There may be a light at the end of the tunnel for the Chetrit Group’s troubled Hotel Bossert.
The Chetrit family now hopes to revive plans to reopen the historic Brooklyn Heights hotel after an investment firm purchased the $112 million note against the property, a source close to the developer said.
The Chetrits are in talks with the new owner of the note, Beach Point Capital Management, the source said. If the talks are successful, the hotel could reopen in as little as six months.
Joseph Chetrit and David Bistricer purchased the 14-story building from the Jehovah’s 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.
But their plans got delayed. In 2019, Chetrit bought out Bistricer’s interest and 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, and went into special servicing in August 2020.
Chetrit defaulted on the 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.
Last year, hoteliers Ian Schrager and Ed Scheetz stepped in to possibly partner with Chetrit to rescue the hotel from foreclosure. 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.
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But that never happened. The hotel’s ownership entity was scheduled for a foreclosure auction in January. The auction was postponed several times, and in spring, Hodges Ward Elliott started marketing the loan, according to Morningstar.
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.
Beach Point Capital did not immediately respond to a request for comment.