Isaac Chetrit faces suit from diamond retailer to block eviction

New York /
Jun.June 27, 2013 04:30 PM

Less than a year after buying an 18-story tower in the Diamond District, real estate investor Isaac Chetrit is facing a lawsuit from a retail tenant, which claims he moved to evict them despite taking a deposit for a new lease.

Chetrit and investor Ray Yadidi acquired the Exchange, at 15 West 47th Street, from Carmania, a firm led by investor Aaron Lieber, for $62.5 million in August 2012. The deal was part of a $115 million two-building package sold through CBRE, with the second property being 22 West 48th Street.

In a suit filed Monday in New York State Supreme Court, retailer Diamonds by Siag said that Chetrit visited the store to inform him that a recently negotiated lease extension with Lieber was invalid.

Under that agreement, Lieber extended the lease for one year at $11,000 per month rent and $300 a month for electricity, the suit says. However, Tova Siag, a vice president at Diamonds by Siag, claims in the suit that he reached a deal with Lieber for a new lease for $11,500 per month rent, plus $600 monthly for electricity starting in September 2012.

Nonetheless, Chetrit’s firm filed suit this past November to evict the retailer, alleging that the lease had expired in May 2012, according to court records.

Also in November, Siag filed suit claiming that Lieber sold the building to Chetrit while they were negotiating a lease extension. The company had closed down a second retail location at 20 West 47th Street, and spent $750,000 on new merchandise, expecting to expand to the current location, he claimed.

In the latest suit, Diamonds by Siag alleges that in February, the two sides once again entered talks for a new lease — this one with a five-year term and a base rent of $240,000 per year, plus $5,400 for utilities.

In March, an executive who works with Chetrit, Jack Yadidi, allegedly met with Siag and the company’s treasurer, Yeheskel Siag, to exchange the deposit and a copy of the new lease, which the parties signed. They also agreed on terms for the renovation of an additional 150 square feet of retail space for the store to expand, the suit says.

The rent check was deposited into the landlord’s bank account, according to the suit, although an attorney for the landlord later sent an email claiming the check had been deposited into an escrow account. Then, in April, the lawyer allegedly sent another email saying the landlord was not interested in honoring the new lease.

Diamonds by Siag has asked for a restraining order to block the eviction and unspecified compensatory damages.

Winick Realty Group was retained as the exclusive broker for a 19,176-square-foot ground floor, cellar and mezzanine combination space at the building, marketed towards a financial tenant.

“That was over a year and a half ago,” said CEO Jeff Winick. “We don’t have anything to do with the property.”

Lawyers for Chetrit and Siag did not return calls. Siag said he would have to ask his lawyer for permission to comment. Chetrit was not immediately available for comment. Jack Yadidi declined to comment. Lieber could not be reached for comment.


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