NJ brokerage sues JHSF over commission on 57th Street buy
Endeavor claims Brazilian developer did deal "behind everyone's back"
New Jersey brokerage Endeavor Global Group Realty is among the plaintiffs suing the Brazilian investors who bought a Midtown development site from Extell Development for $95 million last year, claiming its owed $5.7 million in commission fees.
Endeavor principal Rick Arroyo alleges that JHSF Participacoes – a Brazilian development firm that acquired the vacant 24,000-square-foot building at 16 West 57th Street last year – never paid his firm its agreed commission related to the deal.
JHSF — through its Fasano Hotels and Restaurants group — plans to build a luxury hotel on the site, located between Fifth and Sixth avenues.
But Endeavor alleges that JHSF circumvented a non-disclosure agreement with the firm, teaming up with former Safra Bank CEO Sergio Millerman to acquire the property under the guise of an LLC to avoid paying brokers’ and finders’ fees.
JHSF and Endeavor were connected through sales agent Solange Sucar Elias and Sao Paulo-based firm Soma Brasil Commercial Representation, who are also listed as plaintiffs on the lawsuit. Arroyo was marketing 16 West 57th Street as a hotel development at the time, while JHSF was looking for commercial properties in Midtown, the suit claims. The site offers 75,000 buildable square feet.
Endeavor, Elias and Soma acted as the broker, agent and finder on the deal, respectively, agreeing to split a 6 percent commission from the buyer, according to the lawsuit.
But Soma claims that upon providing JHSF with a non-disclosure agreement on the deal, the company avoided signing any documents and insisted on obtaining more details about the property.
Endeavor and Soma eventually disclosed the location and further details on the development site, and claim JHSF subsequently arranged to have Millerman purchase the site first under an LLC before selling it on to JHSF for $95 million.
“Once we gave them all the information, they took the liberty and went directly to the seller [Extell] and did a deal behind everyone’s back,” Arroyo told The Real Deal.
A legal representative for JHSF declined to comment on the matter. JHSF is also developing a residential project at 815 Fifth Avenue on the Upper East Side.