HFZ Sued For Delinquent Upper East Side Loans

HFZ Capital principals Ziel Feldman and Nir Meir with 1135 Lexington Avenue (Gettyl; HFZ; Google Maps)

HFZ Capital Group continues to have hassle assembly its debt obligations.

The lender at HFZs deliberate mission on Manhattans Higher East Facet claims the prolific rental developer owes greater than $18 million on defaulted loans, in line with a movement for abstract judgement filed in New York Supreme Court docket on Tuesday. HFZ principals Ziel Feldman and Nir Meir are named as co-defendants for personally guaranteeing the debt.

The lender, recognized as YH Lex Estates, claims it loaned HFZ a complete of $20.5 million between 2017 and 2019 to develop the mission on an assemblage round 1135 Lexington Avenue. The lawsuit alleges that after HFZ defaulted on the preliminary mortgage settlement in November 2019, it agreed to a reimbursement plan. In July, the 2 events once more agreed to increase the repayments, permitting the developer to repay the loans in six installments by October.

However HFZ solely paid $1 million in the direction of the steadiness of those loans, the swimsuit alleges. At one level, the lender claims a $750,000 examine that Meir despatched from HFZ was returned for inadequate funds.

Along with in search of the principal and curiosity of the loans, the lender mentioned that due to the historical past of HFZs noncompliance with its debt obligations, HFZ explicitly agreed to pay all authorized charges and prices incurred.

A spokesperson for HFZ Capital mentioned in an announcement the declare is baseless and is within the strategy of being dismissed.

The legal professional representing YH Lex Estates, Mark H. Hatch-Miller of Susman Godfrey, didn’t return a request for remark. PincusCo first reported the information.

HFZ has grow to be some of the energetic rental builders in New York Metropolis lately, with high-profile tasks just like the XI, the Bjarke Ingels-designed condo-hotel hybrid subsequent to the Excessive Line, and the Bryant, the David Chipperfield-designed rental close to Bryant Park. It additionally guess on rental conversions, together with the Belnord on the Higher West Facet, which it reworked into condos.

However lately the corporate has seen its share of issues. In December, federal officers alleged that HFZ managing director John Simonlacaj let the mob skim a whole bunch of 1000’s of {dollars} from the XI, in addition to different Manhattan tasks. (He was fired from HFZ.) And in September, CIM Group tapped a brokerage to market junior mezzanine loans tied to 4 of the developers condominium tasks together with 88-90 Lexington Avenue and The Astor at 235 West 75th Avenue via a foreclosure sale.

Final month, Starwood Property Belief filed swimsuit in opposition to HFZ alleging the agency defaulted on loan payments at the Chatsworth, an Higher West Facet co-op conversion.

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