Levy and Charles Dayan in a deal that values the building at about $500 million, the Wall Street Journal reported. The partnership paid $290 million for it in late 2005, and will retain a minority stake. Douglas Harmon of Eastdil Secured marketed the property for the owners.
The seven-story, 700,000-square-foot, 114-year-old building at 19th Street is 80 percent occupied and home to big-box retailers TJ Maxx and Bed Bath & Beyond. RXR CEO Scott Rechler said the building will generate enough income to cover debt payments beginning next year. Rechler said he was attracted to the building because of its unique appearance and its “Silicon Alley” location — home to the city’s growing tech sector. [more]
Brothers Meyer Chetrit, left, and Joseph
From the September issue: Tongues wagged in the real estate industry when news broke that the Chetrit Group — one of the city’s most prominent investment firms — had split in two.
Brothers Joseph and Meyer Chetrit would be relocating from the company’s longtime headquarters at 404 Fifth Avenue into offices at 512 Seventh Avenue, Real Estate Alert reported in June. Meanwhile, their two younger brothers, Jacob and Juda, would continue working out of the Fifth Avenue office, but operate under the name of Chetrit Organization.
Or would they?
The notoriously secretive family broke their silence last month in a rare, albeit brief, phone interview with The Real Deal to deny that a split has occurred. [more]
The four brothers that comprise the powerful, and secretive, Chetrit Group have split up into two separate firms, according to Real Estate Alert. The firm, which recently bought Hotel Chelsea and has large stakes in 620 Sixth Avenue and 530 Fifth Avenue, split sometime in the last month. Sources told the publication that the split was not amicable, and the brothers did not return calls for comment. Brothers Joseph and Meyer Chetrit will continue business as the Chetrit Group, but have relinquished the firm’s 404 Fifth Avenue headquarters to their brothers Jacob and Juda, who will operate as the Chetrit Organization. Joseph and Meyer will move into offices at 512 Seventh Avenue. [more]
A groundbreaking lawsuit heading to trial in federal court claims that prominent developer Joseph Chetrit engaged in discrimination by allegedly firing an employee for his religious beliefs.
Les Kramsky, a former employee, claims in the lawsuit that Chetrit, an Orthodox Jew, only hired him because he believed that Kramsky, too, was Orthodox, then fired him once he discovered that he was not. Kramsky, who is Jewish but not Orthodox, also alleges that he was pressured to pray and participate in religious rituals while at work.
The trial is slated to begin June 27 before Judge Harold Baer of the U.S. District Court for the Southern District of New York. The suit names the Chetrit Group as a defendant, along with the firm’s managing member, Joseph Chetrit, and his brothers Meyer, Juda, and Jacob, who are partners in the company. [more]
A partnership of Joseph Chetrit, Yair Levy and Charles Dayan is looking to unload 620 Sixth Avenue, and according to the Observer, the nearly 800,000-square-foot mammoth anchored by Bed Bath & Beyond could fetch around $500 million in a sale. The landlords purchased the Chelsea property for $289.8 million in 2005, taking out a $235 million mortgage that they nearly defaulted on in the years following. But if recent blockbuster sales in the area are any indication ($900 million for the Starrett-Lehigh Building and $2 billion for 111 Eighth Avenue), it looks like they have a good chance of cashing in. For a buyer, the building appears to have significant upside, to boot. There are 250,000 square feet of additional development rights atop the existing structure, plus 75,000 square feet at an adjacent site that is zoned to allow for hotel development. [more]
620 Sixth Avenue (source: PropertyShark)
SEIU 32BJ, the largest property services union in the country, has leased 245,000 square feet at 620 Sixth Avenue in a cost-saving move that will trim nearly $20 million from the organization’s annual budget, according to a press release. The union is ditching its current headquarters at 101 Sixth Avenue, where its lease is set to expire next year and where, the Wall Street Journal reported, it occupies around 400,000 square feet for almost $70 per square foot. The building workers union, which last month reached a last-minute contract agreement with the city to avoid a strike, will pay in the mid-$30s per square foot for its new digs. 620 Sixth Avenue is owned by a partnership between Charles Dayan and developers Joseph Chetrit and Yair Levy. TRD
It has been taken as an article of faith in the current downturn that tenants are shying away from highly leveraged buildings in an effort to protect themselves against possible building service cutbacks or other interruptions tied to onerous debt-service payments.
High leverage along with financially strapped ownership, legal uncertainty or extremely high vacancy, lead to tenants shunning leasing in certain buildings, brokers have said.
As recently as last week, Real Estate Board of New York panel member Isaac Zion, a managing director at SL Green Realty, said relatively low leverage on the company’s buildings was an advantage.
“Most of our buildings have very low leverage, so it is a positive. We see sort of — for the tenants that are actually moving — there is a flight to quality,” Zion said.
But data requested by The Real Deal from two research firms reveals that the situation is complex, and that high leverage in some buildings leads to high availabilities, while in others it does not. [more]
