Two investors are suing Joseph Sitt’s Thor Equities over their stake in a retail condo at 530 Fifth Avenue.
Monterrey, Mexico-based Intelectiva Real Estate Incorporated and Aranjuez Real Estate are suing Thor’s ownership entity at the Midtown property and demanding to see the books, after Sitt failed to pay them the money they were expecting.
Intelectiva invested $1.8 million and Aranjuez invested $7.1 million after Thor purchased a 50 percent stake in the lower Fifth Avenue retail condo in 2014.
No distributions were made to the investors, and they struggled to get any information out of Thor, according to their lawsuit. In May 2022, a managing member from Thor told them they would receive a payment, but the amount was less than they expected.
In their suit, the investors seem bewildered that an attractive space on one of the world’s most coveted retail corridors could have produced no returns and sustained operating losses every year from 2017 to 2022.
The 26-story retail and office building takes up an entire block front of Fifth Avenue between 44th and 45th Streets — “prime retail space in a very tourist-heavy location” under “a prime office building in one of the most lucrative retail markets in the country,” their suit says.
Thor told the investors that their ownership share had been diluted “without any notice or explanation,” according to the complaint filed in New York Southern District Court. The investors were also told that the “property has been operating at a loss for over half a decade” and that they were no longer entitled to distributions, they alleged.
The investors asked to see Thor’s books for 530 Fifth and received a two-line email response last April, and after that, heard nothing but crickets, according to the lawsuit.
A source close to the company told The Real Deal, “Thor did not manage this asset and is willing nonetheless to facilitate the investors’ access to information so that they are assured that their investment was handled properly.”
Thor bought the retail condo in partnership with General Growth Properties, the predecessor to Brookfield’s mall division, for $595 million. Thor later reduced its ownership to about 10 percent by selling the rest to General Growth in a complicated deal to repay the loan it received from its partner to buy its half stake.
Brookfield sold the 60,000-square-foot property — whose current tenants include shoe retailers Vans and Ugg and the discount store Five Below — to a partnership between Aurora Capital Associates and investor Edmond M. Safra.
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