Big Real Estate
When Joseph Chetrit bought the Chelsea Hotel, there was widespread fear of what would become to the grand old dame. Would she lose her quirks and charm, the characteristics that made this The Chelsea? The Real Deal got a look around the redbrick behemoth on 23rd Street recently, and it looks like the answer is a definite yes.
This week The Observer profiled Jeff Sutton, arguably the most powerful retail landlord in New York City. New Yorkers may be forgiven, however, for not knowing his name—Mr. Sutton resides among that nebulous class of real estate moguls who own vast swathes of the city but who have never met a reporter they wanted to talk to.
Real estate investor Joseph Chetrit closed on his nearly $80 million Chelsea Hotel buy early last week, and now information has trickled out about how he and junior partner Clipper Equities paid for it.
They got an $85 million, 36-month loan from Paris-based banking behemoth Natixis. The loan has a 12-month repayment extension option, and was brokered for the borrowers by Meridian’s Ronnie Levine and Aaron Birnbaum. (Real Estate Weekly has more news on the loan.)
Clipper, incidentally, was the controversial would-be buyer of the massive affordable-housing complex in Brooklyn, Starrett City, offering $1.3 billion in 2007.
Here is the reassuring letter, obtained by The Observer and dated Aug. 4, that several local politicians, including City Council Speaker Christine Quinn and Congressman Jerrold Nadler, sent to tenants at the Chelsea Hotel. A lot has been going on there.
Shortly before noon last Thursday, a woman with a German accent stepped to the front desk of the Chelsea Hotel, and demanded in clipped English her reservation.
“The hotel’s closed,” said a distracted employee behind the desk. He was holding a severance letter presented earlier by the hotel’s new owner, The Chetrit Group, led by the enigmatic real estate investor Joseph Chetrit, whose holdings include the Willis Tower in Chicago, North America’s tallest building, and over 4.9 million square feet of commercial space in New York City.
“Closed? I have a reservation, please,” the woman said.
She got no answer. Sensing something, she tried again.
“Is this the InterContinental?”
The elusive Joseph Chetrit has closed on his $80 million deal to buy the Chelsea Hotel. According to The Real Deal, he and his representatives finalized things at around 5:30 yesterday afternoon, ending speculation that the deal would fall through and that the Chelsea would survive as it always has for the last century or so: as the craziest inn you could imagine, even by New York standards.
One summer Friday in 1994, Ron Cohen, one of the top commercial brokers in New York City, picked up the phone in his office at the old Insignia/ESG, a precursor to today’s mega-brokerage CB Richard Ellis. A man named Joseph Chetrit was cold-calling him about a 16-story office building at 19 West 44th Street that Mr. Cohen’s client was selling.
“Sorry,” Mr. Cohen said. “We don’t work with people we don’t know.”
He hung up and went back to work.
Minutes later, three men walked into Mr. Cohen’s office. They were Joseph Chetrit, his father Simon, and his brother Jacques.
“Well, now you know us,” Joseph said matter-of-factly.
As expected (we noted last week this would likely happen and soon), Lehman Brothers has agreed to unload its majority stake in the old Toy Building at 200 Fifth Avenue in a deal that values it at about $700 million. It is one of the biggest building sales of 2011 so far, and one of the most significant moves by the croaked investment bank’s holding company in its campaign to liquidate its real estate. The buyer is a wing of JPMorgan.
Hot on the heels of RXR Realty’s purchase of the Starrett-Lehigh Building for $900 million and the sale of 111 Eighth Avenue to Google for $1.8 billion, Bed Bath & Beyond’s building is on the block.
A partnership of Joseph Chetrit and Yair Levy, spearheaded by Charles Dayan from Bonjour Capital, bought the building for $289.8 million in 2005, according to city records. But with the trendy Chelsea office market enjoying a boom, driven in no small part by the tech bubble, the building could sell for around $500 million, according to some sources.
Artists and nostalgists need not fear–the Chelsea will remain a hotel.
Joseph Chetrit is the mysterious buyer taking over the famous flophouse, The Journal reports today, beating out more talked about suitors like Andre Balazs, Ian Schrager and David Edelstein. It appears he has no intention of creating condos, unlike Read More