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Sheldon Good to launch RTC's regional auctions.

Sheldon Good to launch RTC's regional auctions

A private Midtown hospital was recently ordered by the New York Civil Court to pay its landlord over $2.5 million for occupying a building 17 months after the lease expired.

The hospital had rented several floors in this midtown building at $28,650 per month since 1975. When a rent agreement could not be reached after its lease expired, the hospital continued to occupy the building for seventeen months without paying any type of the rent to the owners. After the landlord was awarded a judgement of possession, a 28-day hearing ensued to determine the amount of "market rent" owed to the landlord for 17 months of use and occupancy.

The court determined this use and occupancy fee by estimating a fair market value for the hospital's space and comparing it to other Midtown office leases. Judge Salvador Collazo rejected the hospital's contention that asbestos markedly reduced the space's value. "The court must find suspect," stated Judge Collazo, "that the respondent-hospital has willingly remained on the subject premises ... despite possessing the belief that its employees and patients have been, and continue to be, exposed on a daily basis to a medically recognized health hazard."

After hearing testimony from several real estate experts, the court found that the monthly value for the space occupied by the hospital, was over $175,000, almost six times the tenant's previous rent. As a result, the hospital was ordered to pay the owner $2,670,874.13 for 17 months of use and occupancy. "There is a substantial differential between the court's fair market use and occupancy assessment and the tenant's prior rent," stated FBSA&G attorney Lucas A. Ferrara, "because rental values have risen significantly since the tenant's lease was last renewed in 1975."

The case was won by Daniel Finkelstein and Lucas A. Ferrara of Finkelstein, Borah, Schwartz, Altschuler & Goldstein, P.C., and Michael Simon of Tenzer, Greenblatt.

The first in a series of long-awaited, multi-state public auctions of office buildings, shopping centers, hotels and other commercial real estate seized from failed savings and loan institutions by the Resolution Trust Corporation's North Central Region will be conducted by Sheldon Good & Company of Chicago, the auction firm and the RTC announced.

Sheldon Good & Company was selected by the RTC after a nationwide search of real estate brokerage firms.

In the first round of auctions, approximately 40 properties worth $40 million will be offered to the general public. They will range in asking price from $300,000 to $3 million each.
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Title Annotation:Resolution Trust Corp.
Publication:Real Estate Weekly
Date:Sep 18, 1991
Words:424
Previous Article:Carlyle Towers to auction 75 units at grand opening.
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