The Real Deal New York

Silverstone’s Martin Nussbaum forms new investment firm

Split could be result of friction with co-founders, sources say
By Hiten Samtani | November 18, 2013 06:11PM

Martin Nussbaum, a founding principal at Manhattan-based Silverstone Property Group, has started a new real estate investment firm, he told The Real Deal exclusively. The venture, called Slate Property Group, is aiming to be a player in the same asset classes – multi-family rental and mixed-use buildings in Manhattan and Brooklyn – that have made Silverstone a force to be reckoned with in recent years, Nussbaum said.

“It’s just an opportunity to build off the track record we’ve had so far,” he added.

Nussbaum said that two top Silverstone executives – head of acquisitions Steven Figari and Michael Zampetti, vice president of operations, construction and management – would join him in the new venture, which will be run out of a 4,500-square-foot space at 850 Third Avenue. He reiterated that there was no trouble brewing between him and Silverstone’s other founders – whom he’s known since childhood — and that “everyone’s on very good terms.”

Nussbaum also stressed that he would continue to be involved in Silverstone as an owner and an asset manager, but Josh Zegen, a co-founder of Silverstone with Brian Shatz, said that Nussbaum had left the firm. (Zegen and Shatz are also the two co-founders of Midtown-based lender Madison Realty Capital.) “The senior principals of the firm will continue to make all the investment decisions about acquisitions, development, construction and asset management of the Silverstone portfolio,” Zegen said. “We’ll continue with our business plan for value-added and opportunistic investments in the metro area.”

Brokers and collaborators who have worked on deals with Silverstone said that Nussbaum’s move was likely the result of a power struggle between him and his fellow co-founders. There was disagreement between Nussbaum and the Madison principals, one broker said, about how to steer the company moving forward, and rumblings of Nussbaum’s departure had been circulating for at least a few weeks, sources said.

Nussbaum, Zegen and Shatz formed Silverstone in 2009 to capitalize on distressed properties at the bottom of the market. Since then, the company has been pretty busy, having acquired at least 22 properties worth some $345 million since 2010. Some of their biggest deals include the acquisition of a seven-building Kips Bay residential portfolio in partnership with Ari Shalam’s RWN Real Estate Partners for $71.5 million in September of this year, and a 128-unit, 17-story Murray Hill building at 247 East 28th Street for $53 million, also in partnership with RWN, as The Real Deal reported.

Representatives from RWN could not be immediately reached for comment.

GFI Realty’s Yosef Katz, who represented Silverstone in the Kips Bay deal, said that the company was among the city’s “top five players in terms of active purchasing, both on the debt and deed side.” Katz pointed to their success in turning around properties and raising rents, such as at the 33-unit 157-159 Suffolk Street on the Lower East Side, where the group paid $8 million in January 2011 and sold the building for $18 million in December 2012.