A collection of rent-stabilized buildings in Harlem hit the auction block on Tuesday despite attempts by the Mamdani administration to guide the buildings into the hands of tenant groups.
Only one of the 15 multifamily properties, part of a larger group of investments previously owned by Emerald Equity Group, received a bid.
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The winning bid for the property at 417 E. 114 St. was $826K, just $1K above the minimum requirement. The original loan for the property was $1.9M, according to court records. The bidder identified themselves as Matt.
The plaintiff, U.S. National Bank Association, took back most of the buildings for a nominal $500 each. One property went for $1K.
The properties are part of a 38-building portfolio that Mayor Zohran Mamdani got involved with in April. The city backed Spatial Equity’s bid for the 850 apartments, which were riddled with more than 2,300 housing code violations at the time.
The affordable housing developer initially offered $68M for the portfolio, CityLimits reported in July. Last month, the bid was raised to $110M, which creditors again rejected, according to Gothamist.
Vic Washington, community engagement and organizing systems administrator for the East Harlem El Barrio Community Land Trust, attributed the failed negotiations to overlending practices.
"They don't want it on their books," Washington, who is also a co-founder of the East Harlem Tenant Union, told Bisnow.
Tenant advocates hoped that Spatial Equity would eventually transfer the units to the community land trust. Founded by a group of East Harlem residents, the nonprofit owns four properties, according to its website.
The tenant union plans to continue organizing regardless of the new ownership, Washington said.
This is the second time that the Mamdani administration has tried and failed to influence the sale of a large, highly distressed rent-stabilized portfolio. Early into his tenure, Mamdani objected to the auction of roughly 5,200 apartments that were placed into bankruptcy by Pinnacle Group. A bankruptcy judge allowed the sale to proceed nonetheless.
Mamdani has been a vocal supporter of tenant unions, encouraging groups to organize across portfolios, not just in individual buildings.
In addition to Tuesday’s sale of 15 properties, two more auctions are planned, according to court records. Another 13 buildings will be auctioned off on Nov. 17. A date for the remaining 10 is not yet set.
One building, 419 E. 114th St., was returned to the lender on Aug. 4 for $500, according to court records. The upset price, or minimum threshold for the auction, was set at $1.5M, indicating that there were no outside bidders.
Emerald refinanced the properties with a $189M loan in late 2018. Sabal Capital Partners originated the debt through Freddie Mac’s Small Balance Loan program.
The apartments were part of a larger, nearly 1,200-unit, 47-building portfolio that Emerald CEO Isaac Kassirer paid more than $350M for in 2016.
Kassirer planned to renovate the units and remove them from rent stabilization to collect more income. He successfully did so for about 20% of the portfolio before the passage of the Housing Stability and Tenant Protection Act of 2019.
The legislation essentially closed all avenues that landlords used to deregulate units and severely limited rent increases, even if the property remained stabilized. As a result, mortgages originated before HSTPA relied on economics that no longer existed.
Mack Real Estate Group, which held a preferred equity position in the portfolio, took control of the assets in January 2023, replacing Kassirer as guarantor. Months later, the investment firm defaulted, The Real Deal reported.
Rent-stabilized distress is expected to accelerate, especially because a rent freeze is now in effect. Lenders have rapidly exited the space in the years following HSTPA, and even Fannie Mae and Freddie Mac, considered the lenders of last resort, are reportedly reevaluating underwriting standards for the sector.
Between 2020 and 2024, expenses for rent-stabilized apartments have increased by 27%, while rent has grown by 11%, according to a report by Community Preservation Corp., a nonprofit lender overseeing Signature Bank’s regulated portfolio. As of December 2025, the delinquency rate for the loan book, including properties taken back by the lender, was 12%, up from 10% in 2024.
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