A federal bankruptcy judge approved the $451 million sale of a 93-building portfolio encompassing more than 5,100 rent-stabilized apartments in New York City, ignoring efforts by Mayor Zohran Mamdani to block the transaction.
The Gothamist reports the real estate firm Summit Properties USA acquired the portfolio after previous owner Pinnacle Group filed for bankruptcy last May. Pinnacle’s properties became dilapidated and accumulated thousands of open housing code violations, but the company insisted it could not afford to make the necessary repairs.
After taking office on New Year’s Day, Mamdani directed city attorneys to delay the sale, highlighting that Pinnacle owed the city roughly $13 million in unpaid housing violations.
But the judge in the case had already authorized the sale and Summit made its bid before the new mayor was sworn in. The judge also overruled objections raised by city officials, a tenant union and New York State Attorney General Letitia James that tried to cast doubt on Summit’s ability to fix the Pinnacle portfolio problems.
Judge David Jones said he was “satisfied” with Summit’s plan to mitigate the more than 6,500 housing code violations in Pinnacle’s portfolio.
“Summit evinces every good intention to run this portfolio properly,” Jones said in a ruling Friday. “They have shown more than adequate financial wherewithal to do this.”
However, a spokesperson for the Pinnacle Tenant Union complained in a statement, “Summit was forced to commit under oath to a plan for repairs and management of our homes. Summit is not done hearing from us! We’re going to use our power to fight for our homes, better and faster repairs.”
