Brokerage sues for $1.26M commission on Sagamore Hotel sale

Miami /
May.May 11, 2016 06:15 PM

A brokerage firm has filed suit against the former and current owners of the Sagamore Hotel for $1.26 million in unpaid commission related to the $63 million sale of the Miami Beach property.

Cornerstone International Realty sued Sagamore Partners Ltd. and InSite Group in Miami-Dade Circuit Court last week, alleging that its broker, George Smith, brought the buyer and seller together, but was never paid a commission after the deal closed.

InSite Group was the lead partner in a venture that paid $63 million for the Sagamore Hotel at 1671 Collins Avenue in April, a month after the death of Sagamore Partners’ principal Martin Taplin. The deed was signed on April 6, five days before $45 million in debt and interest payments were due on the oceanfront hotel.

According to the lawsuit, Smith contacted Taplin in October 2015 to offer brokerage services for the sale of the hotel. Taplin told Smith that Sagamore would pay a commission if Cornerstone procured a “real” buyer, and referred Smith to deal with his son-in-law, Neil Sazant, on behalf of Sagamore, the suit says.

Smith contacted InSite Group‘s Mario Abati about the opportunity to buy the hotel in an off-market deal, according to the suit. Sazant required Cornerstone to sign a confidentiality agreement so that Smith could negotiate with a potential buyer, the lawsuit says, which Smith signed on Oct. 15, 2015.

The next day, Sazant said he also needed a confidentiality agreement from the prospective buyer, which Abati signed and Smith forwarded to Sazant, saying in his cover letter, “these are serious buyers,” according to the suit.

Smith and Sazant then corresponded back and forth regarding terms of a potential sale, and Smith told Sazant that InSite wanted more information such as trend reports and budgets. On Oct. 19, 2015, Sazant expressed concern about divulging financial information about the property to a competitor, as InSite owns another hotel in South Beach, according to the suit.

Smith responded, saying “these are real buyers motivated buyers and understand the value of land and location in the beach. Before I proceeded with them, I confirmed the value you put on the asset, so there wouldn’t be time wasted. They are willing to reach the numbers you mentioned to me when we first spoke, but before proceeding we need your cooperation,” the lawsuit says.

Savant replied, according to the suit: “I have to think about this. In any event, the asset will not get sold based on the current income, so that really should not factor that much into their decision.” Smith replied: “Absolutely, we are on the same page, but it does hold some weight in their offer.”

Sazant never got back to Smith, according to the suit.

Messages left for Sazant and an InSite executive were not immediately returned to TRD on Wednesday.

On April 5, just before the sale to InSite, Cornerstone’s attorney made a demand for the “customary and reasonable” 2 percent commission, or $1.26 million, the lawsuit says.

“Sagamore and InSite dealt directly with each other and intentionally excluded Smith and Cornerstone from the continued negotiations that immediately preceded consummation of an agreement,” the suit alleges. “Cornerstone, having brought the parties together, is nevertheless entitled to a commission as the procuring cause of this transaction.”


Related Articles

arrow_forward_ios
20200 West Dixie Highway, Miami with Harry Dornbusch and Dr. Joshua Lampert (Google Maps)

Aventura office condo owners allege construction defects at Beacon Tower

Aventura office condo owners allege construction defects at Beacon Tower
Triton Center (iStock)

Questions surround $50M in EB-5 investments tied to former INS building: lawsuit

Questions surround $50M in EB-5 investments tied to former INS building: lawsuit
Diego Lowenstein, Dayssi Olarte de Kanavos, Paul Kanavos, and Ronny Ben Josef, with The The Sagamore (Credit: The Sagamore Hotel)

Owners of Ritz-Carlton South Beach and Bal Harbour hotels merge with Sagamore

Owners of Ritz-Carlton South Beach and Bal Harbour hotels merge with Sagamore
Dina Goldentayer, Ryan Cohen and the Bal Bay Drive home (Credit: Kris Tamburello/Douglas Elliman)

Lawsuit alleges Harding Realty cut out of $24M Bal Harbour sale, reveals Chewy founder as alleged buyer

Lawsuit alleges Harding Realty cut out of $24M Bal Harbour sale, reveals Chewy founder as alleged buyer
Henry Torres, Roza Radkiewicz and Merrick Manor

Henry Torres and Astor Companies allegedly owe broker $1M-plus commission: lawsuit

Henry Torres and Astor Companies allegedly owe broker $1M-plus commission: lawsuit
ShareMD's John Bardis and Real Capital Partners' Otto Travieso with 7400 Southwest 87th Avenue, Miami (Linkedin, Google Maps)

Miami commercial brokerage alleges it was stiffed on medical office commission

Miami commercial brokerage alleges it was stiffed on medical office commission
Mayi de la Vega and Dora Puig with Palazzo Della Luna (Getty, Twitter)

Luxury brokers battle over $520K commission tied to Fisher Island condo sale

Luxury brokers battle over $520K commission tied to Fisher Island condo sale
 Stefano Santoro, Miguel Pinto and Martin Bravo (Apex)

Stefano Santoro sues ex-brokerage over email list, alleges stolen trade secrets

Stefano Santoro sues ex-brokerage over email list, alleges stolen trade secrets
arrow_forward_ios

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

Loading...