Jacob Chetrit refinanced his half-empty office building on Third Avenue with a $320 million loan that gives him some extra cash to bring in a new tenant.
His Chetrit Organization secured the financing for 850 Third Avenue from the private investment firm HPS Investment Partners, sources familiar with the financing told The Real Deal.
The financing package for the 617,000-square-foot building includes a $30 million future-funding piece that Chetrit can tap to renovate the empty space and market it to a new tenant.
Representatives for the Chetrit Group and HPS Investment Partners could not be immediately reached for comment. Ironhound Management secured the financing. A representative for the company declined to comment.
Jacob Chetrit runs Chetrit Organization with his son, Michael.
Chetrit Organization bought the 21-story Midtown East building for $422 million in 2019 from China’s HNA Group, which was looking to shed assets to get a handle on a mountain of debt that was burdening the company.
By the time Chetrit had bought the building, though, its largest tenant, Discovery Inc, already had plans to relocate its headquarters and move out. Occupancy dropped from about 91 percent to 57 percent.
Chetrit fell behind on its $177 million securitized mortgage and missed the loan’s maturity date. Chetrit was facing a UCC foreclosure, but the new funding from HPS allowed him to pay off the loan.