The Frum Fraudfather & Pied à Terre Purgatory

Summary

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The Promote Podcast: The Frum Fraudfather & Pied à Terre Purgatory

April 22, 2026 | Hosted by Hiten Samtani & Will Krasne

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Overview

This episode dives deep into the most captivating and consequential movements in U.S. commercial real estate (CRE): from New York’s renewed appetite to tax high-end property owners, to a sprawling escrow fraud unraveling in the Orthodox Jewish investment world, and Dubai’s glitziest developer failing to sell luxury condos on the tragic Surfside site in Miami. With punchy, insider banter, “The Bard of CRE” Hiten Samtani and institutional insider Will Krasne break down off-headline stories, connect war stories from top brass and shadow operators, and bring listeners right into the engine room of the business.

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Key Discussion Points & Insights

1. Punch List: News in CRE

[02:16–09:00]

• Massive Multifamily Refi:
  • $1.7B refinancing of 13,000 units (part of Starwood’s strata portfolio).
  • “Survive and advance” dominates now—liquidity still out there for the biggest, but it’s all about patience and persistence.
  • Comeback for Dustin Stolly: (“Nice to see Stolly back in the mix,” Will, 03:51)
• OpenAI’s Stargate Pause:
  • OpenAI halts major projects in Norway, UK, and Texas, putting a global drag on economic momentum tied to hyperscale data centers.
  • “If this is getting paused not just in the U.S. but elsewhere, look out below.” (Hiten, 04:36)
• Ares & Clearwater: CPACE Moves Mainstream:
  • Ares invests $300M into CPACE (Commercial Property Assessed Clean Energy) deals via Clearwater.
  • CPACE has evolved rapidly, with half its $10B total volume done in just the last two years.
  • “Every big construction project you see has some sort of sleeve of cpace financing in there.” (Hiten, 07:16)
• Hyundai’s $2,500/sq ft Tribeca Misadventure & SL Green Rescue:
  • Hyundai overpays for boutique Manhattan office, now seeks an SL Green bail out structure (acting as GP/operator for fee upside salvage).
  • “Charging fees to Koreans who can't make decisions because of shame is SL Green's specialty.” (Source via Will, 08:50)

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2. Pied à Terre Purgatory: New York’s Tax on the Luxury Elite

[10:19–18:38]

• Pied à Terre Tax Returns:
  • Revival of a tax on second homes worth $5M+, generating uproar from developers and brokers (the “Voldemort in policy form,” Hiten, 11:39).
  • Viral push: “Zoran goes, taps the screen and says, oh yeah, we're taxing the river...51 million views.” (Hiten, 11:09)
  • Real estate industry fears this kills foreign investment and the viability of luxury condos.
• History Lesson:
  • First proposed in 2014 by Brad Hoylman (now Manhattan Borough President), repeatedly killed by legendary Albany power brokers.
  • Last proposal: 0.5% tax >$5–6M, $370K flat + 4% above $25M, estimated $700M/year revenue.
  • “Stabbed, shot, poisoned, frozen, hung, electrocuted and burned.” (Hiten, 15:14, on repeated bill failures)
• Debate Highlights:
  • Developers: Foreign capital essential for underwriting, business models at risk.
  • Critics: The super-rich can easily afford this (rounding error for them); it’s about fairness and “contributing to the city.”
  • "This is not a tax on New Yorkers. This is a tax on people moonlighting as New Yorkers..." (Hiten, 12:29)
  • "How can you argue against this?...if you're super rich, this is rounding errand." (Will, 16:55)
  • Dueling perspectives: Is this healthy reform, or one more reason not to do business in NYC?
  • "I absolutely buy that argument. The one I don't buy is that people are shopping between Manhattan and Texas..." (Hiten, 15:57)
  • Political power: Governor Hochul and progressive city leaders now back measure, making it trickier to block than in eras past.

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3. "Frum Fraudfather": Real Estate Escrow Fraud in the Orthodox World

[19:54–30:44]

• Mark Nussbaum, the 'Clearinghouse':
  • Orthodox real estate lawyer—more like a discreet merchant banker—whose firms filed for Chapter 11 while facing grand larceny charges.
  • He facilitated deal matchmaking, proof-of-funds, and short-term capital for the tight-knit frum network.
  • “To call him a real estate lawyer is like calling Robert Moses Commissioner of Parks. Technically, it's accurate, but it's woefully inadequate.” (Hiten, 20:08)
  • Deals were often handshake-based (“high mish deals”), relying on social trust and reputation.
• The Escrow Fraud:
  • Without permission, Nussbaum redirected clients’ escrow funds (over $350M at stake, dwarfing prior scandal figures).
  • Central Allegation: Money diverted to Mendy Steiner, who used it for risky and fraudulent real estate deals, often ending in immediate loan defaults.
• The Ripple Effects:
  • Steiner died by suicide in January 2025, at peak crisis, setting off a cascade of lawsuits and further financial revelations.
  • Creditors: Names you’ve never heard of, with wild entity names (e.g., Elizabeth Capital Success owed $156M, Sheldon Zafir $149M).
  • “These people you've never heard of with the wildest entity names and they're like, yeah, we just shelled out nine figures.” (Will, 26:20)
• Unwinding the Shadow System:
  • Fractional ownership, syndications, and shadow investors—all with minimal paper trails.
  • New restructuring officer, Ephraim Diamond, embodies cultural fluency (“It's kind of like havdil when you read a Gemara...apply the same kind of attention to detail and scrutiny that you would reading the Talmud to these bankruptcy docs,” Diamond in AMI Magazine, cited 27:49).
  • Lasting impact: This collapse reverberates through the multifamily, affordable, and nursing home segments.
  • “Who's going to be the next merchant bank clearing house?” (Will, 29:35)

