Emerald Empire Faces Some Issues in Oklahoma

Multifamily investor Moshe Weschler’s value-add strategy was on the brink in Oklahoma.

Weschler’s New York-based firm Emerald Empire blasted off a memo to investors in some of its apartment properties early 2025 asking for more money.

Emerald’s lender “unexpectedly stopped releasing the capex funds” for a multifamily portfolio in Tulsa, Oklahoma, totaling over 600 units, according to an investor memo and email earlier this year, detailing the status of the Tulsa investment.

Emerald — which became one of Chicago’s largest landlords in 2022 with a $600 million purchase of 7,500 South and West side apartments from Pangea Properties — was seeking to get investors to chip in over $7 million, allowing the firm to restructure its Oklahoma loan and cover shortfalls, the memo said.

“The business plan is to unlock the value-add potential by renovating units and addressing vacancy,” the report stated.

In May, Emerald pulled off part of the deal. It landed a $38.6 million loan from its existing lender Arbor Realty Trust, pushing the loan’s maturity date until 2028 and giving the firm some breathing room.

But investor documents and emails show the Tulsa properties have had their challenges.

Emerald stopped paying distributions to investors, according to sources and documents reviewed by The Real Deal. Emerald still needs to refinance two of its properties, including one property which was over 60 percent vacant as of late 2024, according to an investor report.

And Emerald’s claim that its lender “unexpectedly” stopped funding certain expenses leads to more questions than answers. Arbor declined to comment.

A spokesperson for Emerald did not comment on investor distributions or the freeze in capital expenditures. The spokesperson said, however, Emerald’s properties are not distressed and are fully stabilized.

“Emerald Empire has successfully refinanced five assets within its Tulsa portfolio, supported by a strategic infusion of non-agency capital,” said the spokesperson.

Emerald, led by the young duo of Weschler and Yanky Hammer out of Chestnut Ridge, New York, made history when they closed on the acquisition of Pangea’s former properties including more than 400 buildings in Chicago. The deal was among the largest multifamily sales ever in Chicago. Emerald snagged a $430 million loan from Arbor Realty and NewPoint Real Estate to acquire the properties. The loan was sold to Fannie Mae.

Emerald’s big-ticket purchase led to speculation about who was backing the company. But also questions about whether the team had enough experience to handle a portfolio of this size as interest rates rose, tenant groups started organizing and some buildings ran into city code violations. Emerald recently struck a forbearance agreement with Fannie Mae on at least $125 million of debt tied to the Chicago portfolio, allowing it to pause payments on the debt.

In Tulsa, Emerald followed a similar path as other syndicators. It bought seven “value-add” properties in mid 2022, betting on rising rents in markets far outside major metropolitan cities. “Tulsa continues to show itself as a hot real estate market, ranked as the sixth-hottest small market nationwide,” Emerald told investors that year in a report.

Emerald secured a mortgage from Arbor in 2022 to acquire four Tulsa properties with a maximum loan of up to $83.3 million. Arbor provided another loan up to $22 million for Emerald’s other three properties that same year, according to Tulsa County property records.

Emerald said by the end of 2022, the properties had improved under its ownership. Rent collections rose from 86.9 percent in September 2022 to 94.8 percent by January 2023, including through utility bill backs and adding pet fees, according to the investor document.

By the end of last year, though, Emerald, like other syndicators, was hurt by rising interest rates on floating rate debt. While average rent increased to $753 from $719 in the previous year, its lender had halted capital expenditures funding, or a provision to pay for building upgrades and repairs, Emerald said in a report.

“We were forced to halt renovations and shift our focus to preserving operations,” Emerald said in its investor report.

Early this year, Emerald was seeking to raise over $7 million from investors for five of the Tulsa rentals through a capital call. Emerald claimed it would use these newly raised funds to secure a new loan from Arbor with interest rates between 5 and 6 percent. Emerald also said the lender had agreed to reposition the two remaining properties with “even more favorable terms.”

Emerald’s business plan involved increasing rental income by 16 percent, or $1.6 million, and stabilizing occupancy. Emerald sought to attract investors through a new structure, splitting investors into two classes, Class A and Class B.

“While progress on executing our full business plan has been delayed, the steps we are taking now will position the portfolio for long-term success,” Emerald said in an investor report late last year. “The expected loan restructure, coupled with a fresh infusion of capex funds, will allow us to resume renovations, push rents further, and drive NOI (net operating income) growth.”

Meanwhile, it remains unknown why Emerald’s Chicago loan is in forbearance. Out in Tulsa, Oklahoma, Emerald found a willing lender, only after seeking millions of dollars in a capital call from investors.