Slammer Time for Syndicator

“One loses everything when one loses one's sense of humor.” - Ayn Rand, The Fountainhead

Stas Grinberg, the co-founder of Vision & Beyond, who positioned his firm as the go-to multifamily syndicator for members of the Israeli armed forces before going dark and leaving behind a flood of lawsuits and panicked LPs, has been arrested: Grinberg, an Ayn Rand fan, was picked up last week by federal authorities in Houston on charges of wire fraud, bank fraud, and making false statements on loan applications.

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Syndicator Fraud (Cont.)

"Grinberg and Gizunterman [V&B co-founder Peter] began to 'double pledge' properties to obtain financial loans through different lenders for financial gain,” reads the federal filing seeking an arrest warrant reported by WVXU. They were able to do this, it adds, “with the assistance of two closing agents who were complicit in the scheme." An unnamed witness is cooperating w/ the feds in the case.

V&B wasn’t the biggest syndicator – at its peak maybe $500M AUM – but gained attention for establishing an LP pipeline through a 2141 club to help discharged Israeli officers figure out their next moves – i.e. give V&B their money. Grinberg and Gizunterman abruptly pulled the plug on the whole enterprise around Christmas, and investors were asked not to try and contact them. Lawsuits alleging fraud flew in, incl. one filed by the City of Cincinnati, and one from lender Bancorp, which alleged that someone involved in a V&B deal forged a bank exec’s signature on loan docs (more on that case here).

No word yet on Gizunterman, but plenty of other action on the fraud circuit recently: Moshe Silber got a 30-month sentence (pretty good all things considered) last week, and Elie Schwartz entered a guilty plea in his own case a couple weeks prior.

NYCB Comes for Wiener

Woah - NYCB/Flagstar, now a Steve Mnuchin production, is moving to foreclose on a major New York multi portfolio controlled by Joel Wiener’s Pinnacle Group, the largest such action taken by the bank in at least 4Y. The bank filed against ≈ 100 Wiener-controlled entities who collectively borrowed $600M+, per a PincusCo analysis. If this pre-foreclosure action does in fact culminate in a takeover, it would be one of the largest we’ve seen recently: The portfolio in Q is a whopping 5,200 units, over half of Wiener’s entire 🗽 holdings, per PincusCo.

Wiener, who’s in his mid 70s, is one of the biggest multi owners in New York, and per Bloomberg attained billionaire status on the back of those properties. A lawyer by training, he joined the family CRE business before striking out on his own in the 1990s, locking in on a model that worked spectacularly well for a time: buy rent-regulated units in disrepair, fix them up, and then legally raise rents to cover those expenses. Wiener fueled his appetites w/ backing from fund manager Praedium Group in the early 2000s, who he later bought out, and then further funded his quests through TASE bonds in Israel. Such outsized institutionally-backed appetites often attract the ire of tenant activists; one described it “the harassment comes dressed up in a pinstripe suit.” 🕴️ 

Tenants couldn’t bring Wiener down directly, but New York’s ‘19 rent reforms certainly did: Since the 🦁 share of his holdings were rent-stabilized units, a lot of his avenues to make money (major capital improvements, vacancy decontrol) dried up. The portfolio is now worth a fraction of what it was, something Wiener’s peers – A&E prominently among them – are also facing. And as regional banks who held much of that debt are put under new, more combat-ready management, expect a wave of foreclosures to follow. 🤺 

Oh Miki You’re So Fine

Miki Naftali’s eponymous firm is stepping in to buy the Spitzer family’s frou-frou UES rental at 800 Fifth Ave for $800M+, per Bloomberg, in what looks to be the biggest acquisition in the company’s history. Naftali would be paying over $3.8M/unit for the 208-unit building, but given that price and the buyer in Q, this is most likely a condo development play – the site allows for a 350K sf resi project. The Promote first reported that Spitzer, in partnership w/ the Winter family, were shopping the building via Newmark in late Jan., so this thing has moved quick.

Naftali is tearing up the skyline both in New York and South Florida: His UES and UWS projects have knocked it out of the park, and he recently snagged fresh Bank OZK financing for a Williamsburg resi megaproject he’s developing w/ Len Blavatnik’s Access. Meanwhile, in South Florida, he’s made bets on Downtown Miami & Fort Lauderdale.

Barnett Takes the Fifth

Just a quick hit here b/c we’ll be diving into deeper into Gary Barnett’s recent flurry in an upcoming pod episode: Extell has finalized its block-long Fifth Ave assemblage, snagging the final piece (576 Fifth) for $175M from a Korean investor (‘21 PP $101M) . “We paid a stupid price but it gives us the whole block,” Barnett told the Post. “It’s the largest footprint available in Midtown and maybe anywhere.” The KPF-designed project will be a 33-story, 1.1M office and retail tower, home to Ikea 🛋️ ‘s first Manhattan megastore – remember that the clincher here was Gary convincing Ikea’s investment arm to buy its retail space and take a 1/3 stake in the overall tower, in addition to pref.

A proper look in the pod soon, I promise. But for now: More on Gary here, here, and here.

Quickies

• 🎥 I went on Dutch network newsmagazine to talk about why Steve Witkoff has become Trump’s go-to geopolitics guy

• After a couple hiccups, S3’s mega-financing for Astoria Cove has closed - we first reported on the deal last week here ♠️ 

• Bancorp hit w/ class-action suit over syndicator lending practices 

• L+M says take back this asset, Santander says no thanks, L+M says Sue You

• Treasury Sec on how Fannie/Freddie stakes could seed a 🇺🇸 SWF (More on privatization potential here)

• Ep 3 (Signature carcass, Wells v JPM, Newmark v Eastdil) of The Promote Podcast 😍 drops Wednesday - subscribe here 

Unquotable Quotes