Real Estate News

New home sales slowed in April by 6.9 percent

New home sales slowed in April by 6.9 percent

Sales of new homes nationwide dropped in April by their largest monthly percentage this year, with the results coming amid rising inventory and prices.

Sales for those homes dropped 6.9 percent last month to an annualized pace of 673,000, according to a Wall Street Journal report on the U.S. Commerce Department figures. Sales declined in all regions of the country except the Northeast. Existing home sales nationwide, which make up the bulk of transactions, also dropped in April.

Despite that, sales rose 7 percent from April 2018, according to the report, but are still well under pre-recession figures, the Journal reported. And the median sales price for a new home last month was $342,000 — a nearly $30,000 increase from a year prior.

Supply was also up, to 5.9 months from 5.7 months in April 2018.

A slow April followed a strong March for new homes, when sales hit a 16-month high of 692,000 annualized, a 4.5 percent jump over February.

Part of that can be pinned on a drop in mortgage rates following months of steady increases.

Ian Shepherdson, chief economist at Pantheon Macroeconomics, told the Journal that the housing market remains healthy, and has rebounded from a weak fourth quarter following natural disasters around the country.

Housing starts have been somewhat slow this year, as homebuilders struggle to keep costs low amid rising material and labor costs. Groundbreakings also hit an eight-month low in February. [WSJ]Dennis Lynch 

Rendering of Miami Worldcenter and Kevin Lalezarian

Rendering of Miami Worldcenter and Kevin Lalezarian

Miami Worldcenter developers Nitin Motwani and Art Falcone sold off another chunk of land at their mixed-use development in downtown Miami.

Property records show Miami Worldcenter Associates affiliate MWC Block E LLC sold the 2.5-acre parking lot at Northwest Eighth Street between North Miami and Northeast First avenues to Miami World Towers LLC for $43 million.

BNY Mellon provided the buyer, Lalezarian Properties, a $23 million loan to finance the deal.

Records show that Lalezarian Properties can build up to 2,600 residential units with up to 3 million square feet of floor area density on the site.

Based in Long Island, New York, Lalezarian is a family-owned property managment and development firm that leases both residential and commercial buildings, primarily in Manhattan.

In Miami, Lalezarian owns the downtown Miami property at 200 South Miami Avenue, which is leased to Fedex. The company paid $37.25 million for the property in 2017.

Miami Worldcenter Associates has been selling sites within the 27-acre, $4 billion project to other developers. In April, the firm sold a piece to Zom Living and Moinian Group for $19.5 million for a 434-unit apartment tower near the Lalezarian property. Zom also scored a $119 million construction loan for the 43-story building.

CitizenM recently paid $10.75 million for a 15,000-square-foot development site at Worldcenter to build a 12-story, 348-room hotel.

Other components of Miami Worldcenter include high-street retail, a 1,700-room convention center hotel from MDM Development Group and an office tower built by Hines with up to 500,000 square feet of office space. Chicago-based Fifield is also proposing a 47-story, 738,000-square-foot building with about 15,000 square feet of retail space on the northeast corner of Northeast 10th Street and Northeast First Avenue as part of the project.

From left: NAR president John Smaby, Realogy CEO Ryan Schneider, Keller Williams CEO Gary Keller, HomeServices of America CEO Gino Blefari, and Re/Max CEO Adam Contos (Credit: Getty Images, Wikpedia, iStock, and Hitchcock + Associates)

From left: NAR president John Smaby, HomeServices of America CEO Gino Blefari, Keller Williams CEO Gary Keller, Realogy CEO Ryan Schneider and Re/Max CEO Adam Contos (Credit: Getty Images, Wikpedia, iStock, and Hitchcock + Associates)

Defendants have filed a motion to dismiss a March 6 complaint alleging that Realogy, HomeServices of America, Keller Williams and RE/MAX violated antitrust law by requiring a “blanket, non-negotiable offer of buyer broker compensation” when listing a property on a multiple listing service.

The complaint, filed by Christopher Moehrl, a home seller from Minnesota, alleges that the “Buyer Broker Commission Rule” has inflated costs for sellers. The National Association of Realtors, a co-defendant in the case, announced the motion to dismiss the complaint, which has already inspired similar suits from home sellers. The motion to dismiss Moehrl’s complaint claims that the buyer-broker rule does not exist and that there is no anti-competitive agreement in place, Inman reported.

The dispute comes amid other inquiries into MLS practices and their implications for home sellers. The U.S. Department of Justice has demanded that financial services and analytics firm CoreLogic turn over over its MLS data on buyer-broker commissions and the policy language related to the handling of such data. Earlier this month, CoreLogic was named as a defendant in a suit filed by the Austin Board of Realtors in Texas accusing the company of selling data to appraisers. [Inman] — Georgia Kromrei

201 Northwest 21st Street and 210 Northwest 22nd Street

201 Northwest 21st Street and 210 Northwest 22nd Street

Wynwood assemblage – Sarkis Izmirlian | $26M

A billionaire hotelier based in the Bahamas has turned his sights to Miami, paying $26.4 million for an assemblage in Wynwood with plans to build a mixed-use project.

Sarkis Izmirlian, the original developer of Baha Mar in the Bahamas, bought the properties at 201 Northwest 21st Street and 210 Northwest 22nd Street in Miami through a Delaware company, Miami Development 2122 Trustee, Inc.

The seller is Sam Herzberg, whose real estate investment firm, The Sterling Building Inc., includes Richard Do and David Herzberg.

7200 Northwest 25th Street

7200 Northwest 25th Street

Webster Park – AEW Capital Management | $25M

Boston-based AEW Capital Management bought four warehouses at 7200 Northwest 25th Street for $25 million, records show.

Miami-based Cofe Properties sold the 178,521-square-foot property for $140 per square foot. The warehouses are part of a complex known as Webster Park that was built in 1972.

In 2016, records show Cofe Properties purchased the warehouses for $16.6 million. The most recent sale represents a 50 percent increase from the last sale price.

1051 Commerce Parkway

1051 Commerce Parkway

1051 Commerce Parkway – WPT Industrial REIT | $9M

Toronto-based WPT Industrial REIT bought an industrial park right off the Florida Turnpike for $9.4 million.

The property at 10501 Commerce Pkwy is 100 percent leased to tenants that include FedEx Ship Center and Miramar Appliance Repair, according to a press release. The seller was CalSTRS.

The purchase was part of a $226 million portfolio acquisition of 13 properties and three land parcels across the country, which totaled roughly 2.2 million square feet of industrial space.

Mangonia Park industrial park – Alliance HSP | $9M

Alliance HSP paid $8.7 million for an industrial property just outside of West Palm Beach.

The company bought the 6-acre industrial park at 1601 Hill Avenue for $1.45 million per acre. A company tied to Gaeta Limited Partnership of Palm Beach Gardens bought the property in Mangonia Park. It was built in 1975.

Pompano Beach warehouse – Jackson Land Development | $7M

Jackson Land Development bought a warehouse in Pompano Beach for $7 million.

A company tied to Allen Prince and Gordon Ditzel sold the 72,900-square-foot industrial property at 1411-1461 Southwest 31st Avenue to Jackson Land Development, which is based in Pompano Beach.

The property, near the Fort Lauderdale Executive Airport and close to Powerline Road, sold for $96 per square foot.

