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Another Chetrit office loan heads to special servicing

$151M loan on 65 Broadway transfers month after Soho office buildings

Chetrit’s 65 Broadway Loan Heads to Special Servicing
Chetrit Group’s Meyer Chetrit; 65 Broadway (Getty, Chetrit via Richard Lewin, Gryffindor/CC BY-SA 3.0/via Wikimedia Commons)

The Chetrit Group’s office problem, which has stretched from Midtown to Soho, has reached the Financial District.

A $151 million loan tied to the firm’s 65 Broadway went to special servicing this month, ahead of an April maturity date, according to Morningstar Credit. Chetrit remains current on the loan.

A representative for the firm did not respond to a request for comment.

The century-old office tower, once known as the American Express Building, has endured a “steady decline” in occupancy since Meyer Chetrit and co-borrower Robert Wolf of Read Property Group locked in the debt in 2019.

The building, fully leased when the loan was made, was at 84 percent occupancy at the end of 2020 and kept falling, to 75 percent in 2022 and 67 percent in September, Morningstar Credit reported.

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All that empty space eroded cash flow. By the end of 2022, revenue was barely covering debt service.

The loan is Chetrit’s second to land in special servicing in as many months. 

In February, $77 million in debt backed by Chetrit’s Devlin Building at 459 Broadway and 427 Broadway, both office buildings with retail in Soho, transferred to special servicer Rialto Capital Advisors after the owner skipped its January loan payment.

Rising expenses, rather than low occupancy, appeared to be the problem. The debt is now more than 30 days’ delinquent, according to Morningstar.

Last year, Chetrit tossed the keys to 850 Third Avenue to its lender after missing the maturity date on a $77 million securitized mortgage. The Midtown East office building suffered a heavy hit when Discovery Inc. opted to move as Chetrit closed on the building in 2019.

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Chetrit GroupDistressFinancial DistrictMeyer ChetritNYC Office MarketOffice MarketSpecial Servicing