Real Estate News

Bass Pro Shops store in Brandon (Source:

Greenwich, Connecticut-based Starwood Property Trust bought a store in Brandon from Bass Pro Shops Outdoor World for $28.6 million in a sale-leaseback deal.

A Bass Pro spokesman told the Tampa Bay Times in an email that the retailer of outdoor sporting goods is now a tenant of the store with a long-term lease.

The store’s sale price is equal to $220 per square foot. Springfield, Missouri-based Bass Pro opened the store at 10501 Palm River Road in Brandon in July 2015.

Hillsborough County property records show that the $28.6 million sale of the 130,000-square-foot store Brandon store closed Sept. 29.

On the same day, Starwood also bought two other Florida stores in the Bass Pro chain in Palm Bay and St. Lucie, according to the Tampa Bay Times.

Bass Pro opened its store near the Estuary shopping center in Brandon after the Hillsborough County Commission approved a controversial $6.25 million subsidy to improve road access to the shopping center and the surrounding area. [Tampa Bay Times] Mike Seemuth

Jacksonville Beach (Source: Zillow)

An oceanfront property in Jacksonville Beach approved for hotel development sold for $11 million.

The buyer, Ormond Beach-based Elite Hospitality, has listed the address of the Jacksonville Beach property on the company’s website as the future home of a Margaritaville hotel.

The Jacksonville Times-Union newspaper also reported that the previous owner of the development site at 715 First Street North obtained city approval for the development of an eight-story hotel with 220 rooms there.

A spokesman for Elite Hospitality told the newspaper the company will need at least nine months to develop a development plan for the Jacksonville Beach site. If Elite builds a hotel there, it probably will have fewer than the maximum of 220 rooms allowed, the spokesman said.

Elite owns 11 Florida hotels, including four in St. Augustine Beach, three each in Jacksonville and Daytona Beach, and one in Ormond Beach. The hotels bear brands including Courtyard by Marriott, Hampton Inn, Hampton Inn & Suites, Hilton Garden Inn and Holiday Inn Express & Suites. [Jacksonville Times-Union] – Mike Seemuth

Town and Country Plaza in Sarasota (Source: Business Observer)

City records show Publix Super Markets plans to open a new store at a depopulated strip shopping center in Sarasota that lost two anchor tenants.

Publix plans to build a 48,000-square-foot supermarket at the Town and Country Plaza, where Bealls is the lone anchor tenant following the departures of a supermarket called SweetBay in 2013 and a Kmart department store this year.

The Publix plan in Sarasota suggests that, as retail stores struggle to compete against online retailers, Publix may rely less on the shoppers other retailers attract when it decides which shopping centers to anchor.

The Lakeland-based supermarket chain plans to demolish the old Sweetbay supermarket to clear the land for both a 48,000-square-foot supermarket and a 5,000-square-foot out-parcel. Applications for city demolition permits for the Sweetbay redevelopment are pending approval.

Publix has a smaller store at Sarasota Commons, a retail property about one block north of the new-store site. [Sarasota Herald-Tribune] — Mike Seemuth


(Credit: front, Ken Shipp/DOE Photo; back, Wing-Chi Poon)

From TRD New York: Bill Gates’ real estate investment group, Belmont Partners, shelled out $80 million for 25,000 acres of land to construct a city with technology built into its foundations.

The site is located about 45 minutes outside of Phoenix and is being called Belmont for now, according to The Architect’s Newspaper.

“Belmont will create a forward-thinking community with a communication and infrastructure spine that embraces cutting-edge technology,” a company representative told the Newspaper. Those technologies range from high-speed networks to driverless cars and new manufacturing and distribution systems.

Though no construction plans or timeline for the development are publicly known, the firm’s land-use plans were partly revealed: 80,000 residences are slated to be built on the majority of the land with almost 4,000 acres devoted to commercial developments while about 500 acres are set aside for schools.

[The Architect’s Newspaper] — E.K. Hudson

Deerwood Park apartments in Jacksonville

A Miami firm acquired a 15-year-old apartment complex in Jacksonville for $40.8 million, the Jacksonville Times-Union newspaper.

Lloyd Jones Capital, a Miami-based rental property investment firm, acquired the 282-unit Deerwood Park complex for about $145,000 per apartment.

A spokeswoman for Lloyd Jones Capital told the Times-Union that the firm plans to remodel the clubhouse at Deerwood Park and upgrade apartment interiors.

Lloyd Jones owns to other Jacksonville-area apartment complexes called The Meeting House at Collins Cove and Laurel Pointe.

In a press release, Lloyd Jones said its latest apartment-complex acquisition in the Jacksonville area is located in the Deerwood Office Park, which has 5.2 million square feet of office space and houses some of area’s largest employers.

Lloyd Jones also said in the release that its acquisition of the Deerwood Park apartment complex brought to nearly 5,000 the number of apartment units the firm owns. [Jacksonville Times-Union]Mike Seemuth

The Twenty 35 apartment complex in Safety Harbor

Blue Roc Premier Properties LLC paid $21 million for an apartment building in the Tampa Bay area and sold another for $26.5 million.

Blue Roc, a Tampa-based apartment investment company, bought Twenty 35, a 200-unit development with garden-style units in Safety Harbor, 10 miles from Clearwater. The buyer is Covenant Capital Group LLC.

In an off-market deal, Blue Roc also sold a Tampa apartment building with 224 units called The Park at Windsor. The new owner is Redwood Capital Group.

Built in 1984, The Park at Windsor at 4949 Marbrisa Drive in northeast Tampa has one- and two-bedroom apartments with a balcony or patio. Common-area amenities include a clubhouse, fitness center, swimming pool, barbecue area and laundry center.

Twenty 35 at 2035 Philippe Parkway in Safety Harbor was built in 1970. The gated-entry property has one- and two-bedroom apartments with granite counter tops, stainless steel appliances and walk-in closets. Tenants have access to a 24-hour fitness center, a picnic area and a courtyard. [Multi-Housing News] –Mike Seemuth

171 Camino Real

A subsidiary of sugar producer Florida Crystals Corp. plans to build 350 apartments at the corner of Dixie Highway and Camino Real in downtown Boca Raton.

The development, called Camino Square, would encompass two eight-story apartment buildings, with 199 units in one and 151 in the other, plus 631 parking spaces in two garages and a dog park open to the public.

The company behind the project is FCI Residential Corp., a real estate subsidiary of West Palm Beach-based Florida Crystals, which is owned by the Fanjul family.

The development site occupies almost half of a 9.12-acre retail plaza with four one-story buildings at 171 West Camino Real.

New York-based Kimco Realty Corp. owns the rest of the plaza property. Kimco’s plan for the property is unclear. The company didn’t respond to requests for comment from the Sun-Sentinel.

Ele Zachariades, an attorney for FCI Residential, told the newspaper the company hopes to win city approval of the Camino Square project within the next four months and would build the apartment buildings in 20 months. [Sun-Sentinel] – Mike Seemuth

National Cheat Sheet

Clockwise from top left: Miami’s hottest neighborhoods for development, commercial real estate owners love for Republican tax plans, retail leases on Rodeo Drive, and WeWork’s co-founder Miguel McKelvey.

From TRD New York:

Why commercial real estate owners love the GOP tax plan
The commercial real estate industry would see several benefits in the proposed Republican tax bills working their way through the House and Senate. In addition to lower corporate tax rates and the ability to avoid a 30 percent limit on interest expense deductions, the Senate’s version would lower the commercial property depreciation period, the Wall Street Journal reported. Both proposals also preserve 1031 exchanges, which allow property owners to avoid taxes on sales if the profits are reinvested in real estate. [TRD]

WeWork’s co-founder is quite nonchalant about a $20B valuation
Miguel McKelvey, the co-founder of unicorn’d shared space startup WeWork, said the company’s $20 billion valuation doesn’t doesn’t affect him or his business. “You can say, OK it’s your opinion I’m overvalued or undervalued. Like, who gives a shit?,” McKelvey said at a CornellTech@Bloomberg event. Investors, however, might have a different take on that. Japanese conglomerate Softbank invested $4.4 billion into the New York-based firm earlier this year.  [TRD]

Airbnb posts $1B in third quarter revenue
Home-sharing startup Airbnb has been profitable for 17 straight months, as it reported $1 billion in net revenue in the third quarter. A recent Morgan Stanley report that saw Airbnb’s growth is slowing, however, with fewer U.S. and European travelers saying they would book with Airbnb next year. Sources at the nine-year-old company told Bloomberg that the report did not include Asia and Latin America, where Airbnb saw a 150 percent increase in bookings this year. [TRD]

Is Dallas the best location for HQ2?
A new ranking puts Dallas at the top of the list of cities competing to win Amazon’s favor as the internet giant looks to build a second headquarters somewhere in North America. Based on six factors — tech labor force, fiscal health, cost of living, college population, culture fit and state tax rank — the Wall Street Journal found that Dallas best matches Amazon’s requirements. Boston placed second in the Journal’s rankings, followed by Washington D.C. [TRD]

Major Market Highlights

NYC mayor wants to raise taxes on city’s vacant land to fund affordable housing
Mayor Bill de Blasio’s latest affordable housing plan aims to raise taxes on vacant land and “incentivize owners to make their sites productive.” The “Housing New York 2.0” proposal promises to add 100,000 affordable housing units to the 200,000 units pledged in 2014. The city will also hold a “tiny home” design competition so affordable residences can be built on small, city-owned plots where traditional apartment buildings can’t be built. [TRD]

Apartment development booming in Miami’s trendiest neighborhoods
Wynwood, the trendy arts district in Miami, was the most active neighborhood in terms of new multifamily development, according a The Real Deal analysis of building permits filed with the city so far this year. The building department recorded four new projects in the Wynwood-Edgewater-Midtown Miami area, adding as many as 727 units. The area was rezoned in 2015, and a slate of new developments are already in progress, including the Related Group and East End Capital’s Wynwood 25 and Related and Block Capital Group’s Wynwood 26. [TRD]

Rodeo Drive is the second most expensive shopping district in the US
A new report from Cushman & Wakefield finds that Rodeo Drive in Beverly Hills is the nation’s second most expensive retail district. Los Angeles’ famous shopping strip trails only New York’s Fifth Avenue in retail rents, the “Main Streets across the World” report found. With big ticket tenants like Gucci, Versace and Louis Vuitton, Rodeo Drive’s asking rent this year is $875 per square foot, up from $800 in 2016. [TRD]

Growing Houston sees developments planned in ‘old deer huntin’ country’
A planned 4,500 home development north of Houston is the latest expansion of the fast-growing city into formerly untouched lands. Dallas-based Howard Hughes Corp. broke ground on the 2,000-acre master-planned Woodland Hills community this week, with construction to be fully complete in almost a decade. “I remember this as old deer huntin’ country,” Conroe Mayor Toby Powell said, according to the Houston Chronicle. In regards to exposure to flood risk in the wake of Hurricane Harvey, the Howard Hughes Corp. told the Chronicle that “home sites that builders purchase from us will allow the builders to construct homes at or above the 500-year elevation.” [Houston Chronicle]

60th construction crane rises over Chicago
There are now 60 tower cranes looming over Chicago — nearly double the number from 2016. The city has seen an increase in development for the last three years, with Mayor Rahm Emanuel touting it as evidence of the economic opportunities in Chicago. The latest addition in construction hardware comes courtesy of Belgravia Group, which is building an 18-story luxury condominium tower called Renelle on the River, which is 50 percent pre-sold. [Bisnow]

Stephen Bittel (Credit: Florida Democratic Party)

An alleged history of making inappropriate comments caught up with Terranova Corp. founder Stephen Bittel, who stepped down on Friday as chairman of the Florida Democratic Party.

Politico reported on Thursday that Bittel, chairman of Terranova, a Miami Beach-based commercial real estate firm, created an unprofessional workplace environment for women. His actions, Democratic staffers and consultants told Politico, included making unwanted invitations to join him on his private jet, making degrading and inappropriate remarks, leering and more. The women said he never inappropriately touched them or threatened them.

In the wake of the Harvey Weinstein scandal, the list of powerful men facing allegations of sexual misconduct is growing by the day. Last week, the New York Times reported that hotelier André Balazs, who founded the boutique hotel chain the Standard, has reportedly groped women, including actress Amanda Anka.

On Friday, Tallahassee Mayor Andrew Gillum, a top candidate for governor, Democratic candidates Gwen Graham, Chris King and former Miami Beach Mayor Philip Levine, all called on Bittel to resign.

Bittel’s company is developing projects off Lincoln Road in Miami Beach, including The Lincoln Eatery, a food hall, and just completed a new building leased to Anthropologie. Terranova’s portfolio includes more than $1 billion in assets, according to its website [Politico]Katherine Kallergis

Multifamily construction

From TRD New York: U.S. housing starts jumped 13.7 percent last month, reaching the highest level seen all year.

The increase hints that builders are back to work after hurricanes walloped the southeast and slowed residential construction, the Wall Street Journal reported. Housing starts hit a seasonally adjusted annual rate of 1.29 in October, the Commerce Department said on Friday. Building permits for residential projects increased 5.9 percent to an annual pace of 1.297 million last month.

”It was a little bit of a dead cat bounce after the hurricanes,” Terrell Gates, CEO of Virtus Real Estate Capital, told the Journal.

But don’t get too excited. Economists warned that the growth was largely driven by the 37 percent increase in multifamily starts, which can be volatile month-to-month. Single-family start increased 5.3 percent in October. [WSJ]Kathryn Brenzel

4600 Woodlands Boulevard and 13th Floor Homes’ Michael Nunziata (Credit: 13th Floor Homes)

Miami-based 13th Floor Homes is eyeing yet another golf course in Tamarac for a single-family home project.

The developer announced it’s seeking to build 525 single-family homes across two 18-hole golf courses at the Woodlands Golf & Country Club at 4600 Woodlands Boulevard, the Sun Sentinel reported. The city council would have to vote on the deal, but before that, the developer hopes to draw public support from community residents, according to a spokesperson.

Records show the land is currently owned by Canadian golf course owner and operator ClubLink. The firm is a sister company to Morguard, which currently owns a portfolio of multifamily, retail, and office real estate in Canada and Florida, according to its website. It paid $4.2 million for the property in 2011, records show.

According to a notice from the Woodlands Homeowners Association, 13th Floor has an option to purchase the Woodlands golf course from ClubLink.

The planned homes would be priced in the high $300,000s, with a minimum of 2,000 square feet, and feature at least three bedrooms, according to the Sun Sentinel. Mike Nunziata, president of 13th Floor Homes, told the newspaper that he would leave 120 acres empty and separate the new homes with lakes or landscaping. Developed in 1968, the Woodlands spans 279 acres.

In February, 13th Floor scored similar approvals for its Avalon Trails project in Delray Beach. The developer converted an 18-hole golf course in Delray Beach into a community geared toward people 55 and older with about 524 residential units.

The firm also built home communities off Commercial Boulevard in Tamarac on the former Monterey and Sabal Palm golf courses.

Shake Shack is coming to The Shops at Mary Brickell Village (Credit: Wikimedia Commons, The Shops at Mary Brickell Village)

Shake Shack, Raw Juice and North Italia | Miami
Shack enthusiasts living in the Brickell area will be getting their own Shake Shack next spring.

The burger chain signed a lease for nearly 3,000 square feet at the Shops at Mary Brickell Village, at 901 South Miami Avenue.

Shake Shack plans to build its own building with a patio in the east courtyard of the shopping center. It will mark the restaurant group’s fourth South Florida location and its first in Brickell.

RKF’s Drew Schaul and John Ellis represented the mall’s owner, Rockpoint Group, and CBRE’s Paco Diaz represented Shake Shack.

Mary Brickell Village also secured leases with North Italia, taking 8,637 square feet, popular Miami Beach farm-to-table restaurant Dirt with 2,054 square feet, and Raw Juice with 1,233 square feet, according to an RKF spokesperson.

Dirt is open, Raw Juice plans to open Dec. 15 and North Italia will open in 2018, the spokesperson said. RKF brokered the leases.

Rockpoint paid $113.5 million for the Shops at Mary Brickell Village in 2015. The development features 196,000 square feet of retail space, 390 condos, 59 stores and 800 parking spaces. Cryospace, a sub-zero therapy spa, recently signed a lease at the shopping center as well.

Cooper’s Hawk Winery & Restaurant | Fort Lauderdale
Cooper’s Hawk Winery & Restaurant is opening at the Galleria at Fort Lauderdale next year.

The national restaurant group, which has locations at CityPlace Doral and the Gardens Mall, is leasing 15,000 square feet at the Galleria, according to a release.

David Emihovich of Katz & Associates and Kim Salvatori of JLL brokered the lease.

The Strand Bar & Grill | Miami Beach
The Strand Bar & Grill will open at the Carillon Miami Wellness Resort next week.
The restaurant, led by executive chef Stephen Ullrich, will include an outdoor terrace, a separate lounge and bar, a private dining room and a wine lounge, according to a release.

The Miami city commission voted in favor of an ordinance that reduces the minimum size of micro units from 400 square feet to 275 square feet (Credit: Getty Images, Wynwood 25)

The micro unit trend is about to go smaller in Miami.

The city commission on Thursday unanimously voted in favor of an ordinance that reduces the minimum size of micro units from 400 square feet to 275 square feet. However, for properties that are zoned for more than 150 units per acre, micro-unit developments would be limited to transit-oriented areas, such as near Metrorail and Metromover stations.

Supported by several prominent developers in neighborhoods like Wynwood and downtown Miami, the legislation will allow them to build more units using a smaller footprint. Yet, some developers are already working on projects that will offer apartments in the 400 square foot range, such as Wynwood 25, a mixed-used project that will have 289 residential units, under development by the Related Group and East End Capital.

Rendering of Wynwood 29 (Credit: Arquitectonica)

Related is also partnering with Tony Cho’s Metro 1 to develop Wynwood 29, a pair of mixed-used towers at the intersection of Northwest First Avenue and Northwest 28th Street. One of the buildings, a 12-story tower, will have 182 micro-condos that will range in size from 416 square feet to 900 square feet. Other developers who are bullish on micro units include Moishe Mana, Jeff Greene and Property Markets Group.

In a statement after the city commission’s vote, Cho hailed the new ordinance as a key factor in developing projects that offer affordable housing options. “Miami is evolving at a fast pace, and there is a widespread desire for walkable neighborhoods with access to public transit and quality housing attainable for a diverse group of people,” Cho said. “This legislation will allow for the type of high-quality, amenity-rich lifestyle that’s in such high demand.”

According to a 2014 Urban Land Institute study cited by city staff in documents recommending approval of the 250-square-foot minimum, smaller units usually have higher overall occupancy rates.

