The Chetrit Group’s Hotel Bossert is back on the auction block.
A Uniform Commercial Code foreclosure auction for the historic Brooklyn Heights hotel was set for this month, according to financial data firm Morningstar.
A foreclosure attempt was put on hold earlier this year after hoteliers Ian Schrager and Ed Scheetz stepped in to possibly partner with Chetrit. The group sought to raise $26 million to reposition and rebrand the property as Schrager’s Public Hotel. It appears that those plans never materialized.
Joseph Chetrit and David Bistricer purchased the 14-story building from the Jehovah’s Witnesses in 2013. Their plans to reopen the hotel were delayed and Chetrit bought out Bistricer’s interest in 2019.
That same year, Chetrit secured a $112 million loan from Cantor Commercial Real Estate Lending. The loan was assigned to Wells Fargo a year later, when Covid arrived in New York.
Chetrit defaulted on the $112 million loan in 2021, according to court filings; it matured that December and has not been repaid. Wells Fargo initiated a foreclosure in May, claiming Chetrit owed over $126 million.
After Schrager and Scheetz reached a deal with Chetrit, the group sought to extend the loan with the special servicer, according to Morningstar. The group planned to refinance the loan when the establishment was repositioned as a Public Hotel.
But that never happened. The hotel’s ownership entity was scheduled for a foreclosure auction Jan. 11 and the debt — with servicing fees and interest — now exceeds its appraised value of $129 million, according to Morningstar. The auction was postponed and has yet to be rescheduled, according to the firm hired by Wells Fargo to handle the sale, Hodges Ward Elliott.
Lumber magnate Louis Bossert built the hotel in 1909 and it later became known as Brooklyn’s Waldorf-Astoria. The Jehovah’s Witnesses bought the building in 1983.
Chetrit and developer Bistricer purchased the property from the Witnesses in 2013 and promised to restore it to its former glory, including adding 78 guest rooms, a restaurant and a rooftop bar. A year later, renovations were underway.
Chetrit and Schrager did not respond to requests for comment.
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