Prime Finance Buys MDA Apartments for $59M

Multifamily investor Jonathan Holtzman got a lifeline last week when he and lender Prime Finance agreed to a deal for Prime to buy back the MDA Apartments rather than continue litigating a foreclosure lawsuit against the property that the lender filed in late 2024.

An affiliate of San Francisco-based Prime Finance paid $59 million to take over the 190-unit property at 63 East Lake Street and dismiss the prior debt Holtzman’s firm, Detroit-based City Club Apartments, owed toward a $66 million mortgage on the building.

Though Holtzman and his partners will likely not walk away with any financial gain from the transaction, they are free from Prime’s $69 million foreclosure lawsuit that they had been facing for two years. A judge approved a voluntary dismissal of the lawsuit on June 18 because of the deal worked out between the borrower and the lender, court records show.

The agreement implies the lender accepted roughly a $7 million discount on the amount it claimed was owed.

In its initial filing, Prime alleged the ownership, which also includes Chicago-area developer Wayne Moretti of Lexington Homes, missed its June 2024 loan maturity date, after taking out a $66 million loan in 2022 using the property, at 63 East Lake Street, as collateral.

It’s unclear how long Prime plans to hold onto the property or if the lender will invest in any further upgrades.

During the foreclosure proceedings, a judge appointed Matthew Mason of Hilco Global to serve as a receiver of the building in early 2025 at Prime’s request.

The receivership was necessary because 2 out of the building’s 4 boilers were not working, an elevator was broken creating ADA compliance issues and the rooftop needed new pavers and fencing which presented “a life safety issue,” court filings show.

In the months that followed, the receiver appeared to have stabilized the property, receivers reports show.

Representatives of Prime and City Club Apartments did not respond to requests for comment.

The bank takeover draws a contrast to similar foreclosures making their way through the Cook County court system as numerous office buildings faced default in the wake of the pandemic.

In those cases, lenders have been reluctant to take over the titles to such properties.

But Chicago’s strong multifamily market could mean struggling apartments have an easier path to recovery than office buildings.

Chicago is leading the country in rent growth due to a historically low pipeline of new supply. Effective rents increased 3.2 percent year over year as of the second quarter of 2026, Cushman & Wakefield found.

Holtzman has been facing distress among other properties in his portfolio as well.

In 2024, Old National Bank sued Holtzman and an LLC he backed that owns the 21-story, 147-unit multifamily property at 860 North DeWitt Place in the Gold Coast, alleging the ownership defaulted on a $25 million debt, with $22 million still owed.

That case is still playing out in court, records show, with a receiver in charge of operating the building until its resolution.