Two brokers claim they were cut out of nearly $4 million in commissions when SMI USA purchased Thor Equities’ 520 Fifth Avenue alongside Ceruzzi Properties two years ago.
Ajaypal Saran and Ayesha Khan, both brokers registered in New York, are suing SMI for allegedly tricking them into providing information on the property without signing a broker agreement, according to a lawsuit filed in New York State Supreme Court on Monday. The brokers claim they introduced the property to SMI, then known as Shanghai Chengtau USA, as a development opportunity on Fifth Avenue with roughly 300,000 buildable square feet. The brokers said the property was worth an estimated $345 million.
Based on this information, SMI said it was very interested and asked that the brokers provide the name of the owners and the property’s address before signing a broker’s agreement, according to the lawsuit. After the brokers provided the information, SMI said it wasn’t interested in the property.
But in August 2015, SMI partnered with Ceruzzi Properties to buy the property and air rights for $325 million. They are building a luxury condo project on the site, and filed plans with the New York Attorney General’s Office to test the market in December. A projected sellout was not included in the test-the-market application, but the developers have previously indicated that they are targeting $1 billion in condo sales.
Representatives for SMI didn’t immediately return a call seeking comment.
The brokers allege that they were entitled to a one percent broker fee, which works out to just under $4 million when going off the initial estimated price of $345 million. The two are seeking $4 million in damages. Their attorney could not immediately be reached for comment.