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Garrick-Aug closes up shop.

After months of speculation surrounding its future, the pioneering retail brokerage, Garrick-Aug Associates Store Leasing Inc. has folded just days after its founder, Charles Aug, died following a long battle with a rare bone disease.

"It is still a legal entity, but most of the firm's brokers have found new homes," said James Aug, who was president of his father's company.

"As an entity [Garrick-Aug has] lost a lot of credibility in the marketplace. They lost a lot of human resources, due mostly to promises that weren't kept."

Aug was apparently referring to unpaid broker commissions reportedly amounting to hundreds of thousands of dollars that the company owed. "People who had families to feed exercised their options as independent contractors to go their own way," he added.

Aug said the unraveling of the business was the end of "a steep slide downhill" that began after the company was sold for $3 million in 2004 to Larry Selevan's Union Traders Corporation.

Selevan left the firm earlier this year amidst a flurry of rumors regarding a possible merger with the residential brokerage, Century 21 Kevin Brown. At that time, Selevan said it had always been his intention to depart Garrick-Aug "the moment we were able to successfully merge the company with another company."

He said then that UTC was well financed and planning to invest further cash once the merger with C21KB was complete.

However, although Garrick-Aug moved into the C21KB office suite at 575 Madison Avenue, the merger never came to fruition and, in fact, that firm was purchased just this week along with the company founded by real estate entrepreneur, Darren Hornig, Dwelling Quest.

Those two firms have now been merged to form Century 21 NY Metro, a new company owned and operated by RealStar Realty LLC.

Michael Simon, president and chief executive officer, of Century 21 NY Metro told REW, "The new ownership of Garrick-Aug had been in discussion with Kevin Brown regarding a move to Century 21 Commercial branding, but the synergies never materialized and the deal was scrapped shortly after."

According to Simon, while Garrick-Aug had been occupying a portion of his firm's space at 575 Madison, "their license and, as such, their occupancy expired at midnight on September 10, 2006."

Gary Rappaport, general counsel to the 575 Association, owners of 575 Madison Ave. confirmed Garrick-Aug had been operating from the premises for four to six months. He said the firm had no official lease and that, within the past 30 days, all of the firm's employees had "vanished."

Rappaport added, "There's a part-time secretary, I think, who checks the mail every day."

According to the New York State Division of Licensing, Johnathan Krivine is the licensed broker for Garrick-Aug Associates Ltd through 2007. The license is registered under Garrick Aug's former address at 360 Lexington Avenue where Krivine was a broker. REW was unable to contact Mr Krivine for comment. James Aug is licensed as an associate broker for Garrick-Aug Associates Store Leasing and as a private individual broker. In all, some 19 brokers from the firm are licensed with the division.

James Aug said the company's agreement on the office space expired September 11. He said he had "unofficially resigned" as president of Garrick-Aug a year ago and named Seth Bogner of UTC as the man now "in charge" of the firm. REW was unable to locate Seth Bogner or corporate offices for UTC..

Aug claimed he had begun withdrawing from the firm because he disagreed with its politics and confirmed he is planning to launch his own new brokerage company which will be based in New Jersey.

He said, "Garrick-Aug was sold to a bunch of investors that were really not real estate savvy and looked at it as an investment. The thing they didn't realize is that real estate is people generated. They didn't see it that way and they ended up burning too many bridges."

In a 2004 statement issued by Garrick-Aug to announce its sale to UTC, the company stated it was bought by a "purchasing group" that included several senior Garrick-Aug employees, Charles Aug, Larry Selevan and an un-named partner.

Aug said his father had been disappointed with the changes made at the company since he departed early 2005. "He was more than happy to get out of it when he did, to concentrate on his own real estate independently of the company."

The demise of Garrick-Aug marks the end of an era in retail brokerage. At its height, the firm founded by Charles Aug in 1975 carved a niche for store leasing that had never previously existed and provided a training ground that launched the careers of superstar brokers such as Robert Futterman, Ben Fox, of Newmark Knight Frank, and Faith Hope Consolo and Joe Aquino, now chairman and executive vice president respectively at Prudential Douglas Elliman.

"In the late 80's, early 90's, we probably represented all the retail space in Manhattan, from landlord to tenant," Consolo said. "But no matter what happened at the end, Charlie was a true visionary. He started a great company and he was always there working behind the scenes. It was always his company.

"We had 100 brokers all under one roof working on retail--the energy was tremendous. There was no better place to learn and to grow."

Consolo was the last of the star brokers to depart Garrick-Aug following its sale in 2004. A source who remained with the firm until the end said the brokers that stayed following the purchase by UTC were all unsettled. "It was hard for them to focus and the deals closed during this time period were few and far between," said the sources, who asked that his named be withheld from this report.

James Aug admitted he was saddened by the outcome, but added, "It is nice to know that the broker's out there who grew up with the company are going to continue in this business. My father certainly left his mark out there."

Despite efforts to contact Larry Selavan at the offices where he set up his new investment sales business in February, REW was unable to contact him by press time.
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Author:Wolffe, Danielle
Publication:Real Estate Weekly
Date:Sep 13, 2006
Words:1028
Previous Article:Moynihan developers ready to wait.
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