Eli Karp’s Hello Living will say so long to two more of its Brooklyn rental buildings.
Over the past few years, iCross Capital sought foreclosure on three of Karp’s Brooklyn projects alleging the developer failed to make his debt payments. Last month, iCross and Karp reached a settlement to put an end to their disputes.
Karp agreed to hand over his equity stake in one project and plans to sell another through a bankruptcy sale. In exchange, the lender will drop its lawsuits against him.
Karp was once a promising developer who bet on building luxury rental apartments further out in Brooklyn. All of his projects had Hello in their names and stood out for their sleek designs, which appeared out of character to their neighboring buildings.
But Karp began defaulting on his loans around 2019 and lenders initiated foreclosures.
An embittered Karp went scorched earth on one of his lenders, Madison Realty Capital, who sought to foreclose on his marquee project, Hello Nostrand at 1580 Nostrand Avenue. Karp filed a rambling lawsuit against the lender and penned a manifesto on a website called MadisonPirates.com. The lawsuit was dismissed and Madison sold its loans to Arch Companies who has had its own troubles foreclosing on the site.
Karp is battling numerous lawsuits with lenders, including iCross, who provided mezzanine financing for his projects.
In 2018, iCross provided a $6 million loan to Karp’s Hello Flatbush project at 1357 Flatbush Avenue. In 2019, the lender provided a $1 million loan to Karp for a project called Hello Lenox at 271 Lenox Road. That same year, iCross offered Karp a $2.5 million mezzanine loan for Hello Albemarle at 2415 Albemarle Road.
iCross initiated foreclosures on all the properties. The lender was allowed to foreclose on its interests in the Hello Lenox and Hello Flatbush earlier this year. As part of the settlement, Karp will hand over his equity interests at 1357 Flatbush Avenue and has agreed to sell Hello Albemarle at 2415 Albemarle Road through a pending bankruptcy.
The lender dropped its foreclosure lawsuit against Hello Lenox, where Karp is facing a foreclosure from the building’s senior lender.
If Karp adheres to the settlement, the lender will not pursue personal guarantees and on additional money he made on the loans.
Karp did not return a request for comment. An attorney for iCross also did not return a request for comment.