Duane Reade’s Mystifying Real Estate Transactions
Dana Rubinstein April 19, 2010, 3:30 p.m.
The Real Deal has more details in its ongoing, and very, very, very in-depth coverage of the trial of two Duane Reade execs, Anthony Cuti and William Tennant, who allegedly engaged in some questionable leasing practices in New York City using brokerage Winick Realty Group, headed at the time by Jeff Winick and Cory Zelnik.
Writes The Real Deal‘s Adam Pincus:
The brokers, who are not charged in the case, acted on a few deals with Duane Reade as both landlord and broker. In addition, the trial has painted a picture of a retail leasing environment in which landlords in a few instances paid brokers in cash to avoid taxes, including one instance of a suitcase filled with cash, though such cash dealings didn’t occur in connection with the Duane Reade deals.
Defense attorney Reid Weingarten, representing one of the two Duane Reade executives accused of orchestrating sham real estate deals with affiliates of Winick Realty Group, said that while the deals were not bogus arrangements, they were pieces in a cloudy and interconnected world where payments flew back and forth between limited liability companies.
While there is nothing illegal about a property owner acting as broker on his own property, the situation could allow the individual to alter a commission payment based on other financial circumstances. How such commission and other payments are made are central to the allegations against the Duane Reade executives.