Aby Rosen makes it two Lever House lawsuits in two weeks

Landlords Brookfield and Waterman warned RFR to fix sprinklers or lose lease

TRD NEW YORK /
Nov.November 19, 2019 01:23 PM
Brookfield's Rick Clark and RFR Realty's Aby Rosen with the Lever House at 390 Park Avenue (Credit: Getty Images and Google Maps)

Brookfield’s Rick Clark and RFR Realty’s Aby Rosen with the Lever House at 390 Park Avenue (Credit: Getty Images and Google Maps)

The relationship between Aby Rosen and his new landlords at the Lever House, Brookfield and Waterman, just went from bad to worse.

Rosen and Michael Fuchs’ firm, RFR Realty, sued the other two real estate giants Monday after being warned that it could lose its lease on the well-known Midtown office building.

Six days earlier, Rosen had sued Waterman Interests’ principal, Philip M. “Tod” Waterman III, for going behind his back to become one of his landlords at Lever House, 390 Park Avenue.

The latest lawsuit concerns, of all things, a sprinkler-system violation. RFR claims that 60 percent of the prestigious building complies with sprinkler requirements and that it has been “diligently” working to dismiss the Department of Buildings violation.

RFR says it only learned of the violation when its landlords served notice requiring it be cured, lest the lease be terminated. The firm said it has been “sprinklering the balance of the 24-story building with all possible skill and haste.”

RFR, which entered its ground lease for the property in the late 1990s, struggled to refinance in 2015 because of an impending rent reset. Under the agreement with the landowners, the Korein family, the annual ground lease rent would increase by $20 million in 2023. In 2016, special servicer CW Capital filed to foreclosure on the property.

In 2018, Brookfield Properties and Waterman Interests gained a foothold on the property, becoming RFR’s landlord by negotiating directly with the Korein family. Last week’s suit alleges Waterman took financial information Fuchs gave him in confidence and used it to make his own deal with the Korein family.

Last month, soon after Brookfield and Waterman officially became RFR’s new landlord, RFR was notified that it was in breach of lease. The notice pointed out that RFR had not cured a violation by upgrading the sprinkler system, and also had not met sprinkler requirements that the parties had agreed to privately.

The building is mandated by fire and building codes to be sprinklered because it is greater than 100 feet tall.

Brookfield declined to comment. Reached by phone, the attorney for the plaintiff declined to comment. Waterman did not respond to an inquiry and the Korein family was not available to respond.


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