Friday, May 11, 2007

"Sotheby’s and Its Landlord Battle Over Building’s Sale"

Sorry for the light posting. I was out of town for a couple of days. Jumping back in, today's New York Times reports on a dispute that's brewing between Sotheby's and developer/art collector Aby Rosen, who bought the Sotheby's building for $175 million in 2002 and has now put it up for auction seeking at least $500 million. (Final bids were due today.) It's a little hard to figure out from the article what's going on. It quotes anonymous sources as saying "Sotheby’s contends that Mr. Rosen should have offered to sell the building back to Sotheby’s in 2005 for about $300 million, under what is known in real estate circles as its 'right of first offer.'" Rosen's marketing materials do state that any sale "is subject to Sotheby’s right to match the best offer he gets, according to a real estate executive who has seen the document," so it sounds like the dispute is over how to interpret the relevant provision of the contract. (The article also says "Sotheby’s did not discover this right [of first offer] until after Mr. Rosen put the building on the auction block this year," but that doesn't sound right.) Stay tuned.