Joseph Chetrit has scored a loan to revamp one of Times Square’s dirtiest hotels.
Chetrit’s firm, The Chetrit Group, secured a $185 million construction loan from Mack Real Estate Credit Strategies for the 570-key Hotel Carter at 250 West 43rd Street, according to a person familiar with the deal. The financing will replace a $152 million bridge loan from JPMorgan in 2018.
Surya Capital Partners’ Adi Chugh
Surya Capital Partners’ Adi Chugh arranged the financing for Chetrit. He had also arranged the 2018 financing.
The Hotel Carter, initially built in 1930, achieved the rare distinction of being named New York’s dirtiest hotel three times by TripAdvisor. It also made the news for a bizarre homicide in 2007.
The Observer in 2014 called it “undeniably, unequivocally, the worst hotel in New York City.” The hotel, at 250 West 43rd Street, shut down that year.
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That was also the year that Chetrit bought the establishment from the estate of controversial investor Tran Dinh Truong for $192 million. The needed renovations were estimated to cost around $125 million at the time. A year later, Chetrit nabbed a $129 million loan from an Apollo affiliate.
The new loan will be used to complete a gut renovation and turn the property into a modern hotel.
Aging hotels in Times Square have struggled during the pandemic. MCR Investors bought the Sheraton New York Times Square Hotel from Host Hotels & Resorts for $323 million, less than half of what Host Hotels paid for it in 2006. This year, Apollo Global Management and Newbond Holdings sold the Hilton Times Square for just $85 million, a substantial discount from its $242.5 million sale price in 2006.
But newer hotels have performed well. Sharif El-Gamal’s Soho Properties closed on a $317 million refinancing of its Margaritaville Resort Times Square shortly after it was built in 2021. Meanwhile, Gary Barnett’s Extell Development closed on a $325 million refinancing for its 446-key Hard Rock-branded hotel in Times Square.