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4. Dubai’s Gold-Plated Purgatory: Surfside’s Sales Fail

[31:00–37:41]

• Damac & the Surfside Site:
  • Dubai-based Damac, led by Hussain Sajwani (“Dubai’s answer to Donald Trump...Oprah mixed with DJT”), pays $120M for the tragic Surfside condo collapse site.
  • Glossy plans for ultra-luxury condos (starting at $15M, penthouses >$150M) result in...no sales.
  • “They haven't been able to escape that this is the site of a real tragedy.” (Will, 36:35)
• Why the Sales Flopped:
  • Locals and U.S. buyers view the site as hallowed ground; optics poor for both domestic and foreign developers.
  • Damac’s marketing blunders: “He should not have spoken...” (Hiten, 35:42) — e.g., admitting they couldn’t “get comfortable with the source of funding” for interested buyers, a rich irony given Dubai’s own money-laundering perceptions.
  • “The least local person you could be have probably wasn't a great fit.” (Will, 36:45)
  • Branded luxury may work in Miami and Dubai, but some places can’t be “glossed” over.
• Industry Lesson:
  • New projects are like IPOs—you get one shot to set a narrative.
  • “A start in condo sales can often determine the finish.” (Hiten, 37:08)

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Notable Quotes & Memorable Moments

• On the Frum Fraudfather:
  • “He was at the nexus of this from deal making ecosystem... billions of dollars...done in this shadow sphere.” (Hiten, 20:08)
  • “Just like Hyman Roth, he always made money for his partners.” (Hiten, 21:05)
  • “$700,000 for 30 days...That's insane.” (Will, 21:51)
• On NYC Taxing the Rich:
  • “There is nothing that they hate more than the Pied a Terra tax. It is Voldemort in policy form.” (Hiten, 11:39)
  • “We've talked about the rise of the luxury renter, and part of that is people...trying to game the tax system.” (Will, 12:08)
  • “Stabbed, shot, poisoned, frozen, hung, electrocuted and burned.” (Hiten, 15:14)
  • “How can you argue against this?...if you're super rich, this is rounding errand.” (Will, 16:55)
• On Damac’s Miami Misadventure:
  • “What are you buying? When you buy a condo, especially in Miami, you're buying a dream.” (Hiten, 31:19)
  • “For this guy to say that they're not comfortable with the source of funding for the buyer. Who the hell was it?” (Will, 35:25)
  • “You needed somebody local who really understood what it meant to the community.” (Will, 36:38)
• Industry Real Talk:
  • “These deals are called high mish deals. Like, they're cozy. You know what I mean?” (Hiten, 22:04)
  • On high net worth and shadow capital: “This is just how the real estate game works.” (Will, 30:15)
  • “If he gets off lightly, I think that in five years, people give him money again.” (Will, 30:44)

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Timestamps for Important Segments

| Segment | Timestamps | |-----------------------------------|-----------------| | Punch List (CRE News Roundup) | 02:16–09:00 | | Pied à Terre Tax Deep Dive | 10:19–18:38 | | Frum Fraudfather/Escrow Scandal | 19:54–30:44 | | Surfside/Dubai Condo Sales Fail | 31:00–37:41 |

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Conclusion

This is a jam-packed, spicy episode:

• The punch list brings us a rapid-fire look at CRE power plays.
• The New York pied-à-terre tax story shows how policy and politics mix with luxury real estate fortunes.
• The “Frum Fraudfather” scandal unspools a story of big personalities, bigger money, and the cascading aftershocks of trust failures in a tightly knit world.
• And Dubai's Sajwani finds that not every American dream—especially one built on tragedy—can be sold, no matter how much gold you bring.

“Winning’s winning. My other takeaway is a little more personal.” (Will, 03:06)
“It’s all happening.” (Hiten, 37:47)

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Transcript

[A]

Show me the money.

[B]

But just for a couple of weeks, right? So you can close on a couple deals. You'll send it back with 500k or so on top.

[A]

One man's usury is another man's proof of funds.

[B]

Joke's on you, boo, because one man's usury is another man's escrow fraud.

[A]

Go be the money.

[B]

Welcome back to the Promote podcast, your insider guide to the money and mania of the CRE markets. I'm Hitan Samtani.

[A]

And I'm Will Krasny.

[B]

A shout out to our sponsors, LoanBoss, the best in class CRE debt management

[A]

software and Bravo Capital, the leading HUD and bridge lender.

[B]

It's cool to have brand partners that are in the mix in the industry. They get the lingo, they love the content, and they're firms that our listeners are already working with or want to work with. So it's a good time.

[A]

It really is. It makes everything organic. We don't want to be one of those things where it's like Bill Simmons. Brought to you by Allstate reminder tomorrow, Thursday, April 23 to 10, is chopping it up with Lightstone's David Lichtenstein on all things CRE investing. That event is for insiders only, so head to thepromote.com upgrade if you want in.

[B]

I'm really looking forward to it. It's going to be a good time. This week we look at how New York City is chomping at the bit to tax the rich.

[A]

Champing, but champing it.

[B]

I never get this one. But can you champ back or no?

[A]

It's better to have champed and lost than never champed.

[B]

This week we look at how New York City is champing at the bid to tax the rich. But will the rich champ back? Dubai's answer to Donald Trump is bringing his habibi bling to Surfside, but so far it's been a sales desert. And the firmworld's Kevin Bacon, the nexus of a head spinning amount of CRE activity, is facing grand larceny charges over escrow fraud and his firms have just filed for bankruptcy. A lot of revelations in there.

[A]

That one is a whole bag of orbs.

[B]

It's an episode, a series. It could be anything.

