David Bistricer, the managing member of Clipper Equity, has worked through all phases of the market in his four-decade-plus run in New York City real estate.

He’s had highs, like selling the Sony Building at 550 Madison Avenue between East 55th and East 56th Streets to Olayan America for $1.4 billion in May 2016, after paying $1.1 billion for it in March 2013 with Chetrit Group.

And he’s had lows: for example, being placed on the city’s worst landlords list in 2006, when then-Public Advocate Bill de Blasio blasted him because one of his buildings in Flatbush, Brooklyn, had 12,000 violations.

He tried to buy the 5,881-unit Mitchell-Lama complex Starrett City in Brooklyn for $1.3 billion in 2007 but failed. This September, it went into contract for $850 million with Rockpoint Group and Brooksville Company.

“When I was young, my father had a very good friend, a broker,” Bistricer, 69, told Commercial Observer. “He said, ‘I worked on a deal, and it didn’t work out. It was a very big deal. If you think every deal you work on is going to come to fruition, you’ll be 10 times richer than Rockefeller.’ So you work on 10 deals, if two happen, that’s success.”

But the Borough Park resident and father of five adult children unquestionably has been finding success as of late. Together with Chetrit Group, Clipper Equity is transforming the shuttered four-building Cabrini Medical Center at 220 and 230 East 20th Street and 215 and 225 East 19th Street into a residential a condo project, Gramercy Square, with 223 units. The Woods Bagot-designed development features a different style for each property: a modern, a prewar, a boutique and a tower building. It also has about 38,000 square feet of amenities including a pool, a gym, a theater, yoga rooms and a wine cellar. And there’s ample green space with a courtyard, a greenhouse and landscaping around the buildings. Units start at just over $2 million, but the roughly 7,000-square-foot penthouse of the tower—which has 18-foot high ceilings and a 5,680-square-foot terrace—is going for $33.7 million. He’s hoping to sell the condos out for $800 million. Half of the units are already under contract.

While giving CO a tour of four model units (in a one-story building adjacent to the project built ground up just for a sales office), Bistricer gave insight into his thought process behind selling the Sony Building last year, working with the shadowy Chetrit head Joseph Chetrit, his new real estate investment trust, Clipper Realty, and being in the limelight of development in New York City.

Commercial Observer: Tell us about your background.

David Bistricer: I came here as a very young child. I was born in Brussels. My parents are [Holocaust] survivors. So they live with a certain sense of, “We’re survivors we are going to make it.” My mother [Elsa] was in a concentration camp. My father [Moric] was in hiding in Budapest. They survived the war that way, each with their own experiences that are unspeakable in many ways. They lost a lot. But they rebuilt. And they picked themselves up. My father came here, and within a year, he started buying property on the Upper West Side. That was his profession.

How does one buy property without money, credit or connections?

He came with money. And he always said that he came with his business knowledge of many years because his father was in business and he taught him what he knew—and his father taught him what he knew.

What lessons did you learn from your father?

[He] always said there is no real school for a businessman. Obviously you can hone the skills, but you have to have certain [natural] skill sets, like a musician. A [knack for business] is a certain trait that some people have or don’t have. Some people are academics and some are business people.

Were you born with the talent?

I think so. I have some of that in me. And we’ve done business outside real estate, as well.

Like what?

We were in the wiring and cable business [with a company] called Coleman Cable. We were in that for over 15 years. About three years ago [it sold for $786 million, according to published accounts]. It was a public company. We took it private, built it up, merged it. We took it public again, and then we sold.

How much did you make when you sold it?

We did very well. The stock was $12 per share when we bought it, and we sold it for $24.

How did you make it so profitable?

[Part] of the valuations of the project [before we bought Coleman Cable] was a lot of vacant warehouses that they weren’t using. We saw the value was there. We sold what we didn’t need. And we kept what we needed.

Actually, [Coleman Cable] had four different types of businesses. Wiring and cable is one of them. We sold three of them and we paid off all of the debt. One was plastics. One was mobile homes. And the fourth one made certain types of parts for the wiring and cable businesses. After we shrunk it down to one division, then we merged it to another wiring and cable business, and we grew that business and took it public. And there was another company in the business that wanted it and paid us double what it was trading for. It was fun. It took 15 years, but we had a good time.

