Inside Maverick Real Estate’s bag of tricks

NY’s scrappiest distress player is taking on some of the city’s most legendary dealmakers. And it’s getting bolder

Maverick's David Aviram and Ted Martell (Photo courtesy of Maverick Real Estate Partners)
Maverick's David Aviram and Ted Martell (Photo courtesy of Maverick Real Estate Partners)

The residents of a Harlem co-op were in a bind. 

The building had been part of a city initiative that allowed low-income renters to become homeowners, but it was falling apart. Its loan was in default, and a lender was seeking to foreclose. The long-time residents feared they would lose their homes. 

Then the lender, a company controlled by Manhattan-based Maverick Real Estate Partners, bought an additional lien — a default judgment for the building’s unpaid heating bill for close to $63,000. 

The move appeared to make no financial sense. At most, Maverick co-founder Ted Martell said, it would net the lender $30,000 in profits. Maverick would most likely lose money after legal fees. 

But Maverick had a trick up its sleeve. 

By acquiring the default judgment, the co-op owners alleged that Maverick could bypass the traditional foreclosure process and force the building to sell through a sheriff’s sale, in which Maverick could become the lone bidder. Maverick said in court filings that its goal was simply to collect on the unpaid judgment.  

A judge stopped the sale at the last minute, but Maverick continued to press for a sheriff’s sale until a court and appellate court denied their request for summary judgment. The foreclosure is still pending. 

Buildings can easily get stuck in webs of missed payments, and distressed firms will feed on them like trapped flies. Maverick does this faster and more efficiently than any other.

Normally, those that excel in this game are renowned in the industry. The toughest players earn credibility as cowboys, renegades, legends. But Maverick has a polarizing reputation.  

In my opinion, what they are doing is despicable,” said Jared Paioff, an attorney who represented a client against Maverick. 

Retail developer Joe Sitt took an opposing view: “We’ve only had good experiences with the Maverick team,” he said in a statement. Sitt’s Thor Equities has invested in the company’s funds and called it “honest and upstanding.” 

Buying up debt on downtrodden landlords is not unusual or illegal. Many of the most revered investment giants, including Starwood Capital, Fortress Investment Group and Blackstone, routinely buy distressed debt. It is also not unusual for firms to be aggressive with delinquent borrowers. 

But “aggressive” doesn’t do Maverick justice. In 2018, the firm tried to foreclose on a Chelsea building owned by a Holocaust survivor. In 2021, it initiated a foreclosure on a historic theater in the East Village whose long-time owners live in an upstairs apartment. 

Maverick cut its teeth buying up loans and liens for a few million dollars apiece. It commonly charges default rates up to 24 percent, plus  fees and legal costs, which borrowers claim squeeze out any chance of refinancing. 

According to Maverick, it is simply following the terms of the loan documents, fair and square. It says its ultimate goal is just to get repaid. 

Maverick is not interested in owning and managing real estate,” Martell and fellow co-founder David Aviram said in a statement. 

Maverick has found success using these tactics on small property owners, but now it is going up against some of the industry’s most ruthless dealmakers: Joseph Chetrit. Ben Ashkenazy. Yoel Goldman. Even Steve Croman, a notorious landlord whose own hardball tactics have inspired both legislation and a prison sentence.

They are the bully in the schoolyard,” Croman said of Maverick. 

Licking their chops

Aviram and Martell have no social media presence. They do not make the rounds on the real estate party circuit or speak at industry conferences. 

They’ve done almost no press, and declined to be interviewed for this story, though they did provide responses to a list of topics and questions. 

Maverick also provided The Real Deal with the only public photo of the pair at their office, which shows Aviram with grayish hair and a clean-cut face. Martell, in khakis, looks like he’d be comfortable at a Larchmont country club. 

Their educational background supports the suburban-dad vibe. Aviram went to the University of Pennsylvania, majored in philosophy, politics and economics, and worked for Bloomberg’s financial data team. Martell went to Princeton, studied architecture and landed a job with Sciame Construction after school. 

The two met at Columbia Business School in 2004 while studying real estate finance. After that, Martell led projects for two developers, OTL Enterprises and Mitchell Holdings, while Aviram landed at the commercial brokerage powerhouse Eastdil Secured, representing property owners on trophy assets. 

