J
oel Schreiber, a real estate enigma, has finally shared his side of the bizarre Union Bank Plaza saga. In 2022, he went into contract to buy the 40-story office tower in Downtown Los Angeles for $155 million, but after 11 extensions, he negotiated the closing price down to $104 million. This year, Schreiber's group sold the building for $80 million, a deal that made money despite appearing to be a loss on paper.

    Schreiber had no equity in the deal and only stood to make a fee from managing the property with Cushman & Wakefield. However, he was personally liable due to agreeing to a mezzanine loan guarantee. Schreiber claimed the lender didn't care that he had no funds to honor the guarantee.

    A lawsuit against Schreiber by Starwood Capital Group has raised questions about his financial situation. Despite claiming poverty, Schreiber cashed out WeWork stock with SoftBank for at least $44 million and is buying skyscrapers. He faces a hearing in January and potential jail time for failing to hand over documents.

    Schreiber's initial plan was to buy the building from KBS and flip it, but he couldn't find a buyer, so he closed on the property instead. He obtained 11 extensions and haggled down the sales price with the help of lender Don Hankey, who had made a fortune in subprime auto lending.

    Schreiber managed the entity that paid for the property, but claimed the money came from Samuel Kraus and Kindred Equities. However, Starwood noted that $10 million of the acquisition price flowed from Schreiber's company Rocky Capital, which he said was just a pass-through entity. The law firm Nussbaum Lowinger also provided $17 million for the deal.

    In his deposition, Schreiber admitted to not reading the loan terms and providing a guarantee despite having no equity in the deal. He claimed he needed to ensure the deal closed and that the lender knew he didn't have the liquidity required by the guarantee.