What’s the thinking with the Gramercy Square amenity space?

A very important part of this project is giving people the ability to go outdoors, get fresh air, come out and get together with neighbors and talk and do other things.

There are four different styles here—why not just make it all the same?

First of all, it’s a large site, and we wanted to make something available for everybody. Some people like traditional. Some people like modern. Some people like high towers with large ceiling heights. We wanted to make a little bit of everything—not cookie-cutter products. That’s a smart business decision.

Are you going to move in here?

I’m probably going to buy a unit here, but my home is in Brooklyn.

Which one would you choose? Are you a modern guy?

It’s not my choice; it’s my wife’s.

Which building would she like?

Right now we have a traditional house. We are building an apartment in Israel now, and she chose modern.

Is there parking at the Gramercy Square site?

There is parking underground. We are selling those parking spots for $250,000 each. We have over 50 spots.

It’s interesting to see you doing luxury condos since you and your father started in the rental and co-op business. Is there a difference?

It’s the natural progression of the business. We have been doing this for a while. It’s not the first [condo] that we have done and it won’t be the last. We take advantage of opportunities. And we try to do what we can to improve what is there. We are not really trying to change anything. [Cabrini Medical Center] was a place that was closed. The community is very supportive of what we are doing. We are not taking away any sunlight or casting any shadows.

But there is a lot of bad news about luxury condos these days. Why would you want to build now?

New York City is one of the most valuable cities in the world. You have so many people coming here from all over the world. And as bad as the world gets—dangerous things coming in other parts of the world—what we are seeing is people want to put their money here. Think about it. If you have money to invest in any part of the world, you are going to put your money here. Not every place is that safe.

Are you confident that you will be able to sell out?

Without a doubt. You hear about the market with the super luxury on 57th Street, Billionaires’ Row, where you are talking about a very high price per foot. But there’ll be people who will say, “You know what, I won’t buy an apartment for $5,000 a square foot. I’ll buy $2,000 a square foot, and I’ll still have a beautiful place to live.” You walk around the city, and it’s jammed. The city is crowded, and there is no place to go. And people are making money and the businesses are doing well. And it’s a safe [investment].

You have a partnership with Joseph Chetrit on this project. Is he as reserved with you as he is with us?

No. He just doesn’t talk to press.

Why do some in the Orthodox community not like to be in the limelight?

I talk to the press, and the reason that I talk to the press is because press is one of the ways that people know about you and your projects. And if you want to interact with the public as we are doing here, people have a right to know who you are. If you want to be in the shadows, it’s okay, but I think it’s the proper way to deal with people. Let them know who you are, what is going on. Then they’ll feel better about the company. Sometimes you can’t avoid it. The press is going to write. When you get to a certain size, they are going to write. So if you don’t take the calls, they are going to write what they know, and it may not be what you like.

How did you start your relationship with Chetrit?

We met on a certain project [in Brooklyn] by coincidence. It was someone else’s project, but we both wanted to buy it. So, we just bought it together.

What is your take on working with him?

He’s a businessman.

He’s got the talent, like your father would say?

Yes, definitely. He is a nice guy and he knows the market. We both have the same philosophy and are trying to make an honest living. It is very simple. People should be able to rely on you. When you say you are going to do something, do it.

Would you call him a friend?

Yeah, we are friends. Obviously, we get together, socially and things like that. I know all of his kids, and he knows my kids.

Another project you were going to work on with Chetrit was the Sony Building. Why did you sell the property just three years after buying it before your plan to convert it to condos came to fruition?

We had a fantastic offer that was too compelling not to sell. We made a very good profit, and we didn’t have to do anything. We didn’t have to invest any money or time.

But if you had taken the time to invest in it, you could have potentially made more money, no?

Listen, “could have, would have, should have” is not something that a good businessman says because you never know. Maybe we would have made more money keeping it, but one in the hand is worth two in the bush, right?

What projects are you doing in Brooklyn now?

We just finished a rental project near Prospect Park [at 125 Parkside Avenue]. It’s almost a square block, and it’s the first new development on that whole side of the park.

That’s one of the things that we do. We bring in new development and redevelopment into new neighborhoods that haven’t seen it in many years. We take that plunge. We try to keep our eyes on where the opportunities are.

