Chetrit Group CMBS Loan Goes Special Service

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Chetrit Group Director Michael Chetrit and 850 Third Avenue (850thirdavenue)

Chetrit Group Director Michael Chetrit and 850 Third Avenue (850thirdavenue)

A $ 177.2 million loan from CMBS to Chetrit Group for a 21-story office building at 850 Third Avenue is in special maintenance after dangerously close to default, the Commercial Observer reported.

Midtown East real estate is pledged to a single asset CMBS deal known as NCMS 2018 850T, which was concluded in July 2018, according to the publication. It was founded on behalf of a joint venture led by the Chinese conglomerate HNA Group.

Natixis provided a $ 242 million loan for real estate, while Paramount Group and Harbor Group International provided mezzanine financing of $ 100 million, the publication said. Chetrit acquired the asset for $ 422 million from HNA in early 2019.

When the floating rate loan expires in July, its built-in renewal options can extend the maturity until 2023. Wells Fargo is the special handler for the deal.

According to the publication, the debt package for 2018 replaced the $ 238 million in financing of the Morgan Stanley acquisition in March 2016. It was an effort to facilitate the $ 436 million purchase of HNA and MHP Real Estate Services.

By the end of 2020, only 57 percent of the building was occupied, according to the publication. The year-end for the previous year was 91 percent for 2019.

The building’s main tenant, Discovery Inc., vacated the property after its lease expired. Previously, the company leased 31.4 percent footage of the building.

[CO] – Cordilia James

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