The Chetrit Organization has turned two years of negotiations into a done deal for the debt at 65 Broadway.
Michael Chetrit’s firm restructured the debt at the 355,000-square-foot office property in the Financial District and extended the maturity date, the Commercial Observer reported. To land the three-year extension on the $151.5 million CMBS loan, Chetrit pumped in additional equity, which subordinates part of the debt.
Iron Hound Management’s Kevin Thompson and Will Forbes negotiated the deal with special servicer CW Capital and a CMBS trust.
“We believe in a positive future for this asset going forward,” Michael Chetrit told the Observer.
The 65 Broadway debt landed in special servicing in February 2024 after tenants, including Great American Insurance and New York Cares, exited the property.
The loan was flagged in April 2024 for maturity default as cash flow failed to cover loan payments, according to Trepp. The former American Express Building was subsequently reappraised at $104 million, half of the value from five years prior and below the loan balance.
By last June, however, Chetrit and its co-sponsor were able to bring the payments current, according to Fitch commentary from July 2024. There were signs an extension was in the offing as Chetrit pursued a plan to offer additional equity, which is ultimately what went down.
The building is 110 years old and was last renovated in 2018, before the pandemic altered tenant expectations around amenities and customized space. The building was 35 percent vacant as of July 2024.
This is the second significant restructuring to cross the finish line for the Chetrit Organization in recent weeks.
Last month, the firm modified the $714 million debt backing the Yorkshire Towers at 305 East 86th Street and Lexington Towers at 160 East 88th Street on the Upper East Side. The modification brought the CMBS loan current, waived guarantees in the original deal and pushed back the loan’s maturity date.
— Holden Walter-Warner
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