Maverick sues Chetrit over unfinished Penn Station hotel

Lender alleged developer neglected matured loans, didn’t complete project

Maverick Real Estate Partners filed a suit against a prominent developer for the second time in a matter of days, going after the Chetrit Group over an unfinished hotel near Penn Station.

An entity tied to the prolific debt buyer filed a lawsuit this week against the developer and its president, Meyer Chetrit, the Commercial Observer reported. Meyer is named because he personally guaranteed the debt, according to the suit.

Chetrit has been working on a 33-story, 323-key hotel at 255 West 34th Street, a 155,000-square-foot development. The developer purchased the site in 2014 and began developing the hotel in 2019, setting up IHG Hotels & Resorts as the operator. Arbor Commercial Mortgage provided construction financing.

In May, Maverick bought $110 million of debt on the project and quickly asking Chetrit to pay what was owed; the loans matured in April 2022 and Chetrit was required to finish the hotel by the end of 2021, the suit said. The two sides agreed to extend the repayment date to Oct. 30.

Maverick alleged that day came and went without the necessary cash payments. The lender also said Chetrit didn’t pay property taxes on the site, a breach of the loan agreement.

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Maverick is seeking $19 million to cover the principal of the loans, as well as interest. The lender is also demanding Chetrit either complete the hotel or fork over the $106.4 million Maverick claims is necessary to finish the project.

Chetrit seems destined to lose its grip on the project. In November, Maverick foreclosed on the development, which is set to be auctioned on Jan. 18.

This week, Maverick also went after retail magnate Joe Sitt’s Thor Equities, seeking to foreclose on Thor at 446 West 14th Street in the Meatpacking District. Maverick alleged the landlord defaulted on a $25.5 million consolidated loan secured by the property.

Maverick is led by David Aviram and Ted Martell. It has acquired distressed loans secured by properties owned by some of the city’s biggest real estate players, fending off critics accusing the firm of being overly aggressive.

— Holden Walter-Warner