White-shoe law firm Davis Polk and its landlord at 450 Lexington Avenue, Dubai-based Istithmar World, have resolved their $63 million rent dispute, and Davis Polk will remain in its offices, American Lawyer reported.
Davis Polk renewed its lease at the tower earlier this year, and balked at the rent increase Istithmar proposed — from $83 per square foot in gross rent, to $96.40, amounting to $63 million per year, American Lawyer said. The 10-year renewal was set to go into effect in June, but Davis Polk did not pay the requested amount, instead placing some funds in escrow, the magazine said.
Istithmar claimed the increase reflected market rate rents. As the legal battle intensified, Davis Polk disputed the usable square footage of its space, and Davis Polk allegedly block the landlord’s access to the space to have it appraised.
The argument was settled without entering arbitration, the means of resolution stipulated in the lease, American Lawyer said. The details of the agreement were not known, and both parties declined to comment.