Isaac Hager, Brooklyn’s most mysterious dealmaker, is back
After burning bridges with lenders, Hager is following his vision
Eight years ago, Isaac Hager was no one. At least according to him.
Hager said he had no income, no bank statements, and could not produce a single tax return. His wife gave him money for all his expenses and for the education of their five children, Hager testified under oath in 2015 and 2016. At the time, he was already a venerable real estate dealmaker in gentrifying Brooklyn.
Today, Hager is facing foreclosure on the cornerstone of his portfolio, 200 Kent Avenue, anchored by Trader Joe’s.
He could just disappear and go back into being no one.
But Hager is making an unlikely comeback. He’s buying distressed real estate in Crown Heights, smaller sites in Rockland County and a 500-unit multifamily portfolio in the mid-Atlantic region, according to sources and property records.
Hager’s true believers say he’s no different from real estate titans who have made, lost and remade a fortune. Ian Bruce Eichner, Harry Macklowe, even Donald Trump come to mind.
Hager had already lost his shirt once only to again become one of Brooklyn’s largest developers. Unlike others who run into trouble, Hager can bounce back quickly by tapping into deep-pocketed and small-time investors from his community, where deals are often made at dining room tables.
For the past 20 years, Hager has been one of the most active under-the-radar developers in Brooklyn and Queens. In 2018, he had 700,000 square feet of projects underway in Brooklyn. He was known as a trendsetter, among the first to build high-rise condos in Williamsburg. Now he is buying at a time when few are making deals, and it’s not exactly clear how.
The sudden rebound is remarkable even by the Eichner-Macklowe-Trump standard, especially given the current environment.
When interest rates were low, Hager’s dealmaking, like everyone else’s, relied on easy money from both banks and nonbanks alike.
Now financing is more expensive and harder to come by, even for institutional players. One of Hager’s main lenders, Madison Realty Capital, no longer has a relationship with him, according to a source familiar with the matter.
It can take years for developers to get back in the game after burning bridges with lenders. Sometimes they hire crafty public relations teams to bury negative articles. Not Hager.
Against all odds, he has found new backers and continues to raise money from his tight-knit Vizhnitz Hasidic community, in which he is not just a member but royalty. As a grandson of former grand rebbe and leader Mordechai Hager, he has an elite pedigree in Williamsburg and beyond.
David Schechtman of Meridian Capital, who brokers Hager’s deals, said the developer has taken huge risks and is “definitely a maverick.”
“You will be hard pressed to find an equity investor who isn’t happy with him,” Schechtman added. The goodwill has let Hager keep moving on deals, and he has a number outside New York that go unreported by the media.
“At the moment, I think there are very few people who are as flush [with] cash and equity,” said Schechtman.
Hager’s rise
Hager was born in Kaser, an enclave in Rockland County that was founded by his grandfather Mordechai, the longtime leader of the more than 30,000-member Vizhnitz sect.
Hager moved to South Williamsburg in the late 1990s and ran a corrugated container company until the mid-2000s. Around then, Hager met Chaim Lax, founder of a diamond firm from which the two partnered on real estate ventures.
Betting that North Williamsburg would become the next frontier for luxury condos, Hager and Lax built a 136-unit, three-tower condo project near McCarren Park with a projected sellout of about $125 million.
But things turned. Lax died in 2008, leaving millions of dollars owed to the IRS and others. The Financial Crisis had begun, and Hager could not refinance the loan on one of the towers.
“The market went belly-up and I couldn’t cover the rent,” said Hager in a deposition, discussing the struggles at one of his condo towers. “Then the bank started foreclosing. My partner wanted to file bankruptcy. He filed it, and then we lost it. Simple.”
“At the moment, I think there are very few people who are as flush [with] cash and equity.”
It wasn’t the end. Hager slowly built an outer-borough real estate empire again through Cornell Realty. He was known for his friendly personality, his ability to understand trends and his rapid-fire decision-making. He could syndicate money through small-time investors in the community, while also partnering with local players like Asher Abehsera’s LIVWRK or Joe Chetrit.
“I’ve done a number of deals with Isaac over the years,” said Greg Corbin, president of Northgate Real Estate, who specializes in foreclosures and bankruptcies. Corbin described Hager as a “visionary who is exceptional at finding and putting deals together.”
He added: “But sometimes [he] jumps to the next project before the previous one has been completed.”
Cornell bought sites in Crown Heights, a stake in an office building near Penn Station and, for $26.3 million in 2017, a site across the street from Peter Luger Steak House, where the firm planned a 235-key hotel with condos. Hager financed many of these deals through nonbank lenders such as Madison Realty and Eli Tabak’s Bluestone Group.
He gained the faith of his partners. “I’ve had nothing but positive experiences [with Hager]” said Schechtman. “I have never been burned by him. I have never steered an institution wrong by nominating him.”
Since 2008, many of Cornell’s deals have appeared under the name of Hager’s wife, Shifra Hager.
Isaac and Shifra both claimed under oath in separate depositions that she was in charge of the company.
“My husband? He learns [Torah] half a day. He learns in the morning and then he helps me do errands in my house, and then he does for me what I need him to,” Shifra Hager testified in 2017, according to court filings.
Shifra said she collected money from her friends to put together deals. She claimed she would give Isaac money “only when he does things for my house,” and for “him to go to the grocery.”
David Rozenholc, an attorney representing a rent-stabilized tenant who had a $171,000 judgment against Isaac Hager over damages to her unit in 2008, alleged that Hager shifted assets into his wife’s name to try to make himself judgment-proof.
“It was a crock of shit,” said Rozenholc.
Rozenholc’s client eventually settled with Hager in 2020.
