Real Estate Management Company Alleges Racial Discrimination Over Lease

Plaintiff is a minority-owned enterprise. Defendants solicited plaintiff to participate as a subcontractor in its bid under a state health care program. Plaintiff would provide real estate management services for the space used for the health care program. After winning the bid, another defendant subcontractor told plaintiff a new commitment letter must be signed, plaintiff contends. This letter significantly reduced plaintiff’s compensation over the course of the contract.

Plaintiff claims it secured property to be leased and was to be the property manager. Defendants then ceased all communication with plaintiff, and defendants negotiated a lease that prohibited a third-party property manager from holding the lease, plaintiff alleges. The lease is now held by a majority-owned foreign corporation, but plaintiff asserts a third-party benefit in the lease.

Plaintiffs assert claims of race discrimination and breach of contract.

Question(s) For Expert Witness

1.) Was the role sought by plaintiff commercially acceptable?
2.) Did another entity perform that role?

Expert Witness Response

Based on my educational background, my experience as a commercial real estate broker, my review of the materials, my discussions with the individuals, and on a reasonable degree of certainty, my opinion is that plaintiff was proposing to fill a role that was not a commercially recognized role but would be a pass-through for the rent money in exchange for a substantial and undisclosed profit. This is not a role, or even a proposed role, I have ever seen in my 26 years of commercial real estate practice. In addition, it is my opinion that the role plaintiff proposed would not have added value to the leasing transaction and was not viable or even allowed under the relevant lease/sublease agreements. Finally, as elaborated in my report, it is my opinion that there is no other person or entity that replaced plaintiff and performed the role plaintiff proposed to play with respect to the healthcare project.

The expert concentrates on commercial real estate and ahs more than 25 years of experience representing tenants and performing commercial real estate brokerage and property management.

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