Updated November 15, 2022 at 12:45 PMDavid Schwartz’s Sugar Hill Capital Partners, one of the biggest buyers of north Manhattan apartments during the multifamily boom of the late 2010s, is now facing foreclosure on one of its flagship properties. doing.
The investment firm fell behind on a $16 million mortgage on a 54-unit building at 4300 Broadway in Washington Heights, according to a pre-foreclosure lawsuit filed Thursday by lender Signature Bank. And Sugar Hill has failed to pay since August.
A representative for Sugar Hill declined to comment, and a spokeswoman for Signature did not respond to a request for comment. PincusCo was the first to report the lawsuit.
Founded in 2009 by Schwartz and former principal Alex Friedman, Sugar Hill is named after the neighborhood in North Manhattan where the company is headquartered. The company paid his $21.6 million for his 4300 Broadway property in 2016.
Three years later, it leased a 6,000-square-foot food hall on the first floor of the building’s retail space. North End Food Hall — First time in Washington Heights.
sugar hill got bigger Multifamily real estate in areas near the peak of the market before Congress passes a series of changes to state rent laws in 2019. $250 million In late 2018, it was due to purchase a portfolio of 53 Harlem apartment buildings from Irving Langer’s E&M Management.
Jay Solomon, who was the company’s chief creative officer at the time but is now retired, said Sugar Hill was a Harlem-based real estate firm at the time.[s] Careful management of these buildings for years to come is our responsibility to our neighbors and community. ”
However, the multifamily landscape changed a year later, with the Housing Stability and Tenant Protection Act severely limiting the ability of landlords to raise rents for stable apartments.
Since then, the law has been cited as a key factor in the struggles of many multifamily investors, including Isaac Kassirer’s Emerald Equities. half of the portfolio It has defaulted on its debts and gone bankrupt in the last few years.
This article has been updated to clarify that Alex Friedman and Jay Solomon are not affiliated with Sugar Hill Capital Partners.