True to form, Victoria’s Secret wants everything exposed at 2 Herald Square.
The lingerie retailer filed a legal petition as it seeks to challenge the appraisal of its 22,200-square-foot space at the 11-story building. The Cushman & Wakefield team that conducted the survey — Marc Nakleh and Brian Corcoran — has refused to testify, and the retailer is seeking court intervention to compel the brokers to explain their findings, according to filings.
Victoria’s Secret’s space includes 10,700 square feet on the ground floor, 10,100 square feet at the second floor and 1,400 square feet at the mezzanine level. The company signed a lease in the building in 2001. According to Cushman’s appraisal, the annual fair market rent for Victoria’s Secret space is $10.1 million, with the rent starting at $9.7 million in the first year and then increasing by 2 percent annually.
Victoria’s Secret and the building’s previous owner, Sitt Asset Management, have agreed to an arbitration proceeding scheduled for July 18. According to Victoria’s Secret, Nakleh and Corcoran’s refusal to testify denies them the opportunity to perform a cross-examination and prevents the arbitrator from evaluating the appraisal’s accuracy.
Nakleh and Corcoran not only refused to join the proceedings, they also haven’t explained why. Nakleh was issued two subpoenas last March. He ignored both, and only responded to a third subpoena that warned that Victoria’s Secret “will seek a court order.” Corcoran, meanwhile, was quoted in court documents as saying that his interactions with Sitt “left a bad taste in his mouth” and that he’s declining to testify because “life’s too short.”
SL Green Realty acquired the leasehold interest at the property for $274 million last month. The property suffered financial setbacks because of a long-running legal battle between brothers Eddie, Ralph and David over control of the property. It ended in a settlement in January of this year. In spite of the reconciliation, the Sitts and their partners were in danger of losing the property through a foreclosure. SL Green closed the acquisition as the successful bidder, though sources told The Real Deal at the time that there were no other bidders.
Nakleh and his employer continue to stay silent. Nakleh did not respond to a request for comment. Meanwhile, a Cushman representative declined to comment. The company just filed for an IPO.