Summit Properties Secures $451 Million NYC Apartment Deal
A U.S. bankruptcy judge has given the green light to a major real estate transaction in New York City. Summit Properties USA can now proceed with its $451 million purchase of apartment complexes previously owned by Pinnacle Group LLC. The court made this decision despite strong objections from New York City Mayor Zohran Mamdani.
Court Overrules City's Attempts to Delay
U.S. Bankruptcy Judge David Jones approved the sale on Friday. He rejected earlier attempts by city and state officials to postpone the hearing. Mayor Mamdani's administration challenged the deal shortly after he took office on January 1. They argued the transaction should be paused for further review and tenant engagement.
These objections came several months after the court had already approved sale deadlines. Flagstar Bank NA, the lender involved in the deal, supported those original deadlines.
Financial Details of the Transaction
The $451 million purchase breaks down into specific components. Summit Properties will contribute $113 million in equity. Flagstar Bank will provide $338.5 million in financing for the remainder of the transaction.
Summit's Chief Executive Officer Zohar Levy testified about the company's plans. He stated that Summit has allocated $30 million specifically for repairs and maintenance. This funding will benefit approximately 5,200 apartments across four New York City boroughs.
Most of these apartments operate under rent-stabilization rules. They are located in the Bronx, Manhattan, Queens, and Brooklyn.
Legal and Tenant Perspectives
Ken Fisher, the lawyer representing Pinnacle Group, commented on the court's decision. He described the sale as the result of an eight-month court-approved public process. Fisher expressed appreciation for the court's recognition that this outcome represents the best available solution for all parties involved.
"The company, its independent chief restructuring officers and advisors appreciate the court's recognition that this outcome, achieved in challenging circumstances, is the best available for all constituencies," Fisher said in an emailed statement. "We hope the City shares this perspective."
Pinnacle Group had filed for Chapter 11 bankruptcy protection in May. The company listed more than $564 million in debt at that time. Company advisers attributed the bankruptcy filing to several financial pressures.
They cited higher interest rates, increased operating costs due to inflation, and weaker rent collections as contributing factors.
Tenant Concerns and Management Response
Mayor Mamdani demonstrated his commitment to tenant issues on his first day in office. He met with residents at a Pinnacle-owned building in Brooklyn. Tenants from several Pinnacle properties have voiced complaints about maintenance responsiveness.
They reported that the landlord had been slow to address repair requests for years. Garrett Fail, a lawyer representing the Pinnacle debtors, addressed these concerns on Thursday.
He stated that the buildings had received active management throughout this period. Fail emphasized that maintenance issues were addressed as they arose, contradicting tenant complaints.
The legal case, identified as Broadway Realty I Co. LLC, No. 25-11050, was heard in the U.S. Bankruptcy Court for the Southern District of New York.
