By Guelda Voien
Alden Global Capital has deployed millions since the start of the pandemic, including an offer last week to buy newspaper publisher Tribune Publishing — but the hedge fund manager has also allegedly been stiffing the landlord at its Manhattan headquarters on rent payments since last April, according to a complaint filed yesterday.
Looking up at the lipstick building at 855 3rd ave. New York, NY. designed by John Burgee Architects … [+]
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SL Green, the hedge fund manager’s landlord at the posh office space it just vacated, wants Alden to cough up more than $5 million in damages for back rent and losses related to breaking its lease, according to the New York State Supreme Court complaint. Alden leases the entire 34th floor of 885 Third Avenue, which is known as the Lipstick Building.
The REIT took over as de facto landlord last July after the ground lessor failed to pay its rent, and notified Alden of the change at that time, the suit alleges. But not only did checks for the monthly rent of just over $100,000 allegedly fail to arrive, Alden is liable for further rent under its lease, which it chose to terminate in January, SL Green’s attorneys claim. The REIT estimates it is owed “in excess” of USD 5m, not including Alden’s nearly $500,000 deposit — which SL Green claims it can pocket.
The fee simple interest in the Lipstick building backs a $272m single-asset/single-borrower CMBS deal, CSMC 2017-LSTK, which has been in special servicing since June, according to Trepp.
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The landlord also notes that Alden owns 50.1% of Digital First Media, which owns 50 U.S. newspapers and has been characterized as a cutthroat steward of those companies. The Washington Post has described the hedge fund as a “ruthless … corporate strip-miner.”
Alden is also under contract to purchase Tribune Publishing in a deal valued at $630 million, according to multiple press reports.
SL Green’s suit claims the risk of a government-led shutdown is borne by the tenant, according to Alden’s lease. “The lease does not include any general force majeure clause,” the suit reads (emphasis in original).
In support of their claims, the SL Green attorneys cited a rent dispute last year between a Manhattan landlord and Victoria’s Secret in which a judge sided with the landlord in a situation similarly lacking a force majeure clause.
The case is 885 3rd Avenue Realty Owner LLC vs. Alden Global Capital LLC in New York County Supreme Court.
Guelda Voien is a Debtwire ABS reporter covering mortgage-backed securities. She can be reached at [email protected].