Hager’s troubles
The pandemic hit Hager’s portfolio hard, especially the Tillary Hotel.
Hager had bought the site, a former Sunoco station at 85 Flatbush Avenue in Downtown Brooklyn, for $10 million in 2005, later landing a $50 million refinance. But the property faced foreclosure after the Financial Crisis. Chetrit Group and a partner picked it up and finished construction, developing a 174-key hotel with 64 apartments.
In 2019, Hager teamed up with his longtime friend Lipa Rubin, who made his money as a fishmonger, to acquire the hotel back for $95 million. It was among the few upscale hotels in Downtown Brooklyn.
When the city closed down in March 2020, they briefly converted the hotel to homeless housing. The hotel reopened in June of that year, but revenue was down significantly, according to court filings. In mid-2020, Madison Realty and Bluestone initiated foreclosure. Before the scheduled auction, Hager put the hotel into bankruptcy at Judge Robert Drain’s courthouse in White Plains.
At 159 Broadway in Williamsburg, Hager faced a different issue.
The project at the vacant site across from Peter Luger, near the original Williamsburgh Savings Bank, never went vertical.
Hager bought it in 2017 and landed about $31 million in loans from Madison Realty and Bluestone in 2019 to build a hotel. He nearly completed the foundation, but that was it. Hager again put the property into bankruptcy in White Plains to stop foreclosure.
In 2022, Madison Realty acquired the property in a bankruptcy sale. Shortly thereafter, Nat Wasserstein, a trustee for creditors, filed a federal lawsuit accusing Hager of transferring more than $7 million out of the property into dozens of companies connected to him.
“My husband? He learns [Torah] half a day. He learns in the morning and then he helps me do errands in my house, and then he does for me what I need him to.”
“If that wasn’t the case, I would think that he would provide evidence of that to clear the air,” said Wasserstein.
Hager’s lawyers denied the allegations. In an email, Hager called Wasserstein’s suit a “shotgun complaint,” saying that he is “throwing a lawsuit against the wall to see what sticks — by alleging a laundry list of transfers were improper but without identifying who even allegedly received the funds. I fully deny any of the transfers were improper.”
“The success I’ve had in my career and the ventures I’ve been a part of are deeply rooted in the integrity in how I operate my businesses and the trust my partners have in me to do the right thing above all else,” Hager said by email.
The pandemic affected Hager’s smaller real estate holdings as well. He and his wife battled a lender seeking to foreclose on two South Williamsburg condos on a principal of just over $1 million. Hager and his wife claimed their family lived in the units.
Hager said in August 2023 he had to consult with his “business partner,” who would extend funds. The foreclosures were resolved in October.
Schechtman said that the foreclosures or losses are not representative of Hager’s entire portfolio, which reaches into other parts of the country: “His longer-term and core holdings are much more extensive than one will think.”
Sources in Brooklyn real estate attributed some of Hager’s notable flops to the lack of a skilled back office and construction team. They point to projects such as 200 Kent Avenue, which suffered construction delays and flooding, allegedly because of faulty fire sprinklers. Others just point to Hager’s lack of interest in the more granular aspects of development.
“He wants to do deals and move on; he’s a wheeler and dealer,” said Ethan Kobre, a real estate attorney at New York-based Schwartz Sladkus Reich Greenberg Atlas.
But Schechtman blamed bad timing.
“He has a vertically integrated office,” he said. “He’s got real pros behind him.”
Hager’s comeback, part II
One of his largest recent acquisitions, 1000 Dean Street, was vintage Hager: a distressed, value-add deal, with a low basis, in a location on the cusp of change.
Hager partnered with local investor Shiya Labin to buy most of the former Studebaker Service Station, now creative offices in Crown Heights, for $32.5 million from Meadow Partners and LIVWRK. The new owners assumed an existing loan of $18 million from Invesco. They bought the space at a discount from the $56 million that LIVWRK and Meadow Partners had paid in 2019. Beyond Labin, the backers are unknown.
At the time of Hager’s purchase, the building was just 50 percent occupied. Hager now has the opportunity to renovate it, lease it up and flip it.
David Junik of Pinnacle Realty, who has brokered Hager’s deals, thinks that the acquisition is just up Hager’s alley. “You are seeing more of the local players who are opportunistic when there is a lot of uncertainty, and that’s where you are finding a lot of creative deals,” said Junik.
“It’s in a location where there is a lot of high-end residential development taking place,” he added. “A lot of people want to work where they live.”
Hager is also focused on long plays like the 500-unit multifamily portfolio in the mid-Atlantic.
“I don’t think he would have done that 15 years ago,” said Schechtman. “Everything was value-add and explosive growth. Now he’s buying already established apartment complexes.”
Hager has no shortage of funding, according to sources. He has teamed up with Daryl Hagler, a nursing home magnate who co-owns a controlling stake in Israel’s El Al airline and runs Centers Health Care, as one of his main backers, as well as other high-net-worth individuals.
The first clear Hagler-Hager connection was at Tillary, followed by 960 Franklin Avenue in Crown Heights. Hagler was the signatory behind Hager’s $42 million all-cash purchase of the site in 2022.
Bankruptcy filings show that Hagler had attempted to come in as the white knight for the Tillary Hotel, offering to put in $97 million and showing the court proof of $160 million in funds.
Hagler is one of Hager’s “favored equity partners,” according to Schechtman. It is no small thing that this big money backs Hager.
Although Hager lost a major lending relationship with Madison Realty, he appears to have found a better one. Having one big-time investor who sees his strong suit allows him to do what he does best: find undervalued deals when others are backing away.
This belief in Hager might not make sense. But the incurable maverick is already onto his next act.