Thursday, March 24, 2011

Lehman Brothers Holdings will hold foreclosure auction for Dunbar apartments in Harlem


  • March 23, 2011 By Carter B. Horsley
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Lehman Brothers Holdings has scheduled a foreclosure auction for Friday in an effort to seize control of the block-long 550-unit Dunbar apartment complex in Harlem between 149th and 150th Streets off 7th and 8th Avenues, along with a set of smaller properties, according to article today by Eliot Brown in The Wall Street Journal.

The Pinnacle Group, which bought thousand of apartments in low-income neighborhoods during the real estate boom, as a result now faces losing one of its more prominent properties, the article said.

With investment funds controlled by Praedium Group, the article continued, Pinnacle "paid aggressive prices to become among the city's most active buyers of walk-up apartment buildings throughout 2005 and 2006," adding that "Pinnacle has been criticized by elected officials who allege improper eviction practices. The company has denied wrongdoing."

"Amid a tough lending market and lower market prices for the properties," the article said, "Pinnacle failed to repay Lehman about $51 million in junior debt that came due in September. The firm is still in talks with Lehman in an attempt to maintain control of some of its portfolio, a person familiar with the matter said. However, that doesn't include holding on to the Dunbar complex, this person said."

"There are a lot of opportunities and a lot of challenges in this financial environment, but we're very comfortable that we're navigating both successfully," said Kenneth Fisher, an attorney for Pinnacle," the article said.

In 2007, it continued, "a group of tenants sued the company in federal court alleging that the company had improperly forced out tenants. That lawsuit hasn't yet been resolved. Pinnacle has fought the charges, saying it has acted properly. 'Pinnacle is proud of its record of providing safe and affordable housing,' Mr. Fisher said. 'The controversy over its operations is greatly overblown.'"

A spokeswoman for Lehman Brothers Holdings, which still holds real-estate assets while in bankruptcy, didn't respond to requests for comment.

Built in the 1920s, the red-brick Dunbar apartment complex was bought by Pinnacle in 2005 for $94 million from Baruch Singer.
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Tuesday, January 18, 2011

Controversial Pinnacle Group Sheds Uptown Property

March 25, 2009 | 3:32 p.m

Controversial landlord Pinnacle Group has shed one of its uptown properties for $12.5 million, according to city property records.

A group called Latham Properties, affilitated with the budget Latham Hotel on East 28th Street, bought 169-175 East 101st Street, a 119-unit apartment building, on February 26.

The buyer could not be reached for comment. The seller had acquired the building in 2004 for $9.4 million.

Pinnacle Group, which, according to a July 2007 New York Post article titled "'Slum Bum' Hit with RICO Suit," owns 420 buildings in Manhattan and the Bronx, has been the subject of repeated attacks by housing advocates for its tactics in turning affordable units into market-rent apartments.

According to a 2006 Village Voice exposé, a community forum on Pinnacle's alleged abuses attracted 200 residents:

One by one, residents accused Pinnacle of aggressive court tactics—attempts to violate tenants' succession rights, for example, and to evict for bogus reasons. They complained that the company fails to make repairs, or delays repairs, or does shoddy improvements to raise rents beyond regulated limits. Mostly, they blasted the real estate giant for moving into their neighborhoods and moving them out.

In January of 2008, Pinnacle hired Eastern Consolidated to market a portfolio of its properties, hoping to get more than $70 million for 384 apartments, according to an article by my colleague Eliot Brown. Sources say that Eastern Consolidated did not do this deal.
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Pinnacle sues Stringer over tenant conversations

Pinnacle sues Stringer over tenant conversations

June 23, 2008 03:17PMBy Adam Pincus
Scott Stringer


The Pinnacle Group filed a lawsuit against Manhattan Borough President Scott Stringer in New York State Supreme Court this month to force his office to release records of his communications with tenants who filed a federal lawsuit against the controversial real estate company.

Pinnacle sued on June 13, less than a year after a tenants' organization and 10 residents filed a lawsuit in Manhattan U.S. District Court against Joel Wiener's Pinnacle Group alleging deceptive practices, harassment and racketeering.

Pinnacle has denied the charges, and moved in November to have the case dismissed. The judge has yet to rule on the motion.

The Manhattan-based real estate giant owns more than 21,000 rent-regulated apartments in about 420 buildings in Manhattan, Brooklyn, Queens and the Bronx.

Pinnacle sued Stringer, as well as Public Advocate Betsy Gotbaum, after Stringer criticized the company in a public conference call on July 11, 2007, by saying: "The name Pinnacle is just simply a code word for mass eviction."

Wiener's company filed a Freedom of Information Law request in October to review Stringer's records supporting that comment, including information from a housing workshop and public hearing; as well as the communications with the tenant plaintiffs in the federal suit.

Stringer's spokeswoman, Carmen Boon, said in an email that his office did not release all the documents Pinnacle requested because many were exempt from disclosure under the state's Freedom of Information Law. Asked if Stringer would turn them over, she responded that the documents were exempt, but that Pinnacle had the right to sue for them in court.

An attorney for Pinnacle declined to comment. Stringer and Gotbaum did not immediately respond to requests for comment.

Kim Powell, one of the plaintiffs in the federal lawsuit and a Pinnacle tenant in Harlem, said the company wanted to obtain the information to get a leg up to fight the tenants' case alleging violations of the Racketeer Influenced and Corrupt Organizations Act, or RICO.

"Knowing what was said and what is on the record sort of gives them a heads up of our legal strategy," she said. "This is another form of harassment and intimidation."

State Attorney General Andrew Cuomo and the city Department of Housing and Community Renewal struck a deal with Pinnacle in late 2006 that allowed an independent investigator to review the firm's records, following state investigations of allegations of tenant harassment.

http://therealdeal.com/newyork/articles/pinnacle-sues-stringer-over-tenant-conversations
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