Monika Entin and Lincoln Center (Credit: Google Maps)

Monika Entin and Lincoln Center (Credit: Google Maps)

It takes one developer to start a trend.

More than a month since real estate investor Sam Herzberg unveiled a possible transformation of the Sterling Building on Lincoln Road into a hotel, a second property owner wants to do the same to the Lincoln Center, an apartment building with a ground-floor retail annex at 1637 Euclid Avenue.

Monika Entin, an attorney representing Lincoln Center Associates, offered details about her client’s concept to build a multistory hotel addition to the existing three-story 1930s building, during the city of Miami Beach’s land use committee meeting on Wednesday.

Lincoln Center Associates, a company owned by longtime Miami Beach real estate investor Mel Schlesser, purchased the property for $1.1 million in 1986.

“He has been trying to figure out how to improve [Lincoln Center] over the last year,” Entin said. “One of the things he’s thought of is an addition of a hotel.”

Entin explained that Schlesser decided to move forward following the land use committee’s decision in April to explore giving developers height bonuses and relaxing parking requirements to build hotels on Lincoln Road, which are allowed under current zoning regulations. Entin noted that Lincoln Center operated as a hotel until 2001 when Schlesser repositioned the property.

New legislation being drafted by Miami Beach planning director Thomas Mooney and his staff would increase the height limit for hotels on the north side of Lincoln Road from 50 feet to 75 feet, reduce the minimum size of hotel rooms from 335 square feet to 200 square feet, reduce off-street parking requirements and allow for multistory rooftop additions. Herzberg’s Sterling Building proposal would entail placing an addition behind the Sterling Building.

Entin requested that the city create incentives for Lincoln Center, which is on the south side of Lincoln Road. She said her client is seeking a reduction in hotel room sizes to 240 square feet, as well as a reduction in the off-street parking requirement. The new addition would be capped at 50 feet, she added. She did not disclose how many rooms Lincoln Center wants its hotel to have.

Commissioner Joy Malakoff, who attended the land use meeting, said she would support Lincoln Center’s concept even though last month she indicated she did not favor placing hotels on the south side of Lincoln Road due to its proximity to residential properties. Lincoln Center is an exception since it is closer to the retail shops on Lincoln Road and Washington Avenue. “In this particular case, it makes sense,” she said, adding that hotels on Lincoln Road would attract “more high-end visitors to the city of Miami Beach.”

Commissioner Michael Gongora, who is a member of the land use committee, wasn’t as enthusiastic about the idea of hotels on Lincoln Road. “I am very hesitant on this,” he said. “For me to ultimately wrap my head around this and for me to be a yes vote, there needs to be an adequate public benefit.”

The other committee members, commissioners Ricky Arriola and John Elizabeth Aleman, endorsed the proposed changes. The legislation will now go before the city commission, which will vote on whether or not to send it to the city planning board for consideration.

Here are a few real estate events worth checking out next week!

From May 29 to May 31, IMN is holding its 7th Annual Single Family Rental Forum East at the Diplomat Beach Resort. Come to this event to network and hear discussions on how to find success in this sector of the industry. Speakers include Paul Jackson of Residential Capital Partners and Bruce McNeilage of Kinloch Partners.

On May 29, the Miami Association of Realtors is hosting an event on Fair Housing for Real Estate Professionals at its headquarters, 700 South Poinciana Road from 9:30 a.m. to 11:30 a.m. Attend to hear insight on the future of fair housing regulation. Keenya J. Robertson of HOPE, Inc. Fair Housing Center will be speaking at the event.

To search for future industry events or browse past ones, click here. And to submit more industry events, please reach out to

The Vue at Brickell building and Gaston Tomaghelli

The Vue at Brickell building and Gaston Tomaghelli

A handful of condos in Miami were frozen by the U.S. Department of the Treasury as part of an Argentinian drug trafficking and money laundering scheme that centered around the online sale of illegal opioids in the U.S.

On Thursday, five Argentinians were indicted in U.S. District Court in Wisconsin for their role in the Goldpharma scheme. Buenos Aires-based Goldpharma, through online pharmacy websites, sells both legitimate and illegally produced drugs, including oxycodone and hydrocodone, without a prescription. The majority of its illegal opioids have been sold to customers in the U.S., according to the Treasury Department’s Office of Foreign Assets Control (OFAC).

The federal government indicted Conrado Adolfo Frenzel, Jorge Alejandro Paura, Luciano Brunetti, Lucas Daniel Paura and Santiago Videmato.

OFAC is also blacklisting Argentine nationals Sergio David Ferrari, Gaston Tomaghelli, and Roberto Javier Perez Santoro for their role in Goldpharma’s money laundering. Ferrari operates a network of companies called the “Smile Group” that funnels the proceeds of Goldpharma’s sales back to Argentina, according to a release.

In Miami, four units in the Brickell neighborhood were blocked by the Treasury, meaning they are frozen and cannot be bought or sold. Oyster Investments LLC owns the condos, which are: units 1004 and 1603 at Vue at Brickell, at 1250 South Miami Avenue; and units 1606 and 2405 at the Sail condo building, at 170 Southeast 14th Street.

South Florida has long been a hub for illicit money laundering. In this case, Tomaghelli either purchased the units in his name, transferring ownership to Oyster Investments, or bought them under the Delaware LLC directly. Property records show the company paid between $200,000 and $250,000 per Brickell condo between 2011 and 2013, spending a total of $890,000 on the units.

The sanctions on Goldpharma mark the latest sign of the Trump administration’s crackdown on the opioid epidemic. OFAC worked with FinCen, the Justice Department, the DEA and the Argentinian government, according to the release.

“This action leverages Treasury’s unique tools to disrupt the complex global financial and logistics networks that drug kingpins rely on, and complements the efforts of our law enforcement partners who work relentlessly to combat these threats,” Sigal Mandelker, under secretary for terrorism and financial intelligence at the Treasury, said in a statement.

In recent months, federal authorities have uncovered a number of high-profile money laundering cases tied to Miami real estate. In March, the FBI announced it was opening a new task force in Miami to focus on corruption in South America.

A TRD investigation last year found that developers and real estate agents have minimal obligations to perform due diligence on their buyers or the source of their money.

Kenneth R. Harney

Kenneth R. Harney

Kenneth R. Harney, the author for four decades of the syndicated real estate column “The Nation’s Housing,” which explored issues faced by homeowners and home buyers, died May 23 at his home in Chevy Chase, Md. He was 75.

The cause was acute myeloid leukemia, said his wife, Andrea “Andy” Harney.

Distributed weekly to 90 newspapers around the country by The Washington Post Writers Group, Harney’s column was focused on unglamorous but vital issues concerning the intricacies of buying and selling property.

The Real Deal has been running his columns for more than 15 years.

He wrote about such topics as whether do-it-yourself home improvements were likely to increase the market value of a house, plus the perils of such undertakings where, he warned, it was easy for something to go expensively wrong.

One homeowner, Harney reported in January, “inadvertently connected the plumbing from a new bathroom to the home’s sump pump discharge in the basement,” causing raw sewage to flow into the yard.

“The message here isn’t that you should avoid DIY,” Harney wrote. “Rather you should take a sober look in advance at how your own technical and physical skills match up with what you have in mind. When the match doesn’t look all that favorable, call in a pro.”

