Tuesday, February 21, 2017

[Updated] Foreclosure notice arrives on Raphael Toledano-owned building on 12th Street

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A tipster shared the above photo... a foreclosure notice arrived yesterday on the door of 514 E. 12th St., one of the East Village properties owned by Raphael Toledano.

Earlier this month, Madison Realty Capital reportedly moved to foreclose on one of Toledano’s major EV portfolios, 15 buildings total, sources told The Real Deal.

From that article published Feb. 6:

Just three days before Madison filed to foreclose on the buildings, sources said Joseph Sutton, son of retail mogul Jeff Sutton, signed a hard contract to buy the buildings from Toledano for about $145 million.

Madison, according to documents filed in New York State Supreme Court late last week, claims Toledano, the founder of Brookhill Properties, owes the firm about $140 million, which includes $125 million in loans against 15 properties, plus interest and attorneys’ fees.

Sources close to Toledano said that after he defaulted last year, Madison waited months to initiate foreclosure proceedings, allowing time for him to find a buyer for the properties.

The address on the foreclosure notice matches that of Madison Realty Capital.

The notice reads in part:

The dwelling where your apartment is located is the subject of a foreclosure proceeding. If you have a lease, are not the owner of the residence, and the lease requires payment of rent that at the time it was entered into was not substantially less than the fair market rent for the property, you may be entitled to remain in occupancy for the remainder of your lease term.


All rent-stabilized and rent-controlled tenants are protected under the rent regulations with respect to eviction and lease renewals. These rights are unaffected by a building entering foreclosure status.

It's not known at the moment how many other Toledano properties received similar foreclosure notices.

The Toledano-owned 97 Second Ave. will be auctioned off next week.

Toledano purchased 28 buildings in two separate portfolios from the Tabak family for a total of $140 million in the fall of 2015. Toledano has been accused of a variety of predatory practices. In addition, 20 of his buildings were tested for toxic levels of dust.

Updated 1 p.m.

A resident said that that packets of foreclosure legalese arrived on the doorstep outside one of Toledano's building on Fifth Street...


Anonymous said...

Wow, Rafi's making so much money he can let his buildings go into foreclosure and get auctioned off. This boy genius is in the middle of one of the hottest real estate markets in the city's history, and yet his little empire is in foreclosure. What a smart business move. All the other landlords should follow his lead and let their properties go to foreclosure too. So what's a few million dollars to a guy that's rich like Rafi?
Peanuts! Did I mention that he's really rich? Such a genius.

Anonymous said...

I surprised someone is willing to pay him that much for his these buildings, where are all the real-estate sharks, their is blood in the water.

Anonymous said...

WOW this twerp brought all those building just 2 years ago and now they are in foreclosure? The real blame should fall on the banks who prop these criminals up financially.

How are these cowgirls like Rafi, Terrance (from Icon) and Kushner from Hell able to get their hands on all this money to build a house of cards. Go directly to JAIL! Do not pass go.

cmarrtyy said...


The banks are part of the conspiracy. They know they'll get their money out plus a profit and fees. They use people like Raffi. Next!

Curious said...

Maybe someone out there can answer this question...

What happens when a building goes into receivership? Do tenants pay rent to the bank? Does the bank hold on to the property and just keep collecting the income, or do they have any incentive to sell it? I'm interested to know if being a tenant in a receivership property would actually be safer than having a scumbag landlord.

Giovanni said...

@1:01PM Just ask anyone who lives in StuyTown/PCV what it's like when your building is in receivership, The bondlohders controlled the property for years and did many things to make quality of life worse while they dressed the place up for a big sale. They moved students in to drive up rental income and increase turnover to drive up rents, which made the place a virtual frat house on the weekends. They finally sold it to an investor, and now have a new management company, so the the place has ben through three of four management companies over the past decade, each with their own employees, policies and set of rules, which causes more turmoil for tenants.

The end result? Higher rents and lots of noisy students in exchange for zero security. In spite of all the security cameras and rent-a-cops in their branded SUVs, a woman was attacked, beaten and almost raped by a drunk teenager from New Jersey in her lobby inn StuyTown last weekend on 20th St and Ave C. The guy ripped off all her clothes and the attack lasted 10 minutes before a passer by scared the attacker away. Security never showed up in time to stop it. They had the whole thing on tape but no one from security showed up to help her. The banks and investors just care about mking money, not making tenants lives better, or safer.

