Thor, GGP to close on $85M Midtown retail deal in June

Chicago-based REIT still facing contract breach claims in suit over 220 West 57th Street

TRD New York /
May.May 02, 2016 06:12 PM

Thor Equities and General Growth Properties are set to close in June on the $85 million purchase of a landmarked Midtown retail building that’s the subject of ongoing litigation, sources told The Real Deal.

The four-story, 22,000-square-foot property at 220 West 57th Street, located between Broadway and Seventh Avenue, is the longtime home of Lee’s Art Supplies. By early June, the Steinberg family’s art shop, which fully occupied the building, is planning to move out. The exit makes way for significant development potential, given the site’s 126,000 buildable square feet.

Even as the deal nears closing, a lawsuit persists. Investor Joseph Safdieh’s Safka Holdings entered contract to buy the building for $65 million in 2013. GGP turned down his offer to join the deal as a partner, investor or lender because the price was too high, Safdieh alleges.

Safdieh also claims he sought an extension to pay the $5 million deposit, but the sellers would not grant it. He then sued the Steinberg family, but that suit was dismissed and the contract was terminated.

In April 2014, Thor entered contract on the property for $85 million – and soon brought on GGP as a joint-venture partner. Safdieh filed another suit, this time claiming Thor and GGP participated in a “conspiratorial agreement” that left him cheated out of the deal.

Thor is no longer a defendant in the case, but GGP still is. In September 2015, a judge granted a motion to dismiss all claims against Thor. A motion to dismiss claims against GGP was partially granted. The Chicago-based real estate investment trust continues to face allegations of breach of contract.

The next status conference is set for May 10, according to court records.

The property was constructed in 1897 and was known as the Society House of the American Society of Civil Engineers. The Steinberg family opened their business across the street from it in 1951 before moving to 200 West 57th Street in 1975. The family acquired the building in 1995, according to the store’s website.

Lee’s Art Shop has no plans to open a new store elsewhere at this time, DNAinfo reported.

Lawyers for Thor and GGP declined to comment, while Safdieh’s lawyer couldn’t be reached.

Thor is in the process of selling several Midtown properties, including the office component at 685 Fifth Avenue — with GGP — and the full office-and-retail building at 693 Fifth Avenue. The building on West 57th Street is directly across from the site of Extell Development’s 1,500-foot condominium supertall Central Park Tower.

Related Articles

Thor Equities' Joe Sitt and 725 8th Avenue (Credit: Google Maps)

Thor facing foreclosure at Theater District building

Thor Equities' Joe Sitt and a closeup of 545 Madison Avenue (Credit: Google Maps)

Thor Equities loses 545 Madison Avenue

The Chicago condo deconversion craze is dying

Clockwise from left: 270 Richards Street in Brooklyn, 72-01 Queens Boulevard in Queens, and 2069 Bruckner Boulevard in the Bronx (Credit: Thor Equities, EDI International, and Azimuth)

The top 10 biggest real estate projects coming to NYC

Joe Sitt and 1725 Shore Parkway in Bensonhurst (Credit: Google Maps)

Thor sells Bensonhurst big-box store for $75M

545 Madison Avenue and Thor Equities CEO Joe Sitt (Credit: Google Maps)

Thor Equities on the verge of losing another building in Manhattan

AOC unveils rent regulation plan, Hong Kong real estate stocks are sinking: Daily digest

Introducing ThorLogis, Thor Equities’ ambitious plan to break into logistics and e-commerce