In late July, a retaining wall collapsed at a massive two–acre, mixed-use construction project on the Upper West Side, near the corner of West 100th Street and Columbus Avenue, forcing the evacuation of a building at its edge.
Displaced residents of 784 Columbus Avenue, part of the Park West Village complex, are renewing their calls to stop work on the 600,000-square-foot project at 808 Columbus Avenue. Plans call for a 30-story apartment tower with a Whole Foods and other shops at the base.
The collapse also catapulted normally press-shy developer Joseph Chetrit (pronounced she-TREET) into the headlines. Chetrit owns the building site, and 784 Columbus, jointly with Stellar Management.
Chetrit owns more than 50 buildings, either outright or through partnerships, both commercial and residential, spread among New York, Florida, Illinois, California and New Jersey.
How low-profile is the developer? Consider the Chetrit Group’s Web site, whose simple font seems remarkably spare in an era when developers who are selling new residential units like to jazz up their online presence with multimedia slideshows. Not surprisingly, perhaps, the firm declined requests for an interview for this article.
But it hasn’t all been bad news recently for Chetrit — at least in the industry’s eyes. In fact, the last 12 months have been a banner period for the developer, brokers said.
The feather in his cap, they say, was the April sale of 200 Fifth Avenue, part of the International Toy Center, to New York-based L & L Holding Company.
The 800,000-square-foot structure, near West 24th Street across from Madison Square Park, sold for $500 million, or about $625 per square foot.
In 2005, Chetrit and partners purchased the complex for $350 million, or $440 a square foot, where wholesalers introduce vendors to the latest Elmo, G.I. Joe and Barbie dolls. The purchase also included an adjacent building at 1107 Broadway, which they still own. The sale netted a 42 percent return in just two years’ time.
“He’s one of the savviest entrepreneurial investors in the market, with a keen sense to buy at a low price per square foot,” said Richard Baxter, executive director of the capital markets group at Cushman & Wakefield. In 1994, Baxter brokered what he called Chetrit’s first major New York buy: 19 West 44th Street, off Fifth Avenue. The building has since been sold.
Major sales have yielded around $1.2 billion for the Chetrit Group since the start of the year, a period during which it has bought roughly $627 million in properties. As a net seller of real estate, it may have cashed in and maximized its returns at what might prove to be the height of the market, since the credit crunch on Wall Street may dampen Manhattan building sales as cheap capital disappears.
“With anything that he has bought and sold, he has usually almost doubled his money,” said Baxter, who, like most brokers, uses the pronoun “he” when referring to the Chetrit Group.
It’s a nod to Joseph Chetrit, who’s the frontman on most deals, though five brothers make up the company. The other four are Jacob, Jacques, Meyer and Isaac. The family is frequently compared with the Moinian family, led by Joseph Moinian, another New York real estate brand name, because of the breadth and variety of their holdings, perhaps, though both also have roots in the garment industry.
The two also often work as partners, like at 530 Fifth Avenue, an office building at West 44th Street, and more famously on the Sears Tower in Chicago, which they acquired in 2004 with other investors for $840 million.
Access to capital allowed the Chetrits, like the Moinians, to act on deals with lightning speed, brokers said. A source who requested anonymity said they are not backed by institutional funds. Instead, they utilize debt from Wachovia bank, as well as often “their own fortunes.”
The Chetrits’ swiftness is seen in smaller deals as well. Chetrit purchased the Berkeley-Carteret Hotel last fall in Asbury Park, N.J., from Daniel Ahn for $16 million.
Despite being on the market for only a few weeks, the 248-room beachfront property received 12 offers, all of them for at least the asking price, said Patricia Kobble, who represented both the buyer and seller.
Still, “the Chetrits came in strong and made the deal happen very quickly,” said Kobble, a broker today with Portfolio Realty in Linwood, N.J. “And they were very easy to get in touch with throughout the process.”
True, some of Chetrit’s recent sales might indicate a proclivity for the quick turnaround, like 450 West 33rd Street at 10th Avenue, home to the Daily News.
Earlier this year, Manhattan-based Broadway Partners bought the 1.7-million-square-foot structure, whose sloping façde once sheltered an ice-skating rink, for about $700 million, or $412 a square foot. With Ivan Kaufman, president and C.E.O. of Arbor Realty Trust, a publicly traded real estate investment trust, Chetrit had bought a 49 percent stake in the building in 2004 for $171.5 million. Based on a total building valuation of $350 million, that’s about $206 a square foot.
But that’s not typical for Chetrit, said brokers who have worked with the developer, and the deal reflects the partnership’s methods more than the family strategy. Some of Chetrit’s recent purchases indicate more of a long-term investment philosophy.
This spring, he bought 90 and 100 Trinity Place, at Thames Street, from New York University for $64 million.
Formerly home to the Stern School of Business, the buildings now contain two public high schools. Under an existing lease’s terms, the schools must stay, so whatever plans Chetrit has to redevelop the space will have to wait a decade.
Similarly, he recently bought 855 to 871 Sixth Avenue, at West 39th Street, a row of ramshackle buildings whose ground-floor stores sell fruit shakes and pea-green fatigues, for $140 million.
The return rate of the properties would appear to be low — many upstairs windows are boarded over — and redevelopment could take years.
Less risky, but showing Chetrit’s willingness to diversify his locations and invest Downtown, was his April purchase of 26 Broadway, the former Standard Oil building in Lower Manhattan, which cost $225 million.
In the fall of 2005, he bought 620 Sixth Avenue, a seven-story, 670,000-square-foot former department store in the Flatiron District. The landmarked building, which now houses Bed Bath & Beyond, sold for $280 million. The property has 200,000 square feet of developable air rights, which could be filled with condos.
Don’t expect any of these properties to change hands soon, said Douglas Harmon, a managing director with Eastdil Secured, who’s handling the sale of 1107 Broadway, which has 375,000 square feet and is joined to the Toy Center by a mid-height bridge. The building is being marketed for $250 million, Harmon said.
“The Chetrit Group is predominantly a long-term holder of real estate,” he said. “They are savvy investors who have learned to spot opportunity around the globe and can pounce quickly with no nonsense.”