The ghost of Antares rises from the flames

News of the sale of Greenwich Green broke last week (Greenwich apartment complex near NY border sells for $20.7 million) and it reminded me of the sordid real estate “investment” fiasco oh Joe Beninati and Jimmy Cabrero who did business as Antares Investment Partners back in the glory days of 2000-2007, when it all came crashing down.Cabrera’s still in Greenwich, I believe, and who knows where Beninati got to or what he’s up to these days, but it’s still a fun story.

As an aside, I was told by someone who was there that Lehman Brothers put together the deal that enabled Antares’ “investors” to pay $223 million for Putnam Green and an adjacent apartment complex, “Weavers Hill Apartments”. At the final meeting of Lehman bankers [sic] to get the paperwork ready, a bean counter stuck his head out of the closet they’d stored him in and announced, “guys, I keep running the numbers, and there’s no way this works — not even close”. “Shut up” the lead banker explained, “do know how much we’re charging for this deal?” Ah, the Wall Street years; they’re still at the game, two decades later.

Greenwich Time (well, Hearst) used to employ a great reporter, Neil Vigdor, who has since gone on to the NYT, and he wrote a two part series on the Putnam Green purchase and the Antares Boyz; great reading, excellent reporting:

A fall into the money pit

By Neil Vigdor, Staff writer Sep 1, 2009

Antares Investment Partners would make a huge misstep in February 2006, buying the Putnam Green and Weaver's Hill apartment complexes on the western end of town with the goal of converting the properties into high-end condominiums that would be renamed Greenwich Place and Greenwich Oaks. The $223 million property purchase was a record for the town and the state of Connecticut at the time.

Antares ran into problems right away. Elderly tenants, threatened with eviction from their units, banded together to file a discrimination complaint.

Under state law, the company was barred from evicting any tenants 55 or older as long as they paid the market rent for their units. That threw a wrench into the plan.

In order to convert the apartments into condos, the company needed to sell 20 percent -- about 92 of the 462 available units. It got contracts for only 25, according to those with knowledge of the project.

"If you have no experience in doing apartment-to-condo conversions, you don't start out by doing the biggest one in the state and in Greenwich," said Matthew Allen, an asset manager who worked for Antares from September 2006 until he was laid off in October 2007.

"They wanted to be big shots right out of the gate," Allen said

House of Cards

Robert Tuthill, who rented an apartment for years at Putnam Green and put down a 10 percent deposit for a condo, said the company treated tenants shabbily, keeping them in the dark on the status of the project.

"These guys just showed absolute disdain for people," said Tuthill, who found another condo in Byram once the company's troubles became apparent. "It couldn't happen to better people, as far as I'm concerned."

The financing of the venture was even more unconventional than the premise of the project itself, by many accounts. Antares put very little of its own money into the deal, relying on Lehman Brothers and Arch Street Capital Advisors, a Greenwich-based real estate investment advisory firm, to come up with the capital for the purchase and the condo conversion.

Arch Street Capital tapped into its Middle East connections to get cash from hundreds of individual Kuwaiti investors to help finance the venture.

In the end, the total amount financed was $351 million, with Lehman giving a $227.5 million senior loan to Antares in what would be a costly lapse in judgment for the doomed Wall Street institution, those familiar with the deal said.

What was most shocking about the situation was that the chief executive officer of the now-bankrupt Lehman Brothers, Richard Fuld Jr., lived on North Street in Greenwich, not quite eight miles away from both apartment complexes.

A message seeking comment from Fuld was left at his home. He did not respond.

And the day before that article was published, This:

Antares downfall: how a real estate empire crashed and burned

They bought up real estate in Greenwich and Stamford like they were playing Monopoly.

They built backcountry spec houses the size of big-box stores, sat behind home plate at Yankee Stadium, and partied like rock stars with black metal American Express cards.

But Antares Investment Partners had a darker side. The same alpha male executives who loved the trappings of superwealth also risked hundreds of millions in investors' money on overleveraged, underperforming deals and tapped financiers who lined up to provide cash, never looking closely enough to see the cracks in the high-flying company's facade.

"I said to myself, This is going to end badly,'" said Matthew Allen, 37, an asset manager who worked for Antares from September 2006 until he was laid off in October 2007.

Poster child for success, failure

The bricks and mortar of the Antares real estate empire came from sources such as Ivy League endowments, pension funds, family trusts, moneyed Arabs and a Wall Street institution now infamously associated with two words, Chapter 11, but the blue chip blueprint was flawed.

