The Real Deal New York

Rings’ management of portfolio a “mystery” to brokers

Extell is suing to force sale of the lucrative buildings after buying a stake in the collection in June

October 07, 2013 08:59AM

  • Print
Frank Ring

Frank Ring

UPDATED, 11:25 a.m., Oct. 7: Brothers Frank and Michael Ring inherited 15 buildings in prime Manhattan locations, largely in and around the Flatiron District. But the majority of this potentially highly lucrative real estate sits vacant, due to protracted clashes between the brothers, who sold an interest in the portfolio to Extell in June. Now, Extell is suing to force a sale of the portfolio, some of which will be put up for auction this week.

When Leo Ring died in 1998, his son Frank became the manager of his real estate portfolio, but both brothers inherited a 50 percent stake in it. Frank’s management firm is located at 212 Fifth Avenue, a 21-story tower which is mostly unoccupied despite its location overlooking Madison Square Park.

And a 12-story office building at 157 West 23rd Street has been vacant for three decades, according to a Department of Buildings complaint seen by the New York Post. Brookfield Financial’s Eric Anton told the newspaper that the Rings could earn up to $60 per square foot – or about $4 million per year — if they renovated the 68,000-square-foot property.

“It’s really a mystery to most of the broker community,” a broker active in Midtown told the Post of the Rings’ approach. “I always knew not to reach out to them. I knew it was a waste of time.”

Michael tried to sell his 50 percent stake in the portfolio to investor Joseph Tabak for $112 million in 2011, but then reneged on the decision and tried to back out, according to the Post. An arbitrator ruled in Tabak’s favor the following year, according to the newspaper. At the time, Tabak had only put down a $10 million deposit, according to the Post.

Michael declined to comment, telling the newspaper that “my time is worth $5,000 an hour. If you don’t have it, I’m not going to talk.” The Post could not reach Frank for comment.

Gary Barnett’s Extell Development then paid Tabak $74 million for the stake. Barnett sued Frank Ring to force him to sell his stake as well, arguing that the landlord’s neglect was keeping the building from turning a profit.

The widely-anticipated auction of 251 Park Avenue South, owned by F.M. Ring and Extell, will be held later this week. [NYP]  – Hiten Samtani

  • Oouch

    The Rings like to torture brokers and fight with developers and the city.

    Their mismanagement and contentious nature has caused some of their buildings to drag down the value of their neighbors, but that’s been disguised by the overall upward momentum of the market.

    Now they are old and tired, and face a much bigger bully with lots more money who knows opportunity when it knocks. Barnett will clean their clock, and maybe even the facades of some of their wrecks.

  • Mathematician

    Tabak pays $112m and Barnet pays $74m??? Am I missing something???

    • The Three Percent

      “Tabak, who had only put down a $10 million deposit, apparently tired after the court fight. In June, real-estate giant Extell Development paid him $74 million for Michael’s interest.”

      Did Tabak close on the interest and take a $38MM loss?

    • HitenSamtani

      Hi, we’ve noted that Tabak had only put down a $10M deposit. Thanks for pointing that out.

  • marknroses

    If this was residential property, Ring would have been thrown in jail already. Incompetence in Commercial Real Estate is insane and both should be locked up in asylums.

  • harry

    251 Park Avenue South

    The auctioneer Joshua Stein is refusing to include the Domain Name (Internet address) 251PAS.com
    in the auction. It is registered in his name.

    • Joshua Stein

      That is not a correct statement. Someone (I don’t know who) asked me recently if I was planning to include the domain name in the auction. I do not answer every question immediately. Instead, when appropriate, I seek comment from the parties to the litigation before answering questions. That process is underway. There are larger fish being fried in this litigation than the question of who will own http://www.251pas.com. If and when I have an answer to that question, I will answer it the same way I answer all questions, by including the answer in my next “frequently asked questions” distribution, which I will send to everyone who has signed up for my listserv. The terms of sale — the only legally binding statement of the purchaser’s rights — may also address the treatment of the domain name. If you have not signed up for my listserv and would like to receive my various updates and FAQ’s — not a deluge of email, I promise — please send email to info@251pas.com. No one is added to my listserv unless they specifically consent to it or request it.

  • manhattan

    Michael declined to comment to the Post, telling the newspaper that “my time is worth $5,000 an hour. If you don’t have it, I’m not going to talk.”

  • David Brown

    $60 a square foot times 68,000 square feet is $4 million a year, not $4 million a month (unless of course, these properties rent for $720 per square foot).

    • HitenSamtani

      David, you are right- an error in the source story, but should have caught that. Thanks

  • MizBroker

    I have made a few deals with Frank and though he can sometimes be difficult, he is a man of principle, very honest, sticks to his word, always paid on time, and is actually quite nice if you get to know him. I know he’s alienated many brokers but I think it’s a huge shame that him and his brother are losing their entire inheritance because of some money hungry bullies. It was his prerogative whether or not he chose to occupy his buildings and to me, this is plain sad.

    • marknroses

      They would have lost those properties in a pile of rubble sooner or later. Thank goodness nothing has been hurt or damaged from their holdings.

  • Glenn Krasner

    For the last 25 years, I have seen their prime real estate holdings sitting largely vacant, and I never understood it. As the article states, their properties are in prime locations and they could have had at least 80-90% occupancy during the various business cycles, and would have had a nice monthly rental income. There must be some logical reason for it, perhaps a huge tax writeoff, but I wish they explained it to somebody. William Gottlieb was nuts, but at least he rented out most of his properties. Glenn in the Bronx, NY.

  • mike2

    The Ring Brothers are the most dysfunctional duo to ever be involved in real estate.
    They truly represent the old saying “how do you make a small fortune,start with a large one” It’s time for a real player to step in and restore these buildings to what they should have been while employing people in the process.

MENU