New York City's real estate market saw a week of significant developments, from a major developer losing a key property in a foreclosure to a demolition firm settling claims of worker mistreatment for $1.5 million. The events highlight the ongoing pressures and shifts within the city's property landscape, affecting everything from luxury developments to worker safety standards.
In a separate high-profile transaction, the Long Island mansion once owned by Jordan Belfort, the infamous "Wolf of Wall Street," found a new owner for nearly $7 million. Meanwhile, a prominent investment firm secured major financing for an office-to-residential conversion, signaling a key trend in the city's commercial sector.
Key Takeaways
- Developer Eli Karp lost his troubled Flatbush development, 1580 Nostrand Avenue, to lender Madison Realty Capital in a $70 million credit bid.
- Demolition company Alba Services agreed to a $1.5 million settlement over allegations of hiding workplace injuries and retaliating against workers.
- The former Long Island home of Jordan Belfort, known as the "Wolf of Wall Street," was sold for $6.9 million.
- Vanbarton Group secured a $280 million loan to refinance an office-to-residential conversion project, adding 77 new apartments to a Sixth Avenue building.
Developer's Ambitious Project Ends in Foreclosure
Developer Eli Karp's vision for a large-scale luxury apartment complex in Flatbush came to an end this week. Lender Madison Realty Capital has taken control of the property at 1580 Nostrand Avenue through a $70 million credit bid at auction.
Karp's company, Hello Living, acquired the site in 2014 for $13 million with plans to construct a two-building development named Hello Nostrand. However, the project encountered financial difficulties with lenders shortly after construction began.
To prevent a foreclosure, Karp placed the property into bankruptcy in 2021. Despite these efforts, only one of the two planned buildings, a 93-unit rental, was completed. That building, along with the adjacent undeveloped land, was part of the recent auction.
A Pattern of Financial Distress
This is not the first property lost by the developer. Earlier, Karp's property at 2417 Albemarle Road was also taken over by its lender through a credit bid, indicating a pattern of financial challenges for the once-prominent developer.
The foreclosure process was complex. Madison Realty Capital, the senior lender, sold its loans on the property to Arch Companies. Arch then initiated its own legal action to foreclose, culminating in this week's auction that returned the property to the original lender.
Demolition Firm Settles Worker Mistreatment Claims
A New York City demolition subcontractor, Alba Services, has agreed to a significant settlement following serious allegations of labor law violations. The company will pay $1.5 million to resolve claims that it systematically concealed workplace injuries, retaliated against employees, and failed to act on reports of sexual harassment.
The New York Attorney General's office announced the settlement, which addresses actions that allegedly occurred between 2016 and 2024. According to officials, Alba Services failed to report hundreds of injuries, a practice that would have allowed the company to maintain lower insurance costs.
The investigation also found that the company allegedly threatened workers who attempted to file for workers’ compensation. The inquiry gained momentum after the laborers’ union, Local 79, initiated a public campaign in 2022. The union accused Alba of intimidating workers by offering rewards for information on employees who filed what the company deemed "false" claims.
Strict Oversight Measures
As part of the settlement, Alba Services will be under the supervision of the attorney general’s office for a minimum of three years. The company is required to submit reports twice a year to demonstrate its compliance with workers' compensation and human rights laws.
This is not the first time Alba Services has faced legal scrutiny. In 2023, the firm was one of 26 companies indicted in a large-scale construction kickback scheme. According to that indictment, Alba received $2.8 million in inflated contracts for work at two Manhattan locations.
High-Profile Properties See Major Transactions
'Wolf of Wall Street' Mansion Sells
The sprawling Long Island estate formerly owned by Jordan Belfort has been sold for $6.9 million. Located at 5 Pin Oak Court in Glen Head, the 8,700-square-foot home was a symbol of the excess depicted in the film "The Wolf of Wall Street."
Belfort lived in the mansion with his then-wife, Nadine Macaluso, during the peak of his financial career in the 1990s. The property was seized by federal authorities in 2001, two years after his conviction for securities fraud. Belfort later served two years in federal prison.
After his release, Belfort reinvented himself as a motivational speaker and has since relocated. The sale of his former home closes a chapter on one of Long Island's most notorious properties.
Office-to-Residential Conversion Gets New Financing
In a move reflecting a major trend in New York's commercial real estate market, Vanbarton Group has secured a $280 million loan from Invesco. The financing is for its building at 980 Sixth Avenue, which is undergoing an office-to-residential conversion.
The new loan replaces a previous $273 million loan from Blackstone. The refinancing comes after Vanbarton successfully converted three floors formerly occupied by WeWork into 77 new market-rate apartments. This project is part of a larger strategy for the firm.
Vanbarton Group has become one of the city's most active players in converting underutilized office space into housing. The company's current pipeline for such projects now exceeds 2,000 residential units, addressing the city's housing demand while adapting to the changing needs of the commercial office market.