How do you feel about East New York, Brooklyn? Is that a place that you would take a plunge?

East New York needs a catalyst. It needs one guy to come in and say, “O.K., we are doing something.”

Well you could be that catalyst, right?

Not right now, but if somebody shows us something and it’s the right price [then maybe]. If you build in New York and you build good-quality housing at the right price for the right neighborhood, people will come.

Starrett City recently sold for about $850 million, but you tried to buy it for $1.3 billion in 2007 from Starrett City Associates’ Disque Dean and Carol Deane? Why didn’t your deal work out?

What happened there was that that is a Mitchell-Lama project. When we were buying the project, the Mitchell-Lama program expired, so the owner had the right to take it out of the Mitchell-Lama program as of right. The owner decided not to do it but to sell it to us. We then had the option to take it out of Mitchell-Lama. That was an option in my contract, but we didn’t have legally the right to do [that] as of right. We needed permission.

And the government—Sen. Chuck Schumer, who helped me on a project in Sheepshead Bay—said, “we put in so much money into this with Section 8 subsidies and all of these things, that if we have the ability to say no we are going to say no” because they wanted to keep it affordable.

So the price didn’t work. The pricing depended on the increase of the rents. The increase of the rents was greatly reduced. We were going to buy it free market and take the rents to free market.

Do you have any regret losing that one?

We knew that, when we were buying it, the government could say yes and the government could say no. The government allowed many other Mitchell-Lama projects to go out, but they were much smaller.

Not everything works out. That’s part of the business. You have to be able to walk away from something when it doesn’t make sense.

De Blasio, public advocate at the time, put you on the worst landlords list in 2006 for the violations at your Flatbush Gardens rental building. Can you explain why there were all those violations?

I met with him at the time, and I said you are being very unfair because we bought it with 12,000 violations. Right now [in 2017] we have 250 violations. And that’s far less than before. It’s an amazing feat.

When we bought the project [in 2005], it wasn’t working. There were no lights, heat—nothing was working. And we put in the money to fix it up. [We put in] over $20 million. We just spent $3 million on landscaping. It’s a very nice place now.

What do you think about de Blasio now?

He is trying. He is trying to do affordable housing. He is trying with the new 421a plan. He is trying, but it’s not easy.

Do you think he has done a good job?

I think so. I’m not a political person, but I think he is trying to do the right thing.

You brought Clipper Realty to the public earlier this year. Why?

It’s an expansion of the business—that’s basically what it is. It gives you public permanent capital.

How is it going?

It is going very well. It’s an extension of our public experience. Because we were in the public arena with the wiring and cable, we knew all of the ins and outs of the public sector. We have a fantastic board of directors [which includes Sam Levinson of Glick Family Investments, Howard Lorber of Vector Group, Robert Ivanhoe at Greenberg Traurig and Robert Verrone of Iron Hound Management Company].

And we just bought [10 West 65th Street]. We paid $79 million for it—under $600 per square foot. It’s a great price. It’s one building off [Central Park], so it’s a great location, and the building wasn’t touched since the 1940s. A lot of the units are going to be renovated.

We bought it with 10 units vacant. We have [53,000 square feet of] air rights we are going to use.

Companies looking for more money have tapped the Israeli bond market. What about you?

We looked at that, and we choose not to do it. It’s very expensive. You take on debt and pay high interest. And that market is sometimes open, and sometimes it’s closed. I won’t say that we’ll never do it, but right now that’s not the path we chose.

Coworking giant WeWork is putting the finishing touches on a lease for over 250,000 square feet in the Garment District, Commercial Observer has learned.

WeWork is planning to take the space across a number of floors at the 45-story, 1.2-million-square-foot office complex at 500-512 Seventh Avenue between Seventh and Eighth Avenues, also known as 228 West 38th Street, a source with intimate knowledge of the deal told CO. The deal will include a private entrance on West 37th Street although WeWork members will also have access via the West 38th Street and Seventh Avenue entrances.

The deal is for 20-plus years with an asking rent of $65 per square foot, the source said. WeWork is still figuring out when it will get possession of the space, which is hopes to open at the end of the second quarter next year.

