CMBS loan for Chetrit’s 850 Third Avenue enters special servicing

Wells Fargo is the special servicer after the development firm faced imminent default

New York /
Jun.June 17, 2021 12:30 PM
Chetrit Group principal Michael Chetrit and 850 Third Avenue (850thirdavenue)

Chetrit Group principal Michael Chetrit and 850 Third Avenue (850thirdavenue)

Chetrit Group’s $177.2 million CMBS loan on the firm’s 21-story office building at 850 Third Avenue is in special servicing after slipping dangerously close to default, the Commercial Observer reported.

The Midtown East property is the collateral behind the single-asset CMBS deal, known as NCMS 2018 850T, originated in July 2018, the publication reported. It was started on behalf of a joint venture led by Chinese conglomerate HNA Group.

Natixis provided a $242 million loan for the property, while Paramount Group and Harbor Group International provided $100 million of mezzanine financing, the publication reported. Chetrit purchased the asset for $422 million from HNA in early 2019.

When the floating rate loan matures in July, its embedded extension options could push the maturity out until 2023. Wells Fargo is the special servicer on the transaction, the publication reported.

The 2018 debt package replaced $238 million in Morgan Stanley’s acquisition financing in March 2016, the publication reported. It was an effort to facilitate HNA and MHP Real Estate Services’ purchase for $436 million.

Only 57 percent of the building was occupied by the end of 2020, the publication reported. The year end for the previous year was 91 percent for 2019.

The building’s top tenant, Discovery Inc., vacated the property after its lease ended. Previously, the company leased 31.4 percent of the building’s square footage.

[CO] — Cordilia James





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