Some real estate deals are as dry as the ink on a settlement; others are as convoluted as a love triangle. The latter could describe the impending sale of a Manhattan office tower, one third of a trio of buildings known as Worldwide Plaza.
The sale of the tower started out simply enough in June, when RXR Realty and the tower’s owner-partners negotiated a $611 million agreement. The price would give RXR Realty a nearly 49 percent stake in One Worldwide Plaza. RXR also could spend another $1.35 billion to take full ownership of the office building.
RXR Realty proposed the deal with a partner, American Realty Capital. ARC allegedly ditched RXR and approached the One Worldwide Plaza owners with a substantially higher solo offer. A second agreement was forged.
The original buyer said the owners reneged on an agreement and filed a complaint. RXR wants their deal to go through, or to be paid $200 million in compensation if it does not. The tower’s owners maintained that RXR backed out because it couldn’t acquire the needed financing, even with deadline extensions. The initial buyer’s deposit was returned.
American Realty’s purchase of One Worldwide Plaza was on the verge of settlement when RXR Realty convinced a judge to delay the property transaction. At last report, the State Supreme Court was ready to decide whether to let the sale simmer, while legal issues were resolved, or remove the injunction.
Most real estate transactions are not as complicated this one, but you might be surprised. Misunderstandings aren’t isolated to multi-million dollar property deals. The expectations of buyers and sellers must be clear, including personal and legal boundaries allowing parties to walk away from transactions.
The laws and exceptions applicable to real estate transfers and lease disputes are more than fine print. An attorney can review agreements for mistakes and vague wording or help a client take a contract-breaker to court.
Source:
crainsnewyork.com, “Court puts $1.4B trophy property sale on ice” Daniel Geiger, Oct. 28, 2013