While WeWork has some locations nearby (at 404 Fifth Avenue between West 36th and West 37th Streets and 315 West 36th Street between Eighth and Ninth Avenues), it wants to corner the West Side market there due to its proximity to Hudson Yards, the source noted. “Everything is moving west,” he said. “Seventh Avenue is going to be the new center of the city.”

Jeff Winick of Winick Realty Group is representing WeWork in the deal. A Winick spokeswoman said the company declined to comment. Cushman & Wakefield’s Bruce Mosler is working on behalf of the landlords, The Moinian Group, Chetrit Group and Edward J. Minskoff Equities. He didn’t immediately respond to a request for comment. Moinian declined to comment via a spokesman, as did WeWork.

Primary, a co-working company that promotes health and fitness, has signed a 48,873-square-foot deal at Chetrit Group’s 26 Broadway to expand its operations within the Financial District building, Commercial Observer has learned.

The company, which has 25,000 square feet on the majority of the eighth floor of the 32-story tower at the corner of Beaver Street, is adding the entire third floor to bring its footprint to 73,873 square feet. The asking rent in the 10-year deal was $47 per square foot, according to  Lisa Skye Hain, a co-founder of Primary.  The new space will open in the summer.

The new digs will have approximately 130 shared office suites and be able to accommodate about 500 new people. Some of the office suites will be able to fit 30 employees, allowing for more mid-size companies to have access to Primary as its current eighth-floor digs can only accommodate up to 12-person firms.

Also the eighth floor, which is the company’s lone location and home to Primary’s own offices, can fit a maximum of 300 people. As the service has been popular, the founders thought it best to expand in the building rather than opening a new  location nearby.

“We’ve had tremendous success in the eighth floor and we love this location,” said Skye Hain, who co-founded the company with her husband, Brian, and business partner Daniel Orenstein.

And now, she added: “We are looking to expand in [other parts of] Manhattan, too. Our plan is to add another two to three locations in the city this year.”

As part of its focus on health and fitness, Primary offers a range of classes for its members, such as yoga, meditation and boot camp-style exercises, in its 600-square-foot studio space on the eighth floor. The studio is moving to the third floor and will be expanded to 1,000 square feet. The eighth-floor studio space will be tacked onto the café. Primary sells health snacks, including vegan pastries, coconut water and fresh juices to its members.

“Like Facebook and Google does for its employees, we are giving that access [to wellness] to our members,” Skye Hain said. “Our mission is to create a space where people can feel great and work their best.”

Jonathan Mines of The Mines Group, who represented Primary in the deal, did not return a request for comment. And Newmark Knight Frank’s Howard Kesseler and Jamie Jacobs, who handled the deal for the landlord, did not respond to a request seeking a statement.

ACORE Capital has provided a $217.5 million loan to Joseph Chetrit’s Chetrit Group to refinance the Empire Multifamily Portfolio— a portfolio of multifamily properties located in Florida, Indiana, Pennsylvania, Ohio and Kentucky, Commercial Observer can first report.

Iron Hound Management Company Principal Robert Verrone arranged the five-year debt, which includes a first mortgage plus a mezzanine loan. Verrone declined to comment.

The multifamily assets were previously owned by Empire American Holdings. Chetrit Group acquired the portfolio—comprising 56 properties with a total of 5,400 units—in 2015, after being brought in as a buyer by Verrone. Prior to Chetrit’s acquisition, Iron Hound spent three years restructuring the portfolio’s $317 million CMBS loan, which was being specially serviced by LNR, with an A/B note modification, splitting it into a $205 million A-note and a $112 million B-note, as previously reported by CO.

The portfolio was seriously neglected and its loan in special servicing for five years when it was acquired two-and-a-half years ago. Chetrit Group stepped in and has since increased the portfolio’s NOI from $14 million to $20 million, one source told CO on the condition of anonymity.

“Before Chetrit Group got involved in the deal, the portfolio’s properties suffered a significant amount of disrepair and neglect,” said Tony Fineman, a managing director at ACORE. “Chetrit Group came in, righted the ship and significantly improved the performance of the properties.”

While there are many moving parts in closing a multistate portfolio loan, the complexities embedded within were more on the legal and title side, Fineman said.