“Small units with less than 600 square feet were the top performers in recently finished developments as of early 2014,” the study states. “These units reported noticeably higher occupancy (91.3 percent) than the 89.6 percent rate for mid-sized units from 600 to 1,000 square feet and the 89.3 percent in large units of more than 1,000 square feet.”

Rendering of the Soleste Alameda project in West Miami

Estate Investments Group just secured approval for another rental project in West Miami.

The commission OK’d Soleste Alameda, a 306-unit development planned for 6290 and 6320 Southwest Eighth Street, according to a press release. The developer plans to break ground over the next month and deliver the two buildings in early 2019.

Soleste Alameda was previously planned as one mid-rise tower that would have cut off access to Southwest 63rd Avenue, but the developer changed its plans to two buildings and will not be closing the street.

It marks the sixth rental project for Estate Investments Group in West Miami. Last month, the firm, led by principal Robert Suris, sold its third new apartment building in the city for $59 million, or $267,000 per rental.

Rendering of the Soleste Alameda project in West Miami

Estate Investments Group began picking up land in West Miami in 2012, an area that Suris said had previously been overlooked. “If you look at the concentration of multifamily, you’ll see it’s in pockets: Dadeland, Coral Gables. West Miami allowed us to provide housing for a lot of people that work in the airport, Blue Lagoon, the hospitals, Doral and the University of Miami,” he told The Real Deal earlier this year.

“We’re making West Miami an institutional market. The biggest challenge is finding land,” he added.

The developer also recently secured approvals for the 338-unit Soleste Twenty2 in West Miami, and a 200-unit rental project in Palmetto Bay called Soleste Bay Village. EIG also closed on a $52 million construction loan for the 330-unit Soleste Blue Lagoon.

Suris was not immediately available for comment.

Banco Santander at 1401 Brickell Avenue and Avison Young’s David David Duckworth (Credit: Google Maps, Avison Young)

A 14-story building in Miami’s Financial District has hit the market for an undisclosed price, according to the South Florida Business Journal.

The 236,877-square-foot Banco Santander building at 1401 Brickell Avenue is listed for sale, a Santander Holdings USA spokesperson confirmed to the Business Journal. She said the sale is part of a “long-term business strategy.”

Records show the Spanish bank paid $114 million for the property in 2008. The building sits on a 2-acre plot of land, and has about 188,000 square feet of leasable office space, according to the Business Journal. Avison Young’s David Duckworth, Michael T. Fay and John K. Crotty have the listing.

Currently zoned for more than 45 stories, the Banco Santander building, built in 1973, could serve as an investment for developers looking to build in the burgeoning area.

Today, Miami’s Brickell neighborhood is home to a number of recently completed condos and retail projects, including Brickell City Centre. Nearby, Ugo Colombo’s Brickell Flatiron is under construction. [SFBJ]Amanda Rabines

The building at 2855 South Le Jeune Road in Coral Gables with Mike Reininger (Credit: Google Maps, Florida East Coast Industries)

Florida East Coast Industries sold its Coral Gables headquarters as it prepares to move to its MiamiCentral development.

Property records show City National Bank paid $10 million for the office condo building at 2855 South Le Jeune Road. FECI affiliate Sevilla Building Ltd. is the seller.

Fortress Investment Group owns the holding company, which operates Brightline, Flagler Global Logistics and Flagler. Fortress acquired FECI for about $3.5 billion in 2007 and has more than $46 billion of assets under management, according to its website.

Flagler built the four-story, 32,250-square-foot building in 2007, according to a property listing from last year. City National purchased the 16 office condos that make up the fourth floor, where FECI has its corporate office. The Miami bank already owned the retail branch and drive-thru.

FECI is moving to 3 MiamiCentral, where it will take 20,000 square feet at the 90,000-square-foot Class A office building at 161 Northwest Sixth Street, which have an additional 35,000 square feet of retail space, according to a spokesperson.

Other MiamiCentral office tenants include Moss & Associates, Regus, Ernst & Young LLP, Regus and Cisneros. Rental rates are $33 to $35 per square foot, triple net, at 2 MiamiCentral and $29 per square foot at 3 MiamiCentral.

The buildings are part of Brightline’s 11-acre, mixed-use development slated to open soon in Overtown.

Rendering of Megacenter Miramar (Credit: Link Construction Group)

An entity of the Chile-based real estate developer and self-storage operator Red Megacentro just scored a $15.75 million construction loan for its mixed-use development in Miramar that will feature office, storage and warehouse space, records show.

The 267,325-square-foot planned project at 7451 Riviera Boulevard will include 169,427 square feet of warehouse space, 59,364 square feet of self-storage and 38,534 square feet of office. Records show FirstBank Puerto Rico provided the financing.

Megacenter Miramar LLC, led by Patricio Ureta and Pablo Wichmann, bought the 14.7-acre site last year from Broward College for $10 million.

The project is being designed by architecture firm Cartaya & Associates and is slated to be completed by the second quarter of 2018, according to the contractor’s website.

Rendering of Megacenter Miramar (Credit: Link Construction Group)

A notice of commencement filed last year shows the company started remodeling the interior of an existing 61,300-square-foot building on the property. More than 200,000 square feet of the project would be new construction.

In 2012, Ureta and Wichmann partnered with Red Megacentro to develop its business model in the United States. The Chilean-based company has built 40 storage facilities in Chile, Peru, and Miami, with a focus on redevelopment projects, according to its website.

The partnership is also behind Megacenter Brickell, a two-tower, 148-foot-tall building near the Brickell area that will include storage, offices, apartments, and a wraparound mural.

From left: Jeff Bezos, Jeff Blau and Steve Ross

From TRD New York: After Amazon announced its plans for a second headquarters, Related Companies approached the online retail giant with a simple pitch: “Wherever you go, we want to be your developer,” the company’s CEO Jeff Blau recalled at NYU Schack Institute’s annual conference on capital markets in real estate Thursday.

Blau doubts that place will be New York City. He cited Washington, D.C., Boston and Chicago as his favorites to land Amazon. Related’s chair Stephen Ross, speaking on an earlier panel, was equally pessimistic. “I don’t think New York has a chance,” he said. “Other cities, it’s important to them and they’re offering incentives like you wouldn’t believe.”

MaryAnne Gilmartin, CEO of Forest City New York, agreed, citing New York’s high cost of living and office development.

“I think it’s very difficult to imagine based on the cost structure,” she said.

Bill Rudin, head of Rudin Management, was more optimistic, pointing to firms like insurer Aetna that decided to move here despite the costs.

“They could have gone to a lower-cost location but they weighed that versus the talent and the people and the community,” he said. The firm is leasing the entire office portion of Aurora Capital Associates and Vornado Realty Trust’s 61 Ninth Avenue in the Meatpacking District.

Several cities have gone out of their way to offer incentives to Amazon. New York’s mayor Bill de Blasio arranged for the Empire State Building to glow in orange light in a nod to the company’s colors. A small Georgia town even went as far as offering to change its name to Amazon.

ICYMI in person, NYC lit up in “Amazon orange” last night to coincide with the City submitting its official bid for @Amazon’s second headquarters. Iconic buildings, including the Empire State Building and One World Trade, along with billboards and CityBridge’s LinkNYC screens, joined in as a show of support.⠀ ⠀ All photos here courtesy of @nycedc. To see more, check out our Facebook page. Link in bio! ⬆️⠀ ⠀ #NYC #nycgo #seeyourcity #thisisnewyorkcity #allarewelcome #welcomingtheworld #iloveny #lovenyc #citybestpics #city_explore #seemycity #citylimitless #ic_thecity #urbangathering #ig_captures_city #ignycity #igcapture_nyc #ig_great_shots_nyc #ig_photooftheday #igers #igersofnyc #weekly_feature #nycprimeshot #what_i_saw_in_nyc #🗽

A post shared by NYCgo (@nycgo) on Oct 19, 2017 at 7:38am PDT

RXR Realty’s Scott Rechler said that Amazon’s checklist of things it is looking for in a city, including affordable housing and access to functioning transit, should also be seen as a checklist for New York as it tries to stay competitive. “It’s a war for talent,” he said. “That’s what drives the 21st century economy.”

Kenneth Harney

If you hoped that Senate Republicans would treat homeowners and buyers more kindly in their tax overhaul plans than their colleagues did in the House, you were an optimist. It didn’t happen.

In fact, the Senate tax bill released last week is harsher on residential real estate in some areas than the House version, with two notable exceptions: Senate tax writers retained the current $1 million ceiling on home mortgage amounts that are eligible for interest deductions. The House bill seeks to cut that in half to $500,000. But the Senate’s seeming concession has limited value, given that only a small fraction of homeowners in the U.S. have mortgages of $500,000 to $1 million. Also, the Senate bill leaves intact mortgage-interest deductions on second homes; the House bill would eliminate them.

Here’s a quick look at some key punitive details in the Senate bill’s fine print that haven’t gotten much attention but could be important to you:

— Home equity loans: Under current law, you can borrow up to $100,000 in “home equity indebtedness” and write off the interest on that amount. Home equity loans have become enormously popular in recent years — especially in the form of lines of credit (HELOCs) — as owners’ equity holdings have soared to record levels. In the first quarter of 2017 alone, according to ATTOM Data Solutions, 227,000 new HELOCs worth $43.4 billion were originated around the country. HELOCs are hot.

Among the traditional attractions of HELOCs and other forms of home equity loans has been their flexibility. You can use the money you pull from your equity for whatever you like. That would change drastically under the Senate Republicans’ bill. It would erase the entire category known as “home equity indebtedness” from the tax code, pulling the rug out from under the booming HELOC market. Though the bill doesn’t get into operational details, homeowners with existing first mortgages might still be able to borrow against their equity, but they could be restricted to using the money for improvements to their principal residence.

— SALT: Deductions of state and local property taxes, sales taxes and income taxes — the so-called SALT write-offs that are heavily used by homeowners — take a heavy hit under the Senate bill. The House Republicans’ bill would limit SALT deductions to $10,000 in property taxes. Currently there is no dollar limit, and income and sales taxes can be included. The Senate bill would kill the deduction outright. For owners in high-tax markets such as Washington D.C., Maryland, Virginia, California, New Jersey, New York, the New England states plus Illinois and Ohio, the Senate’s total wipeout of the deduction could raise their federal tax bills starting next Jan 1.

— Tax-free gains: The Senate bill would also make a major change in one of the most valuable current tax benefits for homeowners — the ability to pocket capital gains on home sales free of federal taxation. Under the current tax code, home sellers filing jointly can “exclude” up to $500,000 of gains from a sale (up to $250,000 for single filers) tax-free, provided they have lived in and used the property as their principal residence for an aggregate two years out of the preceding five years. That’s a big deal for many sellers, especially seniors who expect to depend on the cash raised from their sale to supplement their incomes during their retirement years.

Like the House bill, the Senate version rejiggers the tax-free formula in order to slash the number of sellers eligible to use this benefit. To qualify, sellers would have to live in their homes for five out of the preceding eight years, and could only use the tax-free provision once every five years. That’s likely to create problems for young families who move from their first home within the first five years and people who are transferred or move to new jobs more quickly than they had originally planned.

What’s next? The two bills must survive upcoming floor debates, which could be dicey given that both measures gush red ink, add to the deficit and have generated strong opposition for handing too many costly breaks to corporations and wealthy taxpayers. Republicans in both houses will need every vote they can muster.

Bottom line: The changes the bills propose to make in home real estate rules are drastic, but they are no sure thing. Don’t panic quite yet — this game is just getting started.

Rendering of Westdale Wynwood

Citing a need to preserve properties for low-income households in Wynwood, the Miami Planning and Zoning Appeals Board rejected a Dallas-based multifamily developer’s request to rezone more than a dozen duplexes and single-family homes for commercial use.

Westdale Real Estate Investment Management is looking to build a 202-unit apartment complex with some office and commercial space on a 3.42-acre site that is currently occupied by 19 properties purchased last year for a combined $16.39 million by an affiliate led by company CEO Joseph Beard. The parcels are located about a block north of Northwest 29th Street between Northwest Second Avenue and Northwest Third Avenue.

To be called Westdale Wynwood, the proposed development would consist of a mix of buildings, including three-story towers on the northern and western parcels and townhouse-style apartments on the southern lots.

Prior to the board’s nay vote at its Wednsday meeting, board member Anthony Parrish acknowledged stopping redevelopment in Wynwood was an unlikely proposition, but questioned whether the city should have a hand in speeding up changes in the constantly evolving, trendy neighborhood.

“Do we want to accelerate the change by allowing folks to go forward with a development that is fairly reasonable,” Parrish said. “This will definitely accelerate the pace of change [in Wynwood].”

City planners Efren Nunez and Ryan Shedd informed the board that approving Westdale’s rezoning requests would be inconsistent with Miami’s comprehensive master plan and Miami 21 zoning code. Nunez said the changes would alter the character of the neighborhood and allow commercial development to encroach on residential homes on the northern side of the proposed complex. He also said the vast majority of the properties Westdale owns were built in the early 1920s and early 1930s.

“One of the goals of the comprehensive plan is to preserve and protect neighborhoods,” he said.

Shedd noted Westdale Wynwood could displace low-income households in an area where the median rent is $672. As of Sept. 30, the median rent price in Miami-Dade for a one-bedroom apartment was $1,981, according to Zillow.

“It is replacing existing housing that is serving a purpose for people in the neighborhood,” Shedd said. “By continued displacement of low-income households, we are encouraging the concentration of low-income households in high-poverty neighborhoods.”

Steven Wernick, a land-use attorney representing Westdale, countered that the new apartments would provide a mix of housing options in Wynwood and that his client has agreed to set aside at least 10 units for workforce housing. “This does not create a domino effect,” he said. “It allows for more housing.”

From left: Adam Neumann, Ben Silbermann and Evan Spiegel

From TRD New York: Airbnb may be worth more than $31 billion, but CEO Brian Chesky still lives in a $3.5 million home — a relatively modest abode for the Bay Area. WeWork’s Adam Neumann, however, has shelled out more than $25 million for a house in Greenwich Village townhouse, a farm in Westchester and a home in the Hamptons.

With “unicorns” — tech companies valued at over $1 billion — under scrutiny over sky-high valuations, tech executives are falling into two camps when it comes to their own home purchases: playing it safe or spending lavishly.

Given the volatility of tech stocks, some execs could face a reckoning, the Wall Street Journal reported.

Adam Neumann’s Greenwich Village home is undergoing a multi-year renovation

Blue Apron CEO Matthew Salzberg, for example, paid $8.7 million for an apartment at 10 Madison Square West in 2016. But earlier this month, Blue Apron stock hit a low of $3.07, down from its IPO price of $10 per share. Meanwhile, Snap’s Evan Spiegel bought a $12 million mansion in Los Angeles once owned by the actor Harrison Ford in 2016. Today, Snap’s shares are trading at $12.46 per share, down 27 percent from its IPO debut.

Then there’s WeWork, whose $20 billion valuation is considered inflated by some critics. Neumann owns a $10.5 million townhouse in Greenwich Village, plus a 60-acre farm in Westchester that he paid $15 million for last year. In 2012, he and his wife purchased a house in the Hamptons for $1.7 million. (Side note: With his townhouse under construction for the past few years, Neumann has rented a 4,207-square-foot condo at 18 Gramercy Park. A similar unit is currently on the market asking $46,500 a month.)

Although some tech execs got financing for their home loans, its not easy to do when their wealth is tied to company stock.

“A lender looks at that and says, ‘We have no idea what the value of those shares are, so we’ll value them at zero,’” Chuck Green, owner of Capital Funding, a mortgage brokerage, told the Journal.

The dot-com bus can also be a cautionary tale. Tech executive Eric Greenberg, founder of the internet consultancy Scient, paid $16.1 million for a three-acre estate in Ross, Calif., more than a decade ago. By 2002, the company filed for bankruptcy and Greenberg recently listed the home for $18.8 million. [WSJ]E.B. Solomont

From left: Howard Stern, Donald Trump, Nelson Peltz and Ken Griffin (Credit: Wikimedia Commons, Getty Images)

Dreading your property tax bill? It could be worse. An analysis of the new tax rolls in Palm Beach reveals how expensive it is to live in the tony town.

Forty Palm Beachers were just billed at least half a million dollars in taxes, with Chicago hedge funder Ken Griffin at the top of the list, according to the Palm Beach Daily News. His tax bills total $2.74 million for his Billionaires Row properties, which are valued at just under $200 million.

Next up is Nelson Peltz, chairman of Wendy’s and a hedge fund manager, and his wife Claudia. Their North County Road estate, on the North End’s Billionaires Row, rang up a $1.84 million tax tab. Its market value is pegged at $109.3 million.

Others in the newspaper’s top 40 ranking include President Trump, whose Palm Beach properties were taxed $642,000 based on a value of nearly $34 million. Trump had the 21st highest Palm Beach tax bill in 2017.

Howard Stern, Frank McCourt, Jim Clark also made the cut. Check out the full list here. [Palm Beach Daily News]Katherine Kallergis

460 Worth Avenue in Palm Beach (Credit: Google Maps)

Immohome AG, a company tied to Liechtenstein-based OEHRI Trust and Management Company, just bought a waterfront Palm Beach home for $20.5 million, property records show.

Karl Heinz and Marianne Andresen, a couple from Hamburg, Germany, sold the 8,450-square foot house at 460 Worth Avenue for about $2,430 per square foot. Karl Heinz is the founder of Karlheinz Andresen Land Administration GmbH & Co, a Hamburg, Germany based property management firm.

Records show the couple bought the home fully furnished from Stephen E. Myers Sr., co-founder and chairman of US Cable Group, in 2009 for $19.9 million plus the price of furniture.

The two-story house, built in 1991, sits on a third-of-an-acre lot at the intersection of South Lake Drive and Worth Avenue, near Everglades Golf Course. Features include a boat dock, pool, patio, elevator and boat lift.

Waterfront homes in Palm Beach tend to sell at pricing stretching into the multimillions. Earlier this month businessman Edward Watkins and his wife listed their Palm Beach waterfront mansion for $105 million.

Rendering of Chinatown North Miami

North Miami’s plans to create a Chinatown are a step closer to becoming a reality.

The North Miami Community Redevelopment Agency approved the city’s master plan for the Chinatown Cultural Arts and Innovation District on Tuesday. The plan, which cost the city $175,000, calls for the municipality to spend $5 million on infrastructure, streetscape and business grants in the new Chinatown district, which runs from 119th Street to 135th Street on Northwest Seventh Avenue.

While the master plan was just approved, the city designated the area as “Chinatown” in February 2016.

The master plan, prepared by urban designer Keith & Schnars and completed in July, features two gateways to the district on the north and south.

“What I’m voting on is a generic plan, Carol Keys, a North Miami Councilwoman and CRA board said. “If it doesn’t turn out” to be a Chinatown in the traditional sense, “we will still have a beautiful enhancement of Northwest Seventh Avenue, designed to attract new investment.”

