Daryl Hagler Refinances Stalled Sunset Park Project

Daryl Hagler is back in business.

Hagler, the nursing home mogul, real estate investor, kosher steakhouse owner, and vice-chair of El Al, provided refinancing for Watermark Capital’s Sunset Park development.

The deal comes two weeks after Hagler settled a lawsuit with New York Attorney General Letitia James over allegations of nursing home neglect for $45 million.

Watermark secured a $42.5 million loan for its 28-story, 497-unit project at 6128 Eighth Avenue from an entity connected to Hagler. The financing staves off a foreclosure attempt from Rialto Capital Group. Marvin Azrak’s Maguire Capital has a small stake in the property.

Watermark, led by Wolfe Landau and Meir Tabak, can now go ahead with its ambitious project on Brooklyn’s former rail yard.

Watermark and Maguire bought up the previous developers’ equity interests and debt piece by piece. The cost, both equity and debt, totaled between $75 million and $80 million.

Previously, a group of Flushing-based developers had planned a three-story mall and a 10-story hotel, two 15-story residential towers with 350 apartments, and a 17-story office tower at the site. The project never made it through the city’s land-use review process, after facing opposition from the local community board.

Watermark and Maguire started acquiring the interests to buy the Sunset Park site in 2021. The two also secured a $45 million acquisition loan from Signature Bank in early 2023. But the Federal Deposit Insurance Corporation seized Signature in March 2023. Rialto, through a joint venture tapped by the FDIC in December, started servicing the debt.

Rialto initiated a foreclosure against the property this summer. The financing from Hagler replaces Rialto’s debt.

Hagler has become more active in New York real estate the past few years. Notably, Hagler teamed up with Cornell Realty’s Isaac Hager to acquire the 960 Franklin Avenue development in Brooklyn for $42.8 million in November 2022. They sold the site for $64 million earlier this year.

Hagler often partners on deals with Rozenberg.

Rozenberg acquired a controlling stake in Israeli airline El Al in 2020, and Hagler has since become the vice chairman of El Al. Rozenberg is also the owner of Tabernacle steakhouse in Midtown, which Hagler is reportedly involved as well. The two also founded a winery in Israel in the Upper Galilee called Tabernacle.

Rozenberg and Hagler are the co-owners of Centers Health Care. New York Attorney General Letitia James filed a lawsuit last year, alleging the partners converted more than $83 million in Medicaid and Medicare funds to enrich themselves, while residents at four nursing homes faced disturbing conditions. The partners settled for $45 million; a majority of the settlement money will go to improving resident care and staffing at a handful of nursing homes in New York.