The Amicable Split Of Two Major NYC Real Estate Families

Breaking up is hard to do. But try doing it when more than $740M in real estate is involved.

Such was the case when Durst Fetner Residential divvied up its assets in a process that finished a couple of weeks ago. It ended amicably and was handled out of court, the Wall Street Journal reports.

“Everyone had to be reasonable,” Jody Durst told the Journal. “If not, that’s when things get ugly and attorneys get large fees.”

Their residential development partnership was forged about a decade ago, when the deeper-pocketed Dursts, whose expertise was mostly limited to office buildings, saw opportunity in the Fetners’ ability to develop residential assets.

Together, their projects included rental buildings like 125 West 31st St and 855 Sixth Ave, and a condo conversion at 1212 Fifth Ave.

Jody Durst told the WSJ that the parting of ways boiled down to a power dynamic, saying neither side became fully comfortable ceding the ability to call the shots to the other.

But the arrangement had also run its course; the Fetners came out of the projects flush with new equity and the Dursts deepened their residential expertise.

The partnership was dissolved through a structure called a “buy-sell” process, where one side offers the other a buyout price for each asset concerned, and they either agree to the price or buy out the side making the offer at the same price.

In this case, Durst ended up with the Fetners’ stake in 855 Sixth Ave, and the Fetners picked up the Dursts’ interest in 125 West 31st St. Members of both the Durst and Fetner real estate dynasties said their families’ long-standing ties helped the process go smoothly and kept tempers from flaring up.

Harold Fetner even said it couldn’t be ruled out that the two families might do business together some time in the future, adding, “Why would I forgo that opportunity by being a jerk?” [WSJ]