Borrower with $9.9M from Signature maturing in Brooklyn, Queens alleges servicer impeding refis

A borrower affiliated with a large multifamily portfolio with two maturing loans totaling $9.875 million, alleges Rialto Capital Advisors, which is servicing the former Signature Bank loans for Blackstone Group, has imposed onerous conditions on loan extensions, contrary to the mortgage agreements.
Case LINK
Court filings represent the position of one party and are not necessarily accurate or complete. Rialto did not immediately respond to a request for comment.

The properties, owned by entities affiliated with landlord and investor Israel Weinberger, are the office building 2-34 Beach 102nd Street in Rockaway Beach and a retail property at 1090 Fulton Street in Bedford Stuyvesant. The suit is seeking $5 million.
The complaint also cites what is says is a similar case, 150535/2024 in Staten Island from March 2024, however that case was discontinued by the borrower, though it reserved all its rights.
According to PincusCo data, Blackstone has filed at least 18 commercial foreclosure cases with original debt totaling $337 million in New York City since April 2024, by far the most active pre-foreclosure plaintiff in the city during that time.
According to the complaint, the loan agreements give the “Borrowers the unilateral right to extend their loan by meeting just one condition, to wit: ‘The term of this Note and the Mortgage (as hereinafter defined) shall be extended for an additional five (5) years (the “Extended Term”) upon Maker providing Payee with written notice, at least sixty (60) days but not more than ninety (90) days prior to the Maturity Date, that Maker wishes to extend the term as herein provided.’ That’s it. There were no other conditions.”
The complaint says Rialto imposed conditions, including, “signing of so called “Pre-Negotiation Letters” – pursuant to which, borrowers and guarantors ‘acknowledge and agree that neither of them has any known claim against Lender or Servicer under the loan documents”, and “Borrower and Guarantor each … expressly, completely, irrevocably and unconditionally releases and forever discharges the Lender Parties, including their respective owners, participants, partners, investors and any predecessor in interest, from any and all liabilities, claims and demands whatsoever, in law or equity…’… a legal fee retainer of at least $5,000… all Lease files… all Ground Lease(s), etc… an additional Site Inspection to be conducted at the Property, for which the Borrower are responsible for reimbursing all costs incurred…'”

The block

On this tax block, PincusCo has identified the owners of two of the eight commercial properties representing 48,015 square feet of the 48,015 square feet. The two identified owners are Israel Weinberger and Jack Aini. There are no active new building construction projects on this tax block.

The owner

The PincusCo database currently indicates that Israel Weinberger owned at least 11 commercial properties with 349 residential units in New York City with 343,821 square feet and a city-determined market value of $29.7 million. (Market value is typically about 50% of actual value.) The portfolio has $65.4 million in debt, borrowed from New York Community Bank and Signature Bank. Within the portfolio, the bulk, or 48 percent of the 343,821 square feet of built space are walkup properties, with elevator properties next occupying 45 percent of the space. The bulk, or 62 percent of the built space, is in Manhattan, with Brooklyn next at 31 percent of the space.

The surrounding

This is the first commercial real estate event of interest identified within the 400-foot radius of 231 Beach 101 Street in the past 24 months.

Direct link to the property’s ACRIS page and link to DOB NOW portal.