The Chinese designs featured in the master plan, such as red gateways to the district, are only guidelines, and the plan’s Chinese architecture are “not a mandatory motif,” she said. Regardless, funds will be available to upgrade streets, put in water features that are really drainage enhancements, a median parkway and 10-foot sidewalks, Keys said.

The redevelopment of the Chinatown District will be done on a site-by-site basis. “Everything won’t look the same, and developers will not be coerced into changing their facades if they don’t want to,” Rasha Soray-Cameau, the North Miami CRA director said in May. But grants will be available to local businesses that want to upgrade their facades.

Rendering of Bridge Point Powerline Road Business Park with Kevin Carroll of Bridge Development Partners (Credit: Bridge Development Partners)

Bridge Development Partners just acquired another heap of land, this time in Pompano Beach, with plans to build a spec industrial park called Bridge Point Powerline Road, The Real Deal has learned.

The Chicago-based developer paid about $12.3 million for 40 acres of land at 1951 North Powerline Road and broke ground on the first phase of the 467,832-square-foot project, according to a source close to the deal. The purchase has not yet cleared records.

The trade, which breaks down to $307,500 per acre, includes a 150,000-square-foot warehouse fronting Powerline Road. The site is between the Florida Turnpike and I-95.

The seller, Waste Management Inc. of Florida, is relocating, according to a press release. Previous sales information is not available online. Kevin Carroll, Bridge Development Florida principal was not immediately available for comment.

Once completed, the project will feature three buildings, two of which will total 172,927 square feet each and share a 180-foot truck court. The third will span 121,978 square feet and feature a 120-foot fully-secured truck court, according to the release. Amenities for the buildings include high ceilings and 54-foot column spacing.

Last month, Bridge paid $28.2 million for 185 acres of land in Miami Gardens where it plans to build another spec industrial park called Bridge Point Commerce Center. Bridge is also in the midst of building a new distribution facility in Fort Lauderdale called Bridge Point Riverbend.

Nearby in Pompano, Farmers New World Life Insurance, a subsidiary of the Swiss insurance company Zurich Insurance Group, in August paid about $15 million, or nearly $120 per square foot, for a distribution center at 4000 North Dixie Highway.

Gerry Parrish Smith and the Delray mansion (Credit: LinkedIn)

Office Depot CEO Gerry Smith found himself a new home in South Florida, property records show.

Smith paid $6.7 million for the waterfront mansion at 16191 Quiet Vista Circle in Palm Beach County. The seller is the son of South Florida billionaire H. Wayne Huizenga, H. Wayne Huizenga Jr. and his wife, Fonda.

The couple listed the seven-bedroom, 10-bathroom house in October for the same price. The 11,000-square-foot home sold for roughly $615 per square foot. It sits on five acres in the Stone Creek Ranch residential development.

Hap Pomerantz of Keyes represented Smith and his wife, Michelle. Records show they financed the purchase with a $3.75 million mortgage from Wells Fargo.

In August, amid slumping sales, Office Depot paid $132 million for its Boca Raton headquarters at 6600 North Military Trail.

Billy Nash of the Keyes Company’s represented Huizenga Jr., who serves as president of Huizenga Holdings of Fort Lauderdale and as chief executive officer of Rybovich Superyacht Marina in West Palm Beach. His billionaire father co-founded Waste Management, led the Blockbuster video-rental company in the 1990s and has owned three professional sport teams in South Florida: the Miami Marlins, the Miami Dolphins and the Florida Panthers.

Moishe Mana and the lot at 151 Northeast First Street in downtown Miami (Credit: Google Maps)

Moishe Mana is still in buying mode.

The investor and developer just paid $9.27 million, or $618 per square foot, for a 15,000-square-foot lot at 151 Northeast First Street in downtown Miami, according to Mika Mattingly of Colliers International South Florida. It brings his grand total in downtown Miami to more than $267 million spent on 42 properties.

Mattingly represented Mana, and Jay Chung of Elijah Venture Corp. represented the seller, Erie Corporation. The sale has not yet been recorded online.

Records show Mana owns the narrow building to the immediate west at 145 Northeast First Street, which he acquired in 2014 for $2.13 million. That building is next to the Dade-Commonwealth building, which sold in 2015 to a joint venture between a sister fund of Paris-based Beekman REIM and Immocorp Capital, with plans to convert the property into a hotel. And around the corner from that is where WeWork will open its flagship Security Building location next month.

In June, a company controlled by Mana paid $4 million, or $667 per square foot, for the 6,000-square-foot lot at 30 East Flagler Street, giving him control of about half of that city block anchored by Macy’s.

He now owns 1 million square feet of building space and 8 acres of land in the Flagler area of downtown Miami. Mattingly, who’s handled most of those acquisitions, said he’ll unveil his plans for the area “in the months to come.” That includes converting the properties into retail, office and residential. Zyscovich Architects is designing the project.

In Wynwood, Mana has amassed 40 acres where he plans to build the Mana Wynwood Americas-Asia Trade Center & International Financial Center, a trade hub and cultural campus set to break ground next year.

Miami neighborhoods map (Credit: Wikimedia Commons)

Wynwood isn’t just the trendiest Miami neighborhood – it’s also where the most apartment development is underway.

The area was the most active in terms of new multifamily development, according to The Real Deal’s analysis of building permits filed with the city of Miami so far this year.

In the Wynwood-Edgewater-Midtown Miami area, the city’s building department recorded four new projects with a combined 727 units. Those projects include AMLI Residential’s Midtown East, a two-phase development with a combined 720 apartments near the Shops at Midtown Miami.

Thanks to the rezoning of Wynwood in 2015, a slate of additional new apartment buildings are now in the pipeline, including the Related Group and East End Capital’s Wynwood 25 and Related and Block Capital Group’s Wynwood 26.

Downtown Miami, including Brickell, had the second highest sales volume of planned multifamily construction this year with two projects totaling 673 units.

CIM Group and the Falcone Group filed permits for Seventh Street Apartments, a two-tower project, on the former site of Grand Central in downtown Miami. It will have 411 units. Late last year, the developers closed on $89 million in construction financing for the first building. Maizon at Brickell also filed its building permit. The 24-story, 262-unit project at 1100 Southwest Second Avenue is being developed by Zom, which secured a $52 million construction loan in May.

Flagami was the third most active neighborhood within the city’s boundaries with 449 units spread across four developments. Little Havana ranked fourth with 14 projects totaling 336 apartments, according to the data. That included units at the Haley Sofge Towers complex, a public housing development at 720 Northwest 13th Court, and a 39-unit project that Habitat Development plans to build at 39 Northwest Seventh Avenue.

Multifamily construction has picked up in South Florida and across the country over the past two years. The seasonally adjusted rate of apartments under construction in the U.S. hit 596,000 in September, almost double the long-term average of 300,000, according to the U.S. Census Bureau.

But developers and landlords may have reason to worry. Homeownership rose to nearly 64 percent in the third quarter of this year, the highest rate since 2014, data shows.

Here’s the full ranking of Miami neighborhoods with the highest volume of units underway, according to the city of Miami’s building department.


Harunobu Coryne contributed reporting.

Holly House Apartments with Cushman and Wakefield’s Calum Weaver and Perry Synanidis (Credit: Holly House Apartments, Cushman & Wakefield)

A New York investment firm just scooped up a vacated apartment community in North Miami for $7.1 million, according to the firm that brokered the deal.

Holly House Partners, LLC, a subsidiary of Freshwater Group, a real estate private equity firm led by Alfred Sayegh, Solomon Gadeh and Joey Sayegh, paid $156 per square foot for the 45,396-square-foot building at 11950 Northeast 2nd Avenue. The deal for the 57-unit Holly House rental building breaks down to about $124,560 per apartment.

Records show the seller, Barry University, paid $4.6 million for the three-story building in 2009 to serve its student population. The building was vacated in May 2017, after Barry University built new dormitories, according to the release. It was built in 1968.

It is unclear what the buyers plan for the property. Joey Sayegh did not immediately respond to a request for comment.

The average unit at the Holly House spans 796 square feet, according to the release. The property offers one- and two-bedroom apartments featuring full kitchens and private patios. Amenities at the gated community include a pool, a courtyard, a laundry room and 66 on-site parking spaces.

Cushman & Wakefield’s Calum Weaver and Perry Synanidis represented the seller. Weaver said in the release the building received 14 offers from investors, despite the building being vacant.

Last month a company controlled by Alfred Sayegh sold two rental buildings in northern Coral Gables for $8.6 million. Sayegh also invested in a multifamily community in Miami’s East Little Havana neighborhood for $13.6 million, last year. – Amanda Rabines

Rodeo Drive (Credit: Wikimedia Commons, Getty Images)

From TRD Los Angeles: Rodeo Drive in Beverly Hills is the second in most expensive retail location in the nation based on rental value, a new report from Cushman & Wakefield shows. It is solely eclipsed by New York’s Fifth Avenue. The famed stretch — home to Gucci, Versace, Louis Vuitton and other big-ticket stores — ranked second on last year’s list, too.

This year, however, asking rent per square foot per year increased to $875, up from $800 in 2016, according to the Cushman global flagship report, “Main Streets across the World.”

San Francisco’s Union Square claims the third spot on the list, with rents asking $700 per square foot. New York City’s Fifth Avenue, on the other hand, commands rents of $3,000 per square foot, providing it with the No. 1 slot on both the nationwide and global list of expensive retail. Other premiere shopping in the country can be found in Chicago’s North Michigan Avenue, Miami’s Lincoln Road and Toronto’s Bloor Street.

Los Angeles is also seeing an increase in restaurants and cafes providing grab-and-go food options, such as Sweetgreen, Joe & the Juice, Cava Grill and Beaming, the report found. More pop-up locations and experience-based locations will also continue to increase as brick-and-mortar stores shed some square footage and consolidate.

Westfield Century City (Credit: Westfield Group)

From TRD Los Angeles: As the retail market undergoes a major shift and consumer preferences change, mall landlords are increasingly finding themselves renting their properties to an unlikely new tenant: startups and lesser-known brands.

The new wave of stores, which often have a big millennial following, usually serve as showrooms and don’t require as much square footage as major department stores have in the past, the Wall Street Journal reported. Customers can continue shopping online and have their purchases delivered to the location, which ultimately helps bring in foot traffic to the mall.

Westfield Century City is a prime example. The recently renovated mall is now host to online retailers such as fashion brand Bonobo, candy boutique Sugarfina, eyeglass retailer Warby Parker and even Amazon Books. Low-calorie ice cream company Halo Top will also be extending its grocery aisle presence and launching its first physical store in the mall soon.

But while these new options may lure savvy online shoppers, it poses a risk for landlords. Taking a chance on a startup can lead to vacant space if the startup fails – as evidenced by Nasty Gal Inc.’s quick rise to prominence and later demise when it opened a physical store – and leaves your space vacant.

The volume of physical stores occupied by retailers that started online stood at 140,209 square feet this year through the end of October, up from 15,435 square feet in 2012, according to real-estate data company CoStar Group. Despite growth, the number represents just under .05 percent of the occupied rentable building area in the malls. [WSJ] Natalie Hoberman

President Donald Trump (Credit: Getty images)

It’s going to be a Palm Beach Thanksgiving for President Trump.

The Federal Aviation Administration issued a new advisory for Trump’s visit from Nov. 21 to Nov. 26. He’s expected to spend the holiday at his Mar-a-Lago Club, according to the Palm Beach Daily News.

Trump’s seven visits to Mar-a-Lago since taking office and two stays as president-elect, including Thanksgiving 2016, have cost local taxpayers nearly $4 million. His summit with Chinese President Xi Jinping at Mar-a-Lago resulted in a $1.5 million security tab, according to the Palm Beach County Sheriff’s Office.

In May, Congress agreed to reimburse New York City, Palm Beach and other cities that have hosted the president for pre- and post-inauguration protection[Palm Beach Daily News]Katherine Kallergis

From TRD New York: A Corcoran Group agent is enjoying his 15 minutes of fame after a video of him swatting away basketball star LeBron James on the New York City subway went viral.

James Michael Angelo was en route to the firm’s Chelsea office on Monday when the Cleveland Cavaliers forward trained his camera on him. “Can you not?” Angelo said with annoyance, pushing the phone away.

The video has since received 216,388 views on YouTube, 38,586 likes on Twitter and 14,310 retweets — including one from Corcoran CEO Pam Liebman, who wrote: “Even @KingJames can’t stop an agent’s Monday hustle.”

Even @KingJames can’t stop an agent’s Monday hustle. @JMANewYork

— Pam Liebman (@pamelabliebman) November 13, 2017

“It wasn’t LeBron James, quote-unquote, that I didn’t like,” Angelo told Inman News. “He was clearly somebody who didn’t ride the subway often, and I probably would’ve had the same type of reaction to anybody else. I had no idea who he was.”

After his run-in with King James, Angelo (who said he’s in talks to launch a television talk show) posted a quippy tutorial on YouTube in which he offers the basketball star pointers for riding the subway and suggested he reach out if he was looking to buy a pad in the Big Apple. [Inman] — E.B. Solomont

(Credit: Getty Images)

A heap of issues regarding payouts for properties that repeatedly flood are spilling out, as revisions to the National Flood Insurance Program make their way through the U.S. House of Representatives.

Over the years, 750 properties in coastal area like Houston, New Orleans, South Florida, the Florida Keys and New York have contributed $800 million in losses, or an average of about $1 million per asset, according to government data pulled together by The Wall Street Journal.

(Credit: Wall Street Journal. Data provided by the Natural Resources Defense Council via FEMA)

The federal program is designed to protect homeowners from the financial risks of flooding, but has racked up almost $25 billion in debt, according to Politico.

About 1.8 million homeowners in Florida hold NFIP policies.

In the event of a hurricane, flood insurance rates are expected to spike. This year, property losses due to Hurricanes Harvey and Irma are estimated to cost billions. According to FEMA, Hurricane Irma resulted in more than 20,000 federal flood insurance claims in Florida. [WSJ]Amanda Rabines

1501 Collins Avenue and Russell Galbut (Credit: Google Maps, Tequilas Chicas)

The majority owners of a commercial condo building in South Beach are attempting to force a fire sale of the building, a recently filed lawsuit alleges. They’re seeking declaratory and injunctive relief and want the judge to stop the sale of the building.

Tequila Chicas, a Mexican-style restaurant and bar, and the owners of some units at 1501 Collins Avenue are suing the building’s condo association and other owners, according to the Daily Business Review. They claim that the association and majority owners of the commercial building – including Russell and Marissa Galbut – are pushing for an online foreclosure sale to buy the other units at a heavily discounted price from market value.

The building’s market value is more than $100 million, according to the lawsuit.

“Then they can take the property and they can redevelop it themselves and make lots of money,” Patrick E. Gonya Jr., an attorney for the plaintiffs, told the Daily Business Review. He said the association secretly voted to terminate the condo, and that the condo association has let the building fall into disrepair. It’s now mostly empty.

In January, a group of investors lost a years-long battle against companies tied to Galbut, his nephew Keith Menin and the Shelbourne’s condo association. The plaintiffs in that case alleged that Menin, Galbut and the association authorized nearly $30 million in illegal assessments to renovate and repair the hotel condo. [DBR]Katherine Kallergis

Boca Raton Municipal Golf Course

The Boca Raton City Council approved the $65 million sale of the Boca Raton Municipal Golf Course West to GL Homes during a meeting Tuesday night.

The homebuilder, which wants to build 580 single-family homes on the 188-acre development site, won a long public bidding process with Lennar Homes and others for one of the last developable sites of its size in Palm Beach County. The property at 8111 Golf Course Road is by Glades Road west of the Florida Turnpike, with some frontage on the turnpike.

The council voted 4-to-1 to approve the ordinance making the sale possible, with councilman Jeremy Rodgers voting against it.

Although GL Homes has already completed some of its due diligence, there has not, as yet, been an environmental assessment on the property, Neil Schiller, attorney for the developer with Saul Ewing Arnstein & Lehr, told The Real Deal. “GL Homes is willing to clean up the contamination on the site,” he said.

The next step for GL Homes is to seek Palm Beach County approval, because the land, although owned by the city of Boca Raton, is within the county. The city has been looking at selling the property for the last few years, Schiller said.

The developer will be seeking a land-use plan amendment, rezoning and site plan approval from the county, a process that can take up to 16 months, he said. GL Homes’ planners are working on a plan now to determine the layout for the development and the exact number of homes that it will build.

Although GL Homes is paying $65 million for the site, the original offer was for $73 million. The lower offer stemmed from a realization that not all of the land was usable. Deed restrictions on the property prevent GL Homes from building on 15 or 16 acres, Schiller said. The cost of cleaning up the contamination left by the golf course is also expected to be costly.

Miguel McKelvey

From TRD New York: WeWork’s $20 billion valuation is the talk of the town, but the company’s co-founder Miguel McKelvey is evidently tired of hearing about it.

“You can say OK it’s your opinion I’m overvalued or undervalued. Like, who gives a shit? It doesn’t affect me and the business I’m trying to do,” he said at a CornellTech@Bloomberg event Tuesday night. “Valuation does not come into the equation. So why do we even need to be in that discussion? I don’t care. Everyone else in the world [can] discuss it.”

McKelvey’s claim is debatable, to say the least. The co-working company’s valuation allowed it to raise billions from investors under favorable terms. Earlier this year, the company landed a $4.4 billion investment from Japanese conglomerate SoftBank, in part to fuel its expansion into Asia.

McKelvey described the firm’s foray into Japan as a kind of cultural crusade. “Let’s just say that work culture in Japan is messed up, right, I think that a lot of people would agree with that,” he said. “We’re looking at it as entering the market to help shift that reality.”

McKelvey reiterated that the company doesn’t see itself as a coworking company, but as a “community company” involved in several different business lines and acknowledged that this can sound vague. “It’s hard to go home for Thanksgiving and explain what WeWork is,” he said.

In recent months, the firm has launched a gym and even an elementary school. Its WeLive co-living business, however, has stalled somewhat. The company once planned to have more than 30 co-living locations open by the end of 2017, but now it only has two (with a third on the way). McKelvey blamed the complexity of real estate development for its slow progress.

“WeLive, to do it right, is mostly ground-up construction,” he said. “Conversions, which we did, are okay, but to do it really well, to create the environments we think are the best, we prefer to do ground-up.”

“The cycle for ground-up development, to do it with partners, is so much longer,” he added. “So there are many projects that are in process but you just don’t hear about them yet.”

The Real Deal reported last week that an investor group led by WeWork’s other co-founder, Adam Neumann, bought a $65 million mortgage on a Chelsea development site. The assemblage had been rumored as a potential location for a WeLive project, but it wasn’t clear whether that’s still the target.