[A]

It's going to come to you on Netflix in about 18 months.

[B]

Executive produced by the Provote so much

[A]

cre spice in one episode. What is this? An episode of Hot Ones? Who wrote this? Let's start with the punch list, our signature rundown of the newsiest news and CRE.

[B]

Just did a major refi. $1.7 billion. 13,000 units.

[A]

Freddy what a fifth of s REIT or Starwood's entire multifamily portfolio. Most of this is about 5 years old as part of the strata portfolio that they bought. But they've sold off some stuff since then. We talk about extended pretend or blend and extend or survive till 25. And this was two year loan, three one year extensions and they used every one of those.

[B]

So they hung on by a thread. But they did hang on. They got it done. Shows that liquidity is still available for the biggest of the big if you know how to hang in there long enough.

[A]

Totally. And they sold off some really good stuff to Bell.

[B]

RIP Bell BGO Partners joint now.

[A]

Yeah, sorry, didn't sell to Bell. Sold it to the artist foreplay known as Bell. But yeah, liquidity is still there for the major players. It's more sort of survive and advance than dominate. Win by an inch or a mile.

[B]

Winning's winning. My other takeaway is a little more personal. The guy in the center of this one, the guy who got an attaboy from Willie Walker himself was Dustin Stoley. We're back.

[A]

We are back baby.

[B]

We are back. So good to see a good comeback story. Stoli just to recap it was a really big debt broker at jll then went to Newmark. He was co head of the division with Jordi Rochlob and then he disappeared for a little while and they reorganized the unit around Rochelb and Jonathan Firestone. Ex eastal guy and Stolli kind of faded into the ether. But then he came back, went back to work for Aaron Appel at Walker and Dunlop. He's got a chip on his shoulder and we love seeing a deal maker with a chip on his shoulder. So he did this one he at 111 Wall street the office to resi record deal. Nice to see Stolli back in the mix.

[A]

The headshot is tremendous. I'm glad to see it back on traded. Looking forward to seeing a lot more.

[B]

All right, next one OpenAI is pausing Stargate projects in Norway and the UK

[A]

those jurisdictions said Sam Altman, you're coming off way too likable. We just can't have someone with that much charisma building stuff in our country. We're going to have to hit pause.

[B]

This is also after pulling back from an expansion that they had planned in Texas.

[A]

Yes. So that' Stargate plan which got so much hoopla what 2 years ago.

[B]

I believe the White House is pretty involved in this project too.

[A]

They were. And it's Oracle, all of those folks. That's on pause.

[B]

It's the who's who of global capital. Everything from the Middle east sovereigns to all the big private credit players in

[A]

the US everyone with an office on Park Ave. Between 47th and 52nd. The bigger takeaway here is that this has been pushing up the entire global economy. As we all have said, if this is getting paused not just in the U.S. but elsewhere, look out below.

[B]

All right, next one. Ares is investing up to $300 million in seat based deals run by Clearwater.

[A]

Clearwater which is run by Jonathan Seabolt.

[B]

Friend of the pod.

[A]

Friend of the pod. He sold his company to Access Capital which is owned by Conversa Capital.

[B]

Your boy.

[A]

Yeah. Mike Simonowski. They do everything. A lot of BTR brokerage. They own George Smith Partners and then also Clearwater.

[B]

We talk about different ways to aum gobble. This one is getting into the zeitgeisty part of CRE finance.

[A]

It is. And we talked about the issues being around origination. Not so much having the availability of capital because we solved that. That's done.

[B]

Now we've got unlimited capital.

[A]

Unlimited capital. One of the areas that has exploded is cpace and this is an environmental loan. I'm going to be totally honest. I don't totally understand. Sepace fire want to heart go planet.

[B]

It was basically created to fund green upgrades in buildings. I think it was first used in Berkeley in 2008 to help homeowners finance their solar upgrades. But it quickly morphed into a commercial vehicle as well. It stayed semi dormant for God like a decade. And then the last couple of years, I don't know what happened. This happened with EB5 too. Developers just caught on and then it absolutely exploded. Of the 10 billion in CPay is done between 09 and 24, about half of that came in 23 and 24 and then 25 was a record year. The Post Brothers construction package for that office to Resi Bahima DC.

[A]

Yeah yeah.

[B]

That's a 500 million-ish Nuveen green capital loan. It's all happening.

[A]

Aries of course is looking to put out as much capital as they can in real estate. You've got the debt and brokerage shop, you've got the equity shop and now you've got a specialty finance shop as well. Under one roof. This is 300 million bucks. That's not nothing for this. They're going to cover the larger checks. They specifically called out in the article that it was Going to focus on like 40, $50 million checks which are, to quote PE Guy, it's substantial.

[B]

This has got a lot of regulatory tailwinds as opposed to headwinds in some of these other spaces. All the states are falling over themselves to offer more and more of this. It's gone from doing maybe charitably $50 million deals to three $400 million deals. It's one of those spaces where records are being broken. It feels like every other month, almost

[A]

every big construction project you see has some sort of sleeve of cpace financing in there.

[B]

The way such facilities typically work is the warehouse lender will want a certain hurdle return and then the cpace provider will pocket any residuals. They make their money on that little spread, whatever's left.

[A]

Nice place to be. You got fixed costs.

[B]

Next one. Our boys at SL Green are stepping in as mechanics.

[A]

Yeah.

[B]

So if I were to tell you, Will, that Hyundai bought a building in Tribeca to potentially occupy one day you want to take a shot at per foot. Obviously occupiers are willing to pay a little bit more than the rest of us, but what do you think it would go for?

[A]

I don't know. 1100?

[B]

Double that?

[A]

That's not great.