“What we liked about this deal is the significant improvement in what was once a pretty dilapidated portfolio—both in terms of performance and the physical plan,” Fineman commented. “The Chetrit Group has done a tremendous job. This transaction has the unique blend of a really great cash-flowing portfolio with a really good amount of upside.”

ACORE closed more than $2 billion in loans in the fourth quarter of 2017 and the firm is expecting a busy 2018, too, Fineman said.

Multifamily is just one asset class that the lender is focused on. “We like the multifamily sector a lot,” Fineman said. “Like everything else, you have to be cautious, but we’re very focused on the particular markets and submarkets we’re lending in and the sponsors’ ability to execute business plans in those markets.”

Officials at Chetrit Group could not be reached for comment.

The Bronx real estate market is still heating up.

The northernmost borough surpassed $2 billion in construction starts for the third year in a row, according to Dodge Data & Analytics numbers released by the New York Building Congress.

The Bronx also experienced a slight uptick in residential construction, with 5.3 million square feet of construction begun last year, up from 5.1 million square feet in 2016. And it accounted for 14 percent of New York City’s residential construction in 2017.

But, the results still fell short of the Building Congress and Dodge’s forecast for the year, which predicted $2.3 billion in construction starts for the Bronx.

Roughly $2.04 billion worth of construction projects spanning 5.3 million square feet kicked off in the Bronx last year, down from 2016’s $2.3 billion and 2015’s $2.2 billion.

Big affordable developments in South and Central Bronx, like the 237-unit Compass Residences project in West Farms, are pushing up the borough’s numbers. Chetrit Group and Somerset Partners also started construction on one of the Bronx’s largest market-rate rental developments, a seven-tower, 1,300-unit complex along the waterfront in the Port Morris section of the South Bronx. The New York Post reported today that Brookfield Property Partners is buying the site for $165 million.

Major infrastructure work also accounted for a significant chunk of the Bronx’s construction spending. The two most expensive projects in the borough were the $232 million reconstruction of the Unionport Bridge and the $213 million rehabilitation of the Robert F. Kennedy Bridge complex and toll plazas, which link Astoria, Queens, Wards and Randalls Islands, Harlem and the South Bronx.  

Considering all five boroughs, however, Manhattan still led the pack. The densest borough saw $15.6 billion worth of construction starts last year, compared with $16.3 billion in 2016 and a 2015 peak of $23 billion. Manhattan accounted for 41 percent of construction starts by value citywide.

Queens came in a close second, with $12 billion in new construction starts last year (up from $5.3 billion in 2016). The $4 billion redevelopment of the Delta Airlines terminal at LaGuardia Airport and the $3.4 billion replacement of LaGuardia’s central terminal both accounted for a huge chunk of construction spending in the city’s largest borough.

Citywide, construction spending was down from the 2015 peak of $41 billion but still healthy. Developers and institutions spent $38 billion on construction and renovations last year, of which $29 billion was new construction.

“I think the story is that the five boroughs are booming,” Building Congress President Carlo Scissura told Commercial Observer. “You see maybe some drops in different categories; overall 2017 was still one of the top years on record. And the scope of construction, design and engineering is really happening in every borough, and not just in one or two places anymore.”

Chetrit Group, Clipper Equity and Read Property Group have scored a $380 million loan from SL Green Realty Corp. to refinance Gramercy Square—the developer trio’s luxury residential conversion of the former Cabrini Medical Center, Commercial Observer can first report.

The transaction closed yesterday, sources told CO. 

The financing package—which has a two-year term with two one-year extension options—comprises a senior mortgage plus mezzanine debt, but the exact breakdown couldn’t be ascertained by press time. It retires $345 million in construction debt on the property from July 2015; a $280 million senior loan led by Natixis and $65 million in mezzanine debt provided by Apollo Commercial Real Estate Finance.

“The refinancing of Gramercy Square Condominiums reflects the confidence of the lending community in our projects as the interest rate on a new loan is substantially reduced,” David Bistricer, the chairman and CEO of Clipper Equity, told CO. 

Iron Hound Management Company negotiated the financing. 

