Beach Point Capital acquires $112M note secured by Chetrit Group’s Hotel Bossert in Brooklyn Heights

UPDATED, 6:19 a.m., August 14, 2024: Beach Point Capital Management, through the entity BP Holdings Goldenrod LLC, with an address in the General Motors Building, bought a note with an original principal of $112 million from a securitized entity called Series 2019-BOSS, with the special servicer Trimont LLC, secured by Chetrit Group’s Hotel Bossert (H9) at 98 Montague Street in Brooklyn Heights, Brooklyn.

An earlier version of this post incorrectly identified the note buyer.

The deal closed on April 25, 2024 and was recorded on May 7, 2024. The prior lender Series 2019-BOSS held debt that had an original loan amount of $112 million.

The property has 187,200 square feet of built space according to a PincusCo analysis of city data.
Chetrit Group along with David Bistricer bought the property on November 2, 2012, for $81 million, but in 2019, Chetrit Group bought out Bistricer, and obtained this $112 million loan. Trimont LLC was the special servicer for the securitized lender which filed a pre-foreclosure in 2022, 510815/2022.

The note sale has not been reflected in the court records as of story publication.

The property

The hotel building in Brooklyn Heights has 187,200 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 78 feet and is 200 feet deep with a total lot size of 15,600 square feet. The zoning is R6 which allows for up to 2.43 times floor area ratio (FAR) for residential. The property is in the Brooklyn Heights Historic District. The city-designated market value for the property in 2022 is $52.6 million. The most recent loan totaled $112 million and was provided by Cantor Commercial Real Estate Lending on November 26, 2019.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the property for the past 24 months. In addition, according to city public data, the property has received 18 DOB violations, $5,205 in ECB penalties, 11 housing violations, $10,405 in OATH penalties, and one housing litigation in the last year.

Development

For the tax lot building, it received its initial certificate of occupancy on April 27, 2018. There are no active new building construction projects or major alteration projects with initial costs more than $1 million on this tax lot.

The neighborhood

In Brooklyn Heights, The bulk, or 26 percent of the 12 million square feet of commercial built space are office buildings, with elevator buildings next occupying 23 percent of the space. In sales, Brooklyn Heights has 2.5 times the average sales volume among other neighborhoods with $689.1 million in sales volume in the last two years and is the 5th highest in Brooklyn. For development, Brooklyn Heights has had very little major development activity relative to other neighborhoods.It had 669,688 square feet of commercial and multi-family construction under development in the last two years, which represents 6 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of 11 of the 20 commercial properties representing 250,801 square feet of the 291,771 square feet. The largest owner is Zachary M. Kaplan, followed by Philip Ruth and then Pamela Casal.
There are no active new building construction projects on this tax block.

The majority, or 64 percent of the 291,771 square feet of built space are hotel buildings, with mixed-use buildings next occupying 17 percent of the space.

The borrower

The PincusCo database currently indicates that Chetrit Group owned at least 38 commercial properties with 2,315 residential units in New York City with 4,663,881 square feet and a city-determined market value of $877.7 million. (Market value is typically about 50% of actual value.) The portfolio has $1.7 billion in debt, with top three lenders as Bank of Montreal, Starwood Mortgage Capital, and G4 Capital Partners respectively. Within the portfolio, the bulk, or 49 percent of the 4,663,881 square feet of built space are elevator properties, with office properties next occupying 27 percent of the space. The bulk, or 70 percent of the built space, is in Manhattan, with Queens next at 26 percent of the space.

Correction: A prior version of this post incorrectly identified the note buyer as Seven Valleys. They are not involved in this transaction. The correction was made on May 8, 2024. In addition, on August 14, 2024, the post was updated to reflect the correct note buyer, Beach Point Capital Management.

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