He weighed such questions as the cost of energy-efficient “green” improvements to a home and how they might affect the selling price.

In the burgeoning “gig” economy, in which many potential buyers earn substantial portions of their incomes from part-time work – driving for Uber or Lyft, for example – Harney examined how lending institutions evaluate their loan risks and qualifications.

He noted that the mortgage financiers Freddie Mac and Fannie Mae, aware that gig workers might not ordinarily qualify for loans based on traditional requirements, were starting to research how to accommodate people who pursued unconventional career paths.

Two of Harney’s columns examining inappropriate charges imposed by a lender at real estate settlements resulted in a refund of thousands of dollars to a home buyer, The Post Writers Group said. Another column led to an increase in credit ratings for borrowers who made prompt payments on student loans.

Over the years, Harney’s topics ranged from vacation getaway real estate scams to online hackers seizing control of real estate listings. He explored the impact of social trends on the real estate market, such as how housing sales have been depressed by the tendency among millennials to marry and have children later in life than previous generations.

In a December 2018 column, Harney cast a revisionist light on one of the oldest real estate shibboleths: the commonly quoted guideline that buyers can afford homes that cost twice their gross annual income.

Not true, he opined, citing a study.

“There is no magic price-to-income rule of thumb for gauging affordability that fits everywhere,” he wrote, “although the median ratio nationwide was 3.3. As with everything in real estate, location plays a crucial role; ratios . . . ranged from an affordably modest 2.3 to a hyper-expensive 5.0.”

Kenneth Robert Harney was born in Jersey City on March 25, 1944. He graduated from Princeton University in 1966, then worked as a newspaper reporter in Camden, N.J., before serving for more than two years in the Peace Corps in India.

He came to Washington in 1970 as a program analyst with the Office of Economic Opportunity, then spent several years as the founding editor of Housing and Development Reporter, a publication of the Bureau of National Affairs.

Harney also owned and managed business, financial, educational and investment organizations and freelanced for The Post and Washington Star before he began writing his syndicated column in 1979.

He won several awards from the National Association of Real Estate Editors and the Consumer Federation of America. From 1995 to 1998, he served on the Federal Reserve Board’s Community Advisory Council. He also was the host of “Real Estate Magazine,” a television show on FNN, a forerunner of CNBC, and the author of two books.

Harney wrote his final column last week.

In 1967, he married Andrea Leon. In addition to his wife, of Chevy Chase, survivors include four children, Alexandra Harney of Shanghai, Brendan Harney of San Francisco, Timothy Harney of Brooklyn and Phurbu McAlister of Silver Spring, Md.; two brothers; a sister; and five grandchildren.

Crystal City, Virginia and Amazon CEO Jeff Bezos

Crystal City, Virginia and Amazon CEO Jeff Bezos (Credit: Getty Images)

Manhattan home prices have sputtered along after Amazon scuttled plans for part of its HQ2 in Long Island City, while the Arlington, Virginia market is getting a big boost form the tech effect.

Pricing in Manhattan grew just 2.4 percent between the time Amazon made its announcement in November of last year and April, according to figures cited by Bloomberg.

In Arlington, however, home prices have grown 17.3 percent during the same time.

“With a household name as big as Amazon moving into Arlington’s backyard, we expected that home prices were going to increase, but because the number of homes for sale is not keeping up with demand, the price growth we’ve witnessed so far in both the mid-market and luxury sector has been dramatic,” chief economist Danielle Hale told Bloomberg.

The rise in Arlington pricing was accompanied by a larger drop in home inventory than Manhattan saw, the news outlet reported.’s report showed that active listings in Arlington dwindled to fewer than 400 listings in April — a 50 percent decrease from a year earlier.

And the Arlington luxury market has also prospered, with a 22.1 percent price increase since last April at the top of the market. The top five percent of homes commanded an average price of $2.4 million.

An analysis of more than 1,000 counties shows that Arlington County and two neighboring counties are among the seven tightest markets nationwide.

Amazon had plans to build a second headquarters at two sites in NYC and Crystal City, an urban Arlington neighborhood. The NYC plans fell through after backlash from community groups and emboldened politicians. [Bloomberg] — Georgia Kromrei

Emerald View at Vista Center

Emerald View at Vista Center

A partnership that includes Chicago-based Vanderbilt Office Properties paid $40 million for a pair of Class A office buildings in West Palm Beach.

KBS Real Estate Investment Trust II sold Emerald View at Vista Center, a 139,471 square-foot property within the 500-acre Vista Center business park, according to a release. Vista Center is made up of primarily office, flex and industrial space with some retail space and a hotel. It’s next to the Emerald Dunes Golf Club.

CBRE’s Christian Lee, Jose Lobon, Kevin Probel, Kevin McCarthy and Tyler Ploshnick represented KBS in the deal.

Property records show an affiliate of Newport Beach, California-based KBS acquired the buildings in two deals totaling $36 million in 2010. The seller made upgrades and improvements to the property, including building move-in ready spec suites and renovating the common areas and lobby. The buildings also have full backup power for up to 25 days in case of an emergency, such as a hurricane.

Tenants include Regus, Human and Oasis Staffing.

Last year, Kayne Anderson Real Estate paid $6.2 million for a 20-acre development site within the same business park with plans to build a roughly 250-unit senior housing facility.

Father east in downtown West Palm Beach, PNC Bank recently sold the office building at 205 Datura Street for $14.2 million to Boca Raton-based Morning Calm Management.

Arbor Parc and BTI Partners CEO Noah Breakstone

Arbor Parc and BTI Partners CEO Noah Breakstone

Lennar Corp. purchased 309 townhome sites for $19.2 million as the homebuilder continues its buying spree in South Florida.

The Miami-based homebuilder purchased the lots at the 69-acre Arbor Parc community in Riviera Beach from BTI Partners. The property is located at 4046 Woods Edge Circle near Palm Beach Gardens. The rest of the 500-home community is owned by 13th Floor Homes.

Arbor Parc sits on a 10-acre lake, with three acres of green space and a mile-and-a-half of bicycle paths. Currently, 125 homes and townhomes have been sold or are under contract, according to a release.

Lennar’s three- and four-bedroom townhomes will range from 1,558 square feet to 2,086 square feet. Prices start in the mid $200,000’s.

In South Florida, demand is growing for entry-level home communities like Arbor Parc, due to rising home prices in Miami and Fort Lauderdale.

Fort Lauderdale-based BTI Partners has been active in Florida. BTI is currently building the Westshore Marina District, the second largest mixed-use community under construction in Tampa. The company is also currently acquiring more than 1,400 acres in Orlando, where it plans to partner with national homebuilders to develop a large residential community.

Lennar is one of the most aggressive land purchasers in South Florida. In February, Lennar paid $5 million to buy 40 lots in the Arden master-planned community in western Palm Beach County.

Paul Manafort and Stephen Calk (Credit: Getty Images)

Paul Manafort and Stephen Calk (Credit: Getty Images)

The chairman of a Chicago bank who allegedly bailed Paul Manafort out of foreclosure in exchange for a high-level post in the Trump administration was charged with bribery by federal prosecutors on Thursday.

Stephen Calk, chairman of Federal Savings Bank, pressured his bank to lend Manafort $16 million in a string of three separate loans to try to gain an appointment in the Trump administration, prosecutors said.