Anonymous said...

Answer for Curious:

The foreclosure court appoints a "receiver"--someone who collects the rent and maintains the property (and collects a fee for doing so), with any leftover money going to the bank. It can be a lucrative benefit since it can take well over a year or more to finally foreclose. See Times article: https://nyti.ms/2lrF4Cl

Usually the receiver hires a management company to handle everything. They can sign new leases as well.

The banks (and in this case it doesn't look like Rafi got his loans from what normal people would think of as a "bank") and others do want to get the property sold so they either get their money back or have full control over the property.

I would definitely stick it out through the receivership. But unfortunately it's a ruthless cycle. ... the next landlord is going to have overpaid for the property too and be just as incentivized to get long-term tenants out.

I wouldn't pay Raffi rent for March... but save it because you'll most likely have to pay any unpaid back rent to the receiver.

NYC10003 said...

I was just told by my neighbor that a stack of these were just placed in our building as well on 329 East 12 st. Good riddance to the little troll.

Anonymous said...

I don't understand how placing stacks of legal notices on the outer doorstep of a building constitutes having given the tenants of that building legal notice of *anything* - what if someone came along and stole all those bundles? Then nobody would have received ANY information.

Giovanni said...

At least Rafi "The Smurf" Toledano, Creepy Croman, Shaoul the Ghoul and Mr. Ivanka Trump Jared Kushner are getting more scrutiny from the city for their shady practices. Via The Indypendent:

Attrition by Demolition

Due to tenant pressure, the city is starting to take harassment by construction more seriously

Construction as harassment has become a major issue in the city over the last decade. The East Village and Lower East Side have been hit hardest, with landlords like Croman, Ben Shaoul, Raphael Toledano and Stone Street Properties using it as a business model. In one deal, Shaoul bought seven East Fourth Street buildings in 2010 and 2011 for $25 million and, after clearing out most of the rent-stabilized tenants, sold them to Jared Kushner, Donald Trump’s son-in-law, in 2013 for $49 million. While Kushner has used construction as harassment in some buildings, most notoriously 170 East 2nd Street, he generally prefers to buy properties after other owners “have done the dirty work,” as one Fourth Street tenant put it in January.

Anonymous said...

One delightful possibility is that the sale to Sutton fell through because he owes more than $145M to the lender (because of capitalized interest, fees, legal reserves, etc.) and the lender wouldn’t release the collateral. In this case he’s well and truly screwed, and the lender can come out better than fine while Rafi's company still owes them money. Let’s hope he signed a personal guarantee on the note.

Anonymous said...

Giovanni, to call those worthless clowns in Security uniforms "Security" is an overreach. I prefer to call them Scarecrows. They see nothing and no nothing. Look at all the Doody on the walk areas in Stuy Town and the bikes zooming through the property with all the signs posted prohibiting this. Yet the Scarecrows do what they are supposed to do..NOTHING.

Giovanni said...

@8:56PM You are right, I will never call them security again. The teenage punk who allegedly attacked the young woman in her StuyTown lobby has now been charged with attempted murder. Given her age I would not be surprised if she is a student at either NYU or another school. So NYU take notice, StuyTown Scarecrows do not even respond in a timely manner to attempted rapes and murders of your students in their own lobbies. And the tenants there are pretty upset about this and other recent lobby attacks. via Town & Village:

Teen who allegedly tried to rape Stuy Town woman hit with attempted murder charge
By Sabina Mollot

A 17-year-old arrested for the attempted rape of a woman in her building in Stuyvesant Town has also been charged with attempted murder.

The alleged attacker, Aaron Kish, was arraigned on Monday night, after police said he admitted he wanted to snap the 22-year-old victim’s neck as she struggled to get away.

According to the criminal complaint, Kish followed the woman as she entered her building vestibule early Sunday morning and grabbed her from behind. She was then pushed against a wall and forced to the floor, police said, before Kish got her in a chokehold and pulled her dress and underwear off.

The victim tried repeatedly to scream for help, while Kish allegedly groped her and told her, “Let me finish I’ll let you go” and also warned her if she fought him, “it will only get worse.” The victim fought back anyway, and managed to elbow and punch Kish, he later told police, according to the complaint. At that point, a neighbor came up to the vestibule and saw the woman naked and Kish with his pants down and said he was calling police. Kish then ran off with some scratches while the victim was left with a bloody lip, pain in her neck and abrasions on her back.

