Forged in Syndicator Fire & Inside Meridian's Healthcare Hullabaloo

Forged in Fire

“My investors are not going to pay for my professional mistakes.” – Stas Grinberg 

If the FBI finds itself jonesing for work, subpoenaing all multifamily syndicator podcast tape between ‘20-’22 should give it plenty of material. It was a period of now-nostalgic exuberance: seemingly anyone w/ chutzpah could make the fix-and-flip numbers work in ZIRP, so the competitive advantage became storytelling: syndicators hit the circuit hard to differentiate themselves not through expertise, but narrative.

Vision & Beyond offered an unusually compelling story. The Cincinnati-based firm, led by Stas Grinberg & Peter Gizunterman, positioned itself as the go-to investor for IDF military personnel and reservists, even establishing a pipeline through what’s known as a 2141 club to help discharged officers figure out their next steps. The end, when it came around Christmas, was brutally swift: Investors were informed that any remaining assets – many were already lost to foreclosure – would be transferred over to them, and asked not to try and contact Gizunterman & Grinberg (whose favorite book, btw, is The Fountainhead )

Legal pandemonium ensued. Vision & Beyond & its principals were hit w/ a flurry of lawsuits, from investors, from lenders, and even the City of Cincinnati, alleging fraud. The most explosive of which, filed by Bancorp in Kentucky circuit court 🏇, alleges that someone involved in the deal forged a bank executive’s signature on loan docs. 🖋️ 

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Mortgage Fraud (Cont.)

“Without the knowledge or permission of Bancorp, or the satisfaction of the indebtedness to Bancorp under the Creekside Note, an unknown person or entity forged the signature of Bancorp Executive Vice President Olek DeRowe,” & another bank employee, Bancorp alleges in the suit, a copy of which was reviewed by The Promote. The fugazi DeRowe signature was allegedly made on Satisfaction of Mortgage docs, which stated that the lender had been paid back its full $9.8M amount (across 2 properties, Creekside North and Cambridge Homes) and thus Vision & Beyond was off the hook. Bancorp also alleges that signatures were forged on Satisfaction of Assignment of Leases and Rents docs. (If this allegation bears out, I’d imagine it violates one of Vision & Beyond’s stated core values, to wit: “Upholding trust, transparency, and ethical practices.”)

Bancorp is also suing multifamily lending bigwig Greystone, Webster Bank and the county of Lexington-Fayette, demanding that they “should come forth and assert their respective interests, if any, in the Encumbered” properties. I’m a bit fuzzy on this part, but it looks like Bancorp’s saying Greystone originated subordinate debt on the properties, and then assigned it to Webster – debt that Bancorp recently learned about.

If you’re a CRE masochist and would like to dive into the 130-page beast of a suit, here it is.

And to catch up more broadly on the pervasive theme of mortgage fraud in CRE, check out The Promote’s special edition on the matter. 

After Meridian Exit, Healthcare Heavies Launch Shop

In December, nursing-home bigwig Sam Stein made a pilgrimage to One Battery Park Plaza, the HQ of Meridian Capital Group. His goal? Broker a graceful exit for Ari Adlerstein & Josh Simpson, 2 of the country’s top healthcare real estate brokers. The duo had been negotiating their departure from the embattled firm for months, even proposing that Meridian’s ownership group back their new venture. Stein, of the aptly named Peace Capital 🕊️ , came in to mediate. He went up to the 26th floor, to the executive offices where Ralph Herzka & Brian Brooks sit, to see what he could do.

The meeting, according to 2 sources familiar w/ the matter, did not go well. Herzka became irate, repeatedly yelling at Stein, who’s a longtime client of the firm. It was clear there would be no kumbaya end to the Adlerstein-Simpson tenure: that week, the brokers were fired for cause, and Meridian issued a pointed statement establishing the pecking order: “Our talented team of brokers, led by rainmakers like our co-founder Ralph Herzka, is unmatched in the industry.”

Stein didn’t respond to requests for comment on the incident, while Meridian, Adlerstein and Simpson declined to comment. The brokers are currently in litigation 💼 w/ the firm, a source confirmed, which is likely why this week’s announcement of their new enterprise, named T7 Capital, was so damn vague: the company doesn’t have a website/description yet, but I’d imagine it’ll end up becoming the platform through which they’ll do what they’ve always done: broker healthcare CRE deals - the team did $5-6B annually in business at Meridian. TBD on how big the new firm will get – I will note that 3 other healthcare finance guys left Meridian this month. And here’s what the market’s asking: w/ all the litigation, who gets the action on Chuny Herzka’s in-contract deal to buy Daryl Hagler & Kenny Rozenberg’s interests in Centers Health Care - a whopper portfolio expected to trade for between $1.5B-$2B? 👩‍⚕️ ❤️‍🩹 

Schreiber Spared the Slammer

Joel Schreiber, who’s being pursued by Starwood for nearly $90M in judgments, may have done enough to avoid seeing the inside of a prison cell. In Nov., a judge presiding over the dispute stemming from a $219M loan on DTLA’s Broadway Trade Center, had warned that unless Schreiber handed over the necessary docs on his labyrinthine finances, he would hold him in contempt. Last week, though, the judge, Aaron Maslow of New York, said that Schreiber has made “substantial efforts” in the cause – Schreiber has now handed over 18K+ pages of docs to Starwood 📃 Per Keith Larsen’s delightful courtroom dispatch for TRD, Starwood’s attorney alleged that Schreiber was hopscotching funds across different bank accts, to which Schreiber’s attorney responded: “There is no proof of that. I wish we had money to move.” 👏 

The sparsely attended proceedings had one delightful cameo: two Lubavitcher lads, who had a hearing over Tunnelgate at 770 (IYKYK).

Key Syndicator Lender Raises $2B Fund

Normally cover fundraising trends rather than individual raises, but this one is v interesting: MF1, a go-to lender for multifamily syndicators incl. Tides Equities, has pulled in $2B for a new bridge loan fund, per PERE. MF1, a JV between Berkshire Residential Investments & Limekiln Real Estate, is headed by Scott Waynebern, who told PERE that “lease-up loans [for] Class A properties in good markets is now 80% of our biz” – prior to the interest rate spikes, it was only 20%. In total, MF1 has originated $23B in debt since launching in ‘19, it said.

How that debt is doing though, is another matter, w/ many of its biggest borrowers incl. Tides going through the wringer. A CRED iQ analysis last summer found that 11.9% of MF1’s CRE CLO book was distressed, and 75% of its book was watchlisted 👀 

Quickies

• 🎥 Why Blackstone can’t take a promote on BREIT

• This could have BIG implications for development contracts etc. but don’t have enough yet so just noting for now: Jewish businesses to be recognized as minority enterprises

• Lloyd Goldman’s once-thriving Gurney’s Montauk heads to special servicing

• Torgalkar’s Sagehall steps in as equity partner at RXR’s 530 Fifth

• Mary Ann Tighe channels Hyman Roth: always made money for [her] partners 😁 🐐 

• The Mendy Steiner-Nussbaum saga: New legal filing says “returned for correction” but here’s what was in there for a hot second, per source (Catch up on whole sitch here)

• Blackstone buying Kimpton Eventi in NYC for $175M (spare a thought for Newbond, which thought they had clinched it 😢 )

• RIP: Rick Matthews, publicist for many of CRE’s power players 🙏 

Where’s Waldo - A Traded Tribute