Hizzoner's Turkish Delight & Aby's Denzel Defense

Hizzoner’s Turkish Delight

“When God wants to make a poor man happy, he causes him to lose his donkey, then find it again.” - Turkish proverb

Michael Bloomberg was the mayor New York real estate machers respected, an incorruptible technocrat who reshaped the city and ushered in a golden age of development. De Blasio, with his grandiose socialist rhetoric and knife-and-fork pizza eating, was the mayor they ridiculed. But Eric Adams… Eric Adams was the mayor they loved. This administration was different for builders and financiers who were savvy enough to bet on Adams early, a giddy era of buddy-buddy texts and shared bespoke tailors and nightcaps with the mayor at Zero Bond. There was a sense that even if the city wasn’t really working, at least their guy was in charge. But Adams wasn’t just their guy, as an explosive new federal indictment reveals. Just like the Beatles, he belonged to everybody.

Adams (Cont.)

Hit this week w/ charges of bribery, fraud and soliciting illegal foreign campaign donations, Adams has become the first sitting mayor in modern NYC history to face federal criminal charges. The case focuses on whether Adams conspired with the Turkish government to receive illegal foreign campaign contributions in exchange for being its man in New York. 🇹🇷 🗽 

There’s a strong CRE angle here – is graft even graft without real estate in the mix? The indictment alleges that a senior Turkish diplomat routed funds to Adams from construction cos., one of which is reportedly KSK Construction. The mayor then “compounded his gains” from the illegal campaign contributions through the city’s matching funds program. Adams was also lavished w/ $123K in perks such as free flights 🛫 , hotel rooms and meals 🍣 over a decade, starting from when he was Brooklyn Borough President.

Great stuff throughout the indictment – here’s the SportsCenter bit

Three months after Adams clinched the Dem mayoral primary in ‘21, the diplomat reminded him via a staffer who his friends were, and said it was “his turn” to repay the affection. "I know," Adams allegedly responded to the staffer. He then leaned on FDNY officials 🧑‍🚒 to bless a new 35-story Turkish consulate building in Manhattan, despite defects in its fire safety systems. (When The Promote broke down a separate FDNY permitting scandal earlier this month, little did we know it was just an amuse-bouche 👄 ) The tower, known as Turkevi Center or Turkish House and located right across the UN, was built by the construction arm of IC Holding, an Ankara-based conglomerate w/ several notable projects in Turkey.

Adams will be arraigned Friday, right about when we go to press. He faces a max of 45Y in prison if convicted on all charges, though he’d likely receive a far shorter sentence. He has struck a defiant tone, saying that “I ask New Yorkers to wait to hear our defense.” ✊ 

CRE players who hoped they had their guy for a full 10Y are probably brainstorming what (and who) is next. This whole mess is playing out as the mayor’s flagship City of Yes housing proposal (full explanation here) just moved past City Planning and is headed to the City Council 🍿 

Chasen Shadows

Brandon Chasen, the high-flying Baltimore developer who this summer declared his firm had “adjusted for longevity,” 🧊 🪠 clearly didn’t adjust fast enough. He’s facing foreclosure on the city’s historic One Calvert Plaza in downtown, per the Baltimore Banner. Chasen paid $11M in ‘22 for the 15-story building, and planned a 173-unit luxury rental conversion for which he landed a $34M loan (a floater, natch) from Sandy Spring Bank. The lender alleges that Chasen Cos., which Chasen runs w/ Bullis prep school pal Paul Davis, failed to complete construction and withheld key financial info before the June default. It’s the latest in a series of actions against the company, which controls 2K units and is beset w/ charges of stiffing contractors, failing to pay utility bills 🚿 and neglecting buildings. It previously settled w/ the Maryland AG over allegations of posing as a state agency.

