Summit Properties to acquire 5K apartments from Joel Weiner’s Pinnacle

Despite efforts by Mayor Zohran Mamdani’s administration, Summit Properties plans to acquire more than 5,000 mostly rent-stabilized apartments in New York from Joel Wiener’s Pinnacle Group. The final auction price was not immediately clear after the company submitted an initial bid of $451 million.

It is the result of Pinnacle’s bankruptcy auction, in which Summit represented the minimum bidder, or the stalking horse. A confirmation hearing is scheduled for January 15.

The auction began despite attempts by tenants and elected officials, most recently Mamdani’s office, to delay the sale. The coalition had asked the judge in the case for more time, initially hoping the city or a nonprofit could put together a workable bid. After Summit came forward as a bidder for stalking horses, the city requested a 30-day pause to evaluate the sale to Summit and explore possible alternatives.

However, the judge rejected that attempt during a hearing on Wednesday, clearing the way for Summit’s acquisition.

As need increases in the city’s rent-stabilized housing stock, the auction result shows a potential future for thousands of homes in the city. Rising expenses and higher interest rates have eaten away at revenues, while a 2019 law has limited owners’ ability to raise rents. Pinnacle placed its LLCs in Chapter 11 bankruptcy and owed $564 million to Flagstar Bank, according to court records.

“We are deeply committed to New York and understand how critical preserving affordable housing is to the success of our city,” Zohar Levy, president of Summit, said in a statement. “We have reached out to the city and look forward to talking to the new administration and residents about our plans to invest in the portfolio and make New York affordable for everyone.”

Summit has a national portfolio of regional shopping centers, office buildings and apartments in New York City. But Mamdani’s government expressed concern that Summit would be unable to make the takeover work while repairing the properties and maintaining rent stabilization. The bankrupt LLCs owe the city more than $12.7 million in unpaid fees and violations, which amounts to more than $5,000.

Legal rents for the units are so low that Summit likely cannot maintain a revenue stream to profitably support renovations and debt payments, the city said in a lawsuit.

Eastdil Secured advised on the auction.