[B]

Hyundai paid 2,500 a foot roughly to Van Barton, which killed it on this deal for this boutique office building called 15 Late street in Tribeca, I believe they never ended up occupying it. And so no one in their right mind is going to buy this at 2,500 a foot or even close to it. The Koreans don't love the shame of taking big realized loss on their books.

[A]

To be fair, I don't think anyone really does.

[B]

Fair, fair, fair, fair. So anyway, they are looking for a capital partner to come in in some capacity. And looks like our boys at SL Green, Harry Citimer and friends, are going in.

[A]

It's like a debt pref.

[B]

Yeah. My sense is that because Hyundai bought this all cash, so there's no debt on this property. So it'll be first dollar pref or mezz or some structure like that.

[A]

They're essentially going to be like the GP and operate the property. And Hyundai maybe salvages some upside, get some cash, and makes the headline a little bit less painful.

[B]

One of our sources put it perfectly. He said charging fees to Koreans who can't make decisions because of shame is SL Green's specialty. That's it for the punch list. We'll be back in a second to tax the rich. I'm here with Aaron Krewitz of Bravo Capital. Aaron $2 billion in deals, 100% HUD approval rate, five years since launching. How do you keep that streak going?

[C]

Comes down to our team. Our underwriters know what HUD wants. We're a pure play HUD lender. Meaning everything we do is HUD and bridge to hud. No taking shots and just hoping when we go, we really go.

[B]

You closed a healthcare HUD Express Lane deal in four days. Four days?

[C]

Four days from our submission to HUD's approval. And it goes back to knowing the ins and outs of the program so

[B]

that there is no guesswork sniffs, assisted living. It feels like such an arcane world full of very complicated regulations and such a specific cast of characters that you really need to know coal to make this work.

[C]

Exactly. We're steeped in state by state regulations and distinctions. But we're not just about hud. We also have a very strong balance sheet. Bridge affiliate, Bravo Property Trust. And we just financed over 170 million out in Miami and 125 million in Dumbo, Brooklyn. If we have conviction, we move fast.

[B]

Thanks, Aaron. And where can people find you?

[C]

We'[e-mail].

[A]

Taxes.

[B]

Taxes.

[A]

Beautiful, lovely taxes. It's not tax day, but we're talking about taxing the rich.

[B]

The pied a terre tax is back. It's back with a vengeance. And this time it's got support all the way up. It's looking a little scary out there for the Ken Griffins of the world and pretty much anyone who wants to buy a second home in New York,

[A]

let's just say objectively not scary. If you're rich enough to afford that.

[B]

Fair, who cares? Fair, fair, fair.

[A]

But let's also just say that between the JFK junior Carolyn Bissette show and this, it's like a big, big retro New York feel. Right now I'm biking in a suit like JFK Jr. Like, that's how we're doing it now.

[B]

Zoran's campaign, we've talked about before, the goats of producing social media friendly content. And they dropped this video in which Zoran goes, taps the screen and says,

[A]

oh yeah, we're taxing the river.

[B]

And apparently this is their most viral video ever. 51 million views as of this recording. That is astonishing. A pied a terre tax, which is essentially a tax on a second home, or third, or fourth, or third or fourth, at valued at $5 million or more, has. Well, I can't tell you. It is hard to overstate how much this thing is loaded by the developer set and the Luxury broker set. There is nothing that they hate more than the Pied a Terra tax. It is Voldemort in policy form.

[A]

Well, it's been their whole business, right. Let's call spade a spade. The high end dev market. A lot of 57th street is not people's primary residence. But yeah, the rare policy from Mandani where I saw people. Right word. People say, you know this. I hate to say it but like

[B]

kind of makes sense we should say that. This iteration, we don't have any specifics yet. We don't actually know exactly how this Pied a Terra version is structured. We have some idea from old ones which we'll get into but we don't quite know how this is going to shake out.

[A]

The gist is essentially like if you want to just play the tax game

[B]

and be 179 days a year.

[A]

Yeah, whatever, whatever in Florida, great, do it. But don't pretend to live here because that's honestly. We've talked about the rise of the luxury renter and part of that is by people who are trying to gain the tax system and not have something on record in New York and avoid the tax man. There's a way to not pay it. It's move to New York.

[B]

Yeah, they've been very clear about that in the messaging which is this is not a tax on New Yorkers. This is a tax on people moonlighting as New Yorkers having an investment pad or whatever. The real estate industry's argument is that if you do this you're essentially penalizing people from investing in the city and it's going to drive more people to Florida. It's the death spiral of New York City luxury real estate, et cetera, et cetera. Nothing gives them hives more than this. When this last popped up after Ken Griffin bought his $238 million at 220, the New York Times had an op ed called the rich didn't always need $238 million penthouses. The brother Zeckendorf developers of 15 Central Park West, 520 Park. Exactly.

[A]

Or Bob diamond just sold his apartment.

[B]

That is correct.

[A]

Nell and Teddy, if you know, you

[B]

know they went to Albany to campaign against this thing. They had their economist feeding stats about how destructive this was going to be.

[A]

A huge part of the residential development industry the last 15 years in New York has been driven by non primary home residences. And so if you can't bank on foreign capital taking out your high end condo project, it's hard to underwrite, especially certain product types.

[B]

Gary Barnett is probably more impacted by pied a chair tax than let's say a Mickey Naftali.

[A]

Very well said. And I think it's the projects that are sort of, let's just say non economic that are going to struggle the most.

[B]

Michael Gross called it helicopter people projects that are built for them, essentially.

[A]

Yeah, if you're doing boutique condos in Tribeca, that's not for this.

[B]

Should we do a little history lesson here?

[A]

Like Huey Lewis said, let's go.

[B]

So in 2014, State Senator Brad Hoyleman. I forget what he does now. Let's have a little googie here. He is a Manhattan borough president.

