A Miami-based developer, Tzadik Management, has filed a lawsuit claiming that an affiliate of lender Arbor Realty Trust purposely got them blacklisted from using Fannie Mae, the government-sponsored agency. Tzadik alleges that the Arbor affiliate spread false information about the developer going out of business to a Fannie Mae employee, who was a former Arbor employee. This alleged act of vengeance has resulted in Tzadik being placed on Fannie Mae’s “do not use” list.
Arbor’s attorney has refuted these allegations, arguing that Tzadik has provided no specific details about the supposed lies spread about them. However, Tzadik’s claims have come to light during a time when Fannie Mae’s sibling organization, Freddie Mac, has cut ties with Meridian Capital Group due to an investigation into the brokerage. This development has sent shockwaves through the industry, as Meridian is one of the largest commercial mortgage brokerages in the country, and Freddie Mac is a significant source of loans for the multifamily sector.
Previously, Arbor had a close financing relationship with Meridian Capital Group, along with Capital One and Greystone. These allegations against Arbor Realty also follow a recent short seller report by Viceroy Research, which contributed to a decline in the company’s stock price.
Tzadik asserts that their relationship with Arbor soured when they chose to secure financing for a Houston portfolio through Arbor’s competitor, Greystone. Tzadik claims they offered Arbor an opportunity to match the loan, which they declined. According to the lawsuit, Arbor warned Tzadik that they would regret working with Greystone for this deal. This marked the beginning of what Tzadik describes as Arbor’s campaign to sabotage their investments in any way possible.
Tzadik further accuses Arbor of withholding credit for $1.5 million held in escrow, which affected the refinancing of Tzadik’s Sioux Falls portfolios. Additionally, Tzadik claims that Arbor failed to refinance its Sioux City portfolio and prevented Tzadik from assuming a loan for a Rapid City, South Dakota portfolio. Tzadik also alleges that Arbor defamed their reputation, informing Tzadik employees that Adam Hendry, the founder of Tzadik Management, was not creditworthy. This alleged defamation ultimately led to Tzadik being placed on Fannie Mae’s blacklist.
Arbor has denied all of these allegations and insists that Hendry defaulted on payments, leaving them with costs and expenses related to legal proceedings. While Arbor’s motion to dismiss Tzadik’s amended complaint was rejected, the company is currently appealing the ruling. Arbor and its attorney have not yet responded to requests for comment.
Frequently Asked Questions (FAQ)
Q: What is Fannie Mae?
Fannie Mae is a government-sponsored agency that plays a significant role in purchasing commercial real estate loans, making it crucial for many real estate transactions. (Source: [fanniemae.com](https://www.fanniemae.com/))
Q: What is Freddie Mac?
Freddie Mac is a sibling organization of Fannie Mae and serves as a significant source of loans for the multifamily industry. (Source: [freddiemac.com](https://www.freddiemac.com/))
Q: Who is Tzadik Management?
Tzadik Management is a Miami-based developer that focuses on multifamily acquisitions and real estate investments.
Q: What is Arbor Realty Trust?
Arbor Realty Trust is a lender and real estate investment trust involved in financing commercial real estate deals. They offer bridge loans, among other services. (Source: [arbor.com](https://www.arbor.com/))