Company linked to RKF sued over botched commercial condo sale

Deal allegedly fell apart because of noise issues at Switch Playground space

New York /
Feb.February 19, 2018 11:55 AM

UPDATED, 4:57 p.m., Feb. 20: An LLC linked to RKF is facing a lawsuit involving a botched commercial condominium sale and an allegedly noisy fitness center.

The plaintiff, an investment fund known as Real Estate Discovery Ventures, claims it agreed to buy a commercial condo unit at 130 East 12th Street near Union Square for about $8.1 million in July. The company then put down an $814,000 deposit as part of the deal with the seller 130 East Realty LLC, a company linked in property records to the brokerage RKF.

However, in August, the manager of the condo told REDV that it would not approve the sale until the seller and the condo’s tenant, fitness center Switch Playground, addressed the defaults under the current lease, the lawsuit says.

These defaults center on alleged noise issues, as the lawsuit says that the noises and vibrations from Switch Playground’s loudspeakers have caused several residents of the building to complain.

“The broader issue is the volume of their music and, much worse, the volume of their employees yelling into microphones at people who are 20 feet away,” reads an email attached to the lawsuit outlining the condo board’s concerns. “There is some aspect of whatever it is that they do periodically in the workout sessions that involves throwing something against the walls or columns … that shakes the apartments above and, at times, the entire building.”

Switch Playground also violated its lease by running ductwork and HVAC piping through the condo’s walls, putting equipment in common areas and putting up signs without approval from the condo board, according to the lawsuit.

The seller was first notified about these issues in November 2016 but has still not fixed them, the suit says. The condo board tried to resolve the issue by hiring an acoustical engineer who made recommendations for how to solve the noise problem in December, but Switch Playground and the seller have not acted on any of these recommendations, according to the suit.

Although the condo board has not approved the sale of Switch Playground because of these violations, the seller still sent a notice to REDV demanding that they close on the purchase by Feb. 22, the suit says.

REDV responded by demanding the seller withdraw its notice by Feb. 14, and when they did not do this, REDV notified them that they were in default of the agreement, according to the suit. The company is now suing the seller for breach of contract and to get its $814,000 deposit back.

Representatives for REDV did not respond to requests for comment. Representatives for RKF said they had no ownership in the commercial condo unit, but the LLC named in the suit was a client of theirs. They would not identify the client.

Residents of a nearby condo in the Flatiron District recently sued SoulCycle over noise complaints, saying that they are constantly hearing “earsplitting music” and “screams of encouragement” coming from the gym.

CORRECTION: An earlier version of this article misidentified RKF as the party being sued. The party being sued is an LLC that in property records lists RKF and its office address as its point of contact.


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