Property Sales Roundup: Pike Sells Former ​“Cage” For $3.3M; Mandy Refinances, Expands

A 22-unit Sherman Avenue apartment complex once known as ​“The Cage” has changed hands for $3.3 million — nearly twice the amount its former landlord paid for the property seven years ago.

That’s one of New Haven’s latest local real estate transactions, as recorded on the city’s online land records database. (See below for a full roundup of recent sales.)

On June 15, 76 Sherman LLC sold the two-building, 22-unit apartment complex at 76 Sherman Ave. to UK Sherman LLC for $3.3 million.

The seller is an affiliate of the local landlord Pike International.

The buyer and new owner is a holding company controlled by Jacob Klein of Monsey, N.Y.

The Sherman Avenue apartment complex last sold for $1,802,000 in 2015. (Click here and here to read articles from 2014 about Pike’s then-efforts to convince the city to drop a decades-old Land Disposition Agreement so that it could purchase and fix up the property.)

The city most recently appraised 76 Sherman Ave. as worth $2,968,100 — an 88 percent jump from the apartment complex’s pre-revaluation appraisal of $1,575,800.

Last week’s property sale, meanwhile, took place roughly a year after the Pike affiliate almost lost 76 Sherman Ave. to foreclosure.

“Pike international remains committed to upgrading and revitalizing the unique and architecturally diverse real estate of the Elm City,” Pike President Shmully Hecht told the Independent in an email comment for this story. ​“For 22 years Pike has transformed hundreds of buildings and upscaled entire neighborhoods for the betterment of our wonderful populations.”

“Upon acquisition, 76 Sherman was known as the notorious ​‘Cage’ for its drug trade and prostitution,” Hecht continued. ​“Subsequent to our investing hundreds of thousands of dollars and working closely with law enforcement and the Elicker administration it is now a safe and upscale community of hard working families. 

“Pike takes pride in working daily with the dedicated staff of LCI, the building dept, and other agencies both State and Federal in our collective efforts to rebuilding our city.”

On Monday morning, 76 Sherman Ave.‘s new property manager, Joseph Katz, met up in the back parking lot with three contractors and maintenance workers to survey the site. 

“We plan to renovate the common areas,” he said, and will take a look at the rest of the complex ​“unit by unit.”

He said the new owner has ​“no major plans” for the site: ​“Just maintenance.” He said any other repairs to the property will be done on a ​“unit by unit” basis.

Overall, Katz said, ​“things look fine” at 76 Sherman Ave. (Katz made clear that he is new to this property as of the latest change in ownership. He did not manage this property when it was owned by Pike.)

Medina Kome ventured out of her apartment and over to Katz when she saw the new property manager and maintenance crew standing by their pickup trucks in the parking lot. She spoke with him briefly about some fixes she’d like to see in her unit, which she moved into only a month ago.

“He’s good people,” she said about Katz. She said she had met him late last week, soon after the property officially changed owners. 

She said she’d like to see her apartment’s bathroom and kitchen upgraded. Otherwise, she’s happy at 76 Sherman, particularly because the rent is reasonable. (She declined to say how much she pays.)

Foreclosure Dodged After Conditions Dispute

The Pike affiliate’s sale of 76 Sherman Ave. comes roughly a year after the local landlord nearly lost the property to foreclosure thanks to a lawsuit filed by Deutsche Bank National Trust Company in June 2021.

While Deutsche Bank wound up dropping the foreclosure lawsuit last October, some of the details that emerged in the intervening four months’ worth of legal filings reveal how Hecht’s company came to acquire the property in the first place — as well as the alleged state of disrepair 76 Sherman was in when Pike first bought the complex in 2015.

The original foreclosure lawsuit was filed on June 14, 2021,by bank-hired local attorney Philip Kent. 

It stated that, as of May 31 of last year, Hecht’s company owed $1,694,296 in principal on a $1,852,500 mortgage loan from 2006 that the Pike affiliate had taken over when it bought 76 Sherman Ave. for $1,802,000 in 2015. 

Deutsche Bank’s lawsuit sought a strict foreclosure of the mortgage as well as the immediate possession of the property.

On Aug. 30, 2021, Pike-hired attorney Ori Spiegel filed a legal answer in the case in which he wrote that the bank had ​“represented to the Defendants that subject property was in good condition and free of defects” when Pike bought the property and assumed the mortgage in 2015.

“The Plaintiff knew or should have known that the subject property was in a severe state of disrepair,” Spiegel wrote. ​“The Defendants relied upon Plaintiff’s misrepresentation. The Defendant 76 Sherman, LLC was required to expend substantial costs for said repairs to its detriment.”

On Sept. 28 of last year, the bank-hired attorney responded with a motion for summary judgment, as well a motion for order of sanctions against Hecht’s company.

In a memorandum of law supporting those motions, Kent criticized the Pike affiliate’s ​“shameful lack of candor” in its Aug. 30 special defenses.

He wrote that the landlord’s and his attorney’s claims that they didn’t know about the conditions of 76 Sherman Ave. was ​“shocking.” That’s because the Pike affiliate had sought to purchase the very same property back in 2013 for $1,665,000, ​“but cancelled the transaction due to anticipated repair costs after Defendants completed their due diligence,” Kent wrote.

The bank-hired lawyer wrote that, after Hecht’s company scrapped that original deal, the Pike affiliate’s lawyer said in a letter that ​“it was his personal understanding that the building had numerous problems differing from statements made by the seller, including ​‘evidence of water infiltration into the building, a roof that needs to be replaced, substandard operating furnaces, etc.’ ”

Even after that original deal fell through, Hecht’s company continued to pursue trying to buy the property.

