In late 2016, Benny Barmapov was negotiating a deal to sell Michael Miller the ground lease for two adjacent properties on 10th Avenue near the High Line. But Miller died just before the scheduled closing, leaving his son Brandon in charge.
Miller’s Real Estate Equities Corporation, then led by Brandon Miller and Mark Seigel, bought the leasehold for 118 10th Avenue in a January 2017 deal valued at $21 million.
REEC planned a 10-story, 100,000-square-foot office building with retail on the ground floor — but never built it.
Instead, the leasehold changed hands again two years later when an entity tied to GDS Development Management and Swedish real estate firm Klövern AB took it over. Plans for an office building were derailed by Covid-19, Barmapov said, and the leasehold was transferred back to Brandon Miller in December 2023.
But Miller, who died suddenly on July 3, stopped paying the ground lease just a few months into 2024, Barmapov said. In January, as it turned out, Miller had pledged his equity interests in the entity controlling the property to a company called DIA Family Holdings, according to a UCC filing. On July 12, DIA filed for Chapter 11 bankruptcy protection.
Not every development goes according to plan, but the reasons why 118 10th Avenue ended up vacant and weed-infested may shed light on the state of Miller’s dealings at the end of his life, and on the future of his company and its projects.
Public records begin to paint a picture of a business in the wrong asset class at the wrong time. Real Estate Equities, or REEC, fell behind on at least a few payments beside the Chelsea project, according to lenders. The company hit other obstacles as it pivoted from residential and commercial to an almost exclusive focus on office projects, many of which have been moving forward only in fits and starts.
Yet Miller and wife Candice Miller, a blogger and Instagram influencer, continued to live lavishly, hopping between an Upper East Side rental apartment listed at nearly $50,000 per month, and a Hamptons home in Water Mill. They threw parties, traveled to Europe and drove four classic cars that Brandon Miller had financed, according to UCC filings — two Porsches, a Ferrari and a 1968 Ford Bronco. Candice documented their lifestyle on Instagram.
“Under-the-radar” developers
The Real Deal’s coverage of the Chelsea office development plan referred to REEC as an “under-the-radar Midtown-based property investment firm” in late 2018, but its deals had grown increasingly visible.
In the 2010s, the firm was plowing ahead with several residential projects. REEC signed a 150-year ground lease in 2010 at 137 Franklin Street in Tribeca to build a three-unit co-op with a sellout price of $23 million. Miller grabbed the first sale, paying $3.9 million in 2013 for what StreetEasy lists as a luxurious, 4,000-square-foot penthouse.
In 2021, Miller sold the unit for more than $9 million to an anonymous limited liability company. The cash infusion came as debt had turned sour on an office project in the East Village, one of several problematic developments on the horizon for REEC.
Still focused on residential in 2015, it teamed up with Magnum Real Estate Group to buy a $75 million assemblage at 196 Orchard Street for a luxury condo development. And in 2017, it acquired the ground lease for 1228 Madison Avenue for $15.6 million, although REEC appears to have exited that condop project before it was complete.
At the same time, REEC was juggling a number of office projects. In November 2015, it took over the leasehold at 313-315 West 125th Street in a deal valued at $5 million. In 2018, Mavik Capital, a distressed debt investor previously named Terra, injected a preferred equity investment of $20 million, SEC filings show, and made a senior loan in 2019 backed by 286 Lenox Avenue for $4.7 million, which was taken over by First Republic Bank a year later.
East West Bank foreclosed on 313 West 125th Street in 2022, with $14.6 million in outstanding debt, according to PincusCo.
REEC secured financing and almost closed a deal to buy the leasehold for two floors at 958 Madison Avenue in 2016, with the option to purchase the entire property, according to a lawsuit in federal court, before the owner backed out.
In November 2016, REEC and Boss Equities took over the leasehold at 286 Lenox Avenue for $4.8 million and built a ground-up office building, then signed over the ground lease to Regal Acquisitions in January 2020 for $10.2 million, according to property records.
After that, the firm bought ground leases for offices between 2017 and 2020, amassing property with a total value of more than $127 million, according to property records.
The project at 118 10th Avenue was one of at least four office developments that Real Estate Equities had under development when Miller died.
Neighborhood offices
While plans for the office building near the High Line were shelved amid the Covid-19 closures, Miller’s pursuit of new office development continued with projects in the East Village and Harlem.
The East Village saga began in 2017, when REEC bought the leasehold on the property for $29 million from Edward Gabay. In 2018, REEC filed plans to build a 53,000-square-foot office building at 1 St. Marks Place in the East Village, but progress was slow. Before foundations were even dug, Madison Capital Realty tried foreclosing on the property in 2021.
Parkview Financial rescued the project with a $70 million refinance the following year.
Only the third and final tier of the nine-story building is still under construction. But as the building nears completion, 24 percent of Manhattan offices remain vacant, according to a Cushman & Wakefield report, and for the first time since 2021, no new construction or full renovations of offices were completed last quarter.
REEC recently fell behind on loan payments at the project, Parkview Financial CEO Paul Rahimian told TRD, and there are not yet tenants for the building’s retail or office space. “The project is entirely on spec,” Rahimian said.
“We think there will be demand for new office in such a popular neighborhood, and we were surprised like everyone else to learn about what had happened [with Miller],” he added.
In September 2020, REEC took over the leasehold at 156-166 Bowery, a 15,000 square-foot assemblage in Nolita, in a deal valued at $50 million. In 2022, the firm filed plans for a 73,000 square-foot mixed use commercial building and landed a $60.5 million loan from Raven Capital Management, according to property records.
But progress at that property appears to have stalled.
At the last project where Miller completed construction before he died — a new office building in East Harlem built out for life-sciences tenants — the development took a wayward turn. After REEC bought the leasehold in 2020 for $27 million, it lined up its financial exit a year later — a sale contract with Elie Schwartz’s Nightingale Properties that had a 2025 deadline to close.
Since then, Schwartz was found to have misappropriated investor funds that were meant to be used to buy real estate projects worth tens of millions of dollars in Miami and Atlanta. Federal authorities opened an investigation into Nightingale over investor funds being transferred to Schwartz’s personal bank account.
The East Harlem project has 130,000 square feet and was among the city’s 10 biggest new building applications for 2020, one of only two in Manhattan developments to make the list.
A security guard at the vacant building said one tenant is expected to move in this summer.
The decision to pursue a new office building in East Harlem contrasted with at least one other developer who pivoted to residential in the area after the pandemic.
When REEC successfully rezoned the site in 2023 for commercial development rather than residential, it noted in its application that proximity to public transit would be elemental in the success of a new life-sciences building in the otherwise low-rise, residential neighborhood.
The office building stood to benefit from the city’s Second Avenue subway extension, which has drawn investment in anticipation of running the Q train further north on Manhattan’s East Side, making parts of East Harlem more accessible to the city’s subway commuters.
That funding, however, vanished when Gov. Kathy Hochul halted Manhattan’s congestion pricing program.
While partners and lenders wait, some can still envision what might have been for Miller’s projects.
“Brandon had a good idea,” said Barmapov. “I think it’s crazy what happened.”
Keith Larsen contributed reporting.