Vanke seeks to remove RFR from Midtown condo project

Aby Rosen’s firm wants “exorbitant buyout” of 7% stake, developer alleges

New York /
Nov.November 24, 2020 04:06 PM
Vanke US managing director Kai-yan Lee, RFR’s Aby Rosen and 100 East 53rd Street (Photos via Foster + Partners and Getty)

Vanke US managing director Kai-yan Lee, RFR’s Aby Rosen and 100 East 53rd Street (Photos via Foster + Partners and Getty)

RFR Holding is using the pandemic as cover to extract an exorbitant buyout for its minority stake in a Midtown condo project, partner Vanke US has argued in a new court filing.

The allegations are in response to a lawsuit Aby Rosen’s firm filed last month, which accused Vanke, a U.S. subsidiary of one of China’s largest residential developers, of orchestrating a “backdoor deal” that put it on both sides of the borrower-lender relationship for the condo project at 100 East 53rd Street.

Rosen’s firm, “apparently having run out of the funds necessary to contribute to the success” of the project, “is seeking through its meritless lawsuit a continuation of its strategy to extract a buyout of the relatively small position it holds in the company,” Vanke alleges in its response to RFR’s complaint.

The partners secured a $360 million loan for the project from the Industrial and Commercial Bank of China in 2015, but it went into default this May. An entity controlled by Vanke owns a 93 percent stake in the project, while RFR controls 7 percent, according to the filing. Hines and China Cinda Asset Management are also partners in the 63-story, 94-unit development.

Vanke alleges that even before the pandemic hit New York, RFR had developed a strategy “to make the property seem distressed with hopes of gaining leverage with ICBC.” And coronavirus-related disruptions to the market — including a moratorium on foreclosures in New York — have contributed to those plans.

“RFR indicated that its strategy was to eventually force ICBC to foreclose and spend years in litigation (without any strategy for how it would actually defend a lawsuit) with the hope of negotiating a better deal with ICBC,” the filing says.

The developer also rejects RFR’s argument that it was not permitted to negotiate with ICBC. “In fact, RFR specifically requested that Vanke use its banking relationship with ICBC to encourage ICBC to act as its lender for the property,” according to Vanke, adding that RFR had also been given an offer to participate in the loan, but didn’t because the firm is “either unwilling or unable to invest further cash in this project” to finish it.

Vanke claims in its response that from last December to the present, it has contributed approximately $9 million in additional capital to the project, while RFR has contributed nothing. Compass, the co-exclusive sales and marketing agent for the Property, has resigned because of the lawsuit, and RFR has indicated that it will not approve any more unit sales, according to the filing.

RFR declined to comment to Commercial Observer, which first reported the filing. [CO] — Kevin Sun


Related Articles

arrow_forward_ios
Lewis Hamilton and 443 Greenwich Street (Getty, 443 Greenwich)
Formula One champion Lewis Hamilton trades Tribeca penthouse for $50M
Formula One champion Lewis Hamilton trades Tribeca penthouse for $50M
Better.com CEO Vishal Garg (Better.com, iStock)
Better.com CEO apologizes for botching layoffs, anonymously leaking video
Better.com CEO apologizes for botching layoffs, anonymously leaking video
Zillow: iBuyers Account for Record 1.9% of Home Sales in Q3
iBuyers reached record housing market share, sales volume
iBuyers reached record housing market share, sales volume
Toby Moskovits pitches Bronx project rescue, financed by [redacted]
Toby Moskovits pitches Bronx project rescue, financed by [redacted]
Toby Moskovits pitches Bronx project rescue, financed by [redacted]
CoStar CEO Andy Florance
CoStar comes home to play
CoStar comes home to play
Cash-Out Home Refinancing Hits 14-Year High in Third Quarter
Cash-out mortgage refinancing hits 14-year high
Cash-out mortgage refinancing hits 14-year high
HRI's Aaron Carr and 3045 Godwin Terrace (Facebook, Google Maps)
“Our existence is a tragedy”: Housing Rights calls for enforcement overhaul from Hochul
“Our existence is a tragedy”: Housing Rights calls for enforcement overhaul from Hochul
Gov. Kathy Hochul (Getty, iStock)
Hochul opens $539M homeowner assistance fund
Hochul opens $539M homeowner assistance fund
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...