[A]

Ooh, good for him.

[B]

So when he was state senator, he had introduced this tax. Let's take you back to the era of three men in a room. The governor, the speaker, the Senate majority leader were making all the decisions very clandestine, behind closed doors. And this is the era of Cuomo and Sheldon Silver and Scalos. Yep, I think it was Scalos and really messy era of government in New York. And so this got killed. Completely just eviscerated. And then Hoyleman and a couple of his collaborators in the assembly introduced the bill, or a version of it, another, what, dozen times. And it got killed and killed and killed and killed. Stabbed, shot, poisoned, frozen, hung, electrocuted and burned. And at the time, the structure was something like 5 to 6 million dollars. Homes would be hit with a half percent tax. Anything in the 25 million range would be hit with a flat $370,000 and then 4% on any value north of 25 million. One estimate pegged that this moved would add about 700 million to state coffers.

[A]

Not nothing.

[B]

Rebny came out hard against this. Do you remember this guy, Stevie Spinola?

[A]

Infamous.

[B]

This is when Rebny had real juice. At one point, Spinola was sitting in the Senate chambers writing pro industry legislation. We've talked about this, Will. He called Charlie Bagley of the New York Times brazenly from there. A lot of industry people campaigned very strongly against this.

[A]

Like we've talked about with the Road to Housing act. Anytime you put uncertainty or add costs into things, it can really put a damper on the market. And these are markets where the marginal buyer is everything, the marginal project is everything. And so those don't get built, that cascades all the way down. And so it's just adding another reason for people to not want to do business here. Which, you know, is a reasonable perspective.

[B]

I absolutely buy that argument. The one I don't buy is that people are shopping between Manhattan and Texas or Manhattan and frankly, anywhere. What is more likely to happen is they're not going to pull the trigger. As opposed to say, I'm going to take my 5 million and go to fricking Dallas. What the hell did I say?

[A]

Yeah. So you're going to pay your broker more than the tax to leave and not have your apartment in New York.

[B]

Do you peak what Steve Roth said when this came out back in 2020?

[A]

What'd he say?

[B]

Those who fan the fire of class warfare and those who tear down should be put on double secret probation.

[A]

Better references, Steve, no one knows that you're referring to Animal House. It's just because I'm old. Double secret probation. Let's meet the people where they are. But look, I think to New York. There's a lot of problems with New York, the tax issue. Everyone will always say we wanted to see our money get spent more productively. But how can you argue against this? It's like a very common sense thing, which is like if you want to have a fancy apartment, live in New York and if you're super rich, this is rounding errand. Doesn't matter.

[B]

The counter argument is why do we keep putting shackles on the free market?

[A]

This ends up being like a race to the bottom. The argument a lot of people will make is we should just eventually have no taxes on rich people or any people.

[B]

I mean, that's what they want. Yeah.

[A]

They could just go anywhere. And yeah, capital is much more fluid than it used to be. We need to reckon with that. You need to make a city hospitable to business. The question is, what actually drives jobs? We have to build more housing. That's the most important thing. These things on the margins, it just gets their hockles up. Right.

[B]

I think the mayor kind of enjoys that. He gets a rush out of the. If you look at that video, he's got the grin on his face. He's trolling them and it's working. I believe everyone has a role to play in contributing to our city, and some a little bit more than others.

[A]

Oh, it absolutely is.

[B]

When he shot it, was he standing outside 220? I think it shot outside 220.

[A]

Coming back to the 51 million views. And again, this is not a political statement. He has the juice. You just can't say that he doesn't.

[B]

Just like Trump has the juice, Zorin has the juice.

[A]

Zorin has the juice to come out against it. He wants you to come out against it. Like the right thing to do is say nothing. All these people who are freaking out about it. You're sort of telling on yourself. It's the Streisand.

[B]

Streisand effect.

[A]

Yeah, Streisand effect. Steve Roth coming out and saying his dated references like that's what he wants.

[B]

This is going to be a particularly tricky one to challenge, and here's why. One, it is not a standalone bill, so it's not something you can surgically strike as such. Second, this has Bayern all the way up to the top. We Talked earlier about 2010's Three Men in a Room. Three Men in a Room and Cuomo killed it, I think, in 2019. Hochul. Governor Hochul is very much on board and some of her quotes. I think I'd like you to read this one for the record, because it sounds like it's straight out of Zoran's phrasebook. Who said it? Zoran or Kathy?

[A]

There are literally Russian oligarchs buying up properties, driving up the property values. They're all welcome to stay, but I think there's a logic behind them also

[B]

contributing to the the city fun times ahead. So will you violate any debt covenants recently?

[A]

So funny you should ask. I have been in technical default recently. I mean, who among us, right? But not since Q4. And that's not because I paid off a loan. It's because that's when I started using Loan Boss.

[B]

I can't believe how old school some of our listeners are. They're still crunching DSCRs in Excel and all that.

[A]

Ugh, Total waste of time. Risky business to boot. Lone Boss runs the entire process for me. One click Covenant testing. Incredible. Instant cash flow forecasting. Impeccable. And my favorite nerdy delight, the live Forward Curve. So I hate having to go download the forward curve. And then it's always vertical. And you gotta alt HVT to have it go horizontal. Make sure the index match works like ridiculous.

[B]

They've just got it sorted here for you.

[A]

Much better. So thank you Lone Boss listeners.

[B]

Check them [e-mail] that's loneboss.com and tell them the promote sent you.

[A]

One of my favorite things on this podcast is Hiten covering the from Beat and Man. We have a major, major, major story in that space. Nussbaum Lowinger files for Chapter 11 bankruptcy Mark Nussbaum.