According to an indictment unsealed in Manhattan district court, the loans came at a time when Manafort was trying to avoid foreclosure of several properties, the New York Times reported.

Among the list of appointments that Calk wanted in return were Treasury secretary, commerce secretary and defense secretary. Calk also tried to convince Dennis Raico, a senior VP at the Federal Saving Bank, to call Manafort to ask if Calk was being considered for secretary of the Department of Housing and Urban Development, according to the Times.

The loans were enough to get Calk’s foot in the door, but not enough to seal the deal, the indictment showed. After the first loan was conditionally approved in 2016, Manafort appointed Calk to a campaign economic advisory committee. While the second loan was still pending, Manafort recommended the presidential transition team consider Calk for an administration position— which he got to interview for, although he was not hired, according to the indictment.

Raico said Manafort’s financial records didn’t always add up and were cause for concern when granting loans. A home in the Hamptons that Manafort used as collateral, for example, had $3.5 million mortgage, not $2.5 million. Raico also said that Calk met with Manafort, the prospective borrower, without any other bank staff present.

Manafort is currently serving a seven-and-a-half year prison sentence at a low-security prison near Scranton, Pennsylvania after his conviction earlier this year on financial fraud charges.

Calk’s indictment Thursday comes just two months after Manhattan District Attorney Cyrus Vance Jr. indicted Manafort on “pardon-proof” mortgage fraud charges, including alleged bank deception to get financing on a Soho condo at 29 Howard Street in Manhattan. [New York Times] — Georgia Kromrei

1101 and 1109 Northwest 22nd Street, Peter Saliamonas and Tonino Doino of Miami Avenue Holding Company with Phil Gutman

Peter Saliamonas and Tonino Doino of Miami Avenue Holding Company with Phil Gutman

Rosinella Italian Trattoria owner Tonino Doino sold a property in Allapattah to CenturyLink for $18.75 million, The Real Deal has learned.

Doino’s Miami Avenue Holding Company LLC sold the 101,000-square-foot building and land at 1101 and 1109 Northwest 22nd Street. CenturyLink, a telecommunications company based in Monroe, Louisiana, provides communications and data services in 37 states and is among the largest communications providers in the U.S., according to its website.

A rendering of 1101 and 1109 Northwest 22nd Street

Brown Harris Stevens’ Jeff Cohen and Saad Hamdan, led by Phil Gutman, brokered the deal. The brokerage re-listed the property in October for $20 million.

Gutman said the sale is a record for Allapattah, beating the $16 million developer Robert Wennett paid in 2016 for the Miami Produce Center assemblage at 2140 Northwest 12th Avenue, and 1243 and 1215 Northwest 21st streets.

Wennett is planning a 1.4 million-square-foot mixed-use development on the property, just across the Metrorail tracks from CenturyLink’s site. Designed by Bjarke Ingels, the project will have as many as 2,400 co-living units and 637 traditional residential units, 231,000 square feet of office space, 129,000 square feet of retail space, 22,000 square feet for educational uses and more than 1,000 parking spaces.

Allapattah, a primarily industrial area west of Wynwood and east of Miami International Airport, has attracted investors like Wennett, the Rubell family, Michael Simkins and Lyle Stern.

Doino, an Italian restaurateur who also owns the Sunset Juice Cafe, Rosinella Market and Due Baci in the Sunset Harbour neighborhood, paid a combined $1.65 million for the Allapattah properties between 2012 and 2016, and spent at least $3 million partially renovating the building.

“To me, it’s a great property,” Doino said. “As soon as I saw it, I [bought] it right away. I liked the location.”

Jonathan Pollack, Global Head of the Blackstone Real Estate Debt Strategies

Jonathan Pollack, Global Head of the Blackstone Real Estate Debt Strategies

Blackstone is aiming to raise $5 billion for its latest real estate debt fund.

The fund, Blackstone Real Estate Debt Strategies IV, will have an emphasis on the U.S. but also focus on property-related wagers globally Bloomberg reported citing an investor presentation.

Debt funds in the U.S. have seen strong interest in recent years, as investors seek better yields and protection from falls in property values. According to research firm Preqin, real estate debt funds raised $26 billion in 2018 after raising a record $33 billion in 2017, and roughly 40 percent of assets in such funds have yet to be deployed.

One known investor in Blackstone’s latest debt vehicle is the $42.7 billion Illinois Municipal Retirement Fund, which disclosed last week that it had committed up to $100 million.

Management fees, which range from 1.25 to 1.5 percent depending on the size of the investment, will be waived for four months for investors in the first close. The fund is required to meet a return rate of 6 percent to receive carried interest.

Blackstone’s previous debt fund, which raised $4.8 billion in 2016 after targeting $4 billion, originates and structures mezzanine debt on properties in North America and Europe. Blackstone’s real estate debt strategies unit oversees a total of over $17 billion in capital.

Blackstone’s new debt fund comes on the heels of a massive $22 billion it has reportedly raised for a real estate buyout fund, the largest such fund ever. With a typical 2-to-1 debt-to-equity ratio, that fund would have enough purchasing power to acquire all commercial real estate traded in New York, Chicago, and San Francisco in most of 2018.

[Bloomberg] — Kevin Sun

From left: Jay Parker, Jonathan Miller, and Rochelle LeCavalier

From left: Jay Parker, Jonathan Miller, and Rochelle LeCavalier

Migration to South Florida from New York and other high-tax states is a long-term trend in its early stages, according to a group of experts.

“To use a tired baseball analogy, everybody asks: What inning are we in? I would say we’re still driving up to the ballpark. This [migration] is just getting started,” said Jonathan Miller, president and CEO of Miller Samuel Inc., who moderated a panel presentation in Boca Raton at the condominium sales gallery of The Residences at Mandarin Oriental on Wednesday.

“We think this is the tip of the iceberg … We have a relocation division in our company, and the phone is ringing off the hook,” said panelist Jay Phillip Parker, CEO of the Florida brokerage of New York-based Douglas Elliman.

Parker predicted that migration from New York to South Florida will become increasingly apparent in Boca Raton: “You’re going to start to see many more New York-based institutions calling Boca home, from restaurants to clubs to clothing stores … They recognize that more and more of their customers are coming here.”

Among new arrivals from New York is Manhattan-based financial firm Stoever Glass, which has opened an office in Boca Raton, said panelist Jessica Del Vecchio, economic development manager for the city of Boca Raton.

A driving force behind the migration pattern is a tax overhaul law that limited federal deductions for state and local taxes – or SALT for short. Residents of New York, Connecticut and other high-SALT states have seen the impact of the 17-month-old law for the first time on their 2018 federal tax returns.

“I have seen people’s jaws drop when they realize how much more money they have to pay in taxes,” said Michael Kravitz, a tax manager at Engineered Tax Services.

Kravitz said the limits on SALT deductions will add momentum to a pre-existing “tax migration” trend in which 14 million Americans moved from high-tax to low-tax states during the 2000-2017 period.

“It is predicted that high-tax states such as California and New York will lose about 6 percent of their population by 2028, and the zero- or low-tax states like Florida will experience about 25 percent population growth,” Kravitz said, citing an article entitled “The Great Tax Migration” on the Real Clear Politics website.

Parker said tax migration has expanded the market for luxury real estate in South Florida, where Northeastern residents still see value. “If you compare a luxury product in New York City today to a luxury product in South Florida, it’s easily one third of the price here,” he said.

