Flagstar Bank is reducing its exposure to New York City multifamily properties. In the process, it’s reducing its exposure to Steve Croman, too.
Flagstar sold notes with an original principal of $247 million to an affiliate of Bellwether Asset Management, PincusCo reported. The deal includes 38 loans tied to 49 of Croman’s properties, accounting for about 680 total units.
All of the debt was originated by Flagstar’s predecessor, New York Community Bank, between 2015 and 2020. Properties are in a wide array of Manhattan neighborhoods, including the West Village, Murray Hill, Gramercy, Kips Bay, East Village and Alphabet City.
Centennial Bank helped finance the loan purchase for Bellwether, which has a portfolio consisting of 138 million square feet worth of office, industrial, retail, hotel, multifamily and residential lot space.
Flagstar and Croman have had their differences. In July, Flagstar sued Croman, claiming the property owner owed $29.6 million related to three Stanton Street properties on the Lower East Side.
At the time, Croman was facing seven active foreclosure suits seeking about $51.4 million in principal from Croman and his companies. A temporary receiver had been appointed in five of the cases.
Croman has also faced legal action from his former office landlord, who alleges the property owner failed to pay more than $1 million in rent on a Noho office space. He is also being sued by his father, who has called him a “fraudster” and is seeking to dissolve their partnerships.
Croman was once named one of the city’s worst landlords and served eight months in prison in 2018 after being convicted of mortgage and tax fraud related to his multifamily buildings.
The deal closed around the same time Flagstar reported its third-quarter earnings. The company has nearly $9.59 billion in loans tied to heavily rent-stabilized buildings on the books, down about $324 million from the last time the bank reported its numbers three months ago.
About 60 percent of Flagstar’s loans to New York City multifamily buildings are tied to heavily rent-stabilized properties. Of those loans, about 45 percent have financial red flags, according to the bank.
— Holden Walter-Warner
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https://therealdeal.com/national/2025/01/27/flagstar-formerly-nycb-unloads-debt-to-cantor-fitzgerald/
Flagstar continues lowering rent-stabilized exposure
Croman facing seventh active foreclosure case as legal assault continues
