Developers struggle to recover lost advances

New York /
Oct.October 18, 2010 03:30 PM

Gary Barnett

Though brokers typically get their commissions at closing, developers hoping to attract buyers to unfinished properties have advanced brokers part of their commissions when the sales contracts were signed. But since then, many of these deals have fallen through, and developers have been battling to get their money back, according to the New York Times. Gary Barnett of Extell Development, for one, is fighting to get back the more than $1 million he paid to various brokers who found buyers at his Lucida condominium project at 151 East 85th Street. If a deal fell through, brokers were obligated to return the commission in most cases. But until recently, they never had to worry that buyers would want to back out before closing. For the most part, developers and brokers were able to get buyers to close and when they didn’t, they have reached deals. Barnett said brokerages have paid him back in most cases. But he said the experience has taught him a lesson. “We’re not going to do that anymore,” he said, referring to advanced commissions. [NYT]

 

Related Articles

arrow_forward_ios
One Manhattan Square Extell Development CEO Gary Barnett (Credit: Curbed NY)
Extell lands $690M refinancing package for One Manhattan Square
Extell lands $690M refinancing package for One Manhattan Square
Extell Development's Gary Barnett (Credit: Getty Images and iStock)
Chelsea residents paid Gary Barnett $11M to protect their views from a planned tower
Chelsea residents paid Gary Barnett $11M to protect their views from a planned tower
Central Park Tower
Extell just went public with Central Park Tower listings
Extell just went public with Central Park Tower listings
Extell's CEO Gary Barnett (Central Park Tower)
Barnett secures $380M mezz financing for Central Park Tower
Barnett secures $380M mezz financing for Central Park Tower
Extell CEO Gary Barnett pictured with One57. (Extell, One57)
One57 condo sells at record 51% loss
One57 condo sells at record 51% loss
Renderings of 1223 Spofford Avenue, Bronx, 153-10 88th Avenue, Queens and 1201 Spofford Avenue, Bronx (iStock, NYC Economic Development Corporation, Zara Realty)
The top 10 biggest real estate projects coming to NYC
The top 10 biggest real estate projects coming to NYC
Extell Development's Gary Barnett and Central Park Tower (Building photo via Central Park Tower)
Falling ice capades: Extell sued over icicles at Central Park Tower
Falling ice capades: Extell sued over icicles at Central Park Tower
Extell Development's Gary Barnett and 32 West 48th Street (Google Maps)
Extell makes its Diamond District hotel official
Extell makes its Diamond District hotel official
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...