In Boca Raton, luxury residential developments historically have clustered along the ocean. But luxury buyers are increasingly seek residences in active settings near restaurants and other amenities, Parker said, citing as an example The Residences at Mandarin Oriental, which is part Via Mizner, a mixed-use development including a Mandarin Oriental hotel.

“People are far less preoccupied with parking themselves on the beach and roasting. They are much more interested in walkable areas. And you can see that in the development in the downtown corridor” of Boca Raton, said panel member Rochelle LeCavalier, vice president of sales for The Residences at Mandarin Oriental.

Kushner Companies president Laurent Morali

Kushner Companies president Laurent Morali

Kushner Companies closed on its purchase of a $1.1 billion portfolio of Mid-Atlantic apartment buildings with financing from Warren Buffett’s commercial lending company, according to sources.

Berkadia Commercial Mortgage provided Kushner with nearly $800 million in debt to finance the purchase of the portfolio of 6,000 rental apartments in Maryland and Virginia from private-equity firm Lone Star Funds, sources said.

The deal closed yesterday.

A spokesperson for Kushner Companies declined to comment, and representatives for Berkadia could not be immediately reached.

Berkadia, the Manhattan-based lender owned by Buffett’s Berkshire Hathaway and Jefferies Financial Group, provided the 10-year debt through Freddie Mac.

The Mid-Atlantic apartment portfolio is the biggest acquisition for Kushner Companies since the firm purchased 666 Fifth Avenue for a record $1.8 billion in 2007. The company – led by Charles Kushner, Nicole Kushner Meyer and Laurent Morali – sold the ground lease on the troubled asset last year to Brookfield Asset Management, and has since ventured farther outside the high-stakes world of New York City real estate that came to be the company’s calling card over the past decade plus.

The family firm, which at one point owned as many as 30,000 multifamily units, is returning to its roots owning and managing apartments. In addition to the Lone Star deal, Kushner is working on developing a three-phase, $550 million apartment project in a Miami Opportunity Zone with 1,100 units.

Kushner has also bought multiple properties in an Opportunity Zone in New Jersey. A watchdog group earlier this year filed a complaint with the Department of Justice asking the department to investigate possible conflicts of interest that White House advisor Ivanka Trump – who is married to Kushner family scion Jared Kushner – may have by benefitting from the program. (Jared Kushner stepped down as CEO in January 2017, and does not hold a role in the company now.)

Kushner Companies has also been in hot water over some of its rental properties. Tenants in Kushner properties around Baltimore filed a federal lawsuit in 2017 accusing the company of charging improper fees and threatening eviction in order to force payment. A circuit judge last month reportedly denied the tenants’ request to certify for a class-action lawsuit.

In New York City, an investigation by City Councilmember Ritchie Torres reported in March that Kushner buildings in the East Village were operating with expired certificates of occupancy – meaning tenants are not legally allowed to live there. Torres acknowledged that this kind of violation is commonplace across the city and not specific to Kushner buildings. The landlord told The Real Deal at the time that it had inherited issues from previous owners and would work to correct anything further.

The landlord reportedly received a subpoena last year from the U.S. attorney’s office in Brooklyn seeking paperwork concerning its rent-regulated apartments. A Kushner representative at the time said the company was complying with the request.

Morgan Management CEO Robert Morgan (Credit: Facebook and iStock)

Morgan Management CEO Robert Morgan (Credit: Facebook and iStock)

The Securities and Exchanges Commission and the Justice Department are alleging that Robert Morgan, one of the largest landlords in the country, ran a “Ponzi scheme-like” scam.

The SEC filed civil charges against Morgan, who they say raised $110 million from more than 200 investors — promising returns of 11 percent — only to use that cash as a “fraudulent slush fund” to pay previous investors, the Wall Street Journal reported. Investors are still owed $63 million. Morgan, who has previously denied any wrongdoing, is also facing criminal charges from the Justice Department of conspiracy to commit bank fraud, wire fraud and money laundering.

Lenders are chomping at the bit to foreclose on the properties involved under the fraud provision most mortgages have, as in Syracuse, New York, where Bob Morgan recently lost a 208-unit apartment complex to mezzanine lender SteepRock Capital LLC.

Morgan Management says it has 140 properties and 34,000 units in 14 states. It was ranked by Yardi Matrix as the 15th largest portfolio in the U.S. earlier this year.

The SEC case could reverberate through the rest of the industry, as it raises questions about how Fannie Mae and Freddie Mac guard against multifamily apartment buildings over reporting income, a problem that afflicted single-family housing in the lead up to the 2008 crisis.

Morgan has been under investigation since last year. The Justice Department filed a criminal indictment alleging that Morgan, his son, a mortgage broker and former Morgan Management executive of the firm doctored financial records to get bigger loans from lenders to the tune of $500 million. The Justice Department seeks to forfeit $267.3 million from the four defendants, who have pleaded not guilty to the charges. [WSJ] — Georgia Kromrei

Francis X. Suarez and Carlos Gimenez with Coconut Grove Playhouse

Francis X. Suarez and Carlos Gimenez with Coconut Grove Playhouse

The fate of the Coconut Grove Playhouse revival plan could now head to the courts.

The Miami City Commission on Thursday failed to overturn Mayor Francis Suarez’s veto that had thrown the renovation project proposed by Miami-Dade County into peril. County officials, led by Miami-Dade Mayor Carlos Gimenez, said the county will likely sue the city to nullify a previous Miami Historic and Environmental Preservation Board decision and the veto that rejected Miami-Dade’s proposal.

Near the end of a contentious hearing that lasted close to three hours, Gimenez and Suarez sparred over the fate of the historic theater, which has remained shuttered for the past 13 years. “We are ready to go,” Gimenez said. “Any delays will cost us one to three years. If we don’t finish the project, the state will likely take it back.”

Suarez accused Gimenez and county officials of misleading the public that Miami-Dade has fully funded the $23 million restoration project. “The county’s plan contemplates $9 million from the Miami Parking Authority and the Coconut Grove Business Improvement District,” Suarez said. “The entirety of the county’s plan is predicated on the MPA and the city [funding] the restoring of the southern and eastern facades. Five-and-half years after the lease was given to the county, nothing happened.”

The county’s proposal has been in the works for six years under a lease agreement with the state, which owns the theater. Miami-Dade wants to restore the playhouse’s wing-shaped Mediterranean facade while demolishing the auditorium behind it. In its place, the county would build a smaller, stand-alone theater, as well as an adjacent parking garage to be operated by the Miami Parking Authority.

The county filed an appeal to overturn a historic preservation board vote rejecting the demolition. Earlier this month, the city commission voted 3-2 to reverse the board’s decision. Then Suarez vetoed the city commission, the first time he’s done so since he was elected in November 2017.

In his May 17 veto message, Suarez said the city has a duty to preserve historic properties like the 1927 theater. “The county’s plan that cannibalizes the historic structure will not meet my approval,” Suarez wrote. “But a revised proposal that begins the process…by beginning with the parking lot construction immediately and restoring the facade would meet my prompt approval.”

Rendering of 4141 North Miami Avenue and Remy Jacobson

Rendering of 4141 North Miami Avenue and Remy Jacobson

Developer Remy Jacobson closed on a nearly $12 million loan to redevelop a property in the Design District.

