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Chetrit, SL Green Restructure Debt on New York City Building

By David M. Levitt 
 
Jan. 23 (Bloomberg) -- Investor Joseph Chetrit reached an agreement with SL Green Realty Corp. to restructure the $265  million of debt on 620 Avenue of the Americas, a 700,000 square-foot 19th-century building in Manhattan’s Chelsea neighborhood. SL Green, a lender on the office and retail property, forgave some interest and set aside a reserve, while the Chetrit partnership put in an unspecified amount of new equity, a person familiar with the negotiation said. The building’s debt consisted of a $205 million securitized senior loan and two subordinate $30 million loans held by New York-based SL Green, the person said. 
 
Chetrit confirmed the completion of the restructuring in an interview yesterday. He said he put in new capital and declined to give the amount.

“620 is back to its usual,” he said. “The lender and borrower have resolved all their differences.” 

 
Chetrit and his partners, who include investors Yair Levy and Charles Dayan, bought the building for $290 million in 2005. The senior mortgage, originated by Wachovia Corp., was referred to a special servicer in December, according to Bloomberg data. 
 
Rick Matthews, an SL Green spokesman, said the company had no comment. 
 
SL Green, New York’s biggest office landlord, had begun foreclosure procedures on the building, Real Estate Weekly reported on Dec. 2. 
On Jan. 8, SL Green won control of 100 Church St., a lower Manhattan office tower, through an auction of the collateral on mezzanine debt on that property. 
 
The Chelsea building’s borrowers were advised by Robert Verrone of Ironhound Management Co. in New York. Verrone said the agreement was “an amicable solution” and declined to comment further. 
 
The building’s retail tenants include Filene’s Basement and Bed Bath & Beyond, according to Mrofficespace.com, a real estate information Web site. Gap Inc., the San Francisco-based operator of the Old Navy and Banana Republic chains, is exiting the building, according to Bloomberg data. It agreed to lease 265,000 square feet in a downtown building, according to a report by Grubb & Ellis Co., a commercial property broker. 
 
The architecture firm Hellmuth Obata & Kassabaum Inc. also leases space in the building, which is at the corner of West 18th Street.