AIG Deal Provides $4M+ Gain

AIG Deal Provides $4M+ Gain TULSA, OK - AIG's distressed financial condition may have created a $4 million-plus profit opportunity to flip four Tulsa apartment complexes. Through four separate entities, the New York firm Tulsa Affordable Housing Solutions bought the Arbors of Southern Hills, Hunter's Creek, Lakewood Park and Sand Dollar on the River apartments from affiliates of the New York-based multifamily investor NVHF for a combined $18 million, according to documents entered April 1 at the Tulsa County Courthouse. Those four apartment blocks immediately sold to affiliates of Tulsa-based multifamily operator Capital Assets for $22.98 million, with Capital Assets receiving $825,000 back in insurance proceeds for Sand Dollar on the River.

NVHF, which insiders described as a nonprofit entity supporting Jewish causes, was led by Chairman Pesach Lerner, according to county records. Rabbi Lerner is executive vice president of the National Council of Jewish Youth in New York, an organization that coordinates activities by Orthodox congregations across the U.S. and Canada.
Listed as an associate vice president on the council's board is Stanley Treitel, whom Tulsa County records name as the president and sole member of Tulsa Affordable Housing Solutions.

Various online sources list Treitel as the executive director of United Housing and Community Service of Beverly Hills, Calif., as well as the president of SLT Consultants of Los Angeles.

He has been linked to several housing properties in that area, with an October 2005 report in the Los Angeles Times referring to him as a "slumlord."

NVHF received funding to repair and renovate its underperforming Tulsa portfolio from two Tulsa Industrial Authority bond issuances in 2000 and 2001. In relation to that, NVHF entities drew $21.6 million in mortgages from AIG SunAmerica Life Assurance Co., with smaller second mortgages from Bank of Oklahoma.

According to observers of the latest transaction, last fall NVHF arranged a deal with American International Group to settle its debt on the Tulsa properties for $18 million.

That proved one small deal in the morass surrounding AIG, which soon became headline news. The financial giant lost $61.7 billion in the fourth quarter, called by some the largest corporate loss in history, even as AIG received more than $170 billion in the federal rescue package.

NVHF approached Phoenix-based Hendricks and Partners in September about the possibilities of selling the 984 Tulsa units, setting a March 31 deadline to complete the transaction.

To find a buyer able to meet that timetable, Hendricks broker Aaron Hargrove took the opportunity to Capital Assets, represented by Tooman Partners broker Gary Krisman.

Capital Assets made the deadline with financing through Todd McNeill of Metropolitan Capital Advisors, Evans Rector with Power One, Alliant Capital, and SpiritBank. Moriah Real Estate Co. was an equity partner.

More Stories

Get The Newsletter

Get The Newsletter

The latest multifamily industry news delivered to your inbox.