The Real Deal New York

Azad sues former Soho retail owners over failed Vornado bid

Willets ultimately sold 131-137 Spring Street to SL Green for $122M
By David Jones | February 28, 2013 06:30PM

The former owners of 131-137 Spring Street are facing up to a $6.75 million lawsuit from Azad Property Group, a commercial brokerage that claims it arranged a deal for Vornado Realty Trust to buy the Soho retail building, only to have the owners back out and sell the property to SL Green Realty.

Azad, led by three brokers formerly of Itzhaki Properties, said it approached Willet Cos., a Rye, N.Y.-based commercial landlord, with a $100 million bid from Vornado, and ultimately reached an agreement for the trust to purchase the 68,000-square-foot property for $112.5 million.

But after a series of back and forth negotiations, Willet reneged on the deal, according to the suit filed Monday in New York State Supreme Court.

In the end, SL Green and investment partner Jeff Sutton acquired the property for $122 million in late December, as The Real Deal reported.

“It wasn’t a bidding situation,” said Michael Stolper, an attorney representing Azad. “They said if this happens, if you satisfy the conditions, the deal is yours.”

Azad is seeking $1.4 million for alleged breach of contract, $6.75 million for the fair market value of the transaction and $1.4 million for alleged tortious interference in the deal, plus punitive damages.

Willet owns more than 2 million square feet of Class A and Class B space, including 113 Spring Street, a 25,000-square-foot mixed-use building and 413-415 West Broadway, a 30,000-square-foot office and retail building, both in Soho. The firm is owned and managed by chief executive Frank Kenny and chief financial officer Bruce Beswick.

The suit is the second one filed against Willet disputing the same transaction. Thor Equities sued the owners last week, alleging it had a deal to buy the property before SL Green.

In that suit, Willet said that Thor had repeatedly tried to lower its offer and that the owners were pushing to complete the sale before the end of 2012 due to the expected rise in capital gains taxes.

Willet company officials were not immediately available for comment.

Correction: A previous version of this story incorrectly used a cumulative number for Azad’s damages request. The story also cited an interim negotiating issue between Willet and Vornado over “mortgage defeasance,” but the final offer from Vornado included that figure, according to the complaint. 

  • Erz

    should of had the seller sign exclusive before sending the listing out. Duh!

    • Cleo

      I noticed when comparing past sales that some owners sold to someone AFTER ending a broker agreement – maybe because they were approached independently. While this lawsuit may be without merit, as a landlord, I mind very much being put in the same basket as landlords who do pull fast ones because we all pay the price for a lack of trust.

  • Cleo

    On the bright side, you sold your building for a great price. Congratulations.

  • kakaw

    Dumb lawsuit…I wont working with them, thats for sure.

    • Erz

      these guys are always getting into something dumb whenever I hear Azad I hear trouble.

  • arty55

    kakaw: “Them,” as in Willet or Azad? Reads as though a broker is bitter because he couldn’t get his deal over the line. Doesn’t appear as if anything was signed either.

    Seems like a weak argument to me…

  • Buy&Sell NYC

    Problem here is when the seller gets greedy and cute and shops around the LOI that the broker has probably worked on for a bunch of months. So I wonder is it worth spending $600.00 per hour to defend yourself with 2 Lawsuits? I think not. Maybe Azad will not get a dime but Willet will loose hundreds of thousands to defend themselves. Now that is pure stupidity. Be honest it will keep more money in you pocket.