Toys ‘R’ Us loses $10M Times Square flagship rent appeal

Toys ‘R’ Us won’t be getting back $10 million it allegedly overpaid in rent and taxes at its Times Square flagship store. A New York State appeals court ruled for the landlord, an entity affiliated with Bow Tie Partners, a real estate development firm, pointing out that Toys ‘R’ Us had paid the alleged overcharges for 12 years without complaint.

The toy store had argued that the terms of their lease limited the amount of real estate taxes they had to pay for the signs of other tenants on the building, according to Law360. However, that provision does not apply to another section of the lease, which requires the tenant to pay a proportionate share of the building-wide real estate taxes, the five-judge state appeals court panel ruled.

“When reviewing the parties’ course of conduct, including plaintiff’s consistent payment of its share of the real estate taxes for over 12 years without protest, it is clear that defendant’s construction of the relevant lease provisions comports with the parties’ intent,” the panel stated.

This ruling affirms a previous decision that called the terms of Toys ‘R’ Us’ lease “clear and unambiguous.” [Law360] —Christopher Cameron