Courts roundup: Mack sues Chetrits again, now for $223M; $14M Chelsea retail pre-foreclosure

Mack Real Estate Group filed a suit in Manhattan State Supreme Court yesterday seeking repayment of senior and mezzanine loans, along with additional fees, totaling nearly $223 million, alleging the loans secured by a Times Square hotel under renovation at 250 West 43rd Street, are in default. This is not a pre-foreclosure action. This is the second suit Mack filed against the Chetrit Group at the building related to these loans. In September Mack was seeking $6.5 million tied to an alleged default in a $31.5 million junior mezzanine loan. That case remains active, with the Chetrits currently seeking a dismissal.
New case LINK
Previous case 655162/2024 LINK

On August 1, 2022, Mack provided a $120.5 million senior loan, a $41.5 million senior mezzanine loan and a $31.5million junior mezzanine loan, for a total of $193.76 million, with a maturity date on August 1, 2024. Mack alleges as early as January 2023, only months after it provided the original loans, it sent notices to Chetrit Group that the loans were in arrears. Those notices were followed up several times, ultimately culminating in this action.

According to the complaint, Mack alleges a senior loan, a senior mezzanine loan and a junior mezzanine loan secured by the hotel project at 250 West 43rd Street is in default, and is seeking an order, “granting Plaintiffs summary judgment against Defendants Meyer Chetrit and Joseph Chetrit (“Defendants”), jointly and severally, based upon Defendants’ indebtedness under a certain Junior Mezzanine Loan Guaranty of Carrying Costs (“Junior Mezzanine Carry Guaranty”), Senior Mezzanine Loan Guaranty of Carrying Costs (“Senior Mezzanine Carry Guaranty”) and Guaranty of Carrying Costs (“Mortgage Carry Guaranty”), and entering judgment as follows…” Jacob Chetrit of the Chetrit family recently died. Crain’s reported on the litigation.

The hotel building in Times Square has 238,818 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 145 feet and is 100 feet deep with a total lot size of 14,500 square feet. The zoning is C6-5 which allows for up to 10 times floor area ratio (FAR) for commercial and up to 10 times FAR for residential with inclusionary housing. The city-designated market value for the property in 2022 is $28.5 million.

Direct link to the property’s ACRIS page and link to DOB NOW portal.

LNR files $14.2M pre-foreclosure for Chelsea retail: LNR Partners, the special servicer for the trust COMM 2013-CCRE13, alleges a $14.2 million loan provided in 2013 and secured by four retail condos in the Spears building at 525 West 22nd Street with a combined 16,411 square feet on the ground floor (and additional space in the cellar) that has an initial maturity date in December 2023, was in a maturity default, and is seeking to foreclose. Lender Cantor Commercial provided the $14.2 million loan in 2013. Savanna bought the building in January 1995 for about $3 million and converted in 1997 to condos, with Savanna principals retaining the retail units after the conversion.
According to the complaint, “Pursuant to the terms of the Loan Documents, the Borrower agreed to pay the principal balance, all accrued and unpaid interest and all other amounts due under the Loan Documents by December 6, 2023 (the “Maturity Date”)… By letter dated August 1, 2024, the Lender provided the Borrower with notice of the default…” Christopher Schlank, Philippe Weissberg, Jonathan Leitersdorf were named in the complaint as guarantors of the loan.
Crain’s reported on this property earlier this year after the loan was transferred to special servicing in November 2023 that it may face foreclosure.

Direct link to the property’s ACRIS page