What do you do with a nine-story, 169,410-square foot distressed senior care home? You sell it for about $500 per square foot to a real estate investment firm with plans to convert the building to luxury apartments, of course. That was the case for Haysha Deitsch, who purchased a Brooklyn building in 2006 for $40 million and just closed this Fall on an $84 million sale to New York City-based Sugar Hill Capital Partners. However, things were not all smooth in Mr. Deitsch’s 10-year ownership, especially since 2014 when he and Sugar Hill initially agreed on the sale. Following that agreement and a 90-day notice to residents to vacate, tenants’ families sued Deitsch for allegedly trying to evict residents by serving them rotten food and turning off their air conditioners. Deitsch was then sued by Sugar Hill for the delayed eviction process. The court case carousel continued in March 2016 when Deitsch sued the tenants’ families for preventing his plans to sell. That $50 million lawsuit failed, and Deitsch finally paid out a $3.35 million settlement to the five remaining residents, who then vacated. During this saga, the holder of the property’s debt, Madison Realty Capital, foreclosed on the building. Now that the sale to Sugar Hill has closed, Madison Realty will receive remaining payments on the $33.4 million in debt, and Jeffries LoanCore provided a loan to replace the existing debt. Ofer Cohen and Adam Hess of TerraCRG brokered the transaction.
