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ew York court approves transfer of HAP Seven property to Madison Realty Capital after project collapses due to pandemic disruptions, inflation and interest rate hikes. The property has been officially transferred to the financing entity, effectively placing ownership in the bank's hands.

    Hundreds of Israeli investors had collectively invested at least $70 million into the project, which aimed to build a 7-story residential building with 129 units at 4452 Broadway in Manhattan. Construction halted in June 2021 after Madison Realty Capital ceased funding during the structural phase. The developers sought alternative financing but failed to revive the project or find a buyer willing to meet the $25.5 million price tag.

    Following court proceedings under Chapter 11 bankruptcy protection, the partnership filed a bankruptcy request which was approved by the New York State Supreme Court. In a letter to investors, the partnership explained that despite efforts to secure alternative financing or an equity investor, no offers were made due to deteriorating market conditions caused by the pandemic, inflation and interest rate hikes.

    The consequences of this outcome are severe: it means a total loss of the investment. The company's founders expressed deep regret for being unable to protect investors' capital, acknowledging that they had invested additional private funds and worked tirelessly to try and prevent this outcome.