Chetrit Org’s 850 Third Avenue heads to foreclosure auction

Mezzanine lender Harbor Group International initiated process

New York /
Aug.August 09, 2021 04:04 PM
The Chetrit Organization’s Michael Chetrit, Harbor Group International CEO Jordan Slone and 850 Third Avenue (Harbor Group, 850thirdavenue)

The Chetrit Organization’s Michael Chetrit, Harbor Group International CEO Jordan Slone and 850 Third Avenue (Harbor Group, 850thirdavenue)

The Chetrit Organization’s 850 Third Avenue is headed for the auction block.

The UCC foreclosure auction, scheduled for Sept. 14, was initiated by an entity associated with Harbor Group International, an investment firm headquartered in Norfolk, Virginia.

The firm holds a $25 million junior mezzanine loan backed by a Chetrit entity that owns the 21-story, 617,000-square-foot office building between East 51st and East 52nd streets, according to a public notice reviewed by The Real Deal.

Investor Jacob Chetrit and his sons Michael and Simon Chetrit acquired the property from Chinese conglomerate HNA Group for $422 million in 2019.

Harbor Group International and Michael Chetrit did not immediately return phone and email messages seeking comment.

The Chetrit Organization has been behind on its debt payments for the $177.2 million CMBS loan backed by the property. The loan went into special servicing in June and has been listed as delinquent since July, according to DBRS Morningstar. In addition to the $25 million Harbor Group loan, the Chetrit entity took out a $75 million senior mezzanine loan.

The trophy asset became a source of dispute in the pandemic when its biggest tenant, Discovery Communications, reportedly held onto its 190,000-square-foot space for two months without paying rent after its lease expired in May 2020.

The landlord sued the media company — which owns television brands such as Discovery Channel, HGTV and Food Network — for back rent, but the tenant countered, saying that its planned relocation to new offices at TF Cornerstone’s 230 Park Avenue South was delayed because of the pandemic, according to court papers.

State Supreme Court Justice Barry Ostrager sided with the tenant, saying that the case should be “mediated and not litigated.” The Chetrit Organization appealed the decision, and the case is pending review in the Appellate Division.





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