Aby’s Denzel Defense

In the Tony Scott classic Crimson Tide, Gene Hackman & Denzel Washington are going toe-to-toe on a nuclear submarine. Their dispute, and by extension the fate of the free world, comes down to a single question: should an order to launch a missile against a Russki base be carried out immediately, or do we wait to confirm who’s in charge? 🚀 

Aby Rosen, in the fight of his life over RFR’s trophy-heavy troubled portfolio, is channeling Zel in his latest legal maneuver against megalandlord Solil Management, which booted him out of the Gramercy Park Hotel in ‘22 over his alleged nonpayment of ground rent and brought in Tyler Morse’s MCR to operate it. Solil is still gunning to collect its money, but Rosen now argues that the explosive Goldman family feud – see Sol Asylum here – puts that crusade into “serious question.” He’s pushing for a stay on the damages he’s on the hook for until the family works out who’s actually running the Solil empire.

“Ms. Goldman was the one who signed the notices to cure and for termination on behalf of [Solil],” Rosen claims in new court filings (h/t TRD), referring to the late Sol Goldman’s daughter Jane Goldman, who’s been running day-to-day ops at Solil and is now in a multibillion-dollar battle w/ her sister and nephew. “On the other hand, there is no evidence that any other Goldman family member has been involved in this action.” Perhaps other family members would be less zealous about bringing the heat against him, Rosen argues, or may even question Jane’s decision to boot him. It’s the kind of creativity under fire one loves to see from titans on the ropes, and Rosen has titillated us with more to come: he told CO earlier this month that his firm plans to resolve all its debt pains – $2.5B & counting – without selling or surrendering any of its trophies. RFR also just sued its landlord Cooper Union at the Chrysler Building, in an attempt to block being kicked out of its ground lease there 🫡 

Slammer Time for Mortgage Fraudster

Surprised this didn’t create a bigger stir: Tyler Ross, co-CEO of prolific multifamily investor Roco Real Estate, was sentenced to a year & a day in prison for mortgage fraud, the DoJ announced Sept. 19. Ross misrepresented expenses in order to juice NOIs leading to higher valuations on Roco’s properties, including on some that were part of the $570M+ sale to Joe Chetrit’s Chetrit Group in ‘19. Per the DoJ, “Ross supplied the false financial information to the buyer of the properties and ultimately to the financial institution that issued a $481M loan for the transaction.” He “himself received over $2M in proceeds” from the deal, the DoJ added 🧃.

Ross was also fined $200K and after his prison stint will have 2Y of supervised release. As dramatic a rise & fall as you’ll see – founded in ‘11, Roco had amassed 21K units by ‘19 before the Chetrit deal, and by this time last year Ross had pleaded guilty to 1 count of conspiring to commit an offense against the U.S. He’s part of a rogues’ gallery of convicted mortgage fraudsters who’ve either been sentenced or are awaiting their fate. To name a few: Barry Drillman, Aron Puretz, Jacob Deutsch, Mark Silber, Fredrick Schulman and Chaim “Eli” Puretz. 

More: Dial M for Mortgage Fraud  

Quickies

• Charles Cohen (more on his woes here) booted from Tower57 ownership

• We wrote about Elliott Investment Management’s big CRE swings on Wed., and an 🦅 👁️ reader reminded us that Elliott’s also the $$ behind prominent CRE lender Argentic (a JV w/ Silverpeak). Good spot BB 🙏 

• Apollo lends $159M for refi of Mack/STRS ‘ Greenpoint rental

• “Worst landlord” Ohebshalom back in the slammer 

• Vanbarton pays $95M for William Kaufman’s Lower Manhattan building in resi conversion play  

• Patrick Bet-David, a fave among tough 💕 RE types, drops $25M for Ft. Lauderdale office/hangar 🛫 

• NJ regional bank Cross River sells $217M CRE loan book to Johnny Zamir's (deep cut) Keystone 

• Tenant-rep shop Cresa, another one of those firms you have to remind yourself exists, says it’s in M&A mode nationally

Unquotable Quotes

Pondering: Newmark is indeed big in the large-loan placement space. But judging from the trade publications, you’d think they were the only game in town – they absolutely dominate the ink 🖋️ Feels to me like Gosin is actively encouraging his brokers to get the word out about deals, while CB/JLL/Cush are being more demure.