American Realty sued over $91M Tribeca purchase

Broker claims the REIT stiffed him on commission

TRD New York /
Dec.December 31, 2013 05:00 PM

A Manhattan-based sales broker claims American Realty Capital New York Recovery REIT, a real estate investment trust, stiffed him on a brokerage commission stemming from its $90.8 million purchase of a commercial condominium in Tribeca last summer.

The broker, Rama Bassalali of RMB Properties, accused Midtown-based American Realty of refusing to pay a commission that he estimates should be about $850,000 for the off-market purchase. He made the claims in a lawsuit filed yesterday in New York State Supreme Court.

Bassalali says he introduced American Realty, headed by Nicholas Schorsch, to the seller of a 158,573-square-foot condominium comprised of the top three floors of 50 Varick Street, occupied by communications and branding agency Spring Studios on a 15-year lease. Milan-based Estate4, the seller, redeveloped the seven-story Property Located Between Laight Street and Ericsson Place.

However, Bassalali never inked a formal contract with the buyer, he says in court filings, who he said would pay the commission.

“[American Realty] knowingly induced RMB to render such [brokerage] services by promising to and agreeing to treat RMB ‘fairly’ in paying a brokerage commission,” the suit said.

Bassalali was an active broker during the boom with major transactions including the $450 million sale of 2 Park Avenue in 2006, property databases Real Capital Analytics and CoStar Group show, but he has been less active since about 2008.

Joe Sitt’s Thor Equities had already inked a contract in the spring to buy the property, located between Ericsson Place and Laight Street, but made a quick $5.86 million when it assigned its purchase rights to American Realty, the suit says.

City property records value the transaction at $72 million, which appears to be the net price paid to the seller. The $90.8 million price cited by American Realty likely includes the payment to Thor and a $12.5 million credit American Realty says it received from the seller to complete construction of the property.

American Realty, Bassalali and his attorney, James Kennedy at the law firm Kennedy Berg, did not immediately respond to requests for comment.

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