As previously reported by CO, the borrowers purchased the former Cabrini Medical Center at 224 to 228 East 20th Street and 209 to 225 East 19th Street in May 2013 for $152 million from S.K.I. Realty, an affiliate of Memorial Sloan Kettering Cancer Center.

When completed, Gramercy Square will house 223 luxury condos across four buildings—The Tower, The Prewar, The Boutique and The Modern—and include 20,000 square feet of private outdoor space designed by award-winning landscape architect M.Paul Friedberg & Partners, including a central courtyard, walking paths and a common rooftop terrace with outdoor kitchen.

The development will also be home to The Gramercy Club, an 18,000-square-foot amenities space exclusive to the residents of Gramercy Square. It boasts a 75-foot pool, a hot tub, a sauna, steam rooms, a yoga studio, a gym and a golf simulator.

“The project has had a fantastic response from buyers and we are looking forward to having our first round of owners move into 225 East 19^th Street in early summer,” Bistricer said.

Officials at SL Green and Iron Hound declined to comment. Officials at Chetrit Group and Read Property Group could not immediately be reached for comment. 

The New York City Charter School for the Arts has inked a sublease to move its campus to Chetrit Group’s 26 Broadway, according to tenant broker Savills Studley.

The performing and visual arts school is relocating from the fourth floor of a city Department of Education-owned building at 440 West 53rd Street to part of the 12th floor in the 32-story building between Beaver Street and Exchange Place. It will occupy 26,208 square feet on a long-term sublease from New York Film Academy (NYFA), per a release from Savills Studley. Asking rent and length of lease weren’t disclosed, but CoStar Group data indicates that the film academy’s lease runs through 2030.

Savills Studley’s Marc Shapses, Roi Shleifer and Seth Wasserman represented New York City Charter School of the Arts in the transaction. Howard Kessler of Newmark Knight Frank represented sublandlord NYFA in the deal and didn’t immediately respond to a request for comment via a spokesman.

“NYC Charter School of the Arts needed a long-term home where its students could learn and grow,” Shapses said in prepared remarks. “With collaboration and support from NYFA and building landlord Chetrit, we were able to bring the school Downtown with an ideal agreement that will fuel the organization and its students for years to come.”

David Bistricer’s Clipper Equity has pulled in a $125 million refinancing from Citigroup to refinance a mixed-use building in Brooklyn just six months after it last re-upped its debt on the property, according to city records.

In December, Bistricer grabbed a $75 million mortgage, also from Citigroup, to refinance prior CMBS debt on 250 Livingston Street in Downtown Brooklyn, a building that’s mostly occupied by city government agencies. In April, the two city divisions that lease space there, the Human Resources Administration and the Department of Environmental Protection, renewed their leases. That, presumably, was the impetus for Citigroup to issue the landlord an additional $50 million in a new mortgage.

The two government agencies signed up to embark on a 10-year renewal of their 342,000-square-foot lease in the building starting next year, PincusCo reported in April. They’ll be paying $44 per square foot, which equates to annual rent just shy of $14 million—more than twice what they’ve paid Clipper Equities for the space in the past.

The 12-story building, which occupies about half the block between Hoyt Street and Bond Street, was built in 1920, and its city office tenants represent a majority of its square footage. The building also has a residential component, with 36 apartments and a separate entrance on Schermerhorn Street, which it abuts to the rear.

The new debt deal was arranged by Iron Hound Management‘s Robert Verrone and Patrick Perone, a spokesman for the company said.

Clipper paid $22.5 million to buy the asset 17 years ago, augmenting a portfolio that mostly includes residential properties around New York City. At 10 St. Paul’s Place, just south of Prospect Park, Bistricer’s firm is responsible for Parkside Brooklyn, a multi-stage project that has opened in phases in recent years. In Manhattan, it owns The Brewster—a residential tower on West 86th Street—and Riverwatch, a multifamily asset at 70 Battery Place.

Bistricer had been attached to the project to renovate and reopen Brooklyn’s historic Hotel Bossert, but his stake in the endeavor was bought out by Chetrit Group, Brownstoner reported in April.

Bistricer did not immediately respond to inquiries. A Citigroup spokesman declined to comment.

The historic Hotel Clark in Downtown Los Angeles, which has been sitting vacant for years, is finally scheduled to open in November. 

