“There are three sides to every story: your side, my side, and the truth. And no one is lying.” - Robert Evans, The Kid Stays in the Picture

Jona Rechnitz successfully used the Philly Shell in his legal battle w/ Floyd Mayweather, who has dropped (for now) his $175M fraud lawsuit against the controversial CRE and diamond hustler. But the spillover war from that saga, one that has embroiled the founders of ravenous multifamily REIT GO Residential, is far from over – in fact, both sides are turning up the heat.

On Friday, Meyer Orbach and Josh Gotlib sued Rechnitz in New York Supreme Court, alleging that Rechnitz is, in essence, attempting a shakedown: They allege he’s using a dispute re. distributions over multifamily deals he engineered for Mayweather in Manhattan to go scorched earth on them and their business, at a time when they’re in the midst of a sensitive and highly scrutinized acquisition of a huge Sunbelt portfolio (Insiders: We broke down that pending GO-H&R deal in August here 🔒 )

Rechnitz, as you can imagine, sees it differently: He’s accusing Gotlib of repeatedly stiffing Frist Apex, the Ayal Frist-run LLC he represents, on distribution payments, and stonewalling him for a year on questions re. the portfolios.👇

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A demand letter that Frist Apex sent Gotlib on Sept. 7, a copy of which was reviewed by The Promote, lays out Frist Apex’s grievances.

“I did not want to be here,” Rechnitz writes in the letter. “I brought Floyd Mayweather to you, I put my own relationships and credibility behind these transactions, and I have spent the better part of a year asking for money that is owed and records that any investor is entitled to. I have been given changing explanations, partial payments, payments recharacterized as loans, and long stretches of silence.”

But there is a word in there – investor – that Gotlib & Orbach take issue with. “Jona Rechnitz is not a member of any entity that we have done business with or that has invested with us,” they said in a joint statement to The Promote. “He is a shakedown artist who is desperate for one last score before he must report to federal prison to serve his sentence for the crimes he committed. He has a trail of unpaid judgments and unpaid debts and we are not going to become the latest victims of his unethical and illegal conduct.”

(Editor’s Note: This thing is a sprawling, multifaceted telenovela, w/ chapters that play out courtside, tableside at Reserve Cut and in private planes and clubs across various national and international hotspots. It’s beyond our scope here to recap the entire thing, but the links included give you plenty of rabbit holes to go down.)

Gotlib is also the managing principal of Black Spruce, through which he amassed thousands of NYC apartments yet managed to stay under the radar until recently. In fall ‘24, Mayweather’s Vada Properties struck a deal to buy into Black Spruce’s Upper Manhattan-centric AH portfolio. Though that deal was billed in the trades at the time as a $400M+ outright acquisition, in reality it was merely a 5% stake sale w/ an option to upsize. As we wrote in May, “this whole saga really doubles as a media-manipulation story. 🗞” Soon after, Mayweather bought into the luxury Manhattan rental portfolio assembled by Gotlib and Orbach through GO Partners – they bought much of that portfolio in a $1.8B acquisition from real estate scion Stefan Soloviev. (As with the Morningside deal, the exact nature of Mayweather’s investment was seemingly embellished in the press.)

Frist Apex claims it is entitled to 20% of the distributions from the properties, according to court filings. WhatsApp (obv) messages included along w/ the demand letter show Rechnitz repeatedly asking for status updates on the GO portfolio at various points last year, incl. on a trophy 66th St. rental. The messages – from a group chat between Orbach, Gotlib and Rechnitz – show Rechnitz getting increasingly frustrated w/ the duo over the status of deals such as an RXR (Scott Rechler) investment in the 66th St. property (which was eventually consummated early this year), and over the status of Mayweather’s stakes in the portfolio. A source familiar w/ GO characterized Rechnitz as merely an operator for Mayweather, and said that now that he and Mayweather are at odds, Rechnitz has no rights to disclosures re. the Vada investments.

Gotlib & Orbach allege that Rechnitz is going way out of bounds in the distributions dispute, in which Black Spruce filed a parallel interpleader action in Sept.– basically asking the court to allow it to park the distributions w/ the court for the time being. They claim that “rather than confine that dispute to the parties or the courts, Rechnitz has engaged in an incessant dissemination of falsehoods about Plaintiffs to, among others, the press, numerous professional contacts, personal contacts (including the president of one Plaintiff’s synagogue), and regulators involved in Plaintiffs’ businesses, together with threats to do more unless Plaintiffs pay him. This is a calculated money grab.”

They say that on Oct. 1, Rechnitz wrote a letter to the Ontario Securities Commission and the TSX (Reminder that’s where GO REIT went public in a $400M+ IPO last summer 🍁 ) in which he referenced the in-process H&R transaction (10K+ units in the Sunbelt, plus stakes in 2 large rentals in Miami and LIC), and claimed that Frist Apex’s investment was solicited “under false pretenses.” They further say that Rechnitz looked to tarnish Gotlib’s personal standing among the mishpacha by flagging the litigation to the president of Gotlib’s synagogue.

Rechnitz says his demand letter led them to scramble. “Since I sent a demand letter to Josh Gotlib on the day before he raced to court with an interpleader request, many people have come forward to me with complaints and allegations about their experiences and dealings with them,” he said in a statement to The Promote. “This lawsuit came only after dozens of emails requesting basic financial information and documentation, followed by a formal demand letter when those requests were not adequately addressed.” He added that he intends to sue, and said that “at some point, there has to be accountability and transparency.” (His full statement is here.) He’s also been pinging Orbach separately, according to messages we reviewed, repeatedly warning him that Gotlib would be his downfall.

As for Mayweather: Has he permanently hung up the gloves (sorry, had to) in his battle with Rechnitz, or will he return to the ring? His suit was discontinued "without prejudice," which means he’s able to refile at a later date/in a different jurisdiction.

A property that was once a battleground between SL Green and Ben Ashkenazy (Insiders: See the full rundown here 🔒 ) now holds the bragging rights for Manhattan’s priciest office space, a staggering example of just how rapidly the ultra-premium market in the city has blossomed. Castle Hook Partners, a hedge fund started by 2 star Soros Fund alum and backed by Druckenmiller himself, has a deal to take the top 2 floors of 625 Madison, the ground-up tower being developed by Related Cos. and fmr. SLG bigwig Andrew Mathias. Castle Hook has agreed to pay between $350-$400/ 🦶 for the 53K sf spread, per the FT, which means up to $21M/Y. That bests the $327/ 🦶 record set at Soloviev’s 9 West 57th just a few months prior, and that was for a pint-sized 5K sf space.

What’s remarkable to us is that Castle Hook, led by David Rogers, is willing to shell out that much cash for a firm w/ just 35 employees - that equates to about $600K/employee/year in office rent! W/ some of these new financial powerhouses (we did a snapshot of some of them recently), the revenue generated/employee is so staggering that it might be time to revisit some of the traditional ways we think about office-space allocation.

Hottest hut in town: Much of the who’s who of the SNF and CRE worlds – from Yoeli Landau to Shaya Prager to Murray Huberfeld and beyond – were in Jerusalem this past week for the harvest festival of sukkot, and it was a SCENE: One attendee described the elaborate evening banquets and music-filled festivities thus: “Everyone is swinging their own d*cks and throwing bigger parties than the next.” 🛖