The week in New York City, real estate was all about trouble: who’s been in it before, who’s in it today and how to avoid it in the future.
For Eli Karp, trouble arose this week. Madison Realty Capital took over his Flatbush property at 1580 Nostrand Avenue with a $70 million credit bid, where Karp once planned a sprawling two-building development called Hello Nostrand on the site.
Karp’s Hello Living bought the site for $13 million in 2014 touting plans to build a luxury apartment complex. As soon as construction started, however, he ran into trouble with lenders.
He put the property into bankruptcy in 2021, a day before senior lender Madison Realty Capital could launch a UCC foreclosure process. Madison sold a $6 million mezzanine loan and $73 million senior loan on the property to another firm, Arch Companies, which proceeded to sue Karp to initiate another foreclosure on the property.
He has only finished one of the buildings, a 93-unit rental which was auctioned off in June alongside the undeveloped property. The once-rising star also lost 2417 Albemarle Road to his lender in a credit bid via auction.
Wrecking crew
Demolition company Alba Services confronted issues from its past.
The nonunion subcontractor agreed to pay $1.5 million to settle claims that it flouted New York’s workers’ compensation laws, retaliated against injured workers and failed to address reports of sexual harassment.
Alba allegedly failed to report hundreds of workplace injuries between 2016 and 2024, allowing the company to lower its insurance costs. The company also threatened employees who tried filing workers’ compensation claims.
The settlement was announced by the New York Attorney General’s office, but the ball started rolling when the laborers’ union, Local 79, launched a public campaign against the firm in 2022, accusing it of offering rewards for information on employees who filed “false” workers’ compensation claims as a means of intimidation.
As part of the settlement, the company will be overseen by the attorney general’s office for at least three years and is required to file biannual reports showing compliance with workers’ compensation and human rights laws.
Litigation concerns are nothing new for Alba. In 2023, it was one of 26 companies indicted in a wide-ranging construction kickback scheme; Alba received $2.8 million in inflated contracts and change orders at 250 Fifth Avenue and 189 Bowery, according to the indictment.
The wolf’s den
Trouble used to dog Jordan Belfort — the inspiration of Martin Scorsese’s Oscar-winning “Wolf of Wall Street.” While he’s looking to turn over a new leaf as a motivational speaker, anything connected to the disgraced former stockbroker and convicted felon will continue to grab headlines.
His former Long Island mansion at 5 Pin Oak Court in Glen Head found a buyer at a $6.9 million price point. lived in the 8,700-square-foot home with his wife, Nadine Macaluso, during the height of his career in the 1990s.
The feds took Belfort’s home in 2001, two years after his conviction of securities fraud and prior to a two-year stint in federal prison. So much for “not f*king leaving,” in the words of Leonardo DiCaprio, who played Belfort in the film.
Belfort pivoted his life and moved west, buying an oceanfront home in Hermosa Beach in California, but has since apparently relocated to Miami during the pandemic.
Reboot
Speaking of pivots, Richard Coles and Gary Tischler’s Vanbarton Group are becoming masters of office-to-residential conversions. This week, the company landed a $280 million loan from Invesco to refinance a 455-unit building at 980 Sixth Avenue.
The loan replaces a $273 million one from Blackstone’s mortgage trust. Vanbarton went seeking the permanent financing after converting WeWork’s former three floors into 77 market-rate apartments.
The firm is one of the most active office-to-residential converters in the city with a pipeline exceeding 2,000 units.
Your move, Nathan Berman.
Read more
Eli Karp’s troubled Flatbush development returns to lender
Demolition firm agrees to pay $1.5M to settle claims it hid workplace injuries, ignored sexual harassment reports
“Wolf of Wall Street” Long Island mansion sells for $7M