In October, WeWork made headlines when it announced the $850 million acquisition of the Lord & Taylor building in Midtown in partnership with private equity firm Rhone Group. McKelvey said the media’s excitement about the deal took him by surprise. “We were not in the market for a building like the Lord & Taylor building thinking, ‘That’s what we have to get,’” he said. “The notoriety that came with it wasn’t planned. And to be honest, it was a surprise to us because we didn’t know that many people cared about that.”

The Chase Bank Building at 1040 Weston Road (Credit: Highline Real Estate Capital)

TA Realty just sold two of its office buildings in Weston for $13 million, according to a press release.

Realty Associates Fund X, an affiliate of the Boston-based firm, sold the 62,000-square-foot office portfolio to Miami-based real estate investment company Highline Real Estate Capital and partner Sefira Capital LLC. The trade breaks down to about $209 per square foot.

The portfolio is made up of the 27,084-square-foot Chase Bank Building at 1040 Weston Road and the 33,682-square-foot Weston Commerce Center at 1625 North Commerce Parkway.

The Chase Bank Building at 1040 Weston Road (Credit: Highline Real Estate Capital)

Highline Real Estate Capital announced the sale. The partnership financed the deal with a $9.2 million loan from BankUnited.

Records show the Chase Bank Building last traded for $6.88 million in 2008. TA Realty bought the Weston Commerce Center the same year for $8.4 million.

Avison Young’s David Duckworth, John Crotty and Michael Fay represented the sellers. CBRE’s Christian Lee and Amy Julian helped the buyers obtain financing and Alfie Hamilton and Caitlin Inklebarger from Colliers International will handle project leasing, according to the release.

Weston’s office market has shown decreasing vacancy rates, David Moret, Highline’s founder said, citing a third-quarter Cushman and Wakefield report. He said Weston’s office market vacancy rates are currently pegged at 2 percent.

The buildings sold 90 percent leased, according to the release. Tenants include Chase Bank and a large number of medical offices, Moret said.

In January, a nearby office building leased to Altegra Health sold for $14.1 million.

Renato Balestra and his unit at Murano Grande (Credit: Getty Images)

Italian fashion designer Renato Balestra wants to sell his South Beach condo.

Balestra listed the three-bedroom, 3,000-square-foot unit at Murano Grande for $4.95 million with Cervera Real Estate’s Sildy Cervera, she said. Property records show Balestra paid $1.75 million for unit 2904 at 400 Alton Road.

It’s on the market for $1,664 per square foot. Cervera said Balestra is listing his condo because he’s spending more time traveling. The 93-year-old Italian designer is based out of Rome.

Balestra designs and sells haute couture, menswear, accessories, ready-to-wear collections and more. He’s designed clothing for foreign leaders and celebrities, including the Empress Farah Diba and the queen of Thailand, according to Cervera.

His Murando Grande condo was built in 2003 and features a split floor plan, marble and wood floors, Miele appliances and amenities like a gym, spa, restaurant, pool and tennis court.

Previous owners in the building include Timbaland, who sold his unit for $4.8 million in 2013.

Carlos Melo and Patrick Campbell (Credit: The Melo Group, Related Group, Getty Images)

Micro units may not be worth the hype, according to prominent apartment developers in Miami.

“The cost of land in the city makes the price per unit the same regardless of size,” said Carlos Melo, a principal of the Melo Group, during a panel discussion on millennial living hosted by Bisnow on Wednesday. “So you really don’t reduce the price of the unit.”

Melo’s company has developed nine apartment projects, is building two more and has another two in the planning stages.

“When you have micro units in New York or Japan, it makes sense,” Melo said. “Here in Miami, I don’t see a big difference in price between micro units and regular apartments.”

His comments come at a crucial moment in the advent of micro units in the city. Some of Melo’s competitors, such as the Related Group, are planning mixed-use sites in Wynwood that will feature units as small as 400 square feet, the minimum allowed under the Miami 21 zoning code.

On Thursday, city commissioners will consider amending the code to reduce the minimum to 275 square feet for units located in transit-oriented areas near Metrorail and Metromover stations and other transit sites. The Melo Group’s smallest apartments are in the 600-square-foot range.

Patrick Campbell, a Related Group vice president who also sat on the panel, also said micro units may not be cost effective alternatives for millennials. “With cool amenities and cool locations come high prices,” Campbell said. “It becomes a challenge to cater to millennials and give them something affordable at the same time.”

With Miami becoming so expensive, Related is focusing its multifamily development projects in suburban neighborhoods, Campbell said. “Numbers wise, we can’t do buildings downtown,” he said. “So we are going further away. That helps us overcome some of the challenges.”

From left: Airbnb Founders Chief Product Officer Joe Gebbia, CTO Nathan Blecharczyk and CEO Brian Chesky

From TRD New York: Airbnb raked in $1 billion in net revenue in the third quarter of 2017, continuing a 17-month streak for the company.

The home-sharing company, founded nine years ago, first became profitable during the second half of 2016, Bloomberg reported. Over the last 17 months, Airbnb has reported a profit before interest, taxes and amortization.

But last week, Morgan Stanley released a report that indicated Airbnb’s growth may be slowing. According to the report, fewer U.S. and European travelers than expected indicated that they’d book stays with Airbnb next year. The report was based on an online survey of 4,000 consumers, which did not include Latin America and Asia. Sources told Bloomberg that Latin America saw a 150 percent increase in bookings this year compared to last.

Earlier this month, Airbnb fired 50 full-time employees and more than 100 contractors who prepared meals in the company’s offices, the Information reported. Airbnb CEO Brian Chesky said an outside food service firm was brought in to increase the number of meals served at its offices. [Bloomberg] — Kathryn Brenzel 

The House bill will end the practice of writing off local property taxes, will limit first home mortgage loans and will not allow homebuyers to take out mortgage-interest deductions for second homes (Credit: Getty Images)

A proposed tax-reform bill making its way through the U.S. House of Representatives has some Realtors worried about its impact on homeownership.

Some said the tax bill could cut Florida home values by 13 percent, according to the Palm Beach Post.

Florida Realtors President Maria Wells said the proposal will reduce the tax deduction for mortgage interest, end write-offs for property taxes and boost capital-gains taxes on home sales.

“That would affect the economy in all sorts of ways,” Wells said at a news conference held Monday at the offices of the Realtors of the Palm Beaches and Greater Fort Lauderdale, according to the newspaper. “We know that housing is the canary in the coal mine.”

Under the proposed bill, homebuyers would not be allowed to take out mortgage-interest deductions for second homes or for home-equity loans, and first home mortgage loans would be limited to a $500,000 deduction. The proposals would also end the practice of writing off local property taxes. Tax breaks for homeowners have long been an incentive to buy instead of rent, but proponents of the bill argue that tougher tax breaks for homeowners would counterbalance a standard $24,400 tax deduction for married couples in 2018.

U.S. Rep. Lois Frankel of West Palm Beach said she expects the value of homes to drop because the demand for housing will go down. [Palm Beach Post]Amanda Rabines

Property Markets Group and JDS Development Group just completed Echo Brickell with an expected sellout of about $300 million, developer Ryan Shear told The Real Deal.

Nearly 30 units have closed to date, Shear said. The developers launched sales of the 57-story, 180-unit tower at 1451 Brickell Avenue in 2013. ISG is handling sales and five units are left, according to Shear. Buyers hail from around the world, including Mexico, the United Kingdom, China, Spain, France and Brazil.

The skyscraper, designed by Carlos Ott and Yoo Studio Design, features a 2,800-square-foot fitness center, pool, food and beverage services, hot tubs and sunbathing deck, and a health club and spa.

Property records show buyers so far include Elias Nader, who paid $560,000 for a unit, and a Florida company controlled by Nathacha Oxford that paid $930,000 for a unit.

PMG spent $25 million for the development site in 2013 and financed construction with nearly $124 million in financing from Canyon Capital Realty Advisors. The tower made headlines last year when scaffolding collapsed in October 2016, injuring five people. A bystander suffered a heart attack and died.

The New York-based developer is also working on Muse Residences in Sunny Isles Beach, which will be completed next year, and recently began construction of the Las Olas Riverfront. In July, PMG secured a $154 million construction loan for the two-phase riverfront project, which will include two apartment towers with 1,200 apartments and a waterfront public plaza on the ground floors with restaurants and entertainment.

Canyon Partners Co-Chairman Mitch Julis and 302 East Atlantic Avenue in Delray Beach (Credit: Google Maps, Canyon Partners)

UPDATED Nov. 15th, 11:30 a.m.: A company tied to California hedge fund Canyon Partners just paid $18 million for an office building in downtown Delray Beach, property records show.

Pierre Delray One LLC paid nearly $1,300 per square foot for the two-story, 13,900-square-foot building at 302 East Atlantic Avenue. SunTrust Bank sold the property, which includes an adjacent 18,500-square-foot parking lot between Southeast Third Avenue and the FEC Railway.

Built in 1929, the building sits on 26,571 square feet of land, records show. SunTrust is the building’s main tenant. Records show Canyon also assumed a 4,830-square-foot ground lease for land located below the parking lot. The owner of that parcel is Metropolitan at Delray LLC.

Previous sales information was not available online. A representative for Canyon declined to comment.

Nearby at 217 East Atlantic Avenue, the Buddha Sky Bar building on Delray Beach’s Atlantic Avenue hit the market for $24.5 million, or about $2,130 a foot.

Last year, Canyon Partners Real Estate and partner Citi Community Capital invested in a rental community in Tamarac for $33 million.

Correction: A previous version misrepresented the sale as a ground lease. Canyon purchased the property, which included a ground lease for one parcel. 

Jeffrey DeBoer and Paul Ryan

From TRD New York: There’s a lot to love in the GOP tax plan for the commercial real estate industry.

Commercial property owners would see several benefits under bills from both the House and Senate, including lower taxes on their profits and the ability to avoid a 30 percent limit on interest expense deductions, according to the Wall Street Journal. The Senate bill would also lower the commercial property depreciation period from 39 to 25 years.

“If the bill comes together as envisioned it will be a positive for the underlying economy and that’s what America needs,” Jeffrey DeBoer, chief executive of the Real Estate Roundtable, told the Journal.

The House and Senate bills would also both preserve the beloved 1031 exchanges, which let property owners avoid being taxed on profits from property sales if they reinvest those profits into real estate.

There is much less celebrating on the residential real estate side, where officials are upset over provisions such as one in the House bill that would reduce the residential mortgage debt deduction cap from $1 million to $500,000. Critics say measures like these make it less appealing for people to buy homes, especially in wealthier enclaves with higher tax rates.

Some homeowners in luxury destinations like the Hamptons are already preparing for the possibility of the new tax proposals becoming law by making plans to list their vacation properties as rentals.

The House and a Senate committee are expected to vote on the different tax plans this week. [WSJ]Eddie Small

(Credit: Getty Images)

Three real estate investors who allegedly rigged bids through online foreclosure auctions have reportedly spent nearly $140 million to purchase foreclosed properties at judicial sales in Palm Beach County.

Between 2012 and 2015, Christopher Graeve and Stuart Hanki of Palm Beach Gardens-based Prodigy Capital and Avi Stern won 1,363 properties, but forfeited $427,000 in deposits after walking away from 109 of the more than 1,000 deals, according to the Daily Business Review.

Auction records reveal Stern won 461 properties via bids totaling more than $53 million, Graeve won 755 properties with bids totaling nearly $74.7 million, and his company with Hankin won 147 bids totaling nearly $21.6 million, according to the newspaper.

Cozen O’Connor’s Miami partner Jeffrey Gilbert said online auctions’ policies and procedures are “designed to prevent” abandoning deals.

Graeve forfeited 68 times on bids totaling $5.3 million, which means he lost $266,410 in deposits. Stern forfeited 27 times on offers totaling $2 million, which would require about $102,210 in deposits. And Prodigy Capital forfeited 14 times on nearly $1.2 million in bids, leaving behind $58,160.

The case is Florida’s first bid-rigging indictment of foreclosure auctions. The three investors were indicted earlier this month and now face a penalty of up to 10 years in prison and a fine of up to $1 million.

Attorneys for the investors told the Daily Business Review the allegations are a stretch.

Palm Beach, Miami-Dade and Broward counties moved their foreclosure auctions online seven years ago. [DBR]Amanda Rabines

Miami-Dade County’s condo market experienced a drop in sales volume last week.

Only 70 condos sold for $26 million, less than the nearly $43 million sold during the first week of November. Units traded for an average price of $377,000 and $287 per square foot.

Closing prices in the top 10 deals ranged from $590,000 to $3.5 million.

The most expensive deal was a resale at Terra’s Grove at Grand Bay. Unit 802 in the south tower traded hands for nearly $3.5 million, or about $838 per square foot. It was listed with Gloria Hockaday of Florida Luxury Lifestyle LLC for 343 days before closing.

The second priciest sale was at the Four Seasons Residences in Brickell. Unit 65C sold for $1.75 million, or $814 per square foot. Fabian Dominguez of Fortune International Realty was the listing agent.

Here’s a breakdown of the data from Nov. 5 to Nov. 11. Click on the map for more information:

Most expensive
Grove at Grand Bay # 802-S, Miami | 343 days on market | $3.5M | $838 psf | Listing agent: Gloria Hockaday of Florida Luxury Lifestyle LLC

Least expensive
Turnberry Marina Tower #7D, Aventura | 90 days on market | $590k | $250 psf | Listing agent: Emma Kamagi of Finvarb Realty Inc.

Most days on market
Carbonell #3303, Miami | 1,313 days on market | $750k | $481 psf | Listing agent: Daysi Morey of BHHS Florida Realty

Least days on market
The Decoplage #PH 1, Miami Beach | 66 days on market | $1.5M | $1,327 psf | Listing agent: Celia Morais Tavares de Melo

Two Tequesta Point #3302, Miami | 66 days on market | $885k | $518 psf | Listing agent: Diego Peyon

Rendering of Target at BLVD at Lenox

Miami Beach residents, rejoice. Target is coming to South Beach, which means residents will no longer have to leave the island to get their Target fix.

The retailer will open its first small-format store in South Florida at BLVD at Lenox, a four-story retail development being built by Michael Comras’ MAC 1045 5th St. LLC, according to a press release. The 33,000-square-foot store is slated to open in the spring of 2019.

The 82,000-square-foot building, designed by Zyscovich Architects, will have three floors of retail, with parking on the third, fourth and rooftop levels. The project is a block away from Fifth and Alton, a retail complex anchored by Best Buy, Publix and Total Wine & More.

Target’s small format stores are in major cities, dense suburban neighborhoods and near college campuses. The retailer plans to have more than 130 of the smaller stores by the end of 2019, according to the release.

The Miami Beach location will have men’s, women’s, kids’ and baby apparel and accessories, swimwear and beach gear, home and decor, health, personal care and beauty products, and a grocery section with fresh produce, grab-and-go items, snacks and meals. It will also offer Target’s pickup order service.

Comras said he’s aiming to lease the remaining 34,000 square feet of retail space to restaurant and service-oriented retailers. Asking rents at the project range from rents range from $40 per square foot to $70 per square foot. Available spaces include nearly 28,000 square feet on the ground floor and 5,500 square feet on the third floor. It will have 227 parking spaces.

Comras, who led the investor group that sold an entire block of Lincoln Road to Spanish billionaire Amancio Ortega for $370 million in 2015, assembled the BLVD at Lenox site between 2014 and 2017 for a combined $8.48 million.

The Next Miami first reported Target’s lease.

Art Falcone and the development site at 405 Northeast 2nd Street in Fort Lauderdale (Credit: Google Maps, Miami Worldcenter)

UPDATED, Nov. 14, 1:45 p.m.: A company tied to Art Falcone’s Encore Capital Management just scored a $75 million construction loan for a multifamily project in Fort Lauderdale, property records show.

California-based Pacific Western Bank provided $57 million in financing and New York-based Square Mile Capital provided $18 in financing for the 348-unit, 30-story apartment development at 405 Northeast Second Street.

The Rise Flagler Village will sit on a 1.3-acre site on the north side of downtown Fort Lauderdale. Records show the Boca Raton-based developer bought the property in 2015 for $9.4 million. Construction is set to begin in January, according to the release.

Rendering of The Rise Flagler Village (Credit: Falcone Group)

Architecture firm Cohen Freedman Encinosa & Associates Architects Pa Inc. is designing the project, which will include retail on the first floor, a pool, garden, fitness center and lounge area.

Falcone is also in the midst of co-developing Miami Worldcenter, a massive 27-acre mixed-use project. He and developers Dan Kodsi and Nitin Motwani closed on $285 million in construction financing for Paramount Miami Worldcenter, a luxury condo tower, in March.

Falcone is also working on Plantation Walk, a mixed-use project on the site of the former Fashion Mall in Plantation.

From left: Jorge Escobar, Ignacio Murman and Camilo Lopez

Miami-based TSG Group is launching a new investment platform with plans to spend up to $300 million on commercial real estate in the U.S. over the next two years.

Black Salmon is led by TSG’s Camilo Lopez and Jorge Escobar; Ignacio Murman, former head of acquisitions of Independencia Asset Management; Diego Madotta, former commercial vice president of Capital Markets Argentina; and Eduardo Escayol, a capital markets banker.

The group made its first investment earlier this month, spending $33 million on a 109,000-square-foot Class A office building in San Francisco, called the Offices at Public Market, Escobar said.

Black Salmon plans to invest up to $120 million in its first year and have up to $300 million of assets under management by its second year in cities like Miami, Austin, Chicago, Boston, Denver and up and down the West Coast, he said.

Investors, including foreign high-net-worth individuals, will be able to buy into the platform via their investment accounts at a minimum investment of $250,000. “For financial advisers, it’s a new way to offer their clients a good opportunity to invest in U.S. real estate,” Escobar said.

The group has partnered with Euroclear, a provider of post-trade services, and will work with BNY Mellon, PriceWaterhouseCoopers and Greenberg Traurig.

Just like the holidays, The Real Deal South Florida’s winter issue is right around the corner!

A must read for anyone in the industry, the magazine is packed with the most timely and important real estate stories. Highlights from the upcoming issue include:

– What everyone from commercial brokers to development marketers and real estate attorneys are getting paid, on average, in South Florida
– Which residential brokerages are doling out the biggest price cuts
– A ranking of the top single-family home sales in Palm Beach since 2011
– A deep dive into the recent uptick in activity in Overtown, where Related and other notables are starting to invest
– Co-working spaces in South Florida — how much are they paying for their spaces and how much do they charge?

TRD’s winter issue, which will drop in December, is timed perfectly with the launch of one of Miami’s signature events — Art Basel. Click here to subscribe today.

