Home Real Estate Cleveland’s tallest office tower hit with lien for a $2.5M commission

Cleveland’s tallest office tower hit with lien for a $2.5M commission

by Ozva Admin

A major commission dispute has arisen in Cuyahoga County Property Records of one of the largest office leases in years that was consummated earlier this year on the Key Tower, which is the tallest skyscraper in Cleveland and Ohio.

Allegro Real Estate Brokers and Consultants of Cleveland, who represented the benesch law firm on his lease in Key, on October 21 filed a broker’s lien to record a claim for a $2.5 million commission owed on the building. Millennium Cos. owner Frank Sinito owns the skyscraper through 127 PS Fee Owner LLC. The office tower also serves as the headquarters for Millennia’s portfolio of national multi-family, hospitality and restaurant properties.

Benesch is the second largest law firm in Cleveland in terms of local attorneys, according to Crain’s annual list of law firms. A commission on such a large lease, with a high-profile international law firm in a trophy building, is generally considered a deal for life. Allegro worked with Benesch for eight years, according to a case study on the Allegro website.

The length of the lease for the eight-story tower, which covers 164,000 square feet of office space, has not been publicly disclosed. However, the lien filed with Cuyahoga County property records indicated the total rental value of the lease is $63.5 million. Allegro is entitled to a 4% commission under a brokerage agreement signed with the building on February 16 that sets out payment terms. The actual lease was executed on July 25.

The contract for the payment of Allegro commissions is not included in the presentation.

The law firm plans to move into the Key Tower from 200 Public Square, the city’s other trophy building, in mid-2023. It’s just a short walk up the Key from 200 Public Square.

The standard in the brokerage business is for brokers to receive half of the commission payment at the time the lease is executed and the remainder when the tenant occupies the space or begins paying rent. However, the specific terms may vary between different building owners, especially when it comes to a mass lease.

For example, the commission policy at 200 Public Square is to pay the full commission 30 days after signing, according to Russ Rogers, a senior vice president at Colliers’ Cleveland office that handles leasing at the structure. The 200 Public Square building is owned by DRA Advisors, a New York City-based institutional real estate investment firm. DRA has a portfolio of 538 properties in 37 states and has been in business since 1900.

On behalf of Key Tower and Millennia, Doug Miller, president of Millennia Commercial Group, said in a phone interview that the broker’s levy “isn’t a big deal.”

That’s because, he said, the building has made the commission payments and the money has been set aside.

“They will get their commission,” he said. “They had to file the lien to protect their lien rights.”

As with construction liens, there is a use-it-or-lose-it window for filing notices. For brokerage liens, it is 90 days after signing the lease. If the lien is not filed on time and properly, the brokerage cannot use the lien to take legal action against the building.

For its part, Allegro, as standard policy, is silent on legal issues.

In this case, phone calls and emails about Key’s brokerage lien were not returned by Michael Cantor, president, Russell Lamb, a broker and director who actually recorded the lien, and Adam Gimbel, an Allegro director who signed the brokerage agreement with Key Tower. .

If the lien is satisfied, the brokerage typically files a notice of satisfaction to remove the lien from the county records.

An online search of county records as of 3 pm on Friday, November 11, showed that the lien was in effect and there was no notice of satisfaction.

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