“Soon after, in April 2015, Hecht, through other counsel, increased his offer to $2,000,000 and established the entity, Defendant 76 Sherman, LLC, for that purpose, including an assumption of the mortgage at issue in this foreclosure,” Kent wrote.

“Moreover, with knowledge of needed repairs, the offer included ‘$100,000 to be set aside for the repairs and/or renovations of the property,’ ” the bank-hired lawyer continued. ​“In fact, Defendants executed the Plaintiff’s Terms of Sale sheet which also stated as a condition of sale that the Property was ​‘being sold ​“as is” ​“where is” with all faults and limitations without warranty or representation of any kind whether express or implied, statutory or otherwise including without limitation, warranty of income, operating expenses, tenancy and title.’ … As part of its offer, Defendants held themselves out as a sophisticated and experienced buyer that was a ​‘well-known presence in the New Haven real estate market’ and that had ​‘rehabilitated, renovated and improved more properties in the New Haven market than any other developer.’ ”

At the closing of the 2015 sale, Kent wrote, the Pike affiliate ​“executed a certain Repair Holdback and Security Agreement, which memorialized and made binding the $100,000 holdback for repairs and renovations as part of the transaction. … This agreement included a schedule of required repairs, including unit repairs and upgrades, roof repairs and repairs/improvements to the site, curb appeal, fencing and security system.”

The purchase and sale agreement also clearly stated that the Pike affiliate had ​“a reasonable opportunity to inspect and
investigate the Property” and that they were accepting the property ​“as is”, ​“where is,” Kent wrote. 

“For Defendants and their counsel to now assert that Plaintiff misrepresented the property’s condition or that they were hoodwinked into reliance upon the same is quite simply a knowing lie intended to delay improperly these proceedings at great cost and prejudice to the Plaintiff. That Defendants’ counsel would promulgate such knowingly false defenses is baffling when they are quite familiar with the property in question, were involved in the transaction at issue, and were involved in the prior history of the transaction (including the fact that Defendants initially balked at purchasing the property because of its condition).”

The state court judge never got a chance to rule on the bank’s motion for summary judgment or motion for sanctions order.

That’s because the bank formally withdrew the foreclosure lawsuit eight days later, on Oct. 6, 2021.

The withdrawal of the foreclosure lawsuit in turn came roughly a week after the Pike affiliate that then owned 76 Sherman Ave. received a $2,120,000 mortgage loan from the Boston-based Northeast Bank on Sept. 30, 2021. Then, on Oct. 18 of that year, Deutsche Bank formally released Hecht’s company from the original 2006 mortgage it had previously sought to foreclose on.

Real Estate Roundup: Mandy Spends $2.1M On 11 More Apts

In other recent local property transactions: 

• Affiliates of the local megalandlord Mandy Management spent another $2,152,500 purchasing five different residential properties containing 11 different apartments. The include the two-unit mixed-use building at 1210 Chapel St., the four-family house at 787 Whitney Ave., the two-family house at 432 Dixwell Ave., the two-family house at 457 Edgewood Ave., and the single-family house at 61 Brewster St.

In a separate set of real estate ​“transactions,” three affiliate companies of Mandy Management — Nets Hot BH LLC, Netz Hot II LLC, and Netz Hot III LLC — transferred ownership of 24 different rental properties containing 65 different apartments to a new Mandy-affiliated ownership company called Danny Guy 3 DE LLC. That is: the holding company that legally owns these properties has changed, even though both the buyer and the sellers are Mandy affiliates.

The warranty deeds that were filed on the city land records for three different Mandy-to-Mandy ​“sales,” meanwhile, that Danny Guy 3 DE LLC paid a total of $6,916,000 to acquire these 24 properties. The city last appraised those 24 apartment buildings as worth a total of $6,148,900, after the latest reval.

Then, on June 3, the new Mandy-affiliated ownership company received a $4,995,000 mortgage loan from the California-based lender Corevest American Finance for these same 24 recently transferred rental properties.

What does this flurry of land records mean for these 24 properties in particular, and Mandy’s local real estate empire more broadly?

“We are reinvesting in our New Haven portfolio and refinanced these properties under a new LLC,” Mandy Management’s Yudi Gurevitch told the Independent by email. ​“We will continue to manage and operate each of these properties. Our investment objectives are safety, affordability and growth. We are managing our business to achieve these goals.”

• On March 21, Michael Altieri purchased the two-family house at 41 Howe St. for $235,000 from Shuang Li Lu. Roughly a month later, on April 28, Altieri flipped the Howe Street property for $400,000 — that is, at a $165,000 markup — to Sap RE Holdings LLC, an affiliate of the local megalandlord Ocean Management. The city last appraised the property as worth $466,500.

• On May 16, a holding company controlled by Abraham Gottesman spent a total of $3,984,780 across eight different transactions buying 30 different condos on Eastern St. from holding companies controlled by Daniel and Joseph Scherban. The city last appraised those 30 Fair Haven Heights condos as worth a total of $1,961,500.

• On June 3, Elena Grewal purchased the single-family mansion at 130 Edgehill Rd. for $2,050,000 from Lance Sauberteig. The city last appraised that property as worth $2,147,100. Grewal chairs the East Rock Community Management Team, and also recently bought a three-family rental property in Edgewood.

See below for a table detailing a full list of recent local property transactions.