Our day jobs detracted from the effort and motivation required for Maverick to take off,” the pair wrote in one of their responses. 

That opportunity came during the financial crisis.

We knew developers were stalled out, the securitization markets had seized up, and creditors began to reconcile with the fact that they may have to repossess property that they never thought they’d have to own,” they said. 

While the banks were licking their wounds, those with capital were licking their chops,” they added.

Martell and Aviram quit their jobs and opened an office in January 2010 with a focus on buying distressed debt. They had no experience and little money. They were, however, telling banks what they wanted to hear: Maverick could buy their troubled loans. 

In one meeting in mid-2010, a special assets officer wheeled in a crate full of loan files, and Ted and I spent the rest of the day poring through them trying to make sense of a business we knew little about,” said Aviram.  

Maverick nabbed its first deal on a loan secured by land in North Williamsburg. It was repaid in three months with a 1.3x multiple. 

A year later, Maverick bought a defaulted construction loan secured by a half-built hotel on Orchard Street on the Lower East Side. It discovered that mechanic’s liens had been filed on the property a year prior to the construction loan default.

We hypothesized that mechanic’s liens could be a leading indicator of distress and spent weeks in the basement of the Manhattan County Clerk’s office at 60 Centre Street printing thousands of pages of documents,” they said.

Maverick used lien data like a target list. It began cold-calling construction companies and the banks that were financing those projects. 

Maverick put the Orchard Street loan into foreclosure, which dragged through the courts for years. It was their first taste of the bloodthirsty sport of distressed investing. 

The property owner, Ben Zhavian, got hold of Aviram’s cell phone number and, according to Maverick’s attorneys, called him 24 times in one month, including at 4:45 in the morning. Zhavian would curse and scream and tell Aviram he might send someone to “pay him a visit.”

In court filings, Maverick’s attorneys at Morrison Cohen claim that Zhavian also threatened to kill the hotel manager. Zhavian has denied the allegations and said he never threatened anyone. 

Friend or foe?

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Maverick has no desire to originate loans. Maverick also does not want to service loans at typical interest rates. Maverick wants the default rates, which can run as high as 24 percent, just below the legal limit in New York, according to court depositions. 

We acquire nonperforming debt and seek to get it repaid,” Martell said in a 2021 deposition. 

Put simply, Maverick does not need to play nice. It does not need to build relationships with property owners. It does not need to do loan workouts or restructurings.

It’s a strategy that has not made it many friends. 

A rendering of Chetrit Group’s under-construction hotel at 255 West 34th Street (Rendering courtesy of City Realty)

Borrowers allege that Maverick is overly aggressive in how it classifies nonperforming loans. They say it finds technicalities to force their loans into default. Borrowers say they are up to date on their mortgage payments, but Maverick will argue they defaulted because of things like insufficient reserves, unpaid bills or extra loans. 

They really push the envelope,” said real estate attorney Joshua Wurtzel, who has represented borrowers against Maverick.  

Maverick sometimes pushes it too far. It recently sought to foreclose on a rental property at 416 West 25th Street in Chelsea owned by Andreas Steiner, a Holocaust survivor. Maverick alleges Steiner defaulted by taking out another loan without the prior lender’s consent. The court didn’t buy Maverick’s argument, and neither did an appellate court. 

Maverick said it does not comment on litigation, but it wants to make clear it’s not a predatory lender. 

Maverick buys loans already in default, where a borrower and prior lender have agreed to the rules of the road and a borrower has failed to live up to its obligations,” said Martell and Aviram.

Legal battles 

Win or lose, Maverick is aggressive when it comes to litigation. 

In 2017, Maverick purchased about $40 million in loans from Signature Bank. The loans were backed by a Brooklyn portfolio owned by Chaskiel Strulovitch, a troubled midsize landlord who was accused by Israeli investors of running a Ponzi scheme. 

Once Maverick bought the loans, it quickly sought to accelerate interest, alleging that they actually went into default years prior because Strulovitch had committed fraud by hiding the true owner of the properties.

The case devolved into a bloodbath. 