Though most Angelenos won’t believe it until they see it, since the 11-story hotel has been vacant for over a decade, under construction since 2012, and its reopening promised multiple times.  

The 347-room hotel will be managed by Journal Hotels, which operates the Hollywood Roosevelt Hotel and the Mondrian Park Hotel in New York, among other prominent hotel properties. 

Located at 426 South Hill Street, just north of Pershing Square, the 555-room hotel has somewhat of a tortured history, having been embroiled in two public eviction battles, briefly owned by the People’s Republic of China and transformed from luxury hotel to low-rent apartments to vacant hulk. 

The New York-based Chetrit Group, a private real estate firm, bought the 555-room hotel in the late nineties, after its Chinese owners failed to convert into a cultural center. It has been empty since at least 2008, when Chetrit first indicated its plans to convert it to a 350-room boutique hotel, according to a 2008 article by Downtown News.

Then the recession hit, and it wasn’t until 2012 that Chetrit began its renovation in earnest, with an initial opening planned for September of that year. But the project faced a series of delays, including a legal challenge from the Unite Here union, and at least one change in management and branding. 

When it opens, the hotel, now with 347 rooms, will have a 6,000-square-foot outdoor pool deck, a 10,000-square-foot banquet hall and a 7,000-square-foot coworking space, according to its website. 

Journal Hotels, which came on in 2018, will also manage Chetrit’s Trinity Hotel at 849 South Grand Avenue, another historic hotel that has been vacant for years.  

Opening day for the Clark Hotel is scheduled for November 1, a spokesperson for Journal Hotels confirmed, and Trinity Hotel is scheduled to open next summer. 

RXR Realty has nabbed $228 million from global investment manager Nuveen to refinance an acquisition loan on office space at the 26-story 530 Fifth Avenue, according to city records and sources who spoke to Commercial Observer. 

RXR owns around 530,000 square feet of office space at the roughly 560,000-square-foot office and retail property, located between 44th and 45th Streets in Midtown.

The new debt package will retire $200 million in previous debt provided by Morgan Stanley in 2014 that funded RXR’s $300 million purchase of the space, according to city records and information from CoStar Group. It also includes $18.8 million in new indebtedness in the form of a project loan mortgage, but it could not be gleaned what new construction work, if any, will be undertaken. The deal closed on Oct. 15. 

RXR, in partnership with Thor Equities and the now Brookfield Property Partners-controlled General Growth Properties (GGP), bought the asset for a combined $595 million in 2014, according to city records as well as information from CoStar. 

As part of the deal, Thor took over the building’s roughly 50,000-square-foot retail condominium, which encompasses the lower level and first and second floors. In October 2017, Thor offloaded the entirety of the retail condo to GGP for just over $134 million, according to CoStar. The retail portion includes about 200 feet of frontage along Fifth Avenue and spans the lower level and ground and second floors. 

The property was built in 1957, renovated in 1999 and is currently fully leased, according to CoStar data. 

Office tenants in the building include Toronto-based brokerage Avison Young, which inked a deal in July to move its New York City offices into 45,000 square feet within a section of the third floor as well as the entire fourth floor, as CO previously reported. 

In September 2018, coworking company Convene signed its largest lease to date at the building, taking 116,000 square feet from the seventh through 10th floors on an 11-year lease, as CO previously reported. 

In November 2017, skatewear and shoe retailer Vans signed on for an 8,573-square-foot shop at the lower level and ground floor of the property. The building also added a Duane Reade in February 2018, which took 15,000 square feet on the ground floor. 

The property was previously owned by a joint venture between Crown Acquisitions, MHP Real Estate Services (MHP), Rockwood Capital and Jamestown. That investor group acquired the property for $390 million in January 2012 from Joseph Moinian’s Moinian Group and Joseph Chetrit’s Chetrit Group. 

Previous owner MHP also has offices in roughly 15,000 square feet on the 17th floor. 

Officials at RXR could not be reached. A representative for Nuveen did not immediately respond to an inquiry. 

Brookfield Properties has finally released renderings for its massive planned residential development on the South Bronx waterfront. 

The development, known as Bankside, will bring 1,350 rental apartments to the Mott Haven section of the South Bronx, according to a press release from Brookfield. 

