The Chetrit Group has a new lender but the same old problems at its troubled Hotel Bossert.
A new auction is scheduled for the historic Brooklyn Heights hotel after several postponements of a uniformed commercial code auction and the sale of the note against the property to an investment management firm last year.
The debt has ballooned to $177 million, according to the notice of sale, which was first reported by PincusCo. The Chetrits could still work out a deal with the lender, like they did recently at the Empire Hotel and at their massive Hollywood Beach and Pompano Beach projects.
The Chetrits declined to comment.
The auction is the latest chapter in the long-planned restoration of the 14-story building, which Chetrit and David Bistricer purchased from the Jehovah’s Witnesses in 2013. They promised to restore the hotel 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. Chetrit bought out Bistricer’s interest in 2019 and secured a $112 million loan from Cantor Commercial Real Estate Lending. The loan was assigned to Wells Fargo a year later at the start of the pandemic, and went into special servicing in August 2020.
Chetrit defaulted on the loan in 2021, according to court filings; it matured that December and had not been repaid. Wells Fargo initiated a foreclosure in April 2022, claiming Chetrit owed over $126 million.
In 2023, 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.
But that never happened. The hotel’s ownership entity was scheduled for a foreclosure auction last January but the auction was postponed. Hodges Ward Elliott started marketing the $112 million note; Investment firm Beach Point Capital Management bought it in April for $90 million.
The sale resulted in a $22 million gross loss, plus about $49.5 million in liquidation expenses, according to Trepp. The Chetrits were in talks with the new lender and still hoped to reopen the hotel, a source said at the time. It’s unclear what has happened since then.
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.
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