[From that issue, here are couple of headlines that place the story in historical context:

Antares comes to Stamford

Leona Helmsley, former 'queen of mean', dies at 87

Trump gets OK to end bankruptcy

Now back to your regularly scheduled program]

Antares is now a shell of its former self, when it controlled what company literature touted as $6 billion in real estate assets, including a 35,000-square-foot spec house, a pair of garden apartment complexes in Greenwich known as Putnam Green and Weaver's Hill, 82 acres of land it planned to develop in Stamford's South End and a stake in the swank Delamar Greenwich Harbor hotel.

Its principals, who built gated estates with what seemed to be easy money, are being personally sued for millions of dollars by the company that inherited their biggest development project.

As one former business associate of Antares put it, the company became "Greenwich's poster child for what went on in the rest of the world."

Said Frank Farricker, a Greenwich real estate broker and member of the Planning and Zoning Commission, "It's a freakin' disaster."

In the eye of the storm were James Cabrera and Joseph Beninati, the firm's founding partners, whose mercurial rise to success, insatiable appetite for real estate, oft-described "cowboy" attitude and penchant for the good life rubbed many they encountered the wrong way.

"Oh, these people in Antares, they're an example of the worst that's happened with new-money types. No class whatsoever," said Robert Tuthill, a former Putnam Green tenant who contracted to buy a condominium at the complex from Antares during an ill-fated conversion project.

Cabrera and Beninati could not be reached for comment.

A shooting star

To understand just how far the company fell, however, you have to go back the beginning.

Cabrera, 46, and Beninati, 45, became friends at Choate Rosemary Hall, the illustrious prep school in Wallingford whose famous alums include John F. Kennedy, Adlai Stevenson, Paul Mellon and Michael Douglas. They played football there. Beninati was born in the Bronx, N.Y. Cabrera was a postgraduate who went to Greenwich High School before Choate.

The future business partners went their separate ways after Choate, Cabrera to Duke University and Beninati to Middlebury College. Beninati went on to work for J.P. Morgan, while Cabrera dabbled in commercial real estate as a regional president for the Galbreath Co.

The Choate chums went into business together around 1997, founding Greenwich Technology Partners, a 600-person global systems engineering firm, according to Cabrera and Beninati's biographies. Greenwich Technology Partners was, however, "a shooting star that crashed and burned," by one account, with "not enough revenue and too much overhead," especially as the tech bubble popped.

Antares would follow the same trajectory.

Easy money

Cabrera and Beninati spun off the money they made from GTP and invested in real estate, buying up several properties in Westchester County, N.Y., and in Miami, those familiar with firm's activities said.

They also assembled a syndicate of some 30 investors, each of whom put up around $100,000, and used the money to buy a package of partnership interests owned by real estate mogul Seth Weinstein, principal of Stamford's Hannah Real Estate Investors, that included a stake in the Seaview House, a commercial office property in Stamford.

It was a meteoric rise for the new company, which was named Antares. There was no real rhyme or reason to the choice of name, other than the story that Cabrera and Beninati wanted to be listed first alphabetically in trade show books and other forums.

The business model was a simple one: Tap high-net-worth friends and family connections for money that the company could invest in single-family residential land in Greenwich.

"The money was just too easy," said Charles Mallory, managing general partner of Stamford-based Clearview Investment Management and majority owner of the Delamar Greenwich Harbor hotel.

Mistake by the lake

Antares came of age around 2003, with the company buying the project rights for a gated subdivision in Armonk, N.Y., called Cider Mill.

Around the same time, the company bought a tract on Taconic Road in Greenwich's exclusive backcountry, where there was zoning approval for seven homes on lots of 2.2 acres each, the asking price for which would be between $15 million and $18 million each.

That would be chump change compared with how much the company wanted for a starter palace it was building, also in the backcountry.

Antares set the price at $28 million for the Lake Carrington Estate, a 35,000-square-foot stone monster that would come to symbolize the company, for better or worse.

Its style has been referred to as "stockbroker Georgian." The amenities, if you could describe them so mundanely, included a 36-foot-long indoor lap pool, a home theater, a 20,000-bottle wine cellar with its own tasting room, a squash/basketball court, and two elevators.

Smoke and A-Rod

A New York tabloid reported in July 2007 that New York Yankees slugger Alex Rodriguez was a potential buyer of the estate.

Some on the inside suggested that was just smoke intended to up the ante.

"I don't think he even saw or went to the house," Allen said.

A-Rod didn't bite. Neither did anyone else, for that matter. A full two years later the estate is still on the market, its interior unfinished and a massive dirt pile left in the corner of the property.

Listed by Sotheby's International Realty for $14.5 million, the estate was put up as collateral in settlement negotiations with a group of investors who sued Antares Mansions over losses.

"Everyone thought at the time, if you build it, you'll sell it," Farricker said.

