Pinnacle asks court to intervene in NoMad condo drama

UPDATED May 26, 2:45 p.m.: Unsold units and a defaulted loan are stirring up drama behind the scenes of a NoMad condominium.

The developers behind the mostly finished 42-unit residence at 30 East 31st Street are headed to court after Pinnacle Real Estate this week filed a complaint with the New York County Supreme Court, asking the judiciary to force Ekstein Development to give up its shares of the 40-story luxury condo. 

In exchange, Eckstein would receive two out of 10 unsold condo units at the new development, per an arrangement the pair had settled on in March 2022.

Pinnacle claims in court filings the partition is “reasonable from both economic and practical perspectives.” 

The disagreement comes at a time when the duo are struggling for solutions after they defaulted on a $62 million mortgage they took out in 2019 from the Ireland-based Man Real Estate Debt Investments. 

The remaining balance on the loan is $3 million, according to Erik Ekstein, who said he has personally promised the lender it will be paid in full by the first week of June, regardless of the status of the lawsuit.

Ekstein said he’s not opposed to the restructuring proposed by Pinnacle, but disputed the agreement described in the suit was intact. 

“A deal was never agreed to,” Ekstein said. “We had discussed terms. We were close. Unfortunately everything needs major decision rights at this level, and therefore there are numerous partners and if one doesn’t agree, you’re kind of stuck. That’s what happened.”

Ekstein claimed the lawsuit is Pinnacle’s attempt to pressure an unnamed partner who “wouldn’t give them what they wanted.”

“They look at the world a little differently,” Ekstein said, referring to the unnamed partner. “They want to be able to recapitalize their interest in the property. That’s their right.”

Certes Partners and Erik Ekstein’s firm purchased the development site in 2014 for $15.5 million. 

Pinnacle later joined Ekstein as a development partner, forming ZEF LLC. The firm led by Joel Wiener owned an 80 percent stake in the conjoined development company and Ekstein held the other 20 percent.

Pinnacle had arranged a refinancing of the loan based on presumed complete ownership of the eight remaining units, but now alleges in a complaint that “internal disagreements” at Eckstein has put operations at ZEF LLC into “deadlock.” 

Eckstein has yet to submit a legal response to their partner’s filings. Pinnacle has claimed those disagreements pertained to the terms of the refinancing, the choice of the selling agent and, ultimately, whether to sell or rent the remaining units in the building.

The luxury offering has not yielded as much as the developers anticipated. Eckstein previously projected the condo would have a sellout of $90 million, but instead price tags on the apartments keep hitting the chopping block.

The building’s penthouse, which was originally expected to net $12 million, according to real estate filings, has since dropped to an asking price of $8.5 million.

Meanwhile, one of the two apartments pledged to Ekstein, a two-bedroom, was marketed earlier this year at $3.5 million — $1.2 million below its asking price when it first hit the market.

Ekstein in a statement to The Real Deal described the claims in the suit as “completely one-sided” and said the complaint “does not reflect the actual issues at hand.”

Representatives for Pinnacle did not immediately respond to a request for comment.

The new suit is not the first interruption at 30 E 31st Street. Just months into development, Ekstein sued the managers of a neighboring Cardinal Investments-developed, 13-story condominium, claiming that the managers of m127 were preventing the demolition of a Madison Avenue Baptist Church that occupied the property.

This article has been updated with comments from Erik Ekstein.

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