Chetrit Group has cleared up a $162.6 million loan maturity default on its Empire Hotel in New York with new, smaller financing.
Benefit Street Partners provided $135 million in financing for the 427-room hotel in the Upper West Side neighborhood of Manhattan.
The financing package includes a $120 million senior loan and a $15 million mezzanine loan, according to Benefit Street, and comes after a year of improving performance at the hotel.
“The Empire Hotel represents a strategic addition to our commercial real estate portfolio, showcasing the flexibility and value that our platform delivers to borrowers,” Michael Comparato, head of commercial real estate for Benefit Street, said in a statement.
The loan was used to repay a securitized loan originated by Citigroup Global Markets Realty in 2013 that was scheduled to mature earlier this month, according to commercial mortgage-backed securities data.
The Empire Hotel loan was previously modified in June 2022 that extended the maturity date, according to commentary last month from bond rating firm Morningstar DBRS.
“Although cash flow has improved over the past few years, the asset continues to underperform its competitive set,” Morningstar said. “Moreover, the most recent appraised value of $165 million dated June 2022 represents a 58% decline from the issuance appraised value.”
The Empire Hotel was appraised at $393 million in 2013, CMBS data shows.
Offsetting some of Morningstar’s concerns was ongoing operating improvement. Twelve-month occupancy had improved to 80% as of September, up from 62% in 2023, according to the firm.
Benefit Street allocated the senior and mezzanine loans across its commercial real estate platforms, including a portion to Franklin BSP Realty Trust.
Chetrit did not immediately respond to a request for comment from CoStar News.