For advertising opportunities, please contact us

From TRD New York: More than 2,200 people from China and the United States descended on The Real Deal’s annual U.S. Real Estate Showcase and Forum in Shanghai this year and if you missed any of the action, we’ve got you covered. Check out the above slideshow for an inside look at our three-day event at the Jing An Shangri-La.

You can also check out TRD‘s event coverage by reading the stories below:

Douglas Durst gives keynote at TRD’s Shanghai showcase
The full recap of Day 1 at The Real Deal’s Shanghai showcase
Day 2 recap from The Real Deal’s Shanghai showcase
Key takeaways from The Real Deal’s Shanghai event

Kerry Barger

David Martin and Jorge Perez with rendering of Park Grove (Credit: Park Grove, Wikimedia Commons)

Terra and the Related Group want to add a new office development to their plans for Coconut Grove.

The two Miami developers, which are in the midst of building Park Grove, are seeking rezoning of the properties at 2850 Tigertail Avenue and 2765 South Bayshore Drive from T5-O and T6-12-O to T6-8-O, according to documents filed with the city of Miami.

The joint venture will go before the Miami City Commission on Thursday to upzone one property and downzone the other, which would allow Terra and Related to build an eight-story office building with ground-floor retail space and parking.

The properties at 2850 Tigertail Avenue and 2765 South Bayshore Drive (Credit: Google Maps)

The city’s department of planning recommended rejecting the proposal, but the planning, zoning and appeals board recommended approval at a meeting on Oct. 4.

In a statement, the developers called the current zoning inconsistent and said the zoning changes “will allow the property to be developed uniformly and in accordance with the principles of Miami 21.”

The properties are on the same block as Park Grove, a luxury condo development with three 20-story towers and 296 units. If approved, it would bring another mid-rise office building to Coconut Grove, which has seen limited office development up until recently.

In July, Terra and Mayfair Real Estate Advisors closed on a $32 million construction loan for a 78,000-square-foot, mixed-use office building nearby at 2860 Oak Avenue called Mary Street. It’s slated to open in late 2018.

That same month, Optimum Development USA closed on a $21.5 million construction loan for a five-story, Class A office building planned for 3480 Main Highway, also in the Grove.

(Credit: Getty Images)

The city of Miami will vote on a new standard of micro units at a commission meeting this week.

The ordinance would bring the minimum size of micro units to 275 square feet, smaller than the 400-square-foot minimum currently in place. It was recommended for approval by the city’s planning, zoning and appeals board on Nov. 1 and will go before the commission on Thursday.

Micro units allow developers to build more units using a smaller footprint and also tend to have stronger occupancy rates than larger apartments, according to Urban Land Institute studies cited in the city’s resolution. South Florida developers like Moishe Mana and even Jeff Greene have touted the advantages of building micro. In downtown Miami, Mana scored approvals last year for a 49-story, 328-unit mixed-use apartment tower at 200 North Miami Avenue, which would include micro units geared toward millennials.

Property Markets Group is also building a luxury rental tower downtown with smaller units and more shared amenities.

For properties zoned for more than 150 units per acre, the Miami ordinance would limit micro-unit developments to transit-oriented areas, including near Metrorail and Metromover stations, bicycle and other transit sites. One parking space per micro unit would also be required.

In West Palm Beach, Greene recently pulled his plans to develop the city’s first micro apartments after concluding the numbers didn’t work. The city approved those plans, which called for units sized between 300 square feet to 549 square feet, in April.

(Credit: Getty Images)

Despite Latin American buyers cutting back on home purchases in Florida, the state remains the top destination for foreign buyers purchasing U.S. residential real estate this year, according to a newly released report from Florida Realtors.

And by far, most foreign purchases in the state were in South Florida, with Miami, Fort Lauderdale and West Palm Beach representing 53 percent of the total.

Florida garnered 22 percent of all foreign purchases in the country, with international sales statewide reaching $24.2 billion for the 12 months ended in July, up 25 percent from $19.4 billion in 2016, the report shows. Nationwide, foreign buyers represent 10 percent of the dollar volume of all purchases.

Latin American and Caribbean buyers continued to account for the largest portion of foreign buyers in Florida, at 34 percent. But as Latin American countries face political, economic and currency issues, their share of total purchases in Florida fell from 39 percent the previous year.

Meanwhile, Canadian buyers’ share rose inched up to 22 percent from 19 percent last year amid a strengthening Canadian dollar.

The share of buyers from other areas remained unchanged: European buyers represented 23 percent; buyers from Asia, 10 percent; and Africa, 1 percent.

Among metropolitan areas, after Miami, Fort Lauderdale and West Palm Beach, the Orlando-Kissimmee-Sanford area came in second with 11 percent; Tampa-St. Petersburg-Clearwater at 9 percent; Cape Coral-Fort Myers at 6 percent and North Point-Sarasota-Bradenton at 5 percent.

The report is based on an annual study done by the National Association of Realtors in cooperation with Florida Realtors, analyzing the 12-month period of August 2016-July 2017. The report was based on a survey of 6,551 Realtors.

Overall, foreign buyers purchased 61,300 Florida properties, up from 47,000 in 2016. The median price paid by foreign buyers increased to $259,400, up from $252,500 in 2016. The median price paid by foreign buyers was 18 percent higher than the median price paid by all Florida buyers, according to the report.

Dan Keegan and Ajay Yadav

From TRD New York: Online roommate finder Roomi raised $11 million in a Series A round, as investors continue to pile into shared-living startups.

Atami Capital led the round, which also included Rosecliff Ventures, Townsquare Media, JXC Investors, Great Oaks Venture Capital and DCM. Citigroup executive Dan Keegan, former Trulia president Paul Levine and Global Switch CEO John Corcoran also invested, the company announced Monday.

The Series A round brings Roomi’s total funding to $17 million. Founded in 2015 by Ajay Yadav, the company runs an app that’s a bit like a Tinder for roommates: Users can browse through photos and personal details of potential roommates and message each other.

The company claims to have 1,200 daily active listings and more than 1 million registered users. It is also launching a crowdfunding campaign with a goal of $1 million, inviting its users to buy shares.

Amid rising urban housing costs and demographic shifts, more Americans are choosing shared living arrangements with non-relatives, and Roomi isn’t the only online startup looking to capitalize on that. For example, Common, which manages buildings where customers can rent rooms in shared, furnished apartments, raised $16 million in a funding round last year and is backed by the LeFrak and Milstein families.

Miami skyline (Credit: Getty Images)

While Latin Americans are still hungry for Miami real estate, an Eastern European country popped up on a September report tracking web searches for South Florida homes: Ukraine.

Buyers from Colombia again led foreign interest in Miami homes in September, marking the seventh consecutive month the South American country has led the Miami Association of Realtors’ list.

Colombians represented 11.4 percent of all international web searches on in September, the same month Hurricane Irma hit the Florida Keys.

Canada ranked second with 10.4 percent of searches, followed by Ukraine with 5.5 percent and Venezuela with 5.2 percent. The top three international cities visiting the association’s property search website were: Ontario, Canada, Bogotá, Colombia, and Kyiv City, Ukraine.

Check out the top 10 list of countries looking for Miami homes in September:

  1. Colombia
  2. Canada
  3. Ukraine
  4. Venezuela
  5. Spain
  6. Brazil
  7. Italy
  8. India
  9. Argentina
  10. Philippines

From left: Ric Clark, Sandeep Mathrani and 685 Fifth Avenue (Credit: Getty Images and Thor Equities)

From TRD New York: Brookfield Property Partners made a $14.8 billion offer Saturday to buy the remaining 66 percent of shares that it doesn’t already own in GGP.

Brookfield offered to pay $23 per share, half of it in cash and the other half in equity, the Wall Street Journal reported. Any deal would need the approval of a majority of GGP shareholders not affiliated with Brookfield.

The move comes after reports surfaced last week that Brookfield was in early talks to buy the retail real estate investment trust and take it private. Shares of GGP closed at $22.20 after surging following the reports.

Brookfield during the third quarter increased its stake in GGP from 29 percent. The Toronto-based real estate firm has been an investor in GGP since 2010, when it struck a deal that pulled the Chicago-based mall owner out of bankruptcy.

Rumors began to circulate in early 2016 that Brookfield was considering a GGP buyout, but company executives dispelled the notion saying they were “happy with our GGP investments in their current form.”

Part of the thinking behind this latest proposal is that it would allow Brookfield to add features like office space, entertainment and apartments to GGP’s malls which, like others across the country, has struggled with store closings.

GGP’s taken space back from poor-performing department stores and replaced them with gyms, high-end grocery stores and fast-fashion retailers. [WSJ] – Rich  Bockmann

NFL player CJ Fiedorowicz and the house at 710 Northeast 69th Street in Boca Raton (Credit: ESPN)

Apparently undeterred by hurricanes, Houston Texas tight end CJ Fiedorowicz just picked up a luxury home in South Florida to spend his off seasons.

The NFL player paid $1.58 million for the five-bedroom, 4,374-square-foot house at 710 Northeast 69th Street, according to Douglas Elliman’s Joshua Gold. Gold represented Fiedorowicz, while Jason Abitbol of Miles Goldstein Real Estate represented the seller, Booster Internet Corp.

It hit the market in March 2016 for $2.3 million, and was on and off the market with different agents before it sold last week – at the time, listed for $1.6 million. The property sold furnished at a more than 30 percent discount off the original asking price.

The waterfront Boca Harbour home features Italian countertops with marble sinks, an Italian hardwood kitchen, vaulted ceilings, a second-floor loft, oversized bedrooms, a pool and Jacuzzi, and 52 feet of dock space on a canal that feeds into the Intracoastal Waterway, according to the listing.

Property records show the seller, controlled by Elie Berkovics, paid $700,000 for the property in 2015. Gold said the house was completed rebuilt in 2016.

“[Fiedorowicz] wanted a property he could walk into and not have to do anything,” Gold said.

The 26-year-old athlete was drafted by the Texans in 2014 and signed a three-year contract extension in August of this year.

A number of professional football players call South Florida their home, including recently retired NFL linebackers Stephen Tulloch and Jonathan Vilma.

Elizabeth Mendenhnall and Granger MacDonald

From TRD New York: Two of the real estate industry’s biggest lobbying organizations have expressed concerns with Congress’ proposed tax reforms.

“Simply preserving the mortgage interest deduction in name only isn’t enough to protect homeownership,” said National Association of Realtors president Elizabeth Mendenhnall, according to Mortgage Professional America.

Mendenhall said NAR has concerns over how the proposal could impact middle-class homeownership.

“We’ve already seen that a near-doubling of the standard deduction, combined with the elimination of other deductions like the state-and-local tax deduction, can turn the American Dream into a nightmare for families, as the rug is pulled out from under them,” she added.

Limiting the mortgage interest deduction could cause home prices to fall by more than 10 percent in suburban counties close to New York, far greater than the 3 to 5 percent decline nationwide, according to Moody’s Analytics.

But the plan would also lower the top tax rate on pass-through entities like LLCs, which could mean big savings for condo developers, as The Real Deal reported.

The National Home Builders Association said it does not support the House of Representatives’ bill, but that there was some good news from the Senate version.

“However, though the Senate bill provides meaningful tax relief for small businesses and keeps the complete Low-Income Housing Tax Credit program in place, we still believe that maintaining an effective homeownership tax benefit is vitally important,” NHBA chairman Granger MacDonald said. [MPA] – Rich Bockmann

Miami is somewhat immune to challenges that face retail across the country, a group of top brokers told a crowd at The Real Deal’s Fourth Annual Miami Real Estate Showcase & Forum in October.

Lyle Chariff, Tere Blanca, Avra Jain and Jonathon Yormak were joined by TRD’s South Florida Managing Editor Ina Cordle on a panel titled “Commercial’s Hot Pockets: From broker poaching to an evolving tenant mix, what’s making headlines in the Miami market.”

Despite the optimism, brokers and developers said they were challenged by vacant storefronts, high rents and creating the right tenant mixes.

Check out the full video above. – Katherine Kallergis

Produced by Jhila Farzaneh.

The 80-acre equestrian compound in Wellington

A company tied to a Houston oil conglomerate is looking to sell an 80-acre equestrian compound in Wellington.

Property records show Windsome Farms Limited Inc., which lists the address of Transworld Oil U.S.A., owns Windsome Farms at 13560 Indian Mound Road. It’s on the market with Marley Overman of Keyes’ Illustrated Properties, according to a press release.

The property includes a 26-stall barn with storage, a tack room, office, lounges and apartments. It also features a large grass grand prix field with jumps and hills, a rideable track, 19 grass turnout paddocks and an elevated pad where a luxury estate could be built, the release says.

Records show the owner paid $2 million for the property in 1989.

Last month, a 62-acre farm at 4360 South Road sold for $17.1 million.

Wellington is home to a number of wealthy equestrian enthusiasts, including the Bill Gates family, Steve Jobs’ widow and billionaire Laurene Powell Jobs and Georgina Bloomberg, the daughter of former New York City Mayor Michael Bloomberg. – Katherine Kallergis 


From TRD New York: Though all the trappings that historically indicate a boom in retail are accounted for — consumer confidence, low unemployment and a growing economy — stores continue to shutter.

Explanations of behavioral economics dominate the discussion, however a Bloomberg investigation found a common cause underlying most of the relentlessly hemorrhaging sector (almost 7,000 stores closed so far this year): delinquent loan payments.

In Pittsburgh alone, for example, almost 27 percent of retailers have delinquent loans.

Most retail chains have major debt, typically from private equity firm’s leveraged buyouts, which, in combination with market conditions and negative sentiment, are causing the sector to continue close stores — and Bloomberg’s findings indicate its only likely to get worse.

By next year, $1.9 billion high-yield retail borrowings will mature, with an average of $5 billion borrowings subsequently maturing annually until 2025 and the prospect for refinancing looks precarious as $1 trillion worth of high-yield debt across industries matures simultaneously.

With the Federal Reserve’s increasing of interest rates, investors who were previously willing to take on retailers’ debt are now backing away and so, in combination with negative sentiment toward retail, companies’ efforts to buy additional time seems even more unlikely. [Bloomberg] — E.K. Hudson

The ViaPort Florida mall in Leesburg

A Pompano Beach-based company bought a shopping mall in Central Florida with a 22 percent vacancy rate for $23 million. The buyer, Village Lake Promenade, a company formed in July, plans to renovate the ViaPort Florida mall in Leesburg and reduce its vacancy rate to 15 percent in a year. Meir Benzaken is a principal of Village Lake Promenade and an officer of Pompano Beach-based Exclusive Management and Properties Inc., which specializes in renovating retail properties.

Village Lake Promenade intends to put a new facade on the ViaPort Florida mall and rename the property. Built in the 1980s, the ViaPort Florida mall lost Target and JCPenney as anchors and has retained a roster of tenants that includes Sears, AMC Theaters, PetSmart and Books-A-Million. Turkish developer Coskun Bayraktar paid $14 million for the mall in 2014, when it was called Lake Square Mall, but failed to revitalize the property after renaming it and installing an electronic sign at the entrance. [Orlando Sentinel] — Mike Seemuth



Creig Northrop

A top-ranked residential property sales team in Maryland expanded to Florida by launching Northrop Realty in West Palm Beach.

The founders of the new realty firm are Maryland real estate agent Creig Northrop and his wife Carla Northrop.

He leads the Creig Northrop Team, which ranked first in a survey of residential property sales teams by REAL Trends in partnership with the Wall Street Journal.

Northrop Realty will operate in Palm Beach, Martin, Sarasota and Collier counties.

Serving as associate broker of Northrop Realty is Brian Saver, who has more than 14 years of experience as a Realtor and has overseen more than 1,000 transactions throughout Florida.

Northrop Realty offers a variety of services including three-dimensional virtual tours of homes, digital and traditional advertising, and complimentary professional staging of homes listed for sale. — Mike Seemuth

Margate City Center rendering

Margate city commissioners rejected the site plan for the proposed construction of 922 rental apartments by a Delray Beach-based developer New Urban Communities , which may sue the city.

New Urban Communities had planned to buy 36 city-owned acres in Margate near the intersection of Margate Boulevard and State Road 7 for the proposed project. From 2004 to 2016, the Margate municipal government spent more than $30 million to acquire the 36 acres for a downtown-style, mixed-use development.

New Urban Communities originally proposed buying the 36 acres and building a mixed-use development called Margate City Center with 968 apartments, a hotel, an amphitheater, a parking garage, retail stores and restaurants.

Last year, the Margate City Commission approved that development plan and conditionally agreed to sell the land to New Urban Communities for $10.04 million.

But after the November 2016 election, newly elected members of the city commission urged New Urban Communities to downsize its planned development, and the company agreed to build 750 apartments instead of 968.

New Urban Communities subsequently proposed a site plan with 922 apartments, which city commissioners rejected last week.

Margate Mayor Tommy Ruzzano

The rejected site plan would have put 316 apartments along the east side of State Road 7 and 606 on the west side. Margate Mayor Tommy Ruzzano said he had expected a development with all of the apartments on the west side of State Road 7 and none on the east side.

Michael Moskowitz, an attorney for New Urban Communities, has notified the city that the company plans to file a lawsuit to overturn the commissioners’ rejection of the site plan with 922 apartments. According to the company, 922 is the maximum number of apartments allowable under its development agreement with the city. [Sun-Sentinel] Mike Seemuth

Echo Lake Apartments in Lakewood Ranch

A Massachusetts-based company paid $76.1 million for a 360-unit apartment complex in Lakewood Ranch that opened last year.

Northland Investment Corp. of Newton, Massachusetts, bought the Echo Lake Apartments for about $211,000 per unit.

Echo Lake, which opened in September 2016, has apartments with one, two and three bedrooms. Monthly rents range from $1,235 to $1,645.

Northland bought the apartment complex at 11502 Echo Lake Circle from Tri of Lakewood Ranch Apartments LLC, which has addresses in Cocoa Beach and Milwaukee.

Northland owns more than 30 properties in Florida including Greentree, an apartment complex at 5201 North Dixie Highway in Fort Lauderdale, and Village Place, a garden-style apartment community at 2111 Brandywine Road in West Palm Beach. [Bradenton Herald] — Mike Seemuth


(Back photo: Open Grid Scheduler/Flickr; front photo: Pixabay)

From TRD New York: For the time being, at least, Morgan Stanley believes the future for hotels is looking brighter, while the newness of Airbnb wears thin and safety concerns loom large.

A new Morgan Stanley survey showed Airbnb’s growth is slowing — a finding which resulted in the firm increasing its forecast for the hotel industry’s revenue per available room.

Though the number of travelers booking their accommodations through Airbnb is still rising, 80 percent of travelers are now knowledgeable of the service and many still choose other options. The finding makes Morgan Stanley’s Brian Nowak believes Airbnb has reached the end of “easy growth,” according to Barron’s.

