Search

Donovan LLP Represents Owner in Hotel Loan Restructuring


Originally Published in therealdeal.com

Written by Rich Bockmann


Chetrit secures lifeline at Empire Hotel

Owners get 2 extra years, reduced interest on defaulted mortgage


Joseph Chetrit lives to fight another day at his Empire Hotel.


Chetrit and his partners on the Upper West Side hotel, the Podolsky brothers, negotiated a modification on the property’s $170 million mortgage after falling behind on payments, a person familiar with the agreement told The Real Deal.


The partners got a two-year extension on the loan at the 427-room hotel near Lincoln Center at 44 West 63rd Street and reduced the interest rate. In exchange, Chetrit and the brothers agreed to pay past-due interest and certain fees. They also agreed to certain conditions that make it easier for the CMBS special servicer on the loan to take control of the property should they default on the loan again.


Representatives for Chetrit and the Podolskys did not immediately respond to a request for comment. Iron Hound Management negotiated the loan workout.


Chetrit, an enigmatic mogul profiled on TRD’s June magazine cover, purchased the hotel for just under $80 million in 2004, property records show. The hotel was forced to close in the early days of the pandemic and is now reopened, though it’s not exactly clear to what extent the operations have recovered.


It’s not the only hotel Chetrit’s struggled with. In April he received a pre-foreclosure notice on the Bossert Hotel in Brooklyn, a 187,200-square-foot property Chetrit Group and an investor it later bought out purchased from the Jehovah’s Witnesses in 2012 for $81 million.


Wells Fargo filed the notice on April 13, claiming Chetrit owes more than $126 million on a $112 million loan from 2019.