CRE brokerages ramp up lawsuits to collect commissions, fees

Cushman & Wakefield, Avison Young, JLL tussling with 601W, Knickpoint Ventures and a property manager over allegedly unpaid bills

From left: Cushman & Wakefield CEO Michelle MacKay and Avison Young's Mark E. Rose with 550 West Jackson Boulevard and 4000 West Diversey (Avison Young, Cushman & Wakefield, Stone Real Estate, LoopNet)
From left: Cushman & Wakefield CEO Michelle MacKay and Avison Young's Mark E. Rose with 550 West Jackson Boulevard and 4000 West Diversey (Avison Young, Cushman & Wakefield, Stone Real Estate, LoopNet)

Commercial real estate brokerages are sending lawyers after big Chicago landlords, accusing them of skipping out on $1.3 million in commission and property management fees.

Lawsuits filed in Illinois courts in recent weeks by Cushman & Wakefield, Avison Young and a property manager for offices across the nation indicate the brokerage industry is intensifying efforts to collect cash while transaction volumes are stunted by interest rate hikes.

The filings also come as JLL and CBRE intensify courtroom fights they started last year with Chicago landlords GW Properties and the Pittsburgh-based firm that owns the McDonald’s office building in Fulton Market. Those lawsuits are seeking more than $6 million in commissions they say they’re owed by the property owners.

In the largest of the latest cases, Chicago-based Cushman & Wakefield is suing an affiliate of New York-based Knickpoint Ventures for nearly $657,000. The brokerage says it’s owed the money for negotiating home goods retailer Crate & Barrel’s extension of a 117,000-square-foot office lease it entered in 2018. That was in Knickpoint’s $200 million mixed-use redevelopment of a massive former Marshall Fields warehouse, at 4000 West Diversey Avenue, near Logan Square.

Crate & Barrel exercised its option to extend the lease last year. Cushman’s commission agreement was struck with a venture of investor Aaron Paris back in 2018, and Paris sold off most of his interest in the property to Knickpoint the same year, the lawsuit states. But the brokerage is arguing that Knickpoint assumed the duty to pay out leasing commission costs as part of its deal.

The dispute has echoes of JLL’s dispute with the Snyder family’s real estate arm, Normandy Properties, at the 575,000-square-foot McDonald’s headquarters at 110 North Carpenter Street, where that brokerage claims it’s owed nearly $500,000 after the fast food giant expanded its office lease there in 2022.

JLL’s lawsuit was filed last year and has advanced slowly, in part because it has struggled to schedule a deposition of company executives Adam, Patty and Sheila Snyder. JLL has asked a judge to sanction the LLC that owns the building, in part for canceling Snyder depositions minutes before they were scheduled to begin, court filings show.

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In the West Loop, Avison Young is suing an affiliate of New York-based trophy office landlord 601W Companies for more than $418,000 the brokerage says it’s owed for property management services at the 18-story, 406,000-square-foot building at 550 West Jackson Boulevard. It’s unclear from the suit when 601W allegedly stopped paying Avison, but the brokerage has had a property management agreement in place with the landlord since 2021, court records show.

601W executive Mark Karasick said his firm has been displeased with Avison. He accused the brokerage of misrepresenting the building’s ownership while working with its tenants, and of shady billing practices. 601W owes Avison nothing, he said, and “in fact they might owe us money.”

Representatives of Cushman, JLL and Avison didn’t return requests for comment. Knickpoint declined to comment.

Cushman is also on the other side of the table. Total Facility Services, a Florida-based firm, has sued Cushman, alleging it is owed $337,000 for property management duties like emergency repairs at all of insurer Humana’s office space across the nation.

Cushman paid Total Facility on time between 2018 and 2022, but the brokerage failed to pay off 18 invoices that Total Facility charged between 2022 and 2023, the lawsuit said.

That suit was settled earlier this week, and Total Facility is awaiting payment from the brokerage, court records show. Details of the settlement aren’t publicly available.

Meanwhile, CBRE and GW Properties are continuing to litigate over a broken medical office deal that would have moved Duly Health offices into two buildings that GW would have developed in the suburbs. GW sued CBRE after the brokerage filed liens against the developer’s land to try to collect $6 million in commissions that brokers claimed they were owed. While Duly came close to leasing the space, it backed out of the deal, sparking the dispute.

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