Thirty percent of the units will be “income-targeted,” or rented at below-market rents, in exchange for a tax break through the state’s Affordable New York program. The project will include a new 34,000-square-foot public waterfront promenade, 15,000 square feet of retail and community facility space. The 4.3-acre complex is expected to cost $950 million. 

Plans for the project have not changed much since Brookfield purchased the site for $165 million from its original developers, Somerset Partners and Chetrit Group. 

Construction recently began on the first, 17-story building at 2401 Third Avenue, which will include 450 apartments. Work on the first building is expected to wrap by the end of 2021. The second phase, slated to include more than 900 apartments, will rise to 25 stories at 101 Lincoln Avenue. The development will encompass seven towers total—three towers in the first phase and four in the second phase. The two parcels sit on either side of the Third Avenue Bridge, between Bruckner Boulevard and the Harlem River. 

Brookfield also retained the project’s original architect, Hill West Architects, to handle the design for Bankside. The facade will consist of a combination of brick, masonry, glass and metal.

“We are excited to unveil the new Bankside name and design and to commence construction, bringing the development to life,” said Brookfield Property Group Chairman Ric Clark, in prepared remarks. “Mott Haven is a special neighborhood, and we think Bankside will be a great addition, bringing much-needed housing, a new public waterfront park and esplanade, and hundreds of construction jobs, many of which will be filled with Bronx residents through our local hiring program.”

A once-in-a-century pathogen overwhelmed New York medical centers this spring and at least part of the blame lies in decisions state and health care leaders made to eliminate 20,000 hospital beds over the past two decades.

Target has signed two Manhattan leases totaling 79,000 square feet, and will replace the Barnes & Noble at the corner of East 86th Street and Lexington, Commercial Observer has learned. 

For the first time in a very long time, retailers have not shrieked and put their heads under a blanket every time they turned on the news.

Mack Real Estate Credit Strategies has provided The Chetrit Group with an $82.5 million first mortgage backed by three pieces of collateral, including the The Tillary Hotel and luxury rental property 60 Duffield—both of which are located at 85 Flatbush Avenue Extension in Downtown Brooklyn—plus a handful of condominium units at Chetrit’s 135 West 52nd Street in Manhattan, Commercial Observer has learned.

The deal closed on April 16 and has a 60 percent loan-to-value, sources said. It refinances and replaces roughly $40 million in construction financing on The Tillary and 60 Duffield, provided by TD Bank in September 2013, property records show.

The refinance also includes a $19.5 million, three-year, floating-rate bridge loan from Mack Credit, records show.

The Tillary Hotel and 60 Duffield are each located at 85 Flatbush Avenue Extension, a 12-story, roughly 126,000-square-foot mixed-use building constructed in July 2015. The Tillary is a 174-key, boutique hotel housed on the first six floors of the building, while 60 Duffield is a 64-unit residential portion from floors seven through 12.

Monthly rents at 60 Duffield range from $2,445 for studios to $4,100 for two-bedroom units, according to information from StreetEasy.

Property records show that Chetrit holds a 60 percent majority stake in 85 Flatbush Avenue Extension, and Brooklyn-based Read Property Group owns the remaining 40 percent of the mixed-use development. An official at Read Property Group declined to comment on the deal.

Officials at The Chetrit Group could not immediately be reached. Mack Credit declined to comment on the financing.

New York City-based private equity fund Pembrook Capital Management has lent $35 million against Churchill Real Estate Holdings‘ retail construction project at 259-261 West 34th Street in the Garment District, according to property records.

SL Green Realty Corp. has provided a $204 million loan to The Chetrit Group to refinance its luxury condominium property at 49 Chambers Street in Tribeca, sources close to the deal told Commercial Observer.

The owners of Lower Manhattan’s historic American Express Building have nabbed a $151.5 million CMBS refinancing from CCRE, according to a Kroll Bond Rating Agency analysis.

The fashion house Badgley Mischka will consolidate its New York City offices to two floors at 133 West 52nd Street, and also nabbed the naming rights for the building, The New York Post reported.

Churchill Real Estate Holdings has nabbed a $52 million loan from Marathon Asset Management that refinanced previous debt on its nearly complete office and retail building in the Garment District, sources told Commercial Observer.