The survey also found that an increasing number of respondents who hadn’t booked through Airbnb said they didn’t use the service because of concerns about safety and privacy. [Barron’s] — E.K. Hudson

Winter Springs Town Square

An Orlando-area retail plaza anchored by a Publix supermarket sold for $24.87 million, or about $215 per square foot.

The new owner is Dallas-based Phillips Edison & Company, a leading owner and operator of shopping centers anchored by supermarkets.

Phillips Edison acquired the Winter Springs Town Center, a two-story, 115,767-square-foot retail plaza in Winter Springs, a northern suburb of Orlando.

In addition to Publix, tenants of the retail plaza at 1160 East State Route 434 include Edward Jones, GNC, Great Clips, Quest Diagnostics, Subway, UPS and Zoo Health Club.

The Winter Springs retail property “serves as the de facto downtown for the community,” David Wik, senior vice president of acquisitions at Phillips Edison, said in a prepared statement.

John Bell, managing director of brokerage firm Transwestern, marketed Winter Springs Town Square and represented the seller, an unidentified Dallas-based group. — Mike Seemuth

Rendering of San Miguel Regional Hospital

Miami-based IBT Group reached a construction milestone by completing 20 percent of a new hospital in El Salvador.

An arm of the United Nations called the Office of Project Services selected IBT to build the new San Miguel Regional Hospital.

It will be the first tertiary hospital serving patients in the region east of San Salvador, the capital city of El Salvador.

The $60 million hospital construction project is expected to continue into 2019.

The 160-bed San Miguel Regional Hospital will have five operating rooms, three emergency rooms and an intensive care unit.

Other features of the 355,209-square-foot hospital will include facilities for nephrology care, ambulatory medical procedures and advanced imaging, plus a pharmacy and a blood laboratory.

According to IBT, the government of El Salvador will oversee another contractor that will furnish and equip the hospital.

The hospital will provide specialty medical care to an estimated 212,000 patients in its first two years of operation, reducing the number of patients at congested specialty hospitals in San Salvador by as much as 15 percent. — Mike Seemuth

Target department store at 7730 W. Commercial Blvd. in Lauderhill (Source: Mapquest)

One South Florida store is among 13 nationwide that retailer Target will close due to poor sales after the upcoming holiday season.

Target will close its Lauderhill location at 7730 West Commercial Boulevard on Feb. 3.

The retailer’s nearest location is a SuperTarget, a department store and grocery store, at 12801 West Sunrise Boulevard.

Erin Conroy, a Target spokeswoman, told the Sun-Sentinel that the company usually closes stores if their profitability decreases over several years.

She also told the newspaper that approximately 135 employees will lose their jobs at the Lauderhill store and will have the option to transfer to another Target store.

In addition to the Lauderhill location, Target plans to close 12 other stores including three in Minnesota and two each in Michigan and Illinois, plus locations in Georgia, Louisiana, Kansas, Maryland and Texas. [Sun-Sentinel] — Mike Seemuth

The Seaglass condominum construction site in Bonita Springs

Construction crews topped off Seaglass, a 26-story condominium in Bonita Springs that is nearly 70 percent sold.

Ronto Group, the developer of Seaglass, expects to complete construction  of the 120-unit condominium next summer. Ronto has $143 million of closed and pending contracts to purchase Seaglass units.

By year-end, Ronto plans to open three furnished models of Seaglass units. The models include a 3,088-square-foot model with three bedrooms, three and a half bathrooms, a 485-square-foot terrace and a private elevator foyer.

The other two models include a 3,421-square-foot unit with three bedrooms, three and a half bathrooms and a 525-square-foot terrace.

Ronto also will open a 2,889-square-foot unit with a master suite, two guest bedrooms, three and a half bathrooms and a 464-square-foot terrace.— Mike Seemuth

Holiday Inn Express & Suites in Apopka

Two Orlando-area hotels, a Hampton Inn & Suites and a Holiday Inn Express & Suites, sold for $17.1 million.

The 81-room Hampton Inn and the 77-room Holiday Inn are in Apopka, are 13 miles north of Orlando.

The buyer paid an average of $108,227 per room for the two-hotel portfolio and financed the acquisition with a $15.9 million bank loan.

The buyer also plans to use some of the loan proceeds to finance $2 million of property improvements to the hotels, both built in 2010.

Brokerage firm Marcus & Millichap represented the seller, found the buyer and arranged the acquisition financing.

The blended loan-to-cost ratio of the loan to acquire the two hotels was 80 percent, according to  Robert Bhat, a Miami-based director of Marcus & Millichap Capital Corp., who arranged the financing.

Hampton Inn & Suites in Apopka

The two hotels have a combined annual room revenue in excess of $5 million a year, according to Ahmed Kabani, first vice president investments in the Miami office of Marcus & Millichap, represented the seller and found the buyer.

“The sale underscores the strength of the Orlando hospitality market, where high average daily room rates and revenue per available room are attracting the interest of experienced hospitality property investors,” Kabani said in a prepared statement. — Mike Seemuth

From left: Josh Altman, Tracy Maltas and Madison Hildebrand

From TRD Los Angeles: What’s in a real estate deal?

For Madison Hildebrand, it’s reckoning with brokers past, those who have felt wronged by him and he, wronged by them. In Josh Altman’s world, it’s uncertainty — will he or won’t he get the coveted listing? And lastly, for Tracy Tutor Maltas, it’s finding the perfect home that’s within her dear friend’s budget.

Let’s catch up with our wheelers and dealers.

The British are coming, the British are coming!
Ah, Tantalus. The gift that keeps on giving. The drama never seems to end with this property, which has a caused a major rift between Madison and James Harris and David Parnes, who Madison refers to as the “British guys.”
James has repeatedly called Madison “unethical” because he allegedly told the seller that he had an offer lined up in order to win back the listing, but more on that later.

Madison seems to have struck gold on the elusive Tantalus, which he failed to sell with said British guys last season. An international buyer is interested in purchasing the $8 million home, but alas, there’s a catch. The buyer viewed it months ago when James, David and Madison were still marketing the property together. And you know what that means!

“[James and David] get a piece of the pie, and the only thing they should get is a pie in the face,” Madison says, lamenting that he must share his commission with the Brits.

The plot thickens when the offer comes in at $7.65 million — $100,000 below the seller’s bottom line. How will he make up the price difference? By asking James and David to kick in .05 percent of their commission, of course. This is bound to end well.

After leaving him hanging for a bit, James finally agrees to meet with Madison, not because he wants to fork over some of his due pay, but because he wants the broker to admit he’s a “pathological liar.” Piña Colada in hand, Madison claims he said that he had a buyer for Tantalus, not an offer, and that’s ultimately why he was awarded the listing. There’s a difference, duh!

“Madison isn’t going to admit he’s done any wrongdoing from Day 1,” James said. “I give up, I move on, and please God, we never talk about this home again.”

Ultimately James acquiesces, because who doesn’t like free money?

Brentwood or bust
Tracy is back, showing us why dealmaking is better left to a woman.

“Men in real estate have it so easy,” she says. “I mean they just throw on their suit!”

Seems a bit over simplistic, but yas queen!

Tracy is doing a massive for her friend Cam, who’s very pregnant and has just 30 days to vacate her rental property. She’s looking for a house in Brentwood, because who isn’t looking for a house in Brentwood?

The problem is her budget. It used to be that you could get a pretty nice piece of property for $3 to $4 million, but not anymore. Tracy shows Cam some homes within her price range, some homes she won’t even get out of the car to see and some homes that are bit too expensive. At this point, they may have to scope out some properties in the Valley (gasp!) so Cam and her family won’t be thrown out on the street.

Tracy takes the search out of Brentwood and finds Cam a beautiful new construction home in Studio City. Cam loves the listing, but because this is “MDLLA,” there’s a catch. There’s already an offer on the $3 million home. Tracy knows the developer, however, and says he’ll entertain another offer — but they must act now, which requires Cam to make the decision sans husband, who is traveling for work. She loves the house too much to pass it up, and follows Tracy’s advice to go all in at $100,000 over ask.

In any other world this would seal the deal, but the developer counters and asks both sellers to present a better offer. Tracy calls his bluff. She knows that he’s just trying to get more money, and convinces Cam to hold it at $3.1 million. Her instincts prove to be true, and the developer accepts Cam’s offer.

“Killed it,” Tracy says.


Welcome to Bradbury (maybe)

Josh and his brother Matt Altman are off to one of the most exclusive enclaves in all of L.A. County: Bradbury Estates. The area, which is a cross between Downton Abbey and the Great Gatsby, is home to some pretty opulent real estate.

“It’s home to the highest paid third basemen in baseball, to the heir of a fast food fortune, to one of the biggest film producers in China,” Josh says. “Big time money.”

Josh and Matt meet with Ann and Eric, the developers behind the neighborhood’s Dove Tale estate. The home is a massive 16,515 square feet, and could be one of their biggest listings of the year. That is, if the developers decide to fork it over.

Though Josh did the usual song and dance (his rolodex is the Forbes list, he has the international buyers, etc.), Ann and Eric conclude the meetings without hiring the team. They’re going to meet with other potential brokers. How dare they!

“It’s pretty rare for me not to know if I got a listing or not,” he says. “Especially with Matt and I there.”

They decide to forge forward like they’ve won the listing anyway, releasing the “Altman hounds” and hassling brokers from the comfort of a toilet.

“Hey Bradbury, I’m blowing up your phone, I’m talking about you nonstop, I’m calling everybody telling them about you,” Josh says. “Like De Niro in ‘Cape Fear,’ I’m getting in your house.”


Despite the due diligence, the developers still aren’t ready to pull the trigger. Josh calls with an update on their progress, but they don’t seem impressed. They’ll call him back when they’re ready.

Patience is a virtue — and in real estate, it’s a $19 million mansion.

Saks Fifth Avenue store at Mall of San Juan prior to Hurricane Maria

Shopping mall landlord Taubman Centers Inc. sued tenant Saks Fifth Avenue in Puerto Rico for delaying reconstruction of its hurricane-damaged store at a shopping mall in San Juan.

The Taubman-owned Mall of San Juan in the capital city of Puerto Rico has two anchor tenants, Nordstrom and Saks Fifth Avenue.

Robert Taubman, chief executive officer of Taubman, said last week on a conference call with stock analysts that his company has agreements with Nordstrom and Saks that require both retailers to repair and reopen their stores at Mall of San Juan as soon as possible.

Taubman said Nordstrom expects to reopen its store at Mall of San Juan sometime in 2018, but Saks hasn’t determined how soon it will reopen its store there.

So, Taubman Centers filed a lawsuit in Puerto Rico Superior Court to force Saks to start repairing its 10,000-square-foot store at the mall and to reopen it as soon as possible.

In its lawsuit, Taubman Centers alleges that Saks apparently hasn’t tried to secure its store at the mall by repairing its cracked roof and taking other steps to limit damage from water and mold.

Puerto Rico still faces widespread power outages and damage to infrastructure almost eight weeks after Hurricane Maria devastated the island nation on Sept. 20.

According to Taubman, 55 of 90 tenants at the Mall of San Juan have reopened their stores and more are expected to do so in time for the late-year holiday shopping season. Other tenants could seek rent relief if anchor stores fail to open soon enough. [Wall Street Journal] — Mike Seemuth

State Road A1A along the Atlantic Ocean in Boca Raton (Source:

The city government in Boca Raton may compel owners to sell beachfront properties to prevent further development along the ocean.

The Greater Boca Raton Beach & Park District is interested in acquiring beachfront properties on North Ocean Boulevard, a section of State Road A1A.

The city’s park district last year attempted to acquire several beachfront properties. The owners refused to sell, according to Robert Rollins, chairman of the park district.

The city government now is deciding whether to use eminent domain, which allows a government to force the sale of privately owned land for public purposes.

In eminent domain proceedings, a court decides whether a property purchase is permissible and, if so, sets the price paid to the owner.

The Greater Boca Raton Beach & Park District last year tried to buy properties including a 0.3-acre parcel at 2500 North Ocean Boulevard (owned by Natural Lands LLC), a 0.4-acre parcel just north of 2500 North Ocean Boulevard (owned by Grand National Bank) and a 0.28-acre parcel at 2425 North Ocean Boulevard (owned by Diamond Development Partners).

The park district also has been interested in buying a property at 2330 North Ocean Boulevard and vacant land at 2401 North Ocean Boulevard.

The city of Boca Raton has been trying to buy beachfront properties to preclude their development since  2015, when the city government approved construction of a four-story, 10,000-square-foot house along North Ocean Boulevard.

City commissioners resisted that residential project but reluctantly approved it because the developer had complied with the city’s requirements to build on the site.  [Sun-Sentinel] — Mike Seemuth

Serena Williams

Professional tennis star Serena Williams listed a 2.4-acre lot in Jupiter for sale for $6.5 million. Her asking price for the lot is 57 percent more than the $4.12 million price she paid in 2014.

The lot at 152 Bear’s Club Drive in Jupiter is located along a golf course in the Bear’s Club development, designed by former champion golfer Jack Nicklaus.

Other famous owners of property in the Bear’s Club development include professional golfers Michelle Wie and Ernie Els and basketball legend Michael Jordan.

Michael Leibowitz of Leibowitz Realty Group has the listing for Williams’ lot.

Williams, who recently gave birth to a baby girl, is preparing to move to California, where she just bought a home and listed another for sale.

The tennis star last month bought an estate in Beverly Hills for $6.68 million and listed a six-bedroom residence in Bel Air for $11.995 million. [] Mike Seemuth

Ballpark of the Palm Beaches (Source: Houston Chronicle)

The Houston Astros just won their first World Series championship, but the professional baseball team has won few fans among construction subcontractors in South Florida. Many subcontractors complain they haven’t been paid for helping to build the Ballpark of the Palm Beaches, a new spring-training facility in West Palm Beach shared by the Astros and the Washington Nationals. The Astros and the Nationals got $113 million of tourist tax revenue from Palm Beach County and $50 million from the state to fund about a third of the cost of building the baseball park, which opened earlier this year.

But the teams found shoddy construction at the baseball park, including poorly installed windows and clubhouse showers, and withheld some payments to Hunt Straticon Messam and Cooper (HSMC), a joint venture of four general contractors that oversaw construction of the baseball park, led by Hunt Construction Group. Among the unhappy subcontractors caught in the middle of the dispute between the teams and the general contractors, Davco Electrical claims $6 million of unpaid work, Mancils Tractor Service claims $4 million, and MIK Construction claims $500,000. [Palm Beach Post] — Mike Seemuth

North Miami Avenue between NW 42nd and NW 44th streets

UPDATED Nov. 13, 12:30 p.m.: A controversial plan to build a new parking garage on the border of Miami’s Design District and the Buena Vista neighborhood is set for its first city commission vote next week.

Oak Plaza Associates, a partnership between Craig Robins‘ Dacra, L Real Estate, General Growth Properties and Ashkenazy Acquisition Corp, is seeking permission to rezone five duplexes and two commercial properties along North Miami Avenue between Northwest 42nd and Northwest 44th streets, which abut a single-family neighborhood where some homeowners oppose the project.

According to documents filed with the city of Miami’s planning and zoning department, the proposed garage has been in the works since 2015. An August 31, 2017 letter by Oak Plaza attorney Neisen Kasdin states that rezoning the properties would allow for a new garage that would provide overflow parking in the Design District.

“There is a community need for a parking garage and the property is a suitable location to fullfill this need,” the letter states. “And [its] one of the only parcels that can satisfy the demand for parking in the area.”

The garage would be the fourth in the area. Two garages in the Design District, the Palm Court Parking Garage and the City View Garage, are already built and in operation, and the Museum Garage is currently under construction.

The planning and zoning department recommended approval of the zoning change for the latest proposed garage, but the Miami Planning and Zoning Appeals Board voted 7-3 to deny the project on Sept. 7, 2016.

Oak Plaza worked out covenants with Buena Vista Stakeholders Group and the Buena Vista Neighborhood Association to “ensure the zoning and land use amendments [are] appropriate and respectful of the neighborhood’s character and its current residents,” according to the letter.

Oak Plaza also agreed to allow the neighborhood association to have input as to the type of retail tenants that would lease commercial space on the garage’s ground floor and have input on the project’s design. Oak Plaza also agreed to provide additional security for the residential streets.

However, a vocal, dissenting group of homeowners and residents oppose the project because they say the garage will lead to more commercial development that will gentrify an affordable residential neighborhood. An online video made by Susan Braun, a filmmaker who lives in Buena Vista house across from the proposed garage site, shows opponents voicing their complaints. Braun said that more than 400 residents have signed a petition opposing the project.

Millennial couple posing for their first time homebuyer photoshoot (Credit: Getty Images)

From TRD Los Angeles: What’s that noise you hear? It’s a broker tapping his toes as he waits an hour for his client to pick up her prized fake eyelashes from home so she can look her best on the “Colorado First Time Home Buyer” Facebook page.

Millennials are turning to elaborate photoshoots as a way to celebrate the milestone that is buying a first home, the Wall Street Journal reported. That includes hiring a photographer to snap pictures of them fake dancing in the living room, playfully posing on the front steps and making heart-shaped hand poses around a new key. Cute, huh?

Some will even wear sweaters and dark jeans in 95-degree Texas weather to strike the right aesthetic. “I wanted that cozy feel,” Dawn Richardson told WSJ. “AHH!! #Adulting,” she wrote on her blog later when posting the temperature-confused pictures.

One photographer who spoke with the Journal was given the added responsibility of photo-shopping grass onto an unkempt lawn. She virtually enhanced the neighbor’s lawn, too. Welcome to the world of home-buying in the digital age.

People 36 and younger (also known as millennials) were the largest group of home buyers, at 34 percent, from July 2015 until June 2016, according to a National Association of Realtors report. Roughly two-thirds of those buyers were also rookies, according to the March report, the most recent generational data available.

Brokers are taking note of the generation’s affinity towards social media, too.

Corey Maurice Gilmore, a broker in Alabama, usually takes at least 10 pictures of new home buyers, one of which will often end up on his Facebook page. “It’s kind of like a domino effect: I see a lot of people, a lot of circles of friends, buy houses around the same period of time…because they are seeing their friends make home purchases,” he told WSJ.

But others are claiming the photos shared on social media by brokerages are often a scam to convince others to buy similar homes, and that millennials can’t possibly be buying so many homes.

Proud new homeowners counter-commented with their high-resolution images. [WSJ]Natalie Hoberman

Mayor Philip K. Stoddard with rendering of the Shops at Sunset Place (Credit: Philip K. Stoddard)

At the behest of residents and businesses, South Miami commissioners will reconsider a $300 million plan to redevelop the Shops at Sunset Place.

The commission will vote on a motion to reconsider Federal Realty Investment Trust’s proposal on Nov. 21, Mayor Philip Stoddard told the Miami Herald. The move comes a day after the commission killed proposed zoning rules that would have allowed the mall’s new owners, Federal Realty, Comras Company and Grass River Property, to redevelop the aging mall.

