Flagstar Bank files 4 pre-foreclosure actions at Pinnacle Group loans totaling more than $600M

UPDATED: Flagstar Bank initiated its largest New York City commercial pre-foreclosure action in at least the past four years with four summonses filed Friday against approximately 100 entities owned by Joel Wiener’s Pinnacle Group that have an aggregate original principal of just over $600 million, according to a PincusCo analysis of loan amounts in property records. The bank filed the actions related to Manhattan properties in New York State Supreme Court in Manhattan, while it filed three other summonses, in Brooklyn, Queens and the Bronx county courthouses, covering properties from those boroughs. In each case, the lender filed only a summons, not the complaint, which is unusual in New York City commercial foreclosure cases, according to a PincusCo review of state filings.
The Pinnacle Group is one of the city’s largest multifamily rental owners, with approximately 136 properties totaling about 7.5 million square feet with approximately 8,700 residential units, according to PincusCo data, which estimates the holdings are worth about $1.6 billion. Joel Wiener leads the firm. This action is for more than half of that portfolio by residential unit count, or about 5,200 units.

Manhattan Case LINK
Brooklyn Case LINK
Queens Case LINK
Bronx Case LINK

Court cases represent the position of one party and are not necessarily accurate or complete.
Banks have initiated a large number of pre-foreclosure actions over the past four months, with the surge beginning in December, however the dollar amount has declined since then. In some instances, borrowers refinance the debt and hold on to the asset, and in others, they may lose the property.

The largest Flagstar Bank pre-foreclosure prior to this case was a $100 million filing against Extell Development’s retail at the Belnord. That case was dismissed and the debt on the retail was refinanced with a $40 million loan from Flagstar Bank, in January.

The first filing is for a group of buildings representing a portion of the entire Pinnacle Group portfolio, and is exclusively in Manhattan. Many of the loans were refinanced in 2019 or later with New York Community Bank. In 2022, New York Community Bank purchased Flagstar Bank, then renamed the merged company as Flagstar.
This group of properties has about 1,200 units in about 1 million square feet. The buildings are concentrated in Upper Manhattan, but there are also properties as far south as Chinatown.
The largest of the loans is for a 142-unit building, 25 Hillside Avenue in Washington Heights.
The entire list of properties is 2 West 120th Street, 25 Hillside Avenue, 281 Wadsworth Avenue, 34 Seaman Avenue, 509 West 155th Street, 4530 Broadway, 11 Hillside Avenue, 681 West 193rd Street, 402 West 148th Street, 412 West 148th Street, 241 Sherman Avenue, 544 West 50th Street, 546 West 50th Street, 548 West 50th Street, 58-60 Elizabeth Street, 639 West 207th Street, 233 East 77th Street, 155 Audubon Avenue, 536 Isham Street, 237 West 18th Street, 85 8th Avenue and 349 East 51st Street.

Flagstar Bank pre-foreclosure of 24 Pinnacle Group Manhattan properties

The remaining properties have about 3,900 units spread over about 75 buildings in about 3.7 million square feet of space. Of those, about 2,700 units are in about 50 properties in Brooklyn, about 960 units in 13 properties in Queens, and 267 units in three buildings in the Bronx.

A few of the properties are commercial units in condos or cooperative buildings.

Flagstar Bank pre-foreclosure of Pinnacle Group Brooklyn, Queens, Bronx properties

The neighborhood

In Washington Heights, The bulk, or 45 percent of the 66 million square feet of commercial built space are elevator buildings, with walkup buildings next occupying 27 percent of the space. In sales, Washington Heights has near average sales volume among other neighborhoods with $336.1 million in sales volume in the last two years and is the 23rd highest in Manhattan. For development, Washington Heights has near average amount of major developments among other neighborhoods and is the 23rd highest in Manhattan. It had 1.5 million square feet of commercial and multi-family construction under development in the last two years, which represents 2 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of 46 of the 88 commercial properties representing 1,759,503 square feet of the 2,638,389 square feet. The largest owner is Alma Realty, followed by Chaim Simkowitz and then United States Postal Service. On the tax block, there were five new building construction projects totaling 284,464 square feet. The largest is a 123-unit, 135,361 square-foot residential (R-2) building submitted by Woody Victor with plans filed October 4, 2017 and it has not been permitted yet. The second largest is a 129-unit, 86,760 square-foot residential (R-2) building submitted by HAP Investments and filed by Eran Polack with plans filed May 8, 2018 and permitted August 20, 2019.

The surrounding

Within a 400-foot radius of 35 Hillside Avenue, PincusCo identified two commercial real estate items of interests occurred over the past 24 months. Of those two items, two were loans above $5 million totaling $24.6 million. The most recent of the two was RiseBoro Community Partnership in which borrowed $6.8 million from NYC Housing Development Corporation secured by the 125,951-square-foot, 164-unit rental (D1) on 37 Hillside Avenue on June 26, 2023.

UPDATED: PincusCo is updating the post with additional information on the property totals. When the post was first published PincusCo only included one of the four filings.

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