A partnership including retail-savvy Crown Acquisitions claims in a new lawsuit that its attempt to buy control of a modest commercial building on a dynamic stretch of Fifth Avenue stalled after the owner backed out of the deal in January.
Midtown-based Crown, headed by Stanley Chera, and a company including investor Steven Feldman of One North Realty, are seeking to buy the ground lease that controls 587 Fifth Avenue, a 10-story office and retail building with 30 feet of mid-block frontage between 47th and 48th streets, according to a suit filed in New York State Supreme Court yesterday.
Crown and Feldman, under the name 587 Fifth LLC, filed the suit against the entity that owns the building, Baruch LLC, as well as Asher Zamir, who is a principal of investment firm Zamir Equities. (He also uses a longer version of his last name, Roshanzamir.)
Though the purchase price was redacted from a purported sale contract, dated March 9, 2012, one insider expected the ground lease to sell for about $30 million. The underlying land is owned by the estate of Sol Goldman and is not impacted by the sale of the lease, which runs for another 66 years to March 31, 2079. Zamir and partners purchased the lease in 2003 for an undisclosed sum.
That stretch of Fifth Avenue, from 42nd to 49th streets, has seen the steepest rise in asking rents among Manhattan’s 16 major retail strips over the past two years. Asking prices doubled from $501 per foot in the fall of 2010 to $1,021 per foot in the fall of 2012, a report from the Real Estate Board of New York shows.
The rising rents have led to more sales. In six transactions since January 2010, buyers have paid more than $354 million for buildings in that stretch, an analysis of CoStar Group data shows. For example, Thor Equities paid $132 million for 520 Fifth Avenue in March 2012.
The suit claims that Zamir sent Crown a letter in January terminating the 2012 purchase and sale agreement without giving a specific reason. The would-be buyers are asking the judge to enforce the transaction they allegedly agreed to in the contract.
But there are additional complicating factors. Zamir needs to buy out one of his partners in the building, and it was not clear if that had occurred. The suit is also seeking an order forcing him to complete that transaction, in order to finalize the sale of the building.
In addition, the suit claims Chera and Feldman lent Zamir $500,000 in November 2012, with an anticipated repayment date of the closing or April 30, 2013, whichever came first.
A person at Zamir Equities said Zamir was not available. Feldman declined to comment. A representative for Crown declined to comment.
A Jones Lang LaSalle investment sales team brought the building to market in late 2010, but the listing was pulled, insiders said. The lawsuit did not mention any brokers involved in the disputed transaction.