A Canadian real estate investor could potentially lose an uptown apartment building.
Aaron Drazin, the founder of Montreal-based Crest Realties, has been hit with a foreclosure lawsuit over 410 E. 88th St., a 5-story, 17-unit walkup in Yorkville.
A joint venture led by lender Community Preservation Corp. has accused Drazin of allegedly being in default since December 2023 on a $5.7 million mortgage backed by the property, according to the suit, which was filed Wednesday in Manhattan state Supreme Court.
The lender claims the landlord now owes $7.6 million for the loan, including late charges and interest, and also still might be on the hook for additional lawyers’ fees, according to a default notice submitted as part of the filing.
Drazin does not need to file a response to the suit for several weeks. A phone message left for him at Crest Realties’ office was not returned by press time.
But the prewar, midblock building, purchased by his privately held company in 2015 for $6.7 million, may face the same plight as other aged rentals snapped up years ago by investors hoping to boost rents to market-rate levels once rent-regulated units emptied out.
A series of pro-renter laws passed by the state starting in 2019, including regulations that limit rent increases, have often undermined those business plans and led to financial hardship for some owners.
No. 410 does have at least one rent-regulated tenant, based on a 2024 state housing filing, its most recent. Still, a studio in the building leased this month for $4,000, according to StreetEasy; Manhattan’s median rent in March was about $4,500, a price that usually fetches a one-bedroom.
Signature Bank was the writer of the building’s most recent mortgage, though the lender collapsed in early 2023. No. 410’s debt was later transferred to the CPC-led group, a partnership that also includes nonprofit affordable housing group Neighborhood Restore as well as Related Fund Management, an investment arm of major developer The Related Cos.
The partnership, which does business under the name Community Stabilization Partners, controls No. 410’s debt after paying $171 million for a 5% stake in a massive former Signature portfolio that is backed by 35,000 city apartments, most of them affordable units.
A low-profile presence in local real estate circles, Drazin nevertheless owns several other Manhattan rental properties, including 4240 Broadway, 45 Wadsworth Terrace and 661 W. 180th St. in Washington Heights, as well as office and industrial sites in the U.S. and Canada.
Other members of Drazin’s family control Rester Management, which owns apartment buildings In Montreal and Ottawa.
Mark Slama, the Windels Marx attorney who filed the complaint, declined to comment.