The debtor tapped David Goldwasser, a go-to restructuring specialist for embattled Brooklyn developers, to file for bankruptcy, and White Plains judge Robert Drain denied Maverick’s move to accelerate the interest payments. Maverick also lost its bid to acquire the properties in a bankruptcy auction where its lawyers contested nearly every move, calling the two-day event “a chaotic and disorganized spectacle.”

Now Maverick has moved from the peddlers in Brooklyn to the machers in Manhattan. 

Its most recent target has been Croman, tenant activists’ public enemy number one. Maverick was not intimidated. It bought loans on Croman’s 85-unit assemblage at 208-214 East 25th Street in Kips Bay and alleged that he had defaulted. Croman’s attorney claimed these were technical defaults and that Croman only had a $16,000 shortfall when the debt was sold to Maverick, which tacked on a default rate of 24 percent plus a 5 percent prepayment fee. 

Croman, wisely, tapped Goldwasser to restructure. 

In many respects, the debtor is a victim of predatory lending practices,” Goldwasser wrote in a petition, adding that Maverick has a “questionable reputation” for buying distressed debt to charge default interest.

Maverick has had success collecting on real estate’s largest players who struggled during the pandemic. A judge allowed it to collect default interest on a $22 million loan backed by a property owned by Ben Ashkenazy in Washington Heights.

Maverick reportedly initiated a foreclosure on Chetrit Group’s 33-story, 323-room hotel near Penn Station after it claimed Chetrit defaulted on about $110 million in loans. An auction is set for early this month.

Entrepreneurial grit”

Maverick brags that it has “extraordinarily high-quality” investors that include pension funds, foundations and endowments, but declined to disclose who they are. One pension fund to chip in was the Louisiana School Employees’ Retirement System, which committed $50 million to a Maverick fund in 2020, according to public filings. 

Investors are not the only thing that Maverick keeps close to the chest. In the case of the Harlem co-op tenants, the firm was reluctant to hand over documents in discovery, including  how many distressed mortgages Maverick has acquired and entities Maverick has a controlling interest in. 

Maverick is even fiercely protective of its name. In 2021, Aviram and Martell’s Maverick sued Adi Chugh’s New York-based brokerage Maverick Commercial Properties in federal court over trademark infringement. Chugh’s company eventually changed its name to Surya Capital Partners. 

Aviram and Martell are not easy to decipher. They describe their business in jargon.

Maverick is guided by our core values of Entrepreneurial Grit and Systematic Problem Solving, a symbiotic and never-ending process of improvement,” they said.

To them, real estate appears not to be about owning a piece of New York history, or a trophy, or chasing clout. It’s not a hustle or a passion; it’s an intellectual challenge.

Over the next year, we will continue developing and deploying proprietary algorithms that convert data into actionable intelligence,” they said.

But in at least one situation, Maverick has presented itself as a Robin Hood figure. 

Martell said in a deposition that Maverick acquired the debt on four properties in Greenpoint, Brooklyn, and commenced a foreclosure. The tenants called Maverick and complained about issues at the property, including broken locks and uncollected trash. 

By getting involved, the properties will be sold and repaired and [will] be good places for them to live,” Martell said. 

Maverick’s strategy has been a financially successful one. It raised its sixth fund in 2021 with $318 million in commitments. It has completed over 180 transactions and has $500 million in assets under management.

Maverick has a staff of just 15, but expects to grow to 22 in the next six months as it builds out its data department. Maverick also sees more distress on the horizon as higher interest rates have led banks to pull out of the market.

Many property owners won’t manage this tightrope walk effectively, and this will lead to loan defaults, foreclosures and bankruptcies,” they said. 

That’s great for investors. But in the case of the Harlem co-op, representatives allege Maverick’s business plan could lead to long-term residents, most of whom are low-income people of color, losing their homes. 

The actions of the plaintiff are particularly egregious,” Yetta Kurland, the attorney for the co-op owners, wrote in a filing. 

There’s a cost to this strategy. Whether or not it will turn off investors is yet to be seen, but for the moment Maverick is waging war against real estate’s biggest bruisers and often winning. At least for now, in the world of New York distress investing, Maverick is king.