Robin Leach, eat your heart out

Across the pond from the Lake Carrington Estate, the Antares bosses, each married with three children, built their dream homes. Cabrera's has been described as a classic New England-style house "on steroids" in the neighborhood of 18,000 square feet.

Beninati attempted to remake an Italian villa he and his wife saw on their honeymoon, flying in materials for the construction.

Beninati was widely considered the more extravagant of the two, employing butlers and maids, and driving a Bentley, Range Rover, Mercedes-Benz and Porsche Cayenne.

Membership has its privileges

In the world of Antares, Gold Cards were for wimps. Most top executives had their own American Expresss Platinum Card from the company, complete with a $20,000 monthly spending limit that they were encouraged to exhaust, according to a former member in the firm's inner circle.

Never one to be outdone, Beninati carried an Amex Centurion Card, popularly known as the Black Card, in his wallet.

American Express requires a $5,000 initiation fee and $2,500 annual fee to carry one of the cards, which are made of metal, not plastic.

Membership perks include personal shopping assistance, concierge service, VIP access at special events, hotel and airline upgrades and free companion tickets.

Antares had box seats at Yankee Stadium that it used to woo deep-pocketed investors, as well as Knicks tickets at Madison Square Garden, one former high-ranking executive said.

All its execs had plasma televisions in their offices, and when they traveled, well, the sky was the limit -- a Gulfstream IV, one of several private jets the company had access to through fractional ownership programs. No longer in production, the G-IV sold for about $36 million and can hold 19 passengers, plus two pilots.

Bonus Material

I myself posted a number of stories on the Antares Boyz over the years, and here’s one from 2016 reporting on Joe Neninati’s then-latest fall fron grace:

April 10, 2016 · 11:08 am

Antares star burns out

A planned 900-foot-high condominium tower, a modernist showpiece designed to rival the tallest new Midtown Manhattan residential skyscrapers, landed in bankruptcy court on Thursday amid a slowing luxury market.

Developer Joseph Beninati’s Bauhouse Group put the project into chapter 11 bankruptcy on Wednesday to try to halt a foreclosure after he was unable to find lenders to refinance short-term loans the group used to acquire land and air rights for the tower on East 58th Street near Sutton Place. Construction has not started.

The developer was seeking to block an effort by an investment firm controlled by real-estate investor N. Richard Kalikow from foreclosing on the development. The project faced opposition by local officials and worries by lenders about the increasing risk in financing high-end residential towers.

During a Thursday hearing in U.S. Bankruptcy Court in Manhattan, lawyers for Mr. Kalikow’s investment vehicle asked Judge Sean Lane to dismiss the bankruptcy, which they have called a “classic bad-faith filing” intended to thwart foreclosure. Court papers show the lender is owed more than $170 million, including interest and fees, a figure that is growing by $2.67 million a month.

But wait, there’s more!

Back in 2008, The New Yorker’s Nick Paumgarten wrote a wonderful artile on what was going on in Greenwich at the time, and part of it focused on one of the Antares’ vanity projects. From  “A Geenwich of the Mind”.

In recent years in Greenwich, as elsewhere, many developers have made a great deal of money buying up empty lots or teardowns and building enormous speculative ready-to-occupy mansions. You see them everywhere, a proliferating clan of insta-mini-giganto luxury houses, modest at ten to fifteen million dollars apiece. Their banal extravagance both mitigates and exacerbates what people either too rich or too poor to live in such houses would consider their tackiness.

Lake Carrington is enormous and speculative but not quite occupant-ready. It was framed out and drywalled but otherwise unfinished: no bathroom or kitchen fixtures, no moldings. The floors are plywood. It is a husk. To move in, a buyer would need to put in an additional five to fifteen million dollars’ worth of work. The developers’ name for this situation was “couture-ready,” the stated theory being that the buyers, whoever they might be, would want to customize the guts, but not the shell, to their taste.

Another way of looking at Lake Carrington was that it was a Potemkin manor, a movie set, not as much a dream house as a house in a dream. The developers, in a booklet promoting the property, which was known around their office as “the Bible,” had described it as “Gatsby-esque,” inadvertently summoning up the pretense and the tragedy, rather than the grandeur, of West Egg. The Bible featured stock photographs of polo players, vintage-car grilles, little girls blowing cattails: a Greenwich of the mind. The house was, in one sense, an entirely superficial confection of Greenwichness, and, in another, a canny apotheosis of it. Lake Carrington went on the market in April, 2007, listed at twenty-eight million dollars.

It eventually sold in 2008, just ahead of foreclosing lenders, to some chump for $13.750 million. He finished the project, at great expense, and now, years later, an agent known for her sense of pricing humor has it back on the market for $19.5 million.