Two months after suing the Chetrit Group over its unfinished hotel near Penn Station, Maverick Real Estate Partners has seized control of the project.
Chetrit transferred the project at 255 West 34th Street to Maverick on Jan. 31, city records show. The transfer, which was valued at $104.5 million, wasn’t recorded until Thursday. PincusCo first reported the news.
Chetrit’s surrender seemed a foregone conclusion ever since Maverick filed its lawsuit against the developer and its president, Meyer Chetrit, who personally guaranteed the debt on the project. The lawsuit alleged that Chetrit neglected matured loans and failed to complete the 323-key, 33-story hotel by the end of 2021 as required by a loan agreement.
Chetrit purchased the site in 2014 and began construction on the 155,000-square-foot project in 2019, tapping IHG Hotels & Resorts to operate the hotel before the pandemic halted construction and devastated the city’s hotel market.
Maverick bought $110 million in debt on the project in May of last year, a month after the loans matured, according to the lawsuit, and called on Chetrit to pay what it owed. The lender sought $19 million to cover the principal of the loans, plus interest and demanded that Chetrit either finish the hotel or pay the $106.4 million required to complete the project.
It’s not clear what Maverick’s end game is for the Garment District property. It filed to foreclose in November and had planned to hold an auction on Jan. 18, approximately two weeks before it took control of the project. Maverick could not immediately be reached for comment.
Led by David Aviram and Ted Martell, Maverick is a prolific debt buyer. The firm has a reputation for going after distressed loans secured by major landlords and has drawn criticism from some who consider its tactics to be overly aggressive.
Chetrit, meanwhile, has faced numerous problems across its portfolio in recent months and even days.
This week, the firm fell behind for the second time on a $225 million loan covering 640 apartments in Jamaica, Queens. Chetrit also recently defaulted on an $85 million loan at a development site in Hudson Yards and faces default on a $481 million loan backing 43 multifamily properties, a quarter of which the company is looking to sell.
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— Holden Walter-Warner