Court backs Extell in forced sale of Ring building

New York /
Mar.March 04, 2013 01:00 PM

A state court judge signed an order on Thursday requiring the auction of a 16-story office building co-owned by Extell Development and brothers Frank and Michael Ring, located in the core of the strong Midtown South office market, court records show.

Neither a price nor a date for the sale of the mostly-vacant building, located at 251 Park Avenue South on the corner of 20th Street, was provided in the decision filed on Friday. Insiders said a simple auction could take place as early as 45 days, or if a more-sophisticated broker-led process is undertaken, it may not occur until the summer.

Extell, headed by Gary Barnett, bought a 50 percent interest in the 120,000-square-foot building in December 2011 for $19 million. Four months later he sued the Ring brothers, in New York State Supreme Court seeking the sale of the building, owned 25 percent by Frank, president of F.M. Ring, and 25 percent by his brother Michael. The two are known in the industry as being reluctant to conclude real estate deals.

Frank, through his attorney Charles Salfeld, a partner at the law firm Morrison Cohen, said he was reviewing the decision. At the same time, Frank was, “Looking to work with Extell as to whether they can resolve the outstanding issues between them in a spirit of cooperation,” Salfeld said.

The Ring brothers own a portfolio of 14 mostly-vacant commercial buildings that landlords have sought to lease or buy for years. Currently, brothers Eli and Joseph Tabak are mired in state litigation after Michael balked at the Tabaks’ effort to buy a controlling interest in Michael’s 50 percent ownership of that portfolio for $112.5 million.

The property in the Extell litigation is the only one of those 14 buildings that Frank and Michael do not own alone.

The building is about 25 percent occupied, with Sovereign Bank occupying the ground floor retail on a lease extending to 2024 and fabric company Maharam Fabric on floors 14 through 16 through 2020, court records and a visit to the property reveal.

This was Barnett’s second court victory over the Ring brothers in this type of litigation, seeking a judicial sale. In 2008 he sued them to force a public sale of 20 West 47th Street, a Diamond District building that he acquired an interest in and later sold.

Barnett, Michael Ring and Eli Tabak declined to comment, as did Joshua Stein, an attorney appointed by the court to act as a referee to analyze the property and manage the sale.

In court papers, the Ring brothers suggested instead of a judge ordering a sale of the property, the building should be split into two separate condominiums, with Extell owning one and the Ring brothers the other. Stein, in a court filing, rejected such a plan, saying that dividing the property into condo units would reduce the value of the building.

Under New York law, a court can order a sale of a property if the owners lack an ownership agreement and cannot decide how to proceed, after one has sued to partition the property or force a sale. In the event of a sale, one of the owners can purchase the property using its own stake (plus any additional money, if needed), or an outsider can. Following a sale, the money is distributed among the owners based on their stake.


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 to build UES building around 2 occupant holdouts
Extell to build UES building around 2 occupant holdouts
Extell to build UES building around 2 occupant holdouts
From left: Robert Mercer with 48-05 Metropolitan Avenue and Gary Barnett with 17 West 60th Street (Getty, Google Maps, Bulado General Contractors Corp)
$730M loan bundle funds slew of NYC projects
$730M loan bundle funds slew of NYC projects
Gary Barnett and Central Park Tower at 217 West 57th Street
Why Gary Barnett is selling Central Park Tower at 25% off
Why Gary Barnett is selling Central Park Tower at 25% off
Extell Development chairman Gary Barnett and the empty lot between 79th and 80th on First Avenue (Google Maps)
Extell building 30-story medical tower on UES
Extell building 30-story medical tower on UES
Extell's Gary Barnett and Central Park Tower
Central Park Tower condo sells for half its asking price
Central Park Tower condo sells for half its asking price
Gary Barnett with an aerial of 738 and 740 Eighth Avenue (Google Maps)
Extell’s Times Square megaproject advances with $82M deal
Extell’s Times Square megaproject advances with $82M deal
Extell’s Columbus Circle dev site dream is shrinking
Extell’s Columbus Circle development dream is shrinking
Extell’s Columbus Circle development dream is shrinking
arrow_forward_ios

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

Loading...