The Real Deal New York

Air-rights brokerage claims Brookfield failed to pay commission on Hudson Yards deal

City Center Real Estate says it found buyer for air rights
By Kathryn Brenzel | July 12, 2018 01:45PM

401 West 31st Street overlayed with legal documents (Credit: iStock)

A brokerage that specializes in air rights deals claims Brookfield Properties cheated it out of a $375,000 commission for a sale in Hudson Yards.

City Center Real Estate found a buyer for Brookfield’s air rights at 401 West 31st Street but didn’t receive any payment for its services, according to a lawsuit filed in New York state Supreme Court. The brokerage alleges that it found Sherwood Equities, which agreed to purchase the air rights for a planned 40-story, 215-unit residential building at 452 Tenth Avenue.

Sherwood agreed to buy 23,423 square feet for $9.4 million ($400 per square foot) in 2014, according to a purchasing agreement filed with the court. City Center, which was the only broker hired to find a buyer, claims it’s entitled to a 4 percent commission — so, $374,912 — but Brookfield has refused to pay up. It wasn’t immediately clear on Thursday if the deal has yet closed.

Representatives for Brookfield didn’t return messages seeking comment. City Center’s Robert Shapiro declined to discuss the case.

The air rights spring from Brookfield’s 844-unit residential tower at 401 West 31st Street. The building, known as the Eugene, is an 80/20 project, meaning that 20 percent of the units are affordable. Through the city’s inclusionary housing program, Brookfield received a density bonus by setting aside units for low-income residents (those at or below 80 percent of the area median income). According to the purchasing agreement, 18,739 square feet of space is dedicated to these residents.

Sherwood has owned the 10th Avenue property since the mid-1990s, property records show. The company hasn’t yet filed plans for the tower.