Starwood is looking for $ 157 million from HFZ due to a loan default


Starwood Capital CEO Barry Sternlicht, Chatsworth at 344 West 72nd Street and HFZ Capital Chairman Ziel Feldman (Google Maps; Getty)

Starwood Capital CEO Barry Sternlicht, Chatsworth at 344 West 72nd Street and HFZ Capital Chairman Ziel Feldman (Google Maps; Getty)

Starwood Property Trust is suing HFZ capital group Ziel Feldman, which accused the developer of repaying loans in a cooperative conversion from the Upper West Side and for failing to comply with a tolerance agreement.

Starwood – through SPT Chatsworth Holdings – is seeking $ 157 million, according to a federal lawsuit she filed in New York on Tuesday. The company claims that HFZ, Feldman and his wife Helene are in arrears with their superiors and mezzanine loans, an unsecured loan and a stock loan obligation for Chatsworth, a century old building at 344 West 72nd Street. The inventory loan was to be used to purchase shares in the cooperative.

In a statement Friday, Starwood said he was “in active discussions and the matter could be resolved in a matter of days.”

According to the lawsuit, the balance of the outstanding loans was due in January. Under the contract with Starwood, HFZ was obliged to purchase the unsold units in cooperation within 45 days of the delay, which it did not do according to the complaint.

The suit is governed by the August Tolerance Agreement between HFZ and Starwood. Under the agreement, HFZ agreed to repay a total of $ 9.1 million between August 17 and October 28. Starwood claims that HFZ missed these planned payments under the relief agreement.

Starwood claims that Nir Meir, CEO of HFZ, told the company that he had sent two separate bank transfers to finance overdue payments. But Starwood said he never got the money. On September 4, Starwood’s lawyer told HFZ that the complaint was in arrears with the relief agreement.

An HFZ spokesman called the Starwood allegations “inaccurate.” The spokesman added that “bank transfers were sent and received by Starwood and that Starwood used the funds in accordance with the loan documents, including the payment of interest and legal fees.”

The company declined to comment further.

HFZ bought Chatsworth in 2013 for $ 150 million and quickly sought to convert the 147-rent Beaux-Arts building into cooperatives.

Some units in the building were stabilized by rents and HFZ tried to pay these tenants. In 2017, HFZ was sold 46 of the rental units of the building for $ 38 million to an entity affiliated with the Brazilian banking and real estate group Safras, a Brazilian bank.

Over the years, HFZ has purchased a number of historic rental buildings in the Upper West and turned them into cooperatives or apartments. However, the company encountered difficulties with its loans for several of these buildings.

Last month, the CIM Group used the intermediation in the marketing of mezzanine loans associated with four New York HFZ condominium projects through closing the sale.

Other significant HFZ projects include the XI, a mixed housing and hotel project near the High Line, and Belnord, a legendary tenement building in the Upper West Side, which the developer converted into a 95-unit housing project.

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