The city manager warned that without the promise of redevelopment, Federal Realty and the mall’s other owners could sell the property at a loss to a discount operator.

The Federal Realty-led group paid $110 million for the 500,000-square-foot, Mediterranean-style mall in 2015, and unveiled plans to redevelop portions of the property last year. That included knocking down parts of the mall and adding two apartment buildings with 400 units and a 200-room hotel and retail on the ground floor connecting both. [Miami Herald]Katherine Kallergis

Ori Allon and Robert Reffkin

From TRD New York: For nearly five years, Compass’ rivals have told a well-worn story that goes something like this. It has too many engineers. It’s spending too much. The concept can’t last. Investors will lose their money.

The company’s $100 million funding round this week has prompted a gut check from industry stalwarts, however, who are no longer predicting Compass’ demise.

“They are the greatest fundraising machine in the history of America,” joked Aaron Graf, CEO of lead-generation brokerage LG Fairmont. He said Compass’ successful Series E — along with Redfin’s IPO in July — are a proxy for how investors view real estate tech. “People are willing to bet on it,” he said.

There’s still plenty of skepticism from traditional operators who said it’s unclear how Compass can justify a $1.8 billion valuation. The company has raised $325 million to date from investors, and the latest round included funding from Fidelity Investments, IVP and Wellington Management.

“Rob has proven that he has an extraordinary ability to hold a vision for the company and to be a very effective salesperson — both to investors and agents,” said Clelia Peters, president of Warburg Realty, referring to Compass CEO Robert Reffkin. “I think the question is how they get to margins which justify a tech valuation,” said Peters, who is also a co-founder of MetaProp, a New York City-based incubator for real estate tech companies. “I think everyone who runs a brokerage business wonders about this.”

Since its founding in 2013, Compass has grown to 2,000 agents in 10 regions, with plans to add another 10 markets by 2020. It claims it had $180 million in revenue last year and is on track to make $350 million this year. While brokerage valuations are typically based on multiples of a firm’s earnings, Compass is instead being evaluated as a tech firm — which is why there’s a strong chorus of voices claiming that the valuation is not realistic. 

“I’ve been doing this for 30 years, and I don’t see any basis for a $1.8 billion valuation today,” said Steve Murray, an M&A consultant and founder of RealTrends.

Armed with its venture capital war chest, Compass became the industry’s most aggressive poacher, the firm that everyone loved to hate. Mauricio Umansky, of Los Angeles-based brokerage The Agency , termed its recruitment strategy “horrendous and disgusting,” and predicted it would flame out in five years. Douglas Elliman’s Howard Lorber divined an even speedier demise.

After news broke of Compass’ hefty valuation, rival firms begrudgingly admitted the brokerage has proved to be a viable competitor. “They are still here and growing,” said Bess Freedman, Brown Harris Stevens’ managing director of sales and business development.

As Compass has set its sights on other markets, New York agents and managers said they’re less wary of the company’s aggressive recruitment tactics. “They were brazen with how they were poaching,” said Graf, adding that now, “everyone thinks Compass is done with their New York, insane disruption thing that was freaking everyone out.”

Nest Seekers International CEO Eddie Shapiro called Compass’ rapid ascent “quite amazing,” and noted that the valuation is a good thing for the entire real estate industry. “It elevates all of our valuations and introduces a new approach for the investment community when thinking about real estate brokerages as viable opportunities,” he said.

But one brokerage head suggested that Compass has exaggerated things like how long it takes to come up with comps in order to promote the effectiveness its technology. “They have done a great job of telling a story, in my mind, that’s not really true,” the source said.  

Rob Lehman, Compass’ chief revenue officer, said the question of whether the startup is a tech company or a brokerage is a “false dichotomy.”

“Every company that’s going to succeed in industries in the future is going to have to be a hybrid,” Lehman said. “We are both a tech company and a brokerage and we let the market ascribe the value.”

But critics said Compass’ tech focus won’t eliminate the reality of running a low-margin business. “It certainly helps, but it’s hard to change the fact that the success of the Compass model will be based on traditional brokerage metrics,” said Stuart Siegel, CEO of residential brokerage Engel & Völkers’ New York City operation.

“Converting market share, especially market share that comes with a high price tag, to dependable EBITDA [earnings before interest, taxes and depreciation] is virtually impossible without curtailing spending and top-line growth initiatives,” he added.

Compass has been coy about its endgame — saying it’s backed by patient capital — but many speculate it plans to go public at some point. Even before then, however, it’s likely that investors will want to see returns.

“I’m sure at some point,” Shapiro said, “someone will knock on the door and ask for their money.”


Glenn Kelman of Redfin

From TRD New York: Redfin generated $109.5 million in third-quarter revenue — up 35 percent from the prior year — even as tight inventory took a bite out of potential home sales.

The Seattle-based firm said Thursday that net income for the quarter was $10.6 million, an 85 percent jump from the prior year’s $5.7 million profit. But CEO Glenn Kelman told investors that the profits were seasonal, and Redfin still does “not expect money on the full year.”

Overall, he said Redfin gained market share during the third quarter, several months after raising $159 million in a highly-watched IPO. To that end, Redfin’s marketing expenses were relatively flat — $5.4 million compared to $5.6 million in 2016’s third quarter. “Our agents have as much demand as they can handle, so there hasn’t been as much pressure on ad driven contact growth,” Kelman said.

Redfin agents sold 13.6 million homes during the third quarter valued at $6.3 billion, according to company filings. Although transaction volume rose from 10.6 million last year, it’s been relatively flat this year as a result of an inventory crunch. “There’s so much political gridlock in a place like San Francisco around building new homes, especially high density homes,” Kelman said.

Redfin, which charges buyers a lower commission rate, said it saved customers $37 million in fees during the third quarter. Traffic to its website — growing exponentially even before the company’s IPO — grew 38 percent to an average of 24 million monthly visitors during the quarter. That compares to 13.1 million in 2015’s third quarter. Redfin, which Kelman described as the “Amazon of real estate,” recently launched a mortgage origination business.

The industry has been watching Redfin’s performance closely, treating the company as a barometer for the potential for technology to disrupt real estate. Its IPO in July was seen as a boon to other real estate tech companies, including Compass, which raised $100 million in a Series E round this week. The funding round valued the firm at $1.8 billion.

But Wall Street is still getting a feel for Redfin, whose stock dipped 6 percent after its earnings report Thursday after missing its revenue target of $110.6 million. In its July IPO, Redfin’s stock price soared 45 percent to $21.72, valuing the company at $1.73 billion. But since hitting a $2.05 billion valuation this fall, Redfin’s market cap fell to $1.88 billion. On Thursday, the stock closed at $21.70 per share.

Part of investors’ questions have to do with profitability. The Seattle-based brokerage generated $267.2 million in 2016 revenue, but losses totaled $22.5 million.

My Ceviche and the Uber Eats app (Credit: Getty Images)

Mobile applications are reshaping the way retail tenants allocate space in brick-and-mortar stores, according to entrepreneurs who led a panel discussion on the South Florida retail market.

Sam Gorenstein, COO and executive chef for My Ceviche and Zuuk Mediterranean Kitchen, said UberEats has prompted the Miami-based restaurant chain to closely evaluate how much it will pay and how much space it needs for future store openings. “Some of these technologies are making us adapt our business model,” Gorenstein said. “Knowing we now have to share the pie with a huge platform like UberEats, we are trying to minimize the per square foot price and the size [of restaurants] to accommodate for that loss of share.”

Gorenstein was part of a panel discussion hosted by the Commercial Industrial Association of South Florida and held at The Craftsman bar in Miami Brickell Village on how local retailers are adapting to succeed in today’s technology-driven retail market. He was joined by moderator Tadd Schwartz, president of Schwartz Media Strategies, and panelists Ellen Latham, founder of Orangetheory Fitness; Mitch Kaplan, owner of Books & Books; Edward Beiner, founder of Edward Beiner Purveyor of Fine Eyewear; and Kathy Moorman, Baptist Health’s corporate vice president for real estate.

Panel. From left: Edward Biener, Sam Gorenstein, Mitch Kaplan, Ellen Latham and Kathy Moorman

UberEats is “complementary, but also competing” with Gorenstein’s business because it offers users an array of restaurant options to order from, he said. The mobile application also makes it easier for users to opt for take-out rather than dining in. “So how do we change up the experience at the store level to get consumers to visit?” Gorenstein said. “We are changing the design by trying to cook and be more interactive in front of the customer.”

Baptist Health developed its own mobile application, the PineApp, that allows patients who don’t want to travel to the company’s medical facilities to visit with a physician online. “You can also see what the wait times are in the emergency department and urgent care centers,” Moorman said.

In order to bring people to Baptist Health facilities, the company is offering experiential retail services. “On the real estate end, we are building medical office buildings with a resource room where you will see all these wellness classes, lectures and seminars,” Moorman said. “We also offer opportunities to bring you some meditation type services like some yoga or Tai chi.”

Barnardo Fort-Brescia and his house in Coconut Grove (Credit: Google Maps, Oceana Residences)

Miami starchitect Bernardo Fort-Brescia and his wife, Laurinda Spear, are being accused of cutting down healthy mangroves blocking the waterfront view at their Coconut Grove home.

Neighbors say the Arquitectonica power couple used Hurricane Irma as a cover to chop down the protected trees, which help prevent erosion and fight climate change, according to the Miami Herald.

Property owners across Miami-Dade County likely used the hurricane to clear trees that may or may not have been damaged.

After viewing the damage at Fort-Brescia’s home at 3300 South Moorings Avenue in Coconut Grove, county environmental regulators issued a cease and desist order and are investigating the issue. Neighbors took photographs and videos of workers using chains and trucks leaving damage behind after a Bobcat got stuck, the Herald reported.

The couple’s attorney said the Hurricane destroyed the mangrove strand. But biologists say that the trees are typically quick to recover after a storm. [Miami Herald]Katherine Kallergis

National Cheat Sheet

Clockwise from top left: TRD‘s Shanghai event, Downtown LA’s Million Dollar Theatre, the skyline of North America’s least affordable city, and WeWork’s Adam Neumann.

From TRD New York:
Compass raises another $100M in funding

Venture capital-backed real estate firm Compass raised another $100 million in a new funding round, bringing its total valuation to $1.8 billion. The company plans to use the money to expand to 10 new cities in the next two years and to develop new technology. “We’re just getting started,” Compass’ executive chairman Ori Allon said in a statement to The Real Deal. “The real vision is for Compass to be everywhere.” [TRD]

Struggling shopping malls are dragging down on commercial property values
Mall valuations took a 6 percent dive from September to October and fell by 11 percent in the last 12 months, according to a report by real estate research firm Green Street Advisors. Those dwindling values are weighing down the the entire commercial real estate market, Green Street found. The firm’s commercial property price index, which tracks REIT-owned properties, decreased by 1 percent from September to October — the largest month to month drop since the financial crisis, the Wall Street Journal reported. [WSJ]

Chinese investors should keep their eyes on “1.5” cities, experts say
Despite the Chinese government’s tightening of capital outflows, investor demand for U.S. real estate remains robust, industry insiders from both countries said during The Real Deal‘s latest U.S. real estate showcase and forum in Shanghai. While blockbuster deals have slowed, Chinese investment in “1.5 cities” — those that “will become the 2.0 investment strategy” such as Charlotte, Denver and San Diego — are growing, said Jack Portman, chairman of Portman Holdings. DMG Investments’ Jacky He pointed to the the tremendous interest in U.S. education from Chinese students as a major factor in continued interest in U.S. investment. [TRD]

Douglas Elliman’s sales grow but profitability plummets over 50%
Profitability at Douglas Elliman fell more than 50 percent in the third quarter, even as the New York-based national brokerage’s sale volume rose. Elliman’s revenue rose 3.2 percent to $190.4 million, but its net income fell to $4.2 million from $8.7 million the year before, according to filings by its parent company, Vector Group. Chairman Howard Lorber blamed the drop on fewer “higher margin” new development closings. [TRD]

NYC and San Fran are expensive but North America’s least affordable city is …
North America’s least affordable housing market is north of America, according to The International Housing Affordability Survey conducted by Point2Homes. Vancouver, with a median home sales price of more than $1.1 million and a median family income of $63,944, took the top spot. Home prices are slightly higher in the second-most unaffordable city, Manhattan, with a $1.2 million median, but New Yorkers’ $77,559 median income is also higher than their Canadian counterparts. Third place goes to San Francisco, where the median home price is even higher at nearly $1.3 million. But that’s offset by a median income of $92,094. [HousingWire]

Major Market Highlights

WeWork CEO, partners invest $65M in NYC development site
Adam Neumann, the CEO of high-flying co-working company WeWork, is one of the investors in Chelsea Realty Capital LLC, which acquired a $65 million mortgage on a Chelsea development site. A tipster told The Real Deal in recent months that the company toyed with the idea of building a WeLive co-living tower on the site, which includes parcels at 123-131 West 23rd Street and 116-120 West 24th Street. It wasn’t immediately clear whether that’s still the plan. [TRD]

Voters pass $400M bond to combat sea level rise in Miami
Fifty-five percent of voters in Miami approved a ballot measure to give the city a $400 million bond to be used to combat rising sea levels and to fund affordable housing. The bond will allow the city to spend $192 million on storm drain upgrades, flood pumps and sea walls. About $100 million will be set aside for affordable housing and economic development. [TRD]

Historic LA theater’s future is in the hands of a yet-to-launch startup
The historic Million Dollar Theatre has stood at 307 S. Broadway in downtown Los Angeles since 1917, but its future is now controlled by CoBird, a fashion startup that hasn’t even launched yet — and that has conservationists worried. The theater was included in a sale of properties from Yellin Co. to Adam Daneshgar of Langdon Street Capital, but CoBird had signed a lease on the building a month before. [TRD]

San Francisco grocers look to fill food deserts
The growing San Francisco metro area needs more grocery stores, and high-end companies like Whole Foods and Trader Joe’s are expanding to meet the demand. With retail vacancy rates still lagging behind pre-recession levels, there’s plenty of space to fill, and developers are pushing for on-site grocery stores to be included as amenities in their buildings. “We see the grocery store as an important amenity for our residents and the neighborhood as a whole,” Tishman Speyer Senior Managing Director Carl Shannon told Bisnow. [Bisnow]

Denver voters favor ambitious green roof initiative
Voters in Denver approved Initiated Ordinance 300, which requires buildings to incorporate rooftop gardens and solar panels to increase energy efficiency. New buildings with at least 25,000 square feet will be subject to the new rules, as will older buildings that replace their roofs or expand their square footage. Mayor Michael Hancock was opposed to the measure, but said he will work to implement the rules. “We have always made a good-faith effort to implement the initiatives — once the people have spoken, that’s our job,” he told the Denver Post. [Denver Post]

Miami (Credit: Getty Images)

The Magic City is not just expensive. It’s the most expensive.

Miami ranked as the least affordable metro for renters in the U.S. last year, according to a new report.

Nearly 63 percent of Miami renters spent more than 30 percent of their income on rent in 2016, according to Apartment List. Miami ranked the worst at No. 100, while Ogden, Utah, has the lowest share, at 37.9 percent.

In Miami, rents have increased nearly 16 percent between 2005 and 2016, but renters’ incomes only rose 5.7 percent. A substantial portion of the city’s renters – 33.8 percent – spent more than 50 percent of their incomes on rent, putting them in the severely cost-burdened category, according to Apartment List.

The online rental marketplace analyzed Census data on renter incomes and rents and found that nearly half of all renters in the country were cost-burdened in 2016, which was actually the lowest level since 2008. That’s because high-income renters who would typically have purchased houses have been delaying homeownership and low-income renters may be living with family or pushed into cheaper markets.

Homeownership may finally be back on the rise, though. According to the U.S. Census Bureau, homeownership rose to 63.9 percent in the third quarter of the year, the highest rate it has reached since 2014.

Five of the top 10 worst-affordable metros are in California, including Fresno, Oxnard, Riverside, Los Angeles and San Diego.

A study released in September found that renters in some South Florida neighborhoods could save as much as 45 percent splitting rent with a roommate rather than paying for a one-bedroom apartment.

From TRD New York: The Real Deal’s National Weekly Roundup features a mix of market analysis, breaking news, insider information and much more. It’s the simplest way to stay on top of what’s happening in the biggest real estate markets around the country.

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Kenneth Harney

The message sent by Republicans in the tax overhaul bill they launched last week is unmistakable and blunt: We think homeowners and buyers have gotten much too sweet a deal from the federal tax code for far too long — and now we’re going to whack them down. No other major sector of the economy gets hit so hard in the proposal in so many places as homeownership.

You’ve probably heard about the splashiest cut proposed in the bill: a reduction in the maximum deductible mortgage amount from $1 million to $500,000. And you might have figured, “Eh, no big deal, my mortgage is nowhere near that size.” But you might have missed some of the other less publicized, but punitive, changes tucked away in the legislative text that just might bite you, now or in the future.

For example, Section 1402 of the proposal would significantly alter the ground rules governing a benefit that millions of homeowners have factored into their financial planning for decades. Under current law, you can exclude from taxation the first $250,000 of capital gains on a sale as a single filer ($500,000 filing jointly) provided you have used the house as your principal residence for an aggregate two years out of the five years preceding the sale. Plus you can use the exclusion as frequently as once every two years.

Under the Republican proposal, the two-out-of-five standard would vanish. Instead you’d need to live in and use the property as your main residence for five of the preceding eight years — a requirement designed to lower the number of people eligible to claim the exclusion. This would inevitably hurt middle income and other families who were forced to sell their houses because of job transfers or medical reasons, as well as first-time buyers moving up to a new home a few years after purchase as their families expand. The bill also would limit use of the tax-free exclusion to once every five years, up from the current two years.

Another noteworthy change that’s easy to miss: Section 1302 of the bill, which would slice the mortgage-interest deduction in half, includes a single sentence that could be important to many Americans who own second homes. It says simply that taxpayers can have only one “qualified residence.” With that brief redefinition, the bill would eliminate thousands of homeowners’ ability to write off mortgage interest on second homes and weekend getaway houses. Removing the deduction would increase the cost of ownership on potentially millions of second homes. According to a study last year by the National Association of Home Builders, 7.5 million second homes qualified for the mortgage interest deduction, based on the latest available Census Bureau survey data.

Then there’s the whole issue of when the housing changes proposed in the bill would take effect. Traditionally major tax bills contain “transition” periods to give affected taxpayers time to adjust. That could happen with this bill as well, but at the moment, the starting dates included for housing provisions are shocking. Check out these effective dates as they currently stand in the bill:

— The reduction in the mortgage-interest deduction ceiling, plus deductions for second homes, would take effect on loans taken out after Nov. 2. Not only is there no transition time, the changes are essentially retroactive. This could negatively impact shopping, sales — even prices — on homes closed after Nov. 2.

