SL Green sues Chetrit over $35M deposit for scuttled Daily News deal

The REIT is turning to the courts to keep the deposit for what would have been an $815M sale

New York /
May.May 27, 2020 09:30 AM
SL Green CEO Marc Holliday and the Daily News Building  at 220 East 42nd Street (Google Maps; SL Green)

SL Green CEO Marc Holliday and the Daily News Building  at 220 East 42nd Street (Google Maps; SL Green)

The botched sale of SL Green Realty’s Daily News building has become a courtroom battle.

The real estate investment trust, one of New York City’s largest commercial landlords, is suing the Chetrit Group to keep the deposit the buyer put down for the $815 million deal that went sideways in late March, Crain’s reported.

The battle for the $35 million deposit was telegraphed earlier this month when Jacob Chetrit asked the escrow agent to prevent the funds from being released to SL Green.

Chetrit was unable to close on the purchase of the Daily News building after financing from Deutsche Bank fell through when the pandemic froze debt markets in March.

The escrow account holding the deposit is managed by Fidelity National Title Insurance Co., which is named as a co-defendant in SL Green’s suit. Fidelity reportedly told both the office landlord and Chetrit that it would continue to hold the deposit in escrow until it received an authorization from both parties, or “final determination of the rights of the parties in an appropriate proceeding.”

In an April earnings call, SL Green said it may seek a new joint-venture partner on the Daily News building and announced its “billion-dollar plan” to increase its cash balances. [Crain’s] — Erin Hudson


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