Isaac Kassirer may have unwound himself from a chunk of his troubled asset, but new ownership couldn’t save the rent-regulated properties from foreclosure filings.
The 10-building East Harlem rental portfolio owned by Mack Real Estate Group (and previously tied to Kassirer’s Emerald Equity Group) faces the auction block after Freddie Mac and Sabal Capital Partners filed a $47.9 million pre-foreclosure on Friday, PincusCo first reported. The lenders lodged the complaints on behalf of the bondholders on the securitized debt.
Emerald Equity owned the East Harlem rentals until early last year when family firm MREG, a preferred lender in the ownership structure, exercised an option to purchase the assets, Pincus reported.
Neither MREG’s CEO Richard Mack nor Kassirer responded to requests for comment.
The portfolio is 84 percent rent-stabilized on average, property tax records show.
The buildings include 102, 124 and 126 East 103rd Street; 318 and 328 East 106th Street; 237 and 238 East 111th Street; 413 East 114th Street; 238 East 116th Street; and 291 Pleasant Avenue.
Kassirer has faced bankruptcy and foreclosure on dozens of rent-regulated properties since the 2019 rent law eliminated nearly every route to raise rents. Expenses soared and Covid decimated rent rolls in the years that followed, leaving owners citywide cash-strapped. Some struggled to make loan payments.
For Emerald Equity, which specialized in deregulating assets to hike rents, the legislation was devastating. Owners of Kassirer’s ilk often overleveraged acquisitions, betting that they could secure those outsized revenues. When the rent law illegalized deregulation, such business plans were rendered obsolete.
MREG, meanwhile, specializes in multifamily acquisitions, development, and has an active lending arm that doesn’t shy from taking assets.
MREG took control of the Brookfield entity that owned the Brill Building – once an epicenter of the pop music industry – last July and filed to foreclose on an 11-building portfolio owned by Robert Gans in 2021 after the strip-club landlord defaulted on a $130 million loan.
Richard Mack has also been an unabashed critic of rent regulation, blaming it for stoking the city’s affordability crisis.
Emerald Equity nabbed the East Harlem rentals in a blockbuster 47-building purchase in 2016. Fairstead Capital and an affiliate of E&M Affiliates sold the bundle, known as the “Dawnay Day” portfolio, for $358 million and Kassirer tapped Brookfield for a $300 million acquisition loan.
In January 2019, Emerald Equity refinanced a portion of the portfolio with a $189 million loan from Freddie Mac and Sabal — the largest deal made through the agency’s small loan program, at the time.
Six months later the rent law took effect.
Most recently, Kassirer fielded a foreclosure filing on 27 rent-stabilized Bronx buildings in mid-December after defaulting on the portfolio’s $110 million in CMBS loans. Sabal Capital had issued that debt, too.
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