A credit-bid foreclosure sale left the Chetrit Organization in control of 404 Fifth Avenue, an eight-story Midtown office building. The foreclosure judgment put the outstanding debt at nearly $84 million as of May 2026, according to The Real Deal: The Real Deal.
A second foreclosure followed the debt payoff
The financing traces to a $65 million mortgage originated by Signature Bank in 2016. After Signature failed, a joint venture involving Blackstone, the Canada Pension Plan Investment Board and Rialto Capital acquired the loan in December 2023 as part of a $17 billion portfolio, Commercial Observer reported: Commercial Observer.
Blackstone filed the first foreclosure case in January 2025, alleging that the loan had matured without repayment. The Chetrit Organization completed a discounted payoff tied to the loan in June 2025, ending that case, according to Commercial Observer. The new debt holder filed a second foreclosure action in November 2025. The borrower and debt holder later agreed to a foreclosure judgment in May 2026, which was entered in July, The Real Deal reported.
At the sale, the debt holder could apply the amount owed toward its bid rather than pay the entire purchase price in cash. That mechanism resulted in the Chetrit Organization keeping the building after the foreclosure sale; the precise entity structure and financing mechanics have not been independently confirmed in the reporting available here.
Manhattan office-vacancy context
The New York City Comptroller’s Office reported that Manhattan’s office vacancy rate had more than doubled from under 8% at the start of the pandemic to 16% as of April 30, according to the New York City Comptroller’s Office. The cited figure covers Manhattan rather than Midtown South specifically, so it does not establish 404 Fifth Avenue’s submarket vacancy rate or the building’s leasing prospects. It does, however, provide broader market context for older Manhattan office properties such as 404 Fifth Avenue.
Conversion options for underused offices
New York City provides building owners with a single point of contact to help advance code-compliant, timely office-to-residential conversion projects, according to the Office Conversion Accelerator. Separately, the New York City Comptroller’s Office identified 44 completed, ongoing and potential office-to-residential conversions totaling 15.2 million gross square feet as of the first quarter of 2025. Those programs and figures show that conversion is an active city policy and development category, but they do not establish whether 404 Fifth Avenue is suitable for conversion or what use its owner may pursue.
The property and its ownership history
404 Fifth Avenue stands at West 37th Street and is also known as the Stewart & Company Building. An affiliate of the Chetrit family acquired it in 1998, according to The Real Deal. The landmarked property was completed in 1914 and combines British neo-Classical and Chicago School influences, with blue-and-white terra-cotta ornament, according to the Historic Districts Council: Historic Districts Council.
The building had served as the Chetrit Organization’s headquarters but was completely vacant when Commercial Observer reported the 2025 loan resolution. Iron Hound Management handled restructuring negotiations for the organization in that transaction, as well as for other Chetrit loans, according to Commercial Observer.
Attorney Christopher Milito of Morrison Cohen represented the plaintiff in the foreclosure matter and declined to comment, according to The Real Deal.
