Commercial real estate brokers are livid that the city’s big landlords are disregarding the broker’s “exclusives” with retailers by attempting to land tenants on their own, sources told the New York Observer. Large retail owners, including Joe Sitt and Jeff Sutton, are being accused of “skipping the middle man,” which is “totally not kosher,” a president of a top city brokerage told the Commercial Observer. “It puts the retail brokers in a difficult spot and it is morally incorrect.”
While not technically illegal, the tactic has become a continuing issue that is upsetting many of the city’s retail brokers, even as they try to entice tenants into the landlord’s buildings.
“In several instances the large owners have flown to Europe to visit with the retail tenants in an attempt to bypass the brokers and sign the tenants,” the same source said.
The new generation of building owners, armed with in-house teams, feel that they have the “prominence and dominance” to skip over brokers, Faith Hope Consolo, head of Douglas Elliman’s retail and leasing sales division, told the Observer.
“The Rudins and the Silversteins would never do that,” Consolo added. “This new guard seems to feel like they’re invincible. They feel they are immersed in Asian and European markets.”
However, while the Observer article said Sutton was not paying brokers commissions, in a number of recent deals — including deals with Express, Alexander McQueen, Armani and others– he did. Sutton’s Wharton Properties and Sitt’s Thor Equities did not return the Observer’s calls seeking comment. [NYO] –Christopher Cameron