Brokerage Deborah A. Schwartz Real Estate is suing Starwood Capital and Murray Hill Properties, alleging it was cut out of a $72 million deal between the two commercial giants despite having done all the legwork on it.
Deborah A. Schwartz Real Estate (DAS) claims that in 2010, it provided Starwood with “an entire universe of available information” about 1414 Sixth Avenue, an 18-story commercial building at West 58th Street owned by MHP. After receiving information on the property, Starwood allegedly told DAS that it was no longer interested in buying it.
DAS alleges that MHP then went behind its back and hired a second broker, Ivan Hakimian, who allegedly approached Starwood CEO Barry Sternlicht about a potential deal. In February 2011, Starwood bought the property for $72 million, and eventually developed a 229-key hotel known as 1 Hotel Central Park on it.
MHP and Hakimian, the lawsuit claims, arranged to strike one commission agreement with Itzhaki Properties (Hakimian’s former employer, now known as EPIC Commercial Realty), for a reduced rate of $360,000, and arranged a “secret second commission” of $300,000 to be paid directly to Hakimian.
The suit alleges that the defendants “defrauded not one, but two, brokers in connection with the same transaction,” since Itzhaki didn’t know it was getting a lower commission.
Hakimian, who isn’t named as a defendant in the suit, couldn’t be reached for comment, nor could representatives for Starwood and MHP. A representative for EPIC declined to comment, as did Matthew Press, an attorney for DAS.
As a result of MHP and Starwood’s actions, the lawsuit claims, DAS lost out on a commission of $1.8 million, and the brokerage is seeking damages of that amount, plus interest.
DAS, headed by Deborah Schwartz and Alan Bollinger, has filed similar claims against clients in the past. In 2008, the brokerage sued Rocky Mount Baptist Church for allegedly failing to pay a $192,000 commission after DAS found a buyer for the church’s property. The case was settled in 2012, but details of the settlement weren’t immediately available. It appears that of the more than a dozen civil cases filed in New York courts involving the brokerage or its principals — as both plaintiff and defendant — only the Starwood case is active.