The Real Deal New York

Pinnacle-Praedium partnership plans condo conversion for 36 distressed UWS buildings

August 31, 2010 09:30AM

A partnership including Joel Wiener’s Pinnacle Group and Praedium Group of New York is in talks with special servicer LNR Partners to convert more than 1,000 Upper West Side rental units into condominiums in the face of mounting financial pressure, according to the Wall Street Journal. The units are located in 36 mostly rent-regulated buildings, on which the partnership has a $192 million mortgage that became delinquent earlier this month. Pinnacle and Praedium, who are together among New York’s largest apartment owners, purchased the buildings with the intent of converting their units into market-rate rentals, but as it did for other boom-time investors, that strategy has proven difficult. According to Trepp, they are hoping that selling off the units as condos will boost property values. The delinquent mortgage isn’t the only quandary Wiener and Pinnacle are facing: they are also in the midst of a class-action lawsuit from a group of tenants that claim to have been harassed while the company carried out a plan to illegally inflate rents at their buildings. Wiener’s attorney has called the suit unfounded, but a settlement conference is scheduled. [WSJ]

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