Web hits: The month in review

Halstead takes bigger bite out of Connecticut market

In a massive grab for market share reminiscent of the recent real estate boom, Halstead Property has gained five offices and 160 new agents by absorbing Connecticut real estate brokerage Country Living Associates.

Joining with the 17-year-old Country Living Associates, located in Fairfield County, in addition to the recent takeover of 55-agent Darien’s Wheeler Real Estate, brings Halstead’s total number of agents to more than 900 in three different states, and is part of a strategy of “smart growth” for the company, according to Diane Ramirez, the president of Halstead.

Ramirez did not disclose the details of the arrangement, saying only that Halstead absorbed the agents of Country Living and now has five new offices. The transaction was not a purchase, a Halstead spokesperson explained further, because no money changed hands, but would not elaborate, saying Halstead does not disclose financial details because it is a privately held company.

Country Living Associates, now known as Halstead Property Country Living, previously had seven offices in Fairfield County; Halstead has closed the corporate headquarters in Norwalk and consolidated the company’s Darien office with nearby Wheeler. All of the Darien agents were encouraged to join Wheeler, said company co-founder Sharon Daley Maasdorp, who previously owned the company with colleague John DiCenzo, and now is Halstead’s executive director of sales for New Canaan. By Candace Taylor

Laurel developer sued over rent

Alexico Group is facing litigation after it allegedly failed to pay $254,000 in back rent and other charges for an off-site sales office at the Laurel, its 31-story condominium building at 400 East 67th Street.

Since 2007, the Manhattan-based development marketing firm has operated the Laurel sales and design center at 1161 First Avenue, which is a street-level commercial space located at the rival St. Tropez condo, on the corner of 64th Street.

The complaint, filed by the St. Tropez Board of Managers on May 27 in New York Housing Court, alleges the developer — which pays $53,571 per month in rent — failed to make a payment since January. Alexico, led by Izak Senbahar and Simon Elias, told the landlord that slow sales at the Laurel were hurting its ability to make rent payments for the sales office, according to St. Tropez’s attorney.

“The reason they’re not paying their rent is because they can’t sell any units [at the Laurel],” said Adam Leitman Bailey, attorney for the St. Tropez. “Their lease expires Sept. 30. They’ve asked to be let out of their lease.”

Alexico officials, however, have a different take on the situation.

“The dispute relates to, among other things, space the condominium board arbitrarily annexed without our consent or any advance notification,” according to an Alexico spokesperson, who asked not to be named.

He claimed the St. Tropez expanded a health club into the sales office space without prior consent, and that there were other problems, including flooding, in the building. He declined to comment when asked why Alexico never took the landlord to court over these alleged problems, but said there would likely be new litigation. By David Jones

Extell unloads Diamond District building

Extell Development sold a 10-story building at 30 West 47th Street for nearly $8 million less than the company paid for it last year after stripping it of air rights needed for its nearby Gem Tower.

Extell sold the property at 30 West 47th Street to Jemsa Realty for $42.5 million May 14, after going into contract in January, according to property records published last month.

The developer bought the property for $50.1 million in June 2008, then transferred air rights from the building to its under-construction, 32-story tower at 50 West 47th Street, city records show. By Adam Pincus

Core sues William Beaver developers for fraud

Core Group Marketing has filed suit against the developer of chic downtown condominium William Beaver House, claiming it is owed more than $220,000 in unpaid commissions for units sold at the building.

In a suit filed last month in New York State Supreme Court, Core claims that the project’s owners committed breach of contract and fraud by failing to pay commissions for units Core sold at the development. Core asked that the payments for rent be paid along with interest, legal fees and compensatory damages.

The high-profile Financial District project is being developed by hotelier and nightlife impresario Andre Balazs, along with SDS Investments, a private real estate firm led by developers S. Lawrence Davis and Alex Sapir, president of the Sapir Organization.

Core CEO Shaun Osher declined to comment, but recently told The Real Deal that William Beaver House, located at 15 William Street at Beaver Street, was “one of the most difficult projects I’ve ever worked on,” and that he pulled his sales team from the building when the developer failed to pay his agents their commissions.

Core was hired as the co-exclusive sales and marketing firm at the project in June 2007, along with Prodigy International, a brokerage with offices in New York, Miami, Panama, Mexico and Spain.

Rodrigo Nino, the president of Prodigy, which is now the sole sales team remaining on the project, said he is not familiar with the lawsuit, but that “the developer was very unhappy with the performance that [Core] had. They didn’t sell so they were let go.” By Candace Taylor

Swig rushes to sell debt at Sheffield57 condominium

Developer Kent Swig is racing to complete a deal to sell the senior mezzanine debt at the Sheffield57 condominium to a team led by Fortress Investment Group, amid a blockbuster derivative lawsuit by his fellow investors that could affect a final agreement.

Under the proposed deal, Guggenheim Structured Real Estate would sell its debt in the building, which includes a senior mezzanine loan of $76 million and a junior mortgage loan of about $2 million, sources said.

The sources added that Swig and Guggenheim were looking to sell the debt at 90 cents on the dollar, while most offers were coming in at 60 to 70 cents.

The buyers would then foreclose on the note, take over the property, and pour millions of dollars into the building to complete construction and cover delinquent payments owed to numerous contractors.

“The note’s in default,” said an executive familiar with the negotiations, “but Guggenheim doesn’t have the [additional] money to put into the deal that the property needs.”

Sources say that Fortress had been in discussions with Area Property Partners, formerly known as Apollo Real Estate Advisors, to become a member of the investment group. The sources added that Area officials, however, had concerns about the complicated legal and financial entanglements at Sheffield57. The building’s former owner, Rose Associates, emerged recently as a potential manager and investor in the deal.

“We do not comment on our investments or potential investments,” said Lilly Donohue, a managing director at Fortress.

At least two other firms were left at the altar during the bidding process, including Angelo, Gordon & Co. and Westbrook Partners. Officials at both firms declined to comment. Officials from Area and Fortress also declined to comment. By David Jones

The Observer releases its Power 100 list

The Real Deal’s Amir Korangy made the New York Observer’s Power 100 list of the most powerful people in New York real estate, released last month. President Barack Obama ranked first on the list, which includes politicians, developers and brokers, followed by Stephen Ross, CEO of the Related Companies, and Mort Zuckerman, chairman and CEO of Boston Properties. Twelve women made the list, including Corcoran Group CEO Pamela Liebman, Elliman CEO Dottie Herman and CB Richard Ellis Vice Chairman Darcy Stacom. The Observer also held a poll inviting readers to vote for the most powerful people in New York real estate, and The Real Deal’s Web editor, Lauren Elkies, was named the city’s most powerful real estate blogger. TRD