When the wolves came to Ziel Feldman’s door, it was a triplex penthouse on the Upper East Side of Manhattan. Feldman, chief executive of HFZ Capital, one of the city’s swankiest developers, was forced in December to put his own house up for sale — asking price: $39m — after creditors sued to foreclose on several of his faltering condominium projects.
To many in the real estate world, that event looked like a harbinger of doom. By then, lenders had granted months of forbearance after the Covid pandemic paralysed New York City last March. The expectation in the industry was that many would call time on delinquent borrowers in the new year, touching off a great reckoning after a decade-long rally that has bequeathed plenty of questionable projects.
“The non-performing loans are coming!” Laurie Golub of Square Mile Capital warned in November at the annual conference hosted by New York University’s Schack Institute of Real Estate, claiming that lenders had been “coddling” borrowers. “Don’t expect creditors to extend forbearance much longer,” another panellist agreed. One analyst likened the situation to a storm cloud on the horizon poised to burst at the first crack of lightning.