Commercial
National
Elite social club sues Shvo for $600M, alleging failed projects
Trending
Shvo could lose $180M in rent with Transamerica Pyramid lease lawsuit
Core Club asks court to rescind 20-year deal to occupy first three floors at SF tower
A court will decide whether Shvo will forfeit almost $180 million in potential rent from an elite social club mired in a legal battle over its 20-year lease at the Transamerica Pyramid in San Francisco.
If the New York court grants Core Club’s request to rescind its lease in the building, the New York-based landlord could lose $178.8 million in rent over two decades at 600 Montgomery Street, in the Financial District, the San Francisco Business Times reported.
No trial date has yet been set for the Core complaint.
The owners of the members-only club sued developer Michael Shvo in June for allegedly overpromising and underdelivering on developing high-profile club locations in New York City, San Francisco and Milan.
Core Club, founded in 2005 by Jennie Enterprise, accuses Shvo of fraud and demands he and his partners reduce the club’s Manhattan rent, rescind its lease at Shvo’s Transamerica Pyramid and pay $600 million in damages.
The club alleges Shvo failed to follow through on a promise to invest $100 million in building out the three Core locations, including the one at the Transamerica Pyramid, in exchange for a half stake in Core, according to the complaint.
Core alleges in its suit that plans to open a location at the base of the Transamerica Pyramid have “languished under Shvo’s inaction,” and asks the court to rescind its 45,000-square-foot lease in the building.
In July, Shvo countersued, seeking to dismiss the lawsuit while claiming CORE Club was “incapable of paying back their debts.”
The terms of Core’s lease at the Transamerica Pyramid, made public by Shvo’s attorneys for the first time in July court filings, show the club is slated to pay Shvo a total of $178.8 million in rent over a 20-year lease, according to the Business Times.
The base rent for the first three years of Core’s lease at the Transamerica Pyramid, which spans the first three floors and a portion of a basement level, is $8 million.
Rent escalates annually after the third year. Core signed its lease in 2021 but has yet to take possession of the space, a spokesperson for the company said, and so has not begun paying rent.
Shvo and its partners bought the 48-story spire in 2020 for $650 million. After the purchase, Shvo announced a large-scale renovation, bringing the partners’ total investment to $1 billion.
The firm’s reopening of the Transamerica Pyramid after the $400 million renovation remains on track for after Labor Day, according to the Business Times.
— Dana Bartholomew
Read more
Commercial
San Francisco
Michael Shvo countersues tenant at SF’s Transamerica Pyramid
Commercial
New York
Shvo fires back at Core Club
Recommended For You