Flagstar Files Pre-Foreclosure Cases Against Pinnacle Group

Flagstar Bank filed its largest commercial pre-foreclosure action in years against Joel Wiener’s Pinnacle Group.

Flagstar filed four summonses against nearly 100 entities owned by Pinnacle, PincusCo reported. The four cases pertain to loans with an aggregate original principal stretching beyond $600 million.

The action is connected to more than half of Pinnacle’s multifamily portfolio in New York City, roughly 5,200 units of the 8,700-unit portfolio. Two dozen Manhattan properties are linked to the litigation, as well as approximately 75 properties in the outer boroughs. The largest of the loans covers a 142-unit building at 25 Hillside Avenue in Manhattan’s Washington Heights.

At this stage, the action only involves summonses, not complaints, which is an oddity for commercial foreclosure cases in the state. It’s unclear why Flagstar did not file complaints in its action.

Pinnacle could not be reached for comment by The Real Deal.

Earlier this year, Flagstar — the rebranded New York Community Bank — offloaded $142 million in rent-stabilized debt to Cantor Fitzgerald. The loans were backed by 27 assets, which were 86 percent rent-stabilized on a weighted average, according to an analysis by The Real Deal. The portfolio featured both performing and non-performing loans from borrowers, including Steve Croman, Alma Realty, Fairstead and none other than Pinnacle Group.

Pinnacle’s portfolio spans approximately 136 properties totaling about 7.5 million square feet, according to PincusCo data, which estimates the holdings are worth about $1.6 billion.

In 2022, the billionaire Wiener was penalized after he admitted to not properly acknowledging needed capital repairs at a Forest Hills condo conversion. Under a settlement, Wiener paid $330,000 to the reserve fund of The Georgian at 109-20 Queens Boulevard, which covered the cost of the needed piping, as well as $150,000 to the HPD.

Wiener reached billionaire status in 2017, despite once being a target of tenant complaints and fraud investigations.

— Holden Walter-Warner