Centennial Bank is providing the $11.93 million loan for interior and exterior renovation of the historic building at 4141 North Miami Avenue. J.C. de Ona and Yuleisy Montalvo of Centennial represented the bank and Aztec Group was the mortgage broker.

Jacobson’s 4141 Design LLC paid $10.5 million for the 15,900-square-foot, three-story commercial building in 2016 and received historic designation from the city of Miami shortly after that. In 2017, the Miami Historic and Environmental Preservation Board approved plans to renovate the mid-century modern office building with glass panels, a rooftop terrace and more.

The two-year loan will become a mini-permanent commercial mortgage, Montalvo said. Construction is expected within 45 days and will take between a year and 15 months to be completed.

The first floor of the building will have about 6,100 square feet of retail space, which could be used for a restaurant, art gallery or store; and the second and third floors will have about 4,400 square feet of office space, each. Jacobson is also planning a roughly 4,000-square-foot rooftop event space. Shulman & Associates Architects is the architect.

Jacobson is negotiating with a tenant for the ground floor space at more than $100 per square foot. The second floor is leased to Bunker Capital, a blockchain consulting and advisory firm, for $68 per square foot, he said. Jacobson plans to list the property for sale once it is completed and stabilized.

The building was built in 1961 on a 9,700-square-foot lot.

Jacobson and his brother, Marc-Jean, recently launched a crowdfunding platform called RealT that allows cryptocurrency investors to invest in real estate assets, starting with rental homes in Detroit, Michigan. The company is expanding next to Cleveland, New Orleans and South Florida.

In South Florida, Jacobson heads the Aventura-based development firm J Cube Development. In November, he sold a development site in Wynwood to Quadrum Global for $8.55 million.

From left: Brookfield CEO Bruce Flatt, JW Marriott Essex House on Central Park South, Fairmont Chicago, and Fortress Chairman Wesley Edens (Credit: Getty Images)

From left: Brookfield CEO Bruce Flatt, JW Marriott Essex House on Central Park South, Fairmont Chicago, and Fortress Chairman Wesley Edens (Credit: Getty Images)

Chinese officials looking to sell Anbang’s portfolio of 15 U.S. hotels received offers from 17 bidders, including Brookfield Asset ManagementFortress Investment Group and Blackstone Group.

The bids for Chicago-based Strategic Hotels had a spread of more than $1 billion and reached as high as $5.8 billion, according to Financial Times, which also identified South Korea’s Mirae Asset Management and GIC, Singapore’s sovereign wealth fund, as potential suitors.

The portfolio includes the JW Marriott Essex House on Central Park South in New York, the Intercontinental in Chicago, the Westin in San Francisco, several Ritz-Carlton properties and several Four Seasons hotels.

Blackstone’s bid is noteworthy because it sold the portfolio to Anbang in 2016 for $5.5 billion, three months after buying it for $6 billion.

Anbang last year chose Bank of America to help with the portfolio sale,[which is now scheduled for this summer.

The sale would be Anbang’s most significant foreign deal since the Chinese government took over its operations. Anbang’s former chairman Wu Xiaohui was sentenced to 18 years in prison last year for fraud and embezzlement. [Financial Times] — John O’Brien


2520 Mercedes Drive, Fort Lauderdale

2520 Mercedes Drive, Fort Lauderdale

The trust of a towboat company magnate sold a waterfront Fort Lauderdale estate for $8.1 million.

The trust of James Ronald Hunter, the founder of Nashville, Tennesee-based Hunter Marine Transport, sold the 7,029-square-foot home at 2520 Mercedes Drive for $1,152 per square foot, records show.

The buyers are Jacques Poitras and Lisette Gagnon.

The house is in the ritzy enclave of Harbor Beach and has 100 feet of water frontage on a canal. It has five bedrooms, five bathrooms and three half-baths. Built in 2017, the house overlooks Pier Sixty-Six Hotel and Marina.

Both the buyer and seller were represented by Tim Elmes with Coldwell Banker Residential Real Estate – Fort Lauderdale Las Olas.

Hunter founded Hunter Marine in 1976 after he purchased a small towboat that he named after his mother. He grew the business to include more boats and barges, and later diversified his business by buying a large riverside bulk terminal in metro Nashville. Hunter died in 2017.

Harbor Beach is home to a number of expensive homes. David Sokol, a former executive at Berkshire Hathaway, paid $19.9 million in 2017 for a 13,000-square-foot waterfront mansion at 2400 Del Lago Drive.

Also close by, TGM Associates bought the 394-unit Broadstone Harbor Beach apartment complex in March for $136 million.

Raj Kanodia’s Bel Air spec home (Credit: Simon Berlyn)

Raj Kanodia’s Bel Air spec home (Credit: Simon Berlyn)

Amid a widespread decline in Los Angeles’ high-end residential housing market, a celebrity surgeon-turned-spec developer is ready to sell his massive Bel Air mansion project at a big price cut.

Raj Kanodia told CNBC that he will consider offers starting at just over $120 million on his 34,000-square-foot glass-box style home. Kanodia listed the property a year ago for $180 million.

He’s also willing to rent it out for $1.5 million a month.

“In Las Vegas terms it’s called ‘all in,’” he told CNBC. “I’m all in times a million.”

The house hit the market as median sales prices topped out and deals soon slowed for high-end homes. Sales have remained sluggish in the last several months in L.A.

When Kanodia listed the house last July, developer Bruce Makowsky had recently cut the price on his spec mansion next door, from $250 million to $188 million. That put the properties in direct competition for top sale in L.A.

Kanodia and Makowsky are just two of a number of spec developers left holding onto high-end homes built during the bubble in that exclusive market. Makowsky has since dropped his price again, to $150 million.

Kanodia recently took out a loan secured by the home with Bank of Internet — now called Axos Bank — although he said he has enough equity in the house to pay off any loan, according to CNBC. He reportedly spent $50 million to develop the 1.2-acre estate.

Kanodia said he’ll live in the house himself and sell his home next door if he can’t find a buyer.

“If the bubble bursts… I will accept whatever is there,” he said. [CNBC]Dennis Lynch

 2901 Coral Hills Drive and Welltower CEO Thomas J. DeRosa

2901 Coral Hills Drive and Welltower CEO Thomas J. DeRosa

Welltower bought a Coral Springs medical office building as part of a $1.25 billion portfolio acquisition from CNL Financial.

The Toledo, Ohio-based healthcare real estate investment trust purchased the office building at 2901 Coral Hills Drive for $18.35 million, records show.

The building totals 54,484-square feet and sits on 3.6 acres in front of Broward Health Coral Springs. It was constructed in 2005.

The deal is one of the 55 Class A medical office buildings Orlando-based CNL sold to Welltower on May 15. The Coral Springs office building’s tenants include Sanitas Medical Center, a primary, specialty and urgent care provider.

Welltower mostly invests in senior housing, assisted living and memory care communities, post-acute care facilities and medical office buildings, as well as hospitals, according to its website.

The company has a number of projects in South Florida. In February, a joint venture between Welltower and Revera Living scored a $25.2 million construction loan for its Sunrise of Boynton Beach senior living facility in Palm Beach County.

Last year, Welltower paid $130 million  for a senior living community in Boca Raton.