Kish, of Piscataway, New Jersey, has also been charged with attempted rape, attempted criminal sexual act, sexual abuse and assault as a sexually motivated felony.

Anonymous said...

I am a tenant in one of these Toledano buildings.
The gas line restoration at 325 E12th Street started yesterday and continues today, Wed. 2/22.
All tenant's cooking gas was turned off by the city on May 18,2016.
All Brookhill employees continue working in the buildings at 325, 327 and 329 E12th Street today, after foreclosure notices were delivered to the buildings.
NY Plumbing has continued working at 325 E12th St on the cooking gas line restoration today.
No one seems to have answers to the following:
- Will the cooking gas restoration continue?
- Will the Building Superintendent and other Brookhill Properties employees remain? For how long?
- Does this mean that Jonathan Sutton's "hard contract" to purchase the properties from Toledano is null and void?
- Will these buildings be put up for auction?
Please, only respond to these questions if you know the actual answers from a legal standpoint.

Anonymous said...

Can someone explain what's going on? I'm not too well versed in asshole-economics.

Anonymous said...

@11:24 AM. The properties are already in foreclosure, so any "hard contract" Rafi supposedly has--which is according to an anonymous source who is probably also named Rafi--is basically worthless at this point. The timing on this deal is suspect, and is probably a delay tactic to allow him to hold onto the properties untl he can find a way out of this mess. He had his chance to pay up, now the lender holds all the cards. They can negotiate with any buyer to come in and take the properties or manage the properties themselves. I doubt the employees will remain, you will have a new management company come in, especially since so many violations and problems ocurred under the current regime. It's literally time to clean house.

Anonymous said...

I Am Anonymous 2/22 @ 11:24AM
Some building workers in Toledano's buildings were laid off from their jobs today. Few remain. Not enough building workers left to properly maintain the buildings. Unfortunate. Many of those who did loose their jobs were nice people, friendly with tenants and appeared to be good workers. Hopefully, Oscar, an E12th St Super, is kept on.

Anonymous said...

If the building workers are leaving or being let go, that confirms there is probably no deal in the works to sell off the portfolio, and maybe there not even enough cash on hand to pay them either. It mans Rafi knows his goose is cooked so from now on he will hold onto any stray dollars he can just to pay the lawyers and try to maintain the lavish lifestyle he was hoping to enjoy. He's all but finished now. Too bad for the tenants, but they always get screwed. Contact Rosie Mendez and Brad Hoylman, and start watching for suspicious activity. Especially fires..

Giovanni said...

The Villager reports that the rats are jumping ship--automated message replies from two Brookhill employees say they no longer work for the company. Looks like no ones around to deal with the fallout from this epic disaster. Who is going to look after the tenants while the courts sort this mess out once Baby Smurf Toledano has left the building?

Th-tha-that’s all, folks! Lenders to foreclose on Toledano buildings

Employees at Brookhill Properties did not return requests for comment on the foreclosure, and automated responses from two employees said they were no longer working there.

Real estate experts said in the past that Toledano was overleveraged from the beginning and that his success depended largely on how quickly he could raise the rents in his buildings. He became extremely unpopular with his tenants over the last year and a half, as he allegedly took to various tactics to boost revenues.

Many of his rent-regulated tenants accused him of putting them in danger and threatening them. They even formed the Toledano Tenants Union to confront him as a united force. Toledano settled for $1 million with tenants of one of his E. 13th St. buildings after they sued him for allegedly harassing them.

He was also known among his tenants for his bizarre behavior. There are reportedly taped conversation in which Toledano threatened to tenants to “drop dynamite” in one of his E. 13th St. apartments, according to Gothamist. And he sent gift baskets with wine and fruit to tenants of a building that went without gas or hot water for more than a month.

Anonymous said...

523 E 12th St went thru this when Uiberall (a great landlord) buildings sold to slumlord. No gas for 6 mos as "boiler replaced". Then a year of bed bugs. Followed by New Boiler #2 and now endless constructon in basement for last 6 mos. Drilling, pounding, shoveling hasn't ended. Dumpster out front now a permanent feature of the block. Literally thousands of bags of dirt are filled up and an empty dumpster brought to take more out. Former super claims workmen digging so deep they hit water table. Calls to 311, DOB get no results. Call to BP office community liaison? She was defending landlord! Starting to think owner is weakening foundation to condemn the building because he's lost several court cases to evict rent stabilized tenants.