HFZ, Ziel Feldman sued for default on Upper East Side loan

W Financial REIT alleges developer has paid nothing on $44M loan since June

New York /
Jan.January 19, 2021 06:25 PM
Ziel Feldman with 150, 152 and 154 East 79th Street, and 1131 and 1135 Lexington Avenue (Getty, Google Maps)

Ziel Feldman with 150, 152 and 154 East 79th Street, and 1131 and 1135 Lexington Avenue (Getty, Google Maps)

Another day, another lawsuit for HFZ Capital Group and its founder, Ziel Feldman.

Great Neck, New York–based W Financial REIT is suing an affiliate of HFZ and Feldman for defaulting on a loan tied to five Upper East Side properties.

W Financial REIT provided the $43.6 million loan in February for five properties: 150, 152 and 154 East 79th Street, and 1131 and 1135 Lexington Avenue. The lender alleges that Feldman, HFZ’s managing principal, personally guaranteed the loan.

The suit, filed Tuesday in Nassau County Supreme Court, alleges that HFZ first defaulted on the loan in June and again in the following months. The lender alleges HFZ still has not repaid the loan.

The lender is also seeking accrued interest and other fees in addition to the $43.6 million principal. In total, W Financial REIT aims to collect about $48.6 million.

The Upper East Side acquisition was possibly part of an assemblage to build a larger development.

HFZ had purchased the three properties on 79th Street in March 2020, having acquired the two Lexington Avenue sites in 2017 and 2018. The firm paid a combined $78.75 million for the five properties, records show.

Neither W Financial REIT nor its attorney responded to a request to comment. HFZ also did not respond to a request to comment.

The case adds to the growing list of lawsuits against the New York development firm and its founder.

HFZ was once one of the city’s most prolific condo developers, but it has become entangled in liens and litigation. At its trophy project, the XI condo development in Chelsea, construction has come to a halt. And sources previously told The Real Deal that its lender, the Children’s Investment Fund, was in talks to bring on a new developer to finish the project.

Feldman, who founded the firm in 2005, guaranteed a number of the loans financing HFZ’s projects. Many of these loans are now in default, leaving Feldman personally on the hook to cover the shortfalls.

In the meantime, Feldman has been unloading his personal residences including one in the Hamptons, which fetched $50 million.


Related Articles

arrow_forward_ios
Don Peebles and the Bath Club (Getty, Peebles Corp.)
Judge slaps Don Peebles’ Bath Club Entertainment with $1M in sanctions
Judge slaps Don Peebles’ Bath Club Entertainment with $1M in sanctions
227 Grand Street in Williamsburg, and the Tel Aviv Stock Exchange (far left)
“I suppose a lot of people have a full stomach from what he did:” Inside Yoel Goldman’s very bad year
“I suppose a lot of people have a full stomach from what he did:” Inside Yoel Goldman’s very bad year
Jeff Zucker, Michael Steinhardt and 32 East 64th Street. (Getty, Google Maps, Warburg Realty)
CNN’s Jeff Zucker sells UES pad to hedge funder for $15M
CNN’s Jeff Zucker sells UES pad to hedge funder for $15M
Philip Falcone with his wife Lisa Marie Falcone and their Manhattan home. (Getty, Christie's Real Estate)
Hedge funder Philip Falcone may lose UES, Hamptons homes
Hedge funder Philip Falcone may lose UES, Hamptons homes
Donald Trump, Manhattan District Attorney Cy Vance and Trump Tower in New York (Photos via Getty, Wikipedia Commons)
DA Vance subpoenas NYC tax agency in Trump Org criminal probe
DA Vance subpoenas NYC tax agency in Trump Org criminal probe
666 Greenwich Avenue and David Koraca (Photo via StreetEasy, Goldman Sachs, Facebook)
Convicted fraudster illegally occupied posh West Village rental: lawsuit
Convicted fraudster illegally occupied posh West Village rental: lawsuit
Photo illustration of HFZ chairman Ziel Feldman (Getty, iStock/Illustration by Kevin Rebong for The Real Deal)
Storage Wars: HFZ Capital battles to save tenants’ stuff from auction
Storage Wars: HFZ Capital battles to save tenants’ stuff from auction
The lawsuit involves drugs, Trump, and 11 million dollars. (Getty, Facebook, Pexels)
Drug smuggler pardoned by Trump sued by All Year over high-interest loans
Drug smuggler pardoned by Trump sued by All Year over high-interest loans
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...