From the September issue: The term “vulnerable” is not typically associated with the alpha dogs
of New York City’s high-powered commercial real estate world. But that
is precisely how a number of top commercial firms are feeling these
days, and to compensate, they are taking extra measures to ensure that
landlords can’t stiff them.
An increasing number of brokers are having legal language inserted
into their contracts stating that if their commission is not paid by a
certain date, it will come from the tenant they worked with, instead of
the landlord. The “rent in lieu of commission” clause, as it is
unofficially known, is structured so the payment won’t cost the tenant
a dime; rather, it will simply be deducted from the rent they would
otherwise pay to the landlord. Last month one of the city’s top brokerage firms issued a 10-point
memo to its commission-based employees explaining ways that they can
best protect their spoils. [more]

When the AIG headquarters at 72 Wall Street was sold last Wednesday, a new baseline for Class B office space Downtown of $107 per square foot was set. Youngwoo & Associates and Kumho Investment Bank bought the space for $150 million, the New York Post reported. AIG has 18 months to move from 72 Wall Street to the Goldman Sachs space at 180 Maiden Lane. Goldman, which has already collected $20.5 million in rent from AIG for the space, will collect another $52.8 million before the move is completed. Joseph Moinian, of the Moinian Group, is currently suing Goldman Sachs for $175 million, arguing that Goldman is supposed to pay him 50 percent of anything the company makes on the 180 Maiden Lane sublease. His suit claims that Goldman had allowed AIG to lease the space at far below market value.

Developer Joseph Moinian is suing Goldman Sachs over 180 Maiden Lane

Developer Joseph Moinian filed a $175 million lawsuit against Goldman
Sachs Wednesday, accusing Goldman of giving AIG a deal at 180 Maiden
Lane in which AIG pays far below market-rate rent for the Goldman space
it sublets. Goldman sued Moinian, whose company owns 180 Maiden Lane,
last month, claiming Moinian owes Goldman $3.1 million in brokerage
fees for subleasing the space to AIG. Now Moinian says Goldman isn’t
following the terms of the lease, which require Goldman to pay Moinian
50 percent of any profits made on a sublease. Comments

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Developer Joseph Moinian has informed lenders over the past several months that he expects to default on loans at two of his properties, 180 Maiden Lane and 17 Battery Place North, Crain’s New York Business reported. Both properties’ loans — $292 million at 180 Maiden Lane and $453 million on 17 Battery Park North — are due in November. The credit crunch has made it difficult for Moinian, who has already had to give up 475 Fifth Avenue, to refinance loans. In addition, Moinian’s payments on his 1775 Broadway mortgage are likely to go up 23 percent next year, and the building is only one-third filled. [more]