On the descent into the Wynn Hotel and Resort’s Intrigue nightclub, brokers and real estate folk were greeted by two people dressed in kaleidoscopic mirror-glassed suits, one on stilts, the other balancing on an oversized gym ball while juggling batons.

“It’s like the real estate market on steroids,” said Sam Viskovich, Reonomy’s vice president of marketing, who was attending the party hosted by Marcus & Millichap, and is a first time attendee of the International Council of Shopping Centers’ annual four-day convention in Las Vegas.

But despite the raucous reputation of the convention’s party scene known in previous years, the 2019 events were significantly more tempered. At the same Marcus & Millichap event in 2018, people dressed as trees and walking on stilts meandered through the club while dancers took the spotlight on podiums.

For longtime ICSC veterans like Kazuko Morgan, vice chairman of retail at Cushman & Wakefield in California, excess at the convention has largely been replaced by early mornings at the gym and mellower affairs.

“People in general are much more…I don’t want to say sedate. It’s just different,” she said. “Now, it’s curated cocktails with caviar,” a small, carefully-selected guest list, and a number of people claiming to be heading to SoulCycle at the Wynn for an early morning spin, according to Morgan.

It’s a stark contrast to previous years, according to Morgan, who recalled lavish parties with “women coming out of champagne glasses.”

While the retail market has been suffering, attendees attributed the toning down of the convention’s party circuit to a scaling back on spending by firms in the wake of the 2008 financial crisis, and bans on events hosted by title insurance companies, Morgan said. The title industry has been known for its wining and dining of clients, and in New York, the state recently moved to ban those companies from treating their clients to entertainment and meals.

After the pool parties kicked off on Sunday, thousands of people scuttled across the strip to various events. About 70 people attended CIM Group’s bowling tournament at the Brooklyn Bowl in the LINQ casino. Others attended dinners before heading home for an early night.

But these events were not without a handful of extravagant exceptions.

CoStar’s party at Kaos Nightclub in the Palms casino was the talk of the convention, where the data giant put on a full-blown concert with Vegas-born rock band Imagine Dragons. At Marcus & Millichap’s event, the top-40 playlist blasting across the club’s artificial lagoon was enough to lure some brokers and real estate folk onto the dance floor, before the lights flashed on at just before midnight, signaling that it was time to go home.

After a jam-packed day on the convention floor Monday, parties again took off. Newmark Knight Frank threw its annual show at Marquee Nightclub in the Cosmopolitan casino. The flashy event stood in stark contrast to the goings-on several floors up in the same hotel, where Avison Young and Lee & Associates had leased a four-story apartment – complete with staged bedrooms and a hot tub overlooking the Las Vegas strip – for its party.

As the hot tub gurgled in the unusually cold Vegas night, one broker debated how to spend the hours before his 6 a.m. flight back to New York.

“I can’t sleep,” he said, before ultimately deciding to head to a 2 a.m. Chainsmokers concert.

Ocean Terrace renderings, Alex Blavatnik and Sandor Scher

Ocean Terrace renderings, Alex Blavatnik and Sandor Scher

UPDATED, May 22, 11:20 p.m.: As part of their plan to build a $220 million mixed-use project along Ocean Terrace in Miami Beach, partners Alex Blavatnik and Sandor Scher want to take ownership of the public streets and sidewalks surrounding the proposed development.

The potential deal would allow Blavatnik and Scher to include the public right-of-way as part of the project’s footprint. In exchange, the North Beach developers are dangling $15 million in park and streetscape improvements on Ocean Terrace between 73rd and 75th streets. The city would still control the sidewalks and streets and keep them open to the public.

The city’s land use and development committee voted on Wednesday morning to give the proposal a favorable recommendation, although one member, City Commissioner Michael Gongora, expressed discomfort with giving a private developer complete control of public streets and sidewalks.

“We can’t create the perception that we are creating a private park,” Gongora said. “I am super concerned about taking out parking. It is not so great for the rest of the city that wants access.”

The Miami Beach finance committee will evaluate the developer’s offer next week before going before the city commission.

Last January, the Miami Beach Historic Preservation Board granted Blavatnik and Scher permission to tear down portions of 12 historic buildings on more than 2 acres of land between 73rd and 75th streets and between Collins Avenue and Ocean Terrace. The new development will be anchored by a luxury hotel similar to Faena Miami Beach, a luxury condo tower, street-level retail, restaurants and a parking garage.

According to memos from City Manager Jimmy Morales this week, the developers want to use portions of the public right of ways on 74th and 75th streets between Ocean Terrace and Collins Avenue as part of the project’s floor area ratio. “The proposed vacation would allow the developer to make its proposed mixed use project financially viable,” Morales wrote.

The developers would sign an agreement with Miami Beach to build the $15 million park and streetscape improvements within 48 months of the city commission approving the deal.

Blavatnik and Scher would also provide the city with an irrevocable easement that would continue to allow public access to the streets and sidewalks. An appraisal obtained by the city determined the public right-of-ways are worth $11 million.

Late last year, Crescent Heights scored approval from the city to build a taller tower on the property at 500 to 700 Alton Road in exchange for a 3-acre public park that will be designed by Arquitectonica GEO, on the 600 block. Crescent Heights, led by developer Russell Galbut, has since brought on fifty-fifty partner David Martin in on the project, called the Park on Fifth.

4412 North Bay Road (Credit: One Sotheby’s International Realty)

4412 North Bay Road (Credit: One Sotheby’s International Realty)

UPDATED, May 23, 9:40 a.m.: The brother of Miami Worldcenter developer Dan Kodsi sold a Miami Beach home for $13 million.

Isaac Kodsi, an attorney and owner of Ark Financial Group, and his wife Teresita Menendez Kodsi, sold their waterfront property at 4412 North Bay Road to 4412 North Bay Road Land Trust, an undisclosed buyer, records show.

The seven-bedroom, eight-and-a-half-bathroom home has nearly 10,000 square feet of space, a private courtyard, three-car garage, cabana pool house, and a detached office. It was built in 2010.

Albert Justo and Mirce Curkoski of The Waterfront Team at One Sotheby’s International Realty had the listing. Richard Steinberg and Payton Smith of Douglas Elliman represented the buyer.

The Kodsis paid $4.25 million for the property in 2005 and later built the mansion.

Kodsi’s brother Dan is a co-developer of Paramount Miami Worldcenter, a 60-story, 530-unit building under construction at the mixed-use, master-planned Miami Worldcenter.

A number of high-end homes have sold in Miami Beach so far this year. Yext founder and CEO Howard Lerman paid $17 million in February for a 10,665-square-foot spec mansion at 6010 North Bay Road.

Savannah Lakes

Savannah Lakes

Savannah Lakes — IMT Capital | $90.5M

IMT Capital bought a 466-unit townhome community in Boynton Beach for $90.5 million, marking one of South Florida’s largest multifamily deals of the year.

The 25.6-acre Savannah Lakes community sold for $194,206 per unit. The community at 1001 South Broughton Drive is off of East Gatehouse Boulevard.

The sellers are Madison, New Jersey-based PGIM Real Estate and Atlanta-based Carroll Organization. They had bought the property from Greystar in April 2018 for an undisclosed price. Greystar had purchased the property in 2013 for $59.2 million, records show. The townhome development was built in 1991.

