Major real estate fights are brewing in New York City.
First, we have a showdown between Rialto Capital and Jeff Sutton. Earlier this week, Jeff Krasnoff’s firm filed a lawsuit seeking to foreclose on Wharton Properties’ leasehold on the retail building at 144 5th Avenue in the Flatiron District. Rialto is also seeking to enforce a bad boy guarantee over Sutton’s alleged “misappropriation or conversion of the rents” at the property.
As The Real Deal’s Rich Bockmann reported, it’s a well-trod playbook for Rialto. This time, however, it goes after a much bigger player with more resources to defend himself.
Sutton has been called New York’s “King of Retail.” He’s sold Fifth Avenue buildings to major players like Prada and Gucci and has a net worth of $2.7 billion, according to Forbes. That means he may not bow down to Rialto, which has been primarily going after smaller borrowers. Indeed, a day after our scoop went live, Blackstone called and walked back some of Rialto’s claims about Wharton.
Speaking of legal tussles, President Donald Trump has been going after New York State Attorney General Letitia James. Despite all the bravado, the claims are mired in minutiae.
That’s why TRD columnist Erik Engquist isn’t convinced Trump and his allies have a strong case. White House officials asked for a criminal probe into James’ real estate holdings. The allegations revolve around whether or not she lied on some documents, as well as whether one of her buildings should be classified as rent-stabilized.
“The allegations against her are so picayune that even the right-wing media declined to cover them until James became the subject of a criminal referral by Federal Housing Finance Agency director Bill Pulte,” Engquist wrote. It should be said, of course, that James and Trump have a long history of antipathy.
While some Trumpers may think our analysis is one-sided, Engquist noted that he has covered James’ political career for decades and the AG hasn’t been thrilled with some of his coverage.
In non-legal news, a long-stalled Midtown project may soon see the light of day. Sioni Group and Isaac and Eli Chetrit have been dreaming up a skyscraper at 100 West 37th Street for nearly two decades. Now, they have acquired a $275 million construction loan to pay for the 70-story, 311-unit tower.
But as Keith Larsen reported, while the funding means the project is no longer on ice, the developers weren’t interested in chatting about the financials. Jack Yadidi of Sioni Group said that TRD readers would “not care.” Instead, he emphasized that people would prefer to know about the “uniqueness of the design” and the tower’s finishes.
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