Normandy sued by former partners for hiding Netflix deal

Investors allege Normandy negotiated in secret with Steel Equities, streaming giant

New York /
Jan.January 18, 2021 11:45 AM
333 Johnson Avenue with Royalton Capital’s Jin Lee, Sciame Construction's Frank Sciame and former Normandy partner Jeff Gronning (Royalton Capital, Sciame, Normandy)

333 Johnson Avenue with Royalton Capital’s Jin Lee, Sciame Construction’s Frank Sciame and former Normandy partner Jeff Gronning (Royalton Capital, Sciame, Normandy)

In a drama not quite worthy of a Netflix series but serious enough to trigger litigation, Normandy Real Estate Partners is being sued by its former investment partners for $106 million.

According to the lawsuit filed last month in Manhattan, Normandy — which was part of an investment partnership called 333 Johnson Property Holdings — sold the holdings’ property at 333 Johnson Avenue to Steel Equities for $52.5 million, without disclosing to other partners including Royalton Capital’s Jin Lee and Frank Sciame of Sciame Construction that Netflix was interested in leasing the entire property.

After the sale was completed in December 2018, the value of the 160,000-square-foot site at 333 and 339 Johnson Street shot up to $361 million, Crain’s reported. Gov. Andrew Cuomo’s office announced Netflix’s deal in Brooklyn in April 2019.

Normandy, which has since been bought by Columbia Property Trust, admitted in court papers that the company was aware of Netflix’s interest in leasing the space but claimed that Netflix didn’t want to lease it from the partnership because of its lack of experience in building sound stages.

The plaintiffs argue in court papers that Normandy negotiated with Netflix and Steel Equities behind the scenes. They allege that two principals of Normandy, as well as Princeton Holdings’ Joe Tabak and Robert Wolf of Read Properties, received undisclosed compensation from the deal.

Representatives for Normandy and Princeton did not respond to requests for comment from Crain’s. Steel Equities and Read Properties could not be reached for comment. [Crain’s] — Akiko Matsuda





    Related Articles

    arrow_forward_ios
    270 W Montauk Hwy, Hampton Bays, NY (Loopnet)
    Legendary Hampton Bays bar up for sale
    Legendary Hampton Bays bar up for sale
    Prologis Chairman and CEO Hamid Moghadam (Getty, Prologis)
    Industrial space “effectively sold out” amid leasing frenzy, Prologis says
    Industrial space “effectively sold out” amid leasing frenzy, Prologis says
    Judge trashes 421a rent overcharge suit against Muss
    Judge trashes 421a rent overcharge suit against Muss
    Judge trashes 421a rent overcharge suit against Muss
    Starwood raises $10B for distressed real estate plays
    Starwood raises $10B for distressed real estate plays
    Starwood raises $10B for distressed real estate plays
    Aulder Capital CEO Jonah Bamberger and 162-164 East 82nd Street (Rosewood Realty Group, Slate Property Group)
    Two Upper East Side apartment buildings head to foreclosure sale
    Two Upper East Side apartment buildings head to foreclosure sale
    Stripes founder Ken Fox and a rendering of 40 10th Avenue (Stripes, Neoscape)
    Private equity firm carves out 14K sf at Aurora’s Solar Carve building
    Private equity firm carves out 14K sf at Aurora’s Solar Carve building
    Resurrection! Work resumes on stalled Clinton Hill residential project
    Resurrection! Work resumes on stalled Clinton Hill residential project
    Resurrection! Work resumes on stalled Clinton Hill residential project
    CRE held up through the pandemic far better than most expected (iStock)
    How commercial real estate survived the pandemic
    How commercial real estate survived the pandemic
    arrow_forward_ios

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

    Loading...