Chicago Multifamily Players Enrage Lenders and Investors

Chicago investor Chikoo Patel and his partner Shai Wolkowicki are sinking deeper into multifamily distress for deals across Illinois, public records show.

After Patel took heat from tenants this spring for allegedly deplorable conditions in South Shore apartment units managed by his Chicago-based firm CKO Real Estate, investors and lenders are pursuing him and Wolkowicki for nearly $20 million total in various court cases.

The claims range from failing to pay off large mortgages, to bilking investment partners out of more than $1 million through a Southwest Side townhomes deal, court records show. The allegations show that even as Patel and Wolkowicki were working to gain an interest in more distressed Chicago multifamily properties at attractive prices, they were also losing their grip due to a series of mistakes on investments they already owned.

An attorney for Patel declined to comment, and Wolkowicki — who recently split amicably from his previous firm GW Properties that involved a partnership with developer Mitch Goltz — didn’t return requests for comment.

Brothers Nishant and Vishal Tulsian are putting Patel’s property management practices under the microscope in the Southwest Side case, which stems from financial trouble the trio encountered after purchasing a 24-unit townhouse property in 2020 for $1.8 million. The property is mostly rented to federally subsidized tenants at 4500 West 45th Street just north of Midway International Airport.

The siblings claim in a lawsuit filed in Texas court last month that Patel “fraudulently induced them to invest in the W. 45th St. venture; embezzled hundreds of thousands of dollars from W. 45th St. LLC, including by paying himself hundreds of thousands of dollars in unauthorized or excessive reimbursements in breach of their Operating Agreement; willfully neglected the W. 45th St. property and the W. 45th St. LLC business, causing hundreds of thousands of dollars in damages including lost revenue and fees for years of unpaid utility bills; covered up his neglect and embezzlement with numerous lies; and exposed W. 45th St. LLC to significant potential liability to the Department of Housing and Urban Development.”

Their lawsuit shows HUD removed Patel’s firm as manager of the property in June and replaced it with Gilead Management. The suit also claims Patel never paid his $175,000 capital contribution to the LLC to stake his claim in the property, while the brothers, who lacked low-income housing investment experience, put up all the money to buy the property and relied on Patel’s expertise.

So far, the biggest debt Patel and Wolkowicki are late paying is owed to Old National Bank, which claims they’re late paying off nearly $16 million for a mortgage on a 220-unit property in Springfield, the Illinois capital downstate from their homebase in Chicago. The property, known as Pine Ridge Apartments, at 1833 Seven Pines Road, was purchased by Patel and Wolkowicki for a little more than $16 million, or $73,000 per unit, in 2023. But Old National last month began pursuing foreclosure and collection of a guarantee that Wolkowicki and Patel signed to secure the loan.

The Old National loan wasn’t scheduled to mature until 2026, but the borrowers defaulted on making monthly payments starting in April, the suit said.

Furthermore, a company called Cucumber Capital claims Patel’s CKO was set to borrow more than $110,000 by pledging future business revenues as repayment, including from the Springfield property, but defaulted on the agreement, according to a lawsuit filed in Connecticut.

Legal trouble is ramping up for Patel and Wolkowicki about a year after they were helping Milwaukee-based landlord F Street Investments raise cash to buy $35 million worth of South Side multifamily properties that were in various stages of financial distress. However, public records show that buildings within the portfolios they were targeting haven’t yet changed hands. Meanwhile, a lender has initiated foreclosure actions for a handful of them that are owned by Chicago-based Catalyst Realty. F Street executives didn’t answer questions about the status of the transactions they had planned and instead referred inquiries to Wolkowicki.

Chicago-based lender Renovo Financial earlier this month also sued Patel for allegedly failing to fulfill a guarantee tied to the 13-unit apartment building at 7655 South Coles Avenue in Chicago.

Patel still owes Renovo nearly $54,000 in connection with a loan he took out on the building in partnership with Wolkowicki’s firm Salina Investment Partners, the suit claims. Patel and Wolkwocki’s ventures borrowed $833,000 from Renovo for the property in 2023, but the lender is still seeking payment from Patel even after Wolkowicki appears to have recapitalized the property earlier this year through Salina and an investment partner by getting a new, larger loan from Pan American Bank & Trust.

Patel has yet to respond in court to the allegations. He settled a lawsuit earlier this summer over a nearly $100,000 claim that Broad Shoulders Flats LLC made against him for allegedly mismanaging funds derived from CKO’s operation of a 12-unit building at 1513-17 West Diversey Parkway in Chicago that the LLC owns.