When a commercial property owner gets into litigation with a tenant, the expense can be a huge drain on the bottom line. Sometimes it takes a little outside help to resolve the situation and get back to making a respectable profit. For the owners of the International Olive Building, a landmarked structure at the corner of Broome Street and Mercer Street in Soho, that outside help came from Crown Acquisitions, who took out a 49-year lease to manage the building.
The building owners had signed a lease with Zadig & Voltaire, a high-end French fashion retailer. But the relationship ended up in litigation over allegations the owners failed to renovate the building and correct a number of violations.
Crown stepped in, settled the litigation and plans to renovate the exterior and the ground floor retail space. Their investment should pay off in the form of the $20 million Zadig & Voltaire is expected to pay during the term of their lease. The retailer is expected to occupy 4,800 square feet on the ground floor, starting in mid-2015.
Lease disputes come in many forms and resolving them is not always easy. In some cases the best strategy is to fight it out in court and hope for a favorable decision. In many other cases, settlement is the most cost-effective way to resolve the issue. Obtaining a favorable settlement requires risk analysis, skillful negotiation and creativity. Working with an New York real estate law firm that understands the issues and has experience in litigating commercial real estate disputes can make a big difference.
Source: New York Post, "Coach's woes put Hudson Yards ownership stake at risk," Lois Weiss, November 5, 2014