A Midtown Manhattan skyscraper controlled by The Chetrit Group is expected to be auctioned off next month after the holder of a mezzanine loan on the building initiated a UCC foreclosure sale.

Chetrit's 850 Third Ave. is heading to the block after the proceeding was instigated by Harbor Group International, which owns the $25M junior mezzanine loan on the 21-story tower backed by a Chetrit entity, The Real Deal reports. Jacob Chetrit and his sons, Michael and Simon, acquired the building from Chinese conglomerate HNA Group back in 2019 for $422M. MHP Real Estate Services and ATCO Properties & Management, both minority owners, also sold their stake at the time.

HNA, which was then in the process of shedding its U.S. holdings, took a loss on the sale, having paid $463M for the property back in 2016. In 2018, the U.S. government was reportedly considering a plan to seize HNA's stake in the 617K SF building, because of national security concerns, though HNA denied the reports.

Back in June, Chetrit’s $177M CMBS loan on the 617K SF building was sent to special servicing, according to CMBS tracking firm Trepp. HGI participated in a $342M refinancing package for HNA in 2016, with French bank Natixis backing a $242M senior mortgage and the Paramount Group taking a $75M mezzanine position.

Multiple properties in the city have faced foreclosure auctions in the past 18 months. Mack Real Estate snapped up seven distressed hotels in Manhattan — with the sellers taking a big loss at a UCC foreclosure auction — back in March. Meanwhile, a UCC foreclosure sale of a Brooklyn apartment building at 1580 Nostrand Ave. is set for early next month, per Commercial Observer.