[B]

He's a real estate lawyer. But to call him a real estate lawyer is like calling Robert Moses Commissioner of Parks. Technically, it's accurate, but it's woefully inadequate. This guy Truly, like, if he didn't exist, you'd have to invent him. He was at the nexus of this from deal making ecosystem, which was billions of dollars of real estate, trades, finances, etc. That are done in this somewhat shadow sphere. And Mark Nussbaum, who's getting a little piece of this, a little piece of that, for years built a really profitable business for himself and importantly for most other people, until he did not.

[A]

It was like the Hasidic merchant bank, Allen and Company.

[B]

I mean, I think you're niching down too much. It was the Hasidic, the orthodox. It was the Lakewood crowd, it was the Five Towns crowd. It was pretty deep all over.

[A]

He was the clearinghouse.

[B]

Yeah, that's a great way to put it. He was the clearinghouse. Yep.

[A]

If you needed capital, you'd call him. If you had capital and looking for a deal, you'd call him. He'd matchmake you. He'd do your legal work. He'd help you find the deal.

[B]

And just like Hyman Roth, he always made money for his partners. That's the important thing here. One by one, our old friends are gone. Here's what would happen. Let's do a little role play. I've got a $20 million stash of cash burning a hole in my pocket. You, sir, are a deal maker who needs to buy a multifamily property somewhere in the Midwest. So the way this would work is you would call Mark Nussbaum and say, listen, they're asking for proof of funds. I'm a little light, but I don't really need it for too long. I just need it to get this deal done. Mark would call me and say, sure, here's some money. It's going to magically appear in Will's account for a time, or rather in the escrow account. And then Mark Nussbaum is going to do what he needs to do to put it into Will's account. And for my troubles, I get paid. Did you see some of the rates on this thing?

[A]

That's insane.

[B]

Be like $700,000 for 30 days on,

[A]

like, not that much money.

[B]

It's astonishing.

[A]

And I would wager there's probably not a lot of documentation. There's a lot of handshakes, a lot of talking on the phone.

[B]

These deals are called high mish deals. Like, they're cozy. You know what I mean? It's done. You understand? This is fascinating because until this broke, being part of this community was the. How do I say this? The social glue that served as A deterrent for bad behavior. You're part of this community. You go to synagogue with these guys, you go to dinner with these guys, your kids go to school together. And so you're going to do business over and over. So there was an incentive to play it straight.

[A]

Right. The whole thing is based on trust, and your word is your bond, because if your word is bad, you can't actually keep the thing going. Everyone is incentivized to actually live up to what they said, because that's how you keep the whole machine moving.

[B]

Yeah. And so there's two dynamos here. One we've talked about, Mark Nussbaum, who is currently, by the way, we forgot to mention, facing charges of grand larceny in relation to all this. The other one is no longer with us, but he was a young guy dealmaker called Mendy Steiner. And the central allegation here is that Marc Nussbaum, without his client's permission, diverted quite a bit of money. We'll get into exactly how much in a second. To Mandy Steiner, who then used it for real estate deals and a lot of fraudulent real estate deals. So the money never actually came back. And I'll just give you a sense of scale. The last major escrow fraud in New York, Mitch Kossoff, a real estate lawyer now disbarred. I believe he's in one of the prisons somewhere in New York. He allegedly misappropriated about $15 million. The allegations here, and according to the disclosures in court and whatnot, we're talking about more than $350 million. It's astonishing.

[A]

It really is. It just speaks to one, like how much money there is in this part of the market. One of the theses of the podcast that I think you would have is that that whole section of real estate, which is incredibly undercovered, is like the most liquid, the most fascinating. And the dollar amounts are staggering. We talked about it with the sniff deal, Daryl Hagler and what's his name? Nephew, Honey and honey. But yeah, $330 million. And that's just like the little pieces that got along the way that never

[B]

made their way back. So a lot of it went to Mandy Steiner. Mandy Steiner at some point owned a multifamily portfolio. And this is national. They tend to be concentrated, these guys in Lakewood, Rockland County, Borough Park. But they do deals, they're agnostic about the market. So I think Mandy Steiner owned a bunch of units in Baltimore. Other places somehow got CMBS financing on some of this portfolio. What does the paperwork look like? To get, to get cmbs. There was something sketchy going on for sure because Mendy, in many cases as soon as he would take out the financing, he would be in default almost immediately. So there was like no intention of paying back the loan. I don't think anything came out about him inflating purchase prices or anything like that. But yes, there was some kind of weird momentum.

[A]

There was definitely a scheme. In bond world they call them NCAA bonds. No coupon at all.

[B]

Things get heavy now, so listener discretion is advised. Mendy's trying to get a massive refi that will kick the can down the road. He's unable to get this done and there's a lot of pressure on him. People are starting to ask real questions. Where's the money? Where's the money? Where's the money? And In January of 2025 he checks into the IMAN and never checks out because Mendy Steiner killed himself. And right as that happened, Mark Nussbaum was hit with a major lawsuit from a nursing home investor called Jacob Sod, who we've talked about on this podcast before. And man, from around the time of the suicide, it's just been lawsuit after lawsuit after lawsuit. And the allegations get more and more explosive. Hush money to giant escrow fraud. It's been pretty bad. A few months ago, Nussbaum was charged with grand larceny.

[A]

Some of these creditors are owed. Serious, serious stuff.

[B]

Did you see the one from the promotes chart?

[A]

Oh yeah, yeah.

[B]

There is an entity called Elizabeth Capital Success there's an entity called Elizabeth Capital success that's owed $156 million according to the new Chapter 11 filing in federal court. According to the assignment for the benefit of creditors. It's an alternative bankruptcy process in state court. There's a guy called Sheldon Zafir, he's a lot of Lakewood. He's owed $149 million. Staggering, staggering numbers.