— The capital-gains exclusion changes would cover home sales after Dec. 31. No grandfathering, no wiggle room.

— The capping of deductions for state and local taxes to $10,000 — currently there is no limit for taxpayers who itemize — would start for everybody after Dec. 31. Note that only property taxes could qualify for even this limit — sales and income taxes would no longer be deductible.

— Expenses related to moving from one home to another no longer would be deductible after Dec. 31.

You might be wondering: Could all this nasty targeting of homeownership actually make it through Congress and get signed into law? Certainly the major real estate lobbies — the National Association of Home Builders and the National Association of Realtors — plan campaigns to block the housing changes as the bill moves through the House and the Senate unveils its version.

But keep this in mind: The Republicans are desperate to pass a “tax cut” bill by year’s end. There are plenty of obstacles in their way — even from within their own ranks. But it could happen.

George Gleason

George Gleason

From TRD New York: Bank of the Ozarks in June did away with its holding-company structure as a way to save costs by removing oversight by the Federal Reserve.

And while other banks have the same structure, some say the institutions could be going back to the days of “regulatory arbitrage” seen before the financial crisis when banks sought more lenient regulators, the Wall Street Journal reported.

“It might be arbitrage,” said Karen Shaw Petrou, managing partner of the policy-analysis firm Federal Financial Analytics Inc. “But it’s also a huge boost to their challenged earnings.”

Bank of the Ozarks and other lenders are still regulated by the FDIC, which they said is not a lenient regulator.

“We didn’t really need to be regulated by both,” Bank of the Ozarks CEO George Gleason said.

The Arkansas-based bank, with about $21 billion in assets, is the largest company in recent years to shed its holding-company structure, which is used by about 80 percent of banks and thrifts. Signature Bank is another that doesn’t have a holding company.

Bank of the Ozarks is one of the most active lenders in New York City, especially in the risky construction-financing space so many competitors have pulled back from. In July, company executive Dan Thomas, who headed the real estate lending group, abruptly resigned. But that hasn’t stopped the firm from providing significant loans to New York developers. Earlier this month, it issued a $215 million loan to the developers of 537 Greenwich Street and in September provided the senior portion on a $170 million construction loan to the Chetrit Group for a retail-hotel tower on West 34th Street.  [WSJ] Rich Bockmann

André Balazs (Photo illustration using Getty Images)

At least four women have accused André Balazs of groping them, adding the celebrity hotelier to the growing list of powerful men facing allegations of sexual misconduct in the wake of the Harvey Weinstein scandal.

Balazs, known for his boutique hotel chain the Standard, is accused of reaching under actress Amanda Anka’s skirt while at a movie premiere party at the Chiltern Firehouse in November 2014, the New York Times reported. The premiere was for “Horrible Bosses 2,” which starred Anka’s husband, Jason Bateman. Through a publicist, both Bateman and Anka told the Times that the alleged incident occurred. Bateman’s co-star Charlie Day and his wife Mary Elizabeth Ellis also told the Times they witnessed Balazs grope Anka.

A former employee of the hotelier also told the Times that her boss forcibly touched her in the early ’90s. They went to dinner and a mud-wrestling club afterward, where he allegedly pinned her against a wall, covered her mouth with his mouth and pushed his fingers into her vagina, according to the Times. A different former employee described a similar story to the Times.

In September 2013, a female media executive told the Times that Balazs came up behind her and grabbed her crotch at a party, an account her former roommate confirmed to the newspaper.

A former personal secretary of Balazs told the Times that she never witnessed any inappropriate behavior on his part.

Balazs did not respond to messages left by the Times. He also did not immediately return messages left by The Real Deal.

Balazs recently sold his 20 percent stake in Standard International and the Standard Hotel, and said he would be focusing on the luxury hotels in his portfolio, including the Mercer in Soho, Sunset Beach on Shelter Island, the Chateau Marmont in LA and the Chiltern Firehouse in London.

Rendering of Apeiron at the Jockey Club with Muayad ‘Mo’ Abbas

Apeiron at the Jockey Club is planning to launch presales of condos next year, after winning a key government zoning approval, The Real Deal has learned.

The Biscayne Shores Community Council voted unanimously on Wednesday to approve the planned hotel and residential development on the property of the Jockey Club at 11111 Biscayne Boulevard near North Miami.

In 2015, Apeiron’s development team filed plans for an ultra-modern project that would be built on the Jockey Club’s 13 acres of common grounds. The team, headed by Muayad “Mo” Abbas, Horst Schulze and Michael Bedner, purchased the land for $3.25 million in 2014 and secured a $21 million loan to fund planning costs in December 2015.

The developers’ plans include 120 “serviced” condos ranging from 1,500 square feet to more than 4,500 square feet; a 90-key boutique hotel; a 5-acre health and wellness facility; a new 50-slip, deep-water yacht marina for vessels ranging from 40 feet to over 100 feet; tennis courts and pools. Other amenities for the complex include a new dog park, children’s playground, bayfront promenade, improved landscaping and upgraded security.

The project was tangled in litigation with residents of the Jockey Club until late May, when a judge issued a final order following a trial. The judge’s ruling allowed the developers the right to develop the project and to take over maintenance of the property, which was previously handled by a master association made up of the three existing Jockey Club buildings, built between 1971 and 1982.

Residents of the condo complex filed suit against the developers in March 2016. The lawsuit was grounded in a pair of agreements that were made between the Jockey Club’s original developer and the condo associations of the first two buildings. The first agreement, made in 1977, was between the association of Building II and Jockey Club, Inc. According to the suit, the association agreed to stand aside while the developer built a third tower. In exchange, the residents requested that no further residential construction be made in the complex.

The second agreement, made in 1995, was between the developer and the associations of all three buildings. It essentially gave the buildings easement rights over the complex’s common areas, including its pools and tennis courts, for 99 years. The suit alleged Apeiron, as successor to the Jockey Club’s original developer, would break both of those agreements if it build its project.

The developers are in the permitting process for the hotel and condos, and are also pursuing county permits to build the deep-water marina, a spokesperson for the project said.

Presales are expected to launch in the second quarter of 2018, he said.

Continuum investor Stuart Eichner is relisting his South Beach condo for $11.5 million, roughly 10 percent less than the asking price early last year.

Eichner, a private investor in the Continuum, is the brother of developer Ian Bruce Eichner, whose Continuum Company built the $440 million, two-tower condominium.

The three-bedroom, 3,030-square-foot unit is asking $3,800 per square foot, less than the $4,300 per square foot it was listed for in January 2016. “The market has shifted since we originally listed. At the time we were seeing highly desirable properties selling for record-breaking prices,” said listing agent Samantha Elenson of One Sotheby’s International Realty. “We’re not breaking records anymore.”

Eichner and his wife took the unit off the market after about three months in 2016 while the lobby was being gut-renovated. They decided to sell because the couple is spending more time traveling and less time in Miami.

The listing also includes the poolside two-story, 600-square-foot loft-style cabana – as well as five parking spaces. Property records show Eichner paid $4.1 million for unit 3501 and cabana 4 at 50 South Pointe Drive.

In 2015, his brother, Ian Bruce Eichner, listed his four-story penthouse at the Continuum for $50 million, or $4,519 per square foot. It is no longer on the market.

The development sits on a 12-acre property and features two lagoon pools, a spa and gym, and 1,000 feet of beach frontage. Recent sales are in the $2,200 to $2,4000 per-square-foot range.

The Real Deal’s Shanghai showcase and forum

From TRD New York: “The United States is still the United States,” former New York governor George Pataki said at The Real Deal’s last U.S. real estate showcase and forum in Shanghai. Well, this year, the main lesson from the event could very well be: “China is still China.”

Despite the Chinese government tightening capital outflows and questions brought up by the 19th National Congress of the Communist Party of China, investor demand for U.S. real estate remains robust, top developers, brokers, attorneys and bankers from both countries said during the three-day event at the Jing An Shangri-La last week. Moreover, the demand has spread outside gateway cities to markets all across the country, including Seattle, the Carolinas, and cities in the Bay Area that are not named San Francisco.

The event, which attracted more than 2,200 people from both China and the U.S., kicked off with a welcome party hosted by Adam America Real Estate and Greenland Group, as well as a VIP dinner hosted by Yi Bao, chairman of Cedarlake Capital. At the dinner, attended by the likes of Jack Portman, Douglas Durst and Shahab Karmely as well as some of China’s top business leaders, TRD publisher Amir Korangy said that despite some uncertainty in both countries, deals go on.

“Policies and presidents change,” Korangy said at La Villa Rouge restaurant, “but these bonds that we establish between people will supersede everything else and allow for commerce and trade to continue.”

Douglas Durst of the Durst Org is the am keynote at #TRDForum #Trdshanghai

— The Real Deal (@trdny) November 3, 2017

“Any monetary or policy changes that occur are short-term changes, not long-term changes,” said Christopher Wein of Great Gulf International. Gang Hu, who runs Greenland’s U.S. operations, pointed to President Trump’s China visit as a cause for optimism.

Many wealthy Chinese individuals and institutions who want to invest in U.S. real estate have already taken significant capital out of China and are ready to deploy funds, the business leaders said.

“There’s some practical ways to get the money out, to work around the policy restrictions,” said PwC’s Jennifer Wang.

Though the headline-setting trophy deals in gateway markets – such as Anbang Insurance Group’s Waldorf Astoria purchase or Sunshine Insurance Group’s record-breaking deal for the Baccarat – have certainly slowed down considerably, money is targeting a whole host of other opportunities.

El-Gamal says investors of inst. size very interested in hotels, smaller ones looking at MF #TRDSHANGHAI

— The Real Deal (@trdny) November 3, 2017

Portman, chairman of Portman Holdings, heralded what he called “1.5 cities,” or those on the way to becoming a “2.0” investment strategy, such as Charlotte, Denver and San Diego that are growing. DMG Investments’ Jacky He talked about the Chinese investment community’s attraction to student housing – it’s a market they understand because of the tremendous interest in U.S. education from Chinese students, he said.

That interest in American education remains the most important factor in driving Chinese immigration to the U.S. through the EB-5 visa program, experts said during two panels discussing the future of the program. Ron Klein, a former U.S. Congressman and now a lobbyist with Holland & Knight, explained that legislative reforms were near on the horizon, meaning the minimum investment required for a visa could rise to $800,000 or more. Nicholas Mastroianni, the founder and CEO of the U.S. Immigration Fund, criticized attempts by lawmakers to turn EB-5 into more of a middle-America investment mechanism, since that’s largely not where foreign investors want to put their money. “You can choose the Marriott Hotel in Springfield, Illinois,” he said, “or are you going to build a Times Square hotel built by a $200 million company?” It echoed one of his key takeaways from the 2016 event: “Urban projects are well-financed, well-publicized, and they get done.”

Beyond the panels, the event offered U.S. developers and brokers opportunities to connect with interested Chinese investors through workshops, breakout sessions and exclusive matchmaking meetings set up by TRD. Investors are here with a “few hundred million burning a hole in their pockets” is how one facilitator put it.

Given the 12-hour time difference between New York and Shanghai during the event, sleep wasn’t an option for many. Attendees were spotted hitting the hotel’s gym as early as 4 a.m., embarking on expeditions to find the city’s top dumpling spots, and taking full advantage of the city’s rollicking nightlife (Bar Rouge on the Bund and M1NT are perennial favorites).

A company led by billionaire William Berkley and Bruce Berkowitz of Fairholme Holdings just picked up pieces of an assemblage in west Coconut Grove.

B and B Group Properties LLC paid $5.4 million for six lots totaling about an acre at a bankruptcy auction on Tuesday, according to attorneys Dan Gonzalez and Peter Russin, partners at Meland Russin and Budwick. They represented the seller, Nassau Development of Village West Corp. and Grand Abbaco Development of Village West Corp.

The court appointed Stearns Weaver attorney Drew M. Dillworth as trustee of the bankruptcy estate. Cori Lopez-Castro of Kozyak Tropin Throckmorton LLP represented the buyers.

Lopez-Castro said Berkley and Berkowitz have no immediate plans for the properties, which were part of a bigger, roughly 30-parcel assemblage in the West Grove. Berkowitz is an equity fund manager and Berkley is founder and chairman of the insurance giant W.R. Berkley Corporation.

The properties sold were: 3364, 3384, 3441 and 3461 Grand Avenue, and 3400 and 3412 Florida Avenue.

Other bidders included a partnership between David Martin’s Terra and Michael Comras, and Orlando Benitez Jr., one of the lenders who settled with the trust. BankUnited and Wilmington Trust were the lead lenders.

The trustee, Dillworth, tried to arrange a deal for the bigger assemblage before heading to auction with the six parcels, Russin said.

Terra offered to pay about $35 million for the bigger assemblage last year, but pulled out due to environmental concerns.

Records show the Nassau and Abbaco LLCs are controlled by Julio Marrero, Rosa Marrero, Phillip Muskat and Benitez. A bigger sale has been held up by infighting among the partners. Benitez, who reportedly stated that he brought Terra to the deal, tried to stop that sale last year. Marrero called him a “rogue stockholder,” the Miami Herald previously reported.

The country’s struggling mall sector is pulling overall commercial property values down with it, according to a new report.

Green Street Advisors’ Commercial Property Price Index declined 1 percent to 125.5 in October, the most dramatic month-over-month decline since the recession, the Wall Street Journal reported. Mall values fell 6 percent in October from September and 11 percent in the past year.

The growth in e-commerce has hit second-tier malls especially hard. Few properties are selling and if they do, it’s below their net asset values, Green Street senior analyst Peter Rothemund said.

On the flip side, industrial real estate prices have gone up 10 percent annually. [WSJ]Katherine Kallergis

A new home under construction

From TRD New York: Mortgage giant Fannie Mae wants to make it easier for prospective homebuyers to build new homes.

The company is considering multiple initiatives that would help address the lack of affordable homes in the U.S. real estate market, with its first pilot program consisting of making it easier to get a construction loan, according to Bloomberg.

The program would let lenders sell their construction loans to Fannie on the day that construction starts. The company would then bundle the loan with traditional mortgages and mortgage-backed securities, which could make loans easier and cheaper to get. Borrowers would start making payments on the loans after they move into their homes.

Jon Lawless, vice president for product development and affordable housing at Fannie, said he hopes this will just be the first in a series of programs meant to address the country’s low housing supply.

However, Edward Pinto, co-director of the American Enterprise Institute’s International Center on Housing Risk, was skeptical that Fannie would be able to make a serious dent in the problem.

“It’s a lot easier to say you’re going to do something about supply than it is to get it done,” he said to Bloomberg.

Annual home sales declined in September for the first time since July 2016, which could indicate a chronic shortage of homes that are for sale. [Bloomberg] – Eddie Small

Bijou Bay Harbor and Robert Morales, VP of operations at Ability by Acierto

Ability by Acierto just closed on construction financing for its Bay Harbor Islands development.

Miami-based LV Lending is providing the $14 million construction loan, according to a spokesperson for the project. The developer broke ground on the 41-unit building at 9521 East Bay Harbor Drive earlier this year and is about 70 percent sold.

Ability by Acierto, led by Juan Carlos Gonzalez, recently hired Pordes Residential to take over sales of the project. Units range from 900 square feet to 2,100 square feet and from the $600,000s to just under $2 million for five penthouses. The developer also recently reduced deposit requirements from 50 percent to 30 percent.

Crescendo Real Estate, which has since been acquired by One Sotheby’s International Realty, previously handled sales.

Bijou Bay Harbor is one of more than 20 projects in the pipeline in Bay Harbor Islands, which is near Bal Harbour, Surfside and Miami Beach. A recent report found that the three cities have about two years of excess luxury condominium inventory.

The Weekly Dish is a TRD recurring feature that showcases the latest in South Florida’s restaurant openings, leases and sales.

Three Wynwood and No. 3 Social | Wynwood
Norman Van Aken and Southbound Hospitality just opened their Wynwood restaurant and bar and lounge.

Van Aken and Southbound opened a restaurant on the ground floor of the Wynwood Arcade, called Three Wynwood. They also opened No. 3 Social, a rooftop lounge and bar at the building, which was developed by East End Capital.

Three Wynwood has 100 seats, including a 10-seat chef’s counter. Metro 1’s Tony Arellano brokered the 10-year, 5,500-square-foot lease. Asking rents at the Wynwood Arcade, where other tenants include the Salty Donut, Patrizia Bozzi Design and Bonobos. averaged $55 per square foot, triple net.

Salumeria 104 | Midtown Miami
Salumeria 104 in Midtown Miami is expanding. The 1,900-square-foot restaurant at 3451 Northeast First Avenue #104 is taking over the 1,100-square-foot former space of I Love Pizza next door, restaurant co-owner Graziano Sbroggio of Graspa Group told The Real Deal.

With the additional space, Salumeria 104 will be able to start its own production of “salumi,” — Italian cured meats, Sbroggio said. His partners in the restaurant include Angelo Masarin and Carlo Donadoni.

Sakura 736 | Miami Beach
Chef Carlos Zheng and mixologist Christian Rolan will helm Sakura 736 when it opens on Sunday, Nov. 12.

The Nikkei-style, 3,300-square-foot restaurant, which will blend Peruvian and Japanese influences, will include a bar and lounge. It’s replacing Menin Hospitality’s Red Ginger restaurant at 736 First Street in the South-of-Fifth neighborhood of Miami Beach.

Miami’s Best Pizza | Coral Gables
Miami’s Best Pizza is making a comeback. The popular pizzeria closed at 1514 South Dixie Highway in early 2015 and was replaced by Spring Chicken. Now, it’s reopening at 5833 Ponce de Leon Boulevard, according to the Miami Herald.

The restaurant is taking the former Sunset Quickprint space near Titanic Restaurant & Brewery. It’s slated to open next winter, according to the Miami Herald.

Celis Produce market and juice bar | Palm Beach
Celis Produce, a West Palm Beach-based organic market and juice bar, recently opened at Royal Poinciana Plaza, according to the Palm Beach Daily News. It’s taking Gucci’s former home.
The store and market will sell local products, groceries, smoothies, coffee and acai bowls.

1-800 Lucky | Wynwood
The owners of Coyo Taco plan to open 1-800-Lucky, an Asian-themed marketplace at 143 Northwest 23rd Street, later this month. The Coyo Taco partners inked a lease for the 10,000-square-foot space, which includes a 5,000-square-foot terrace, in July 2016.

The restaurant will include a marketplace with seven food vendors, a karaoke bar and a small theater, Lucky Records and a convenience store.

The restaurant’s lease is an annual rate of $62.50 triple-net, which comes out to about $26,000 a month.

Ina Cordle contributed reporting.

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