The building housing Chetrit Group’s headquarters is in hot water.
Developers Meyer Chetrit, Joseph Moinian and Edward Minskoff are now facing potential foreclosure of their leasehold at three office buildings at 500-512 Seventh Avenue in the Garment District. Among the allegations: the partnership didn’t collect rent from Chetrit Group and let electricity bills pile up until the lender paid them itself.
The official borrower is 500-512 Seventh Avenue LP, which acquired the leasehold in 1999 for $140 million. Jacob Chetrit, late founder of the Chetrit Group and brother to Meyer, signed the transfer papers, along with other signatories.
Meyer Chetrit, Moinian and Minskoff personally guaranteed the $375 million loan in 2018.
The buildings include 512 Seventh Avenue, a 45-story tower with 544,300 rentable square feet; 500 Seventh Avenue, an 18-story building with 676,500 rentable square feet; and 228 West 38th Street, a five-story commercial building with 10,000 rentable square feet.
The lender alleges the partnership failed to make timely payments beginning in February of last year, according to a suit filed Thursday. The creditor was able to collect on the payments from a cash flow account connected to the properties until November, when the funds began to dry up and no longer covered loan payments.
The partnership hadn’t been collecting rent from Chetrit Group, which has its headquarters at 512 Seventh Avenue, since the start of 2023, the lender alleges. The group owed more than $1 million.
“The failure of Borrower to collect the rent from The Chetrit Group for such an extended period of time, in addition to being a violation of Borrower’s obligations under the Loan Documents, has substantially impaired Lender’s collateral,” the plaintiff said in the complaint.
Borrowers narrowly avoided default on the same property leasehold in 2016, although Joseph Chetrit, not Meyer, was involved at that time.
This summer, Con Edison said it would cut off electricity at the properties if the partnership didn’t make a dent in its $2.4 million electricity bill by July 2. The lender made an advance payment to the borrower so the property manager could pay the bill.
A spokesperson for the Moinian Group said the company is actively working on a refinancing solution and “remains focused on the asset for the long-term.”
Minskoff declined to comment. Chetrit and the lender could not immediately be reached for comment.
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