[A]

These people you've never heard of with the wildest entity names and they're like, yeah, we just shelled out nine figures.

[B]

Sometimes they're hard money lenders, sometimes they're

[A]

nursing home guys, sometimes they're hedge fund guys.

[B]

Yeah. Have you heard of the legend of Murray Huberfeld?

[A]

Yeah. So Platinum Partners.

[B]

Huberfeld was convicted in a bribery scheme for the correction officers union with our

[A]

good friend Jonah Reichnitz.

[B]

Exactly. This world is full of circular characters. The latest is that Nussbaum's firms have filed for chapter 11. This overrides any ABC state level proceedings. We took a look in the promote at the restructuring officer What a fascinating gig. This guy, Ephraim diamond has been at the center of the pinnacle bankruptcy that we talked about. Yoel Goldman's bankruptcy, Brookland Capital, which is

[A]

Boaz Gilad's, that one's almost quaint by comparison.

[B]

And Emerald Equity, one of the big fallouts. Isaac Casser from the rent stabilized drama. What a privileged position to be in.

[A]

Just seeing the craziest shit of all time. I don't even know how you can like the Yoel Goldman one. Speaking of like people that need their

[B]

own episode, should we commit now on air to do a special episode on Yoel Goldman at some point?

[A]

Absolutely. All right.

[B]

We commit to that. All right.

[A]

Pinky swear, Pinky swear, Pinky swear. Hold us to it, people. But just untangling all this, the paperwork is non existent in a lot of cases because as we said, this is a high mesh economy. So I don't even know how you go about figuring out who's owed what and what.

[B]

Well, that's why you get paid 35 grand a month, dude.

[A]

I mean, that seems low.

[B]

So you always got to know your audience, right? You got to know how to play to the crowd. And so diamond, he was talking to AMI magazine, which is a. From Focus magazine, read by a lot of these deal makers, or dealmachers, should I say, in this world. And he said the following on the creditor side. I learned to read the documents carefully. It's kind of like havdil when you read a Gemara or a Roshon. These are things I believe in the Talmud. And you're trying to be medaic. Very exact. You apply the same kind of attention to detail and scrutiny that you would reading the Talmud to these bankruptcy docs, which honestly, incredible salesmanship there.

[A]

No notes.

[B]

By the way, only one of us here is Jewish. It's not me. So funny.

[A]

My reformed temple didn't prepare me for this.

[B]

How do we bring the Nussbaum story back? Because it's so sprawling, the numbers keep getting bigger, the cast of characters keeps expanding. How do we kind of tie it all up for the listeners? It's really hard to do.

[A]

It is. It's one of these things where I think that the ripple effects and aftershocks are going to last for years and years because a lot of people in each of these little funding nodes, whether it's CPACE, whether it's EB5, all of these people are made by these certain things. So there are certain, like Mindy Steiner and a bunch of other investors. All of these guys were made through this either Nussbaum's financing or connections, we're going to see aftershocks for a long time to come. In the sniff space, in the multifamily space, in the affordable housing space, in a lot of these different areas that were heavily impacted by this cast of characters. And you see the center kind of implode on itself. And then the real question is, who's going to be the next one? Because this was a really valuable service, I mean, except for the crime. But who's going to be the next merchant bank clearing house?

[B]

That's a fascinating point. And the other thing about this is he was a very well liked guy, apparently great chef. His partner plays a mean Sax Lowinger. When this started getting bad, not as bad as it is now, but when it started kind of going down, people in the community were raising funds to help him out to fill some of these gaps. So it tells you how much goodwill he created by probably making people a lot of money.

[A]

The key is you always make money for your partners. And if you stop making money for your partners, that's when things go sideways.

[B]

When the shadow system is this big and a lot of these people, scant paperwork, secret partners, someone behind someone else, the source of the money's here and someone else is putting it in. This is just how this world has worked for a long time.

[A]

The developer almost never has the money and it's always somebody else behind them or syndicated out amongst a wide variety of people. This goes back to Harry Helmsley taking thousand dollar checks from widows and orphans on syndicated deals across the country. This is just how the real estate game works.

[B]

If you look at Nussbaum's client list, it's pretty staggering. Joel Schreiber, Moshe Silber, shy praker. At least one of those is a convicted felon. He's been at the center of all of this. And I think that if he gets off lightly, I think that in five years, people give him money again.

[A]

100%, without a doubt.

[B]

How should we start?

[A]

So first, let's start.

[B]

I'm allowed to do that. I'm from Dubai.

[A]

So yeah, habibi, come to Dubai. We've talked about how people are moving to Florida because we're taxing second third homes in New York and they're all buying condos down Miami way, except for one site that doesn't seem to be attracting a lot of bids.

[B]

What are you buying? When you buy a condo, especially in Miami, you're buying a dream.

[A]

Let's dig in on that a little bit. In Florida, because they have different laws. Let's double click a little bit. Let's double click it. I've gotten better at that. But in Florida there's different rules on like using deposit money or pre selling condos than there are in New York. So you really are buying a dream in those cases. Like you're buying off of floor plans, you're not buying off of like finished units.

[B]

Yeah. Basically, if buyers don't commit, your building ain't going up, pretty much.

[A]

And what we're talking about is the Surfside condo which collapsed in 2021. Horrible tragedy.

[B]

This is the Champlin Tower south collapse. I believe 98 people died. So one of the biggest tragedies in South Florida history. It spawned a bunch of safety regulations that have turned into assessments. That is something that market is very much dealing with. And we've talked about this in terms of that whole buyout game that developers are playing in South Florida.

