Posted Oct 18, 2018, 3:10 AM
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New Yorker for life
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Join Date: Jul 2001
Location: Borough of Jersey
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https://therealdeal.com/2018/10/17/n...t-520-madison/
Not in my backyard: Tishman Speyer blocks SL Green from taking over Carlyle Group’s lease at 520 Madison
Landlord denies private equity group permission to transfer lease at 520 Madison
By Rich Bockmann
October 17, 2018
Quote:
Hell hath no fury like a New York City office landlord scorned.
As part of its deal to bring the Carlyle Group to One Vanderbilt, SL Green Realty agreed to take over the remaining term on the private equity group’s lease at Tishman Speyer’s 520 Madison Avenue. But Tishman Speyer, uneasy with having to possibly compete with another landlord in its own building, is refusing to allow Carlyle Group to hand over the keys.
“[SL Green] is a direct competitor of [Tishman Speyer],” the landlord wrote in a rejection letter to Carlyle Group, adding that if it were to green light the deal, SL Green will sublease space in the building “in direct competition with [Tishman Speyer’s] own leasing activities.”
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Quote:
Carlyle Group , however, filed a lawsuit in Manhattan state supreme on Tuesday countering that its lease with Tishman has a technical loophole allowing the deal. Carlyle argues that the lease – while preventing the company from transferring its rights to a competing landlord – does not bar the tenant from handing over the lease to a company affiliated with a competing landlord, as is the case at 520 Madison.
“Apparently unhappy that Carlyle is leaving 520 Madison (built in 1982) for a new, state-of-the-art building (i.e. at One Vanderbilt), [Tishman Speyer] has unreasonably denied consent for Carlyle to assign the lease to [SL Green],” the lawsuit claims.
Carlyle Group is asking the court to rule that Tishman’s refusal is unreasonable, and to consent to the agreement with SL Green. A source with knowledge of the negotiations said the lease at One Vanderbilt is not contingent on Carlyle Group transferring the 520 Madison lease to SL Green.
Like SL Green, Tishman Speyer is building new office product in Manhattan. In April, Tishman Speyer announced that it signed Pfizer to an 800,000-square-foot lease at its upcoming 2.8 million-square-foot Hudson Yards office tower “the Spiral.”
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