Josh Rahmani and Ebi Khalili have come a long way since their days hustling Brooklyn real estate for others.
The duo, who got their start in the brokerage business, are now under contract to buy a 40-story tower at 1330 Sixth Avenue from RXR Realty and Blackstone Group for $320 million. It’s a meaty deal that will get them noticed by the biggest players in the New York market.
Rahmani and Khalili, who are cousins in their late thirties, are in the midst of a shopping spree in Manhattan. In addition to the acquisition of 1330 Sixth, their company, Empire Capital Holdings, last year partnered with owner Igal Namdar to buy a Midtown South office building at 345 Seventh Avenue for $107 million.
They are also in negotiations to buy 830 Third Avenue, a 14-story office building and commercial condo in Lower Manhattan, according to a source familiar with the matter.
Sources close to their operation said they fuel their acquisitions with support from families in their close-knit Persian community as well as institutional money.
Rahmani and Khalili did not respond to requests for comment and their former partners declined to report.
The couple largely avoided the press until 2015, when they were the protagonists of a scorched earth legal battle with their cousins and former business partners, Joseph and Daniel Rahmani, whom they allegedly fired and excluded. from their office for stealing commissions.
At one point, Khalili reportedly told Joseph and Daniel Rahmani, “You stole millions of dollars from the company; you’re both fired; get the hell out of here, never come back! “, according to a complaint. The litigation was settled in 2017.
Since then, Rahmani and Khalili have turned away from brokerage and devoted their energy to acquisitions. In 2016, they bought the trendy 64-room McCarren Hotel in Williamsburg, which they were able to refinance in February. They also bought retail assets in Soho and Tribeca as well as 35-37 East Broadway, a former Chinatown gambling den.
“God willing, we’re going to buy over $1 billion from this market.”
Their new focus on the desktop is confusing some. What do Rahmani and Khalili know that Blackstone and RXR don’t? People close to the new buyers said they have the funds to spend whatever it takes to upgrade the space for tenants. And now that prices have fallen – RXR paid $400 million for 1330 Sixth in 2010 – they have a chance to get in the game.
Their rise follows a pattern commonly seen in New York real estate: from peddler to gambler.
Rahmani obtained his real estate license in 2004 during his first semester at Adelphi University. By the end of the second half, he claimed to have traded more than $100 million in properties and acquired three that year, according to his website.
Khalili’s first real estate gig was at Franklin First Financial, a mortgage lender, on Long Island. At age 20, he co-founded Venture Capital Properties, a brokerage firm focused on investment sales, with Rahmani. The firm specialized in off-market transactions and took off in part thanks to Soly Halabi, a high-profile broker who represented Mexican billionaire Carlos Slim.
In 2013, Venture Capital Properties broke into The Real Deal’s top 20 investment sales companies, with over $250 million in deals. According to their website, some of the company’s deals include Eliot Spitzer’s acquisition of 430 Kent Avenue and the Beekman Hotel in Lower Manhattan.
But as their profile grew, internal tensions also increased. According to Rahmani’s account, he and Khalili did all the work, while Joseph and Daniel did not contribute.
Rahmani and Khalili alleged that Joseph and Daniel received a $540,000 commission on the sale of $27 million of Sitt Asset Management rentals in Brooklyn’s Midwood neighborhood, but never reported the sale’s close to the company.
Khalili and Rahmani questioned Daniel and Joseph about the deal, but alleged that “Daniel arrived in a fit of rage and, among other things, threatened to stab me,” according to an affidavit. The brothers had to be restrained by colleagues and escorted out of the building, according to the affidavit.
Daniel and Joseph, meanwhile, alleged that Khalili and Rahmani cut them off from their own business and claimed they were using the brokerage as a personal piggy bank. They also allege that they were subjected to years of mistreatment and abuse.
The cousins are now on good terms, sources say, with some mentioning they saw them dancing together at a recent wedding in Great Neck.
It is difficult to determine the exact source of Empire Capital’s funds. Sources said most of their money comes from wealthy families and wealthy individuals, who are in no rush for quick returns. This gives Empire Capital more time to complete its office plans, while also giving them access to better and cheaper sources of funding. (For 345 Seventh Avenue, Khalili and Rahmani secured a $70 million loan from Benefit Street Partners).
Their only visible partner is Igal Namdar, a fellow contrarian whose company, Namdar Realty, has bought class B and C shopping malls on the cheap. He now owns or manages over 57 million square feet of commercial real estate across the country.
Rahmani and Khalili’s only known problematic asset so far is 430 Broome Street, a residential and commercial building in Soho. Bixby Bridge Capital, which bought Empire’s loan from Sterling National Bank, alleges Empire failed to repay an $8.1 million loan and is seeking foreclosure. The foreclosure suit is still pending.
“I would really appreciate it if you could work with us to resolve this issue,” Josh Rahmani said in an email to Sterling National Bank in 2021, a lawsuit filed in the New York Supreme Court. “Retail was shut down for a year by the government and we still carried it. Please do good with us.
People close to Rahmani and Khalil have described them as accomplished entrepreneurs, with businesses such as Prime Essentials Rx, an independent pharmacy business, to Think Empire, an online terminal for commercial real estate data similar to PropertyShark. Rahmani said last year that he planned to merge Think Empire with his consulting business to take it public.
“We produce something like Yahoo Finance for properties, Moody’s for pricing bank and sponsor positions/portfolios, and a digital exchange like Coinbase for CRE,” Rahmani said in an email found in court records.
Meanwhile, in the real estate world, it’s their latest acquisition that’s grabbing attention.
Although Rahmani and Khalili are only paying $615 per square foot for the 1330 Sixth property – compared to the $770 per foot RXR paid or the more than $950 per foot Macklowe paid in 2006 – they are taking over the property at a time when the office as an asset class has a serious question mark about it. Their plan with the property isn’t entirely clear, but their overall ambition and restlessness certainly is.
“We are ready to embark on a wave of acquisitions with new partners.” Rahmani said in an email filed last year as part of a lawsuit. “God willing, we’re going to buy over $1 billion from this market.”