Jacob Chetrit pulls out of $815M Daily News building deal; SL Green keeps his $35M deposit
Deal collapses after Chetrit’s lender Deutsche Bank pulled the plug
It may be the first New York trophy trade to be scuttled by the coronavirus.
Jacob Chetrit’s $815 million deal to buy the former Daily News Building in Midtown from SL Green Realty is off after Chetrit’s principal lender, Deutsche Bank, backed out, the Wall Street Journal reported.
Andrew Mathias, president of SL Green, confirmed to the newspaper that the sale is no longer on the table, and said that the real estate investment trust, which has seen its shares drop over 40 percent this month, would retain Chetrit’s deposit. Sources told the publication the deposit was $35 million.
In October, The Real Deal revealed that Chetrit was in contract to buy the 37-story tower at the corner of 42nd Street and Second Avenue. The property was depicted in the 1978 “Superman” movie as the Daily Planet headquarters. SL Green, one of New York’s largest office landlords, bought it in 2003 for $265 million.
Chetrit had sought to close on the purchase in what is becoming an increasingly challenging time to score financing. But after the global economic turmoil set off by the coronavirus pandemic, the commercial mortgage-backed securities market is in a precarious position, and earlier this week real estate investor Tom Barrack predicted that it could collapse.
The financing with Deutsche, which was being arranged by Iron Hound Management’s Robert Verrone, would eventually have been packaged into a CMBS, according to the Journal.
Chetrit is the head of the Chetrit Organization, and brother of Chetrit Group principals Joseph and Meyer Chetrit. In January 2019, he bought 850 Third Avenue from embattled Chinese conglomerate HNA Group at a steep discount. [WSJ] — TRD Staff