The lender behind an $85M loan on a prime development site on the west side of Manhattan is moving to sell the debt, courting buyers who would want to foreclose on and take over the land.

Chetrit Group took out a pre-development loan with JPMorgan Chase and Mack Real Estate Credit Strategies in 2018 for 545 West 37th St. Mack now owns the entire loan, which features a $53.7M senior piece and a $31.3M mezzanine piece, and has declared Chetrit in default, Commercial Observer reports.

The prominent New York landlord still owes $85M on the mortgage, which features an $18.5M payment guaranty from Chetrit in the event of default, per CO, which obtained the offering memorandum for the loan sale.

Chetrit Group purchased the site on West 37th Street for $26.5M in 2012 with the view of building a hotel and residential development. The site is zoned for a 375K SF project within the Hudson Yards Special Purpose District, but the plans never moved forward. The offering memorandum describes the loan sale as a “one-of-a-kind opportunity” to buy “a direct and quick path to ownership via a UCC foreclosure,” CO reported.

Newmark's Dustin Stolly and Jordan Roeschlaub, along with their new colleagues Doug Harmon and Adam Spies, are marketing the debt.

The site, which also has frontage on West 38th Street, is not the first financing challenge Chetrit has faced in recent years. Last month, the firm was reportedly looking to sell more than 8,000 residential units it acquired across 10 states in 2019 because it was facing default on a $481M loan it used to finance the deal.

Jacob Chetrit and his sons, Michael and Simon, acquired 850 Third Ave. from Chinese conglomerate HNA Group in 2019 for $422M, and two years later, the $177M CMBS loan on the 617K SF building was sent to special servicing.

In Brooklyn, the company has kept foreclosure at bay at the Bossert Hotel by forming a joint venture with hoteliers Ian Schrager and Ed Scheetz, per CO. The group has been out trying to raise some $26M to rebrand it as a Public hotel.

In other parts of the city, LNR Partners, a subsidiary of Barry Sternlicht's Starwood Property Trust, and Wilmington Trust have initiated pre-foreclosure proceedings against Joe Sitt's real estate firm, asking a court to force Thor Equities to sell 597-599 Fifth Ave. and 3 East 48th St.

A loan backing 11 apartment buildings Blackstone owns in Manhattan was also recently sent to special servicing as the private equity giant stopped funding the property's cash shortfall.