Add a former company headquarters to the growing list of buildings the Chetrit family could lose to foreclosure.
Lender Blackstone has sued members of the prominent real estate clan over allegedly defaulting on a $65 million loan tied to 404 Fifth Ave., a mixed-use site near the Empire State Building where the Chetrit Organization was based for years.
The suit, filed Wednesday in Manhattan state Supreme Court, claims that the landlord, which is helmed by Judah Chetrit, failed to pay off the balance of the loan upon its maturity date in June.
Blackstone, which has owned the debt since December 2023, is seeking to foreclose on the 8-story site at West 37th Street in Midtown to recover not just the balance, which currently stands at $60.3 million, but also interest, late charges and attorney fees, the filing says.
The prewar corner building, which the family purchased in 1998 for $16 million and then refinanced in 2016 with the mortgage that is at the center of the current dispute, according to the city register, seems to be struggling.
The 124,000-square-foot site is completely vacant, according to data service provider CoStar says, though a cosmetology school operated by beauty products company Redken is still holding classes on the second floor, someone who answered the phone there said Thursday.
But the retail space has been empty for years, based on Google Street View photos, with its last tenant, a Capital One bank branch, closing around the beginning of the pandemic, though the brokerage Winick Realty Group has been actively marketing the berth.
Chetrit Organization opened its office at No. 404 more than a decade ago in the wake of a reported rift in the family that split the four brothers running the show into two camps. Besides Chetrit Organization, whose principals were Judah and Jacob Chetrit until Jacob died earlier this month, there’s also Chetrit Group, which is controlled by Joseph and Meyer Chetrit.
Today Chetrit Organization is based at 1384 Broadway, a Garment District tower at West 38th Street that the family has owned since buying it for $41 million in 2006, the register shows. But it’s not known exactly when Chetrit Organization decamped from 404 Fifth.
Chetrit Group, meanwhile, has its headquarters at 512 Seventh Ave., a mixed-use property at West 38th Street that the family owns along with the Moinian Group and Edward J. Minskoff Equities.
But even as they work in separate offices, both sides of the family supposedly still overlap on some deals, which can make it difficult to untangle the chain of ownership at some sites.
In fact, the lawsuit involving 404 Fifth confusingly names both Judah and Meyer as defendants, likely because the building was purchased when the family functioned on a united front.
Efforts to reach both of the Chetrit firms as well as individual family members were unsuccessful by press time. And no legal response is yet on file in the case.
The current conflict intensifies a recent rough stretch for a family once considered among the shrewdest players in the industry.
To wit: A lender is seeking to foreclose over a $156 million note secured by the half-empty FiDi office building owned by Chetrit Organization at 1 Whitehall St. Likewise, a $540 million mortgage backed by a pair of Upper East Side rental towers that are owned in part by the same entity is now in the hands of a special loan servicer.
Earlier this month a bank accused Chetrit Group of allegedly missing a deadline to pay off $223 million in loans for Times Square’s Hotel Carter, which is in the throes of redevelopment. And Joseph Chetrit was personally dragged into court in December for missing months of mortgage payments on his Upper East Side townhouse, though filings suggest he has since taken steps to settle the debt.
Stacey Lara, an attorney with the firm Holland & Knight handling the suit for Blackstone, did not return a call for comment.