[A]

Yeah, because you had older condos which were on land that's incredibly valuable, but the units themselves were dated or needed huge mechanical upgrades or the buildings themselves needed to essentially be raised because they were non functioning. And so Dubai based Damac. Damak.

[B]

Damok.

[A]

Damak Damak bought the site of the Surfside conical apps for $120 million in stalking.

[B]

Horse bid, I believe.

[A]

Yeah. Stocking horse bid. They were the sole bidder too. Because I think a lot of folks were really concerned about the optics of buying this site.

[B]

Understandably, it makes sense that no homegrown firm decided to go for this. Right. They understand that this is going to be a third railing.

[A]

Right. And so of course it sells to. How would you describe him? The. Oh, Hussain Sejwani, Middle Eastern Donald Trump.

[B]

In fact, he's good friends with Trump. He showed up to a bunch of the White House events. Dubai guy. Let me just tell you a little story about which perfectly illustrates him. This is in his telling. So take it with a massive pinch of tagine. All right, so he is in Baghdad studying to be a doctor. Right. He doesn't have the best grades, he flunks a couple years in a row and he's on his way out. He's desperate for another chance. Somehow. Somehow someone hands him the phone number, the personal phone number of Saddam Hussein, the dictator of Iraq. And Sajwani has the stones to call him and apparently gets him on the phone. It didn't end up working out for him, but he got Saddam on the phone. This is the kind of guy he is. Oh my God. Somehow lands up in development in Dubai, has Always been an outsider, someone like Trump. If you think of the core New York real estate developers, they never really accepted Trump as their own. He was always a weird guy from the outside. And Sajwani has a similar reputation in Dubai among the glitterati developers there. But anyway, he's built a huge business, had a couple of bailouts as well. And his marketing gimmicks very much resemble Trump. I believe he was like raffling off private jets if he bought condos and gives away cars and all kinds of stuff.

[A]

So he's like Oprah mixed with djt.

[B]

That's the exact way to think about it. I have said to you before, it's one of my pet theses, that Miami and Dubai are essentially spirit animals. The hoi polloi of Miami and the hoi polloi of Dubai live in very similar ways. It's a lot of bling. The two markets where branded condos are the biggest are Miami and Dubai. It makes sense.

[A]

It does. And so they buy this site in a vacuum. You would say this is incredible real estate.

[B]

Yeah, great site. Good price too.

[A]

Yeah, good price. But again, there's a reason why Related or related Ross or related. George Press didn't buy this. And a lot of people wanted it to be a memorial for the folks who perished in the tragedy. And Democ comes in and buys it. They make it as flashy as possible. They hired Elliman and they're just making these super premium units. I think they start at 15 million. They average between 35 and 40 penthouses. That could hit the market for more than 150. And how many have they sold?

[B]

Zero.

[A]

That's bad.

[B]

SIFR. Not so good. The DMAX sales executive said the initial soft launch we did in January 2025 was premature. We also thought the market would pick up after the inauguration of the president.

[A]

What's telling too is they talked about how they've had bites on a bunch of different deals and in the article they're quoted is saying we couldn't get comfortable with the source of funding. And my God, for this guy to say that they're not comfortable with the source of funding for the buyer. Who the hell was it?

[B]

Because Dubai's KYC policies are pretty, pretty lax in general. This executive who spoke for the Real Deal article should have been gagged. He should not have spoken because he also said the following. Rosselli also acknowledged that Democ doesn't have a track record of developing ultra luxury condos in the US. There's a degree of reasonable skepticism, he said. Why is the marketing director sanctioned like this. It's crazy.

[A]

Unbelievable, we should say.

[B]

From a pricing perspective. Surfside has become a pretty frou frou market. The Four Seasons there, which Ford Partners did, they sold a pad for close to 7,000 bucks a foot. That's like tippy top Manhattan pricing.

[A]

It is for sure, but it's just again, the depth. It's like every unit starts there and it's like you need so many people just to pick this one building. It does seem gauche to want to buy a $150 million apartment.

[B]

They haven't been able to escape that. This is the site of a real tragedy.

[A]

You needed somebody local who really understood what it meant to the community and how to work around it.

[B]

The sentiment of the market, having literally

[A]

the least local person you could be have probably wasn't a great fit.

[B]

Sajwani is as American as they come in kind of the brio and the chutzpah that he has. This shouldn't be a surprise, but he's also involved in a data center venture with Trump.

[A]

I actually did know that. Yeah. Good for him. Great real estate's great real estate, but execution matters, marketing matters, branding matters, and the laws of gravity for supply and demand matter too.

[B]

You know how we've talked about launching a new development condo is like an ipo. Everything has to be lined up. The storytelling has to be perfect. And just saying, oh, it was a little premature. We launched quite sure. You can't really do that with a condo. You really get one shot to. To set the perception right. Because if you don't, you end up with a Surfside situation. You end up with a 172 Madison like Yachak Tesler. You end up with situations where just with a little bit of a sharper execution, you might have had a very different start. And a start in condo sales can often determine the finish. Yeah.

[A]

All said,

[B]

That's it for the promote podcast this week. Taxing the rich, selling the Miami dream at the site of a tragedy and escrow fraud. It's all happening.

[A]

We'll be back next week with more CRE insider goodness. Thanks again to our sponsors, Loan Boss and Bravo Capital.

[B]

You can find them at loanboss.com and

[A]

bravocapital.com insiders and also non insiders who want to become insiders. Check out Hiten's chat with David Lichtenstein on Thursday at 12pm Go to thepromote.com upgrade and we'll send you the deets. That's 12pm Eastern time. It is.

[B]

Thanks. Will for that. You're a mensch. You can have a few of my shekels for show capital anytime.

[A]

Thank you. I always need them.

[B]

Ciao.