The Real Deal New York

GGP, Thor sued for “conspiratorial” West 57th St. purchase

Safka Holdings' Safdieh claims he was cheated out of $65 million deal

April 08, 2015 06:00PM
By Kyna Doles and Claire Moses

Joseph Sitt, 220 West 57th Street and Sandeep Mathrani

From left: Joseph Sitt, 220 West 57th Street and Sandeep Mathrani

Joseph Safdieh’s Safka Holdings is suing Joseph Sitt’s Thor Equities and General Growth Properties, claiming he was bilked out of purchasing a prime piece of real estate on West 57th Street. Safka is asking the court to terminate Thor’s contract and is looking to get back into the deal.

Safdieh claims in the suit, filed in New York State Supreme Court Tuesday, that he planned to buy the landmarked, four-story property at 220 West 57th Street from owners David Steinberg and Jill Isaacs in 2013 for $65 million. The 22,000-square-foot building houses Lee’s Art Shop and comes with 126,000 feet of development rights.

While he was in contract to acquire the property, Safdieh approached GGP, headed by Sandeep Mathrani, to see if the company wanted to be a partner, an investor or lender on the deal. The real estate investment trust, however, declined, and told Safdieh that the price for the building was much too high, according to the suit.

GGP’s chief operating officer Shobi Khan allegedly told Safdieh that the property is “not worth more than $50 million, let alone $65 million,” according to the complaint. Both Kahn and Thor Equities’ Sitt are defendants in the lawsuit.

The property is “not worth more than $50 million, let alone $65 million.”

After entering contract, Safdieh asked the sellers for an extension to pay the $5 million deposit on the property, because he found some problems with it. The owners wouldn’t give it to him, the complaint states.

Safdieh then sued Steinberg and Issacs for $10 million, but the suit was later dismissed and the contract was terminated.

After Safka’s agreement with the building’s sellers was toast, Thor entered contract to buy the building for about $85 million — $20 million more than Safka’s purchase price — and then teamed up with GGP on the deal, according to the complaint. That deal is yet to close, according to sources familiar with the transaction.

Safdieh’s lawsuit claims that Thor served as “the proverbial straw man” for GGP. He is accusing GGP and Thor as well as the sellers of a “conspiratorial agreement.”

A representative from GGP could not immediately be reached on Wednesday afternoon. A representative for Thor declined to comment.

In 2008, Safka — together with GVA Williams and M1 Real Estate — reportedly acquired a 99-year leashold from the Hearst Corporation for the building right next door at 224 West 57th Street.

Alan Lebensfeld, Safdieh’s attorney, told The Real Deal Wednesday that Safdieh had tried to resolve the matter “amicably” first. “My client is willing to talk,” he said, adding that a draft of the complaint was sent to GGP and Thor before it was filed.

“We held out an olive branch,” Lebensfeld said, but it was met with “deafening silence.”

  • Marc

    I thought Persians & Syrians were kissing cousins.

    • Lorenzo

      not when it comes to the island of Manhattan

    • $’s&Sense

      no one is persian in this story…

  • richjew

    Seems like a guy that signed a contract on a property he couldn’t afford to close on. And now hes trying to blame everyone besides himself.

    Bottom line: Dont get in over your head.

  • BH

    Not even sure what to think of this. Seems like they already knew he couldn’t pay for it, so they just waited till the deal was voided and jumped in.
    People shouldn’t over extend themselves, especially in this industry.