Cushman & Wakefield Sues Sotheby's Over $10M Commission From Former HQ Sale

Cushman & Wakefield claims Sotheby’s failed to pay a $10.2M commission for the sale of its former New York City headquarters after the brokerage worked with the buyer of the property.

Chicago-based Cushman filed suit in New York State Supreme Court last week, asking a judge to force the auction house to pay it the $10.2M, as well as extra fees and damages.

Cushman & Wakefield and Sotheby's didn't respond to Bisnow's requests for comment. The Real Deal first reported the lawsuit.

Cushman served as the broker for Cornell's medical school and research division when it was looking to expand in 2021. By 2023, it secured a 30-year lease of Sotheby’s New York City headquarters at 1334 York Ave. Weill Cornell Medicine purchased the building for $510M in October.

In the lawsuit, the brokerage claims it laid the groundwork for the sale but wasn't compensated for it. 

At the same time the lease was inked, Cushman and Sotheby’s signed a written commission agreement that stated that Sotheby’s would pay Cushman for its part in executing the lease, as well as a sales commission of 2% of the building's total sales price if Cornell bought it before the lease was up, according to the suit. Sotheby's paid the lease commission, but not the one for the sale, Cushman claims.

When the sale happened, Sotheby’s allegedly neglected to inform Cushman & Wakefield so it could execute a deal excluding the brokerage from receiving a sales commission, breaching the agreement. The brokerage sent an invoice to Sotheby’s in December, but it was rejected by the auction house. 

Cushman alleges Sotheby’s kept the proceeds “to address its deteriorating financial condition,” which included a $175M mortgage it secured in 2020.

Sotheby’s planned to use the money from the sale to pare down its debt and invest in an office renovation at the Breuer Building at 945 Madison Ave., which it bought for $100M in 2023, as well as other parts of its core business.  

Cushman also alleges that Weill Cornell's lease increased the building's property value and helped the auction house with a large asking price.

“This lawsuit is baseless and completely meritless,” a Sotheby’s spokesperson told TRD in a statement. “We will defend ourselves vigorously in court and we are confident that when the facts come out, we’ll be vindicated.”