212 Fifth developers sue Town over termination notice
Sponsors allege brokerage missed sales targets but fought against being replaced
“Do not go gentle into that good night,” Dylan Thomas urged. But following the Welsh bard’s advice in New York real estate could very well come with legal headaches.
The developers of 212 Fifth Avenue, a 48-unit luxury condominium conversion project underway just north of Madison Square Park, are suing the project’s marketing firm, Town Residential, alleging the brokerage resisted being replaced although it failed to hit sales benchmarks.
The development team, a partnership between Madison Equities, Building and Land Technology and Thor Equities, claims that they sought to end Town’s contract in December. By then, Town had sold 23 units, or just under 50 percent of the project, a spokesperson for the brokerage says. But the agreement with the developer provided that the deal could be terminated if the project wasn’t 56 percent sold by Oct. 15.
Now, the developers want a judge to make an official declaration that the exclusive marketing agreement is terminated effective Jan. 21.
The developers declined to comment on the lawsuit or on who would replace Town. Sales launched on August 31, 2015.
Elaine Diratz, Town’s managing director of new development, said it was “surprising that the sponsor would change agents at this critical time.”
“Since launching just a little over a year ago, as reported on StreetEasy, we have placed 23 units in contract with a total value of $184.65 million and an average sales price of $3,180 per square foot, with many more in discussion,” she said. “We introduced more than 725 of the city’s top brokers and clients including many of the world’s top billionaires to the building.”
The termination is a blow to Town’s new development marketing arm, which Diratz recently took over from Shlomi Reuveni. The project, with a total sellout of $523.29 million, was the biggest on its books. Thor’s CEO, Joseph Sitt, was a co-owner of Town Residential until July, at which time Town CEO and founder Andrew Heiberger bought him out of his stake.
The penthouse at 212 Fifth, a 10,070-square-foot triplex, is on the market for $68.5 million, or $6,850 per square foot.