Silver Blue Lake Apartments

Silver Blue Lake Apartments

Silver Blue Lake Apartments — Newcastle Lake | $23.3M

A company tied to Shiff Group Holdings sold a 239-unit apartment complex in Miami’s Little River neighborhood for $23.3 million.

Zvi Shiff, of Shiff Group Holdings, sold the 239-unit development at 1401 Northwest 103rd Street for about $97,489 per unit, records show. The buyer is a Delaware company, Newcastle Lake LLC.

The Silver Blue Lake Apartments are right off I-95 near Miami Shores City Hall.

The apartment complex has one- to three-bedroom units with monthly rents ranging from $1,125 to $1,500, according to

Boca Villa Apartments

Boca Villa Apartments

Boca Villa apartments — Giles Capital Group | $13.5M

Giles Capital Group sold the Boca Villa apartments in Boca Raton for $13.5 million.

The buyer is the Marina & Briana Limited Partnership, which is managed by Michael Mele.

Boca Raton-based Giles sold the 53-unit apartment complex at 100 West Hidden Valley Blvd for $254,716 per unit. Apartments range from one to two bedrooms. The development sits right off the Federal Highway.

Riverwalk II Apartments

Riverwalk II Apartments

Riverwalk II Apartments — Jeremy Bronfman | $12M

A company tied to a member of the wealthy Bronfman family bought a 112-unit affordable apartment complex in Homestead for $12 million.

Jeremy Bronfman, a scion of the family that founded the spirits company Seagrams, bought the apartments at 301 Southeast Sixth Avenue for $107,142 per unit, records show. Miami-based Treevita Group, led by Hugo Cascavita, sold the property.

Riverwalk II Apartments total 89,218 square feet and were built in 1994, records show. They are subsidized under the Low Income Housing Tax Credit program.

Havana Palms II

Havana Palms II

Havana Palms II | $10.1M

Key International sold a group of apartment buildings in Little Havana for $10.1 million.

The Miami-based company, led by co-presidents Inigo and Diego Ardid, sold Havana Palms II, a 79-unit multifamily complex at 931 Southwest Third Street in Miami, to an undisclosed foreign buyer, according to Marcus & Millichap.

The 2-acre property includes 10 buildings built in 1947. The property was 97 percent occupied at closing. Havana Palms II sold for about $128,000 per apartment.

The property, which could eventually be redeveloped, consists of three studios, 48 one-bedroom apartments and 28 two-bedroom apartments.

Chef Timon Balloo and Felix Bendersky with the Ingraham Building (Credit: Twitter, Facebook and Google Maps)

Chef Timon Balloo and Felix Bendersky with the Ingraham Building (Credit: Twitter, Facebook and Google Maps)

UPDATED, May 23, 1:50 p.m.: 

Balloo and Bar Lab Group | Downtown Miami

Chef Timon Balloo, a chef-partner at Sugarcane Raw Bar Grill, is opening a new concept in downtown Miami called Balloo: Modern Home Cooking. The 800-square-foot restaurant is set to open at the Ingraham Building in downtown Miami this summer.

Bar Lab Group, led by mixologists Gabriel Orta and Elad Zvi, signed a lease for 1,172 square feet at the Ingraham Building, at 25 Southeast Second Avenue, as well. Orta and Zvi, of the Broken Shaker, the Anderson and other popular Miami bars, are still determining what the concept will be, but Orta confirmed that they are considering a wine and amaro bar called Margot Wine Bar.

Orta said he and his partner will be traveling to Prague, Copenhagen and Israel this summer and will finalize the concept after that, “but we do know for sure it’s going to be beer and wine.” It’s expected to open by the end of the year.

Real estate investor Shai Ben-Ami will partner with both tenants on ownership and buildout. Bar Lab Group will also work with Balloo on his restaurant.

Felix Bendersky of F+B Hospitality Brokerage, and Mika Mattingly and Soleil Mershon of Colliers International South Florida represented the landlord, and Ben-Ami represented the tenants.

Bunbury | A&E District

Bunbury Wine Bar is hopping over from Wynwood to Miami’s Arts & Entertainment District.

The wine bar and restaurant closed its original location at 2200 Northeast Second Avenue and opened at the Melo Group’s Square Station, at 1420 Northeast Miami Place. Bunbury is leasing 7,500 square feet of ground floor retail space at Square Station. Unlike its original location, the restaurant is open for breakfast and lunch.

Melo closed on a $142 million refinance of the project in December. The two-tower, 710-unit development was completed about a year ago and is fully leased.

Via Emilia Garden | Midtown Miami

Nonna Beppa Hospitality Group signed a 10-year lease for Via Emilia Garden in Midtown Miami, at 3500 North Miami Avenue.

Claudia Lorenzi, president of Orange Realty Miami, brokered the deal. The restaurant, led by chef Wendy Cacciatori and her wife Valentina Imbrenda, will feature the same menu as its sister location in South Beach. The Midtown space has 2,000 square feet of indoor and outdoor space with an open kitchen and Italian market.

Riverside | Miami Riverfront

Riverside, a new waterfront food hall, is expected to open this summer at 431 South Miami Avenue. The 120,000-square-foot space will have two full-service restaurants: AWA, an Asian concept, and an as-yet unnamed high-end steakhouse. It will also have a Miami River Brewery taproom and fast-casual concepts that include Le Chick, Old Lisbon and Morgan’s.

Salty Donut | South Miami

The Salty Donut is finally opening in South Miami. The popular Wynwood donut shop is leasing 1,300 square feet at 6022 South Dixie Highway, in the former Fox’s Lounge building.

Lndmrk Development and Wynwood Retail Co. are redeveloping the properties at 7435 Southwest 61st Avenue and 6022-6030 South Dixie Highway. Dwntwn Realty Advisors’ Tony Arellano arranged the lease. The asking rent was $65 per square foot, triple net. Salty Donut signed a five-year deal with a five-year extension.

Pompano Beach Fishing Village | Pompano Beach

Pompano Pier Associates has leased its Pompano Beach Fishing Village to: Pompano Beach House, which is open; Oceanic, opening this summer; and Lucky Fish, opening in the fall. Next year, Kilwins, Cannoli Kitchen and BurgerFi are all set to open.

Pompano Beach Associates closed on a $1.7 million loan in 2017 to finance construction of the project, which will include a dual-branded Hilton Hotels property. The developer holds a 50-year ground lease from the city for the site.

Pinstripes | Aventura

Pinstripes is opening a 30,000-square-foot location at the Esplanade at Aventura, which is under construction. It is being developed by Seritage Growth Properties, near Aventura Mall.

The two-story Pinstripes will feature an Italian-American bistro and wine cellar, 12 bowling lanes, indoor and outdoor bocce courts and event space.

Time Out Market | Miami Beach

Time Out Market opened earlier this month in Miami Beach. The over 18,000-square-foot food hall, at 1601 Drexel Avenue, features 18 eateries, including: Coyo Taco, Kush, Bachour, 33 Kitchen, Azucar and Miami Smokers.

Instead of charging rent, Time Out takes a percentage of the chefs’ revenues from sales.

CoreLogic CEO Frank Martell (Credit: iStock)

CoreLogic CEO Frank Martell (Credit: iStock)

The U.S. Justice Department is demanding multiple listings service vendor CoreLogic hand over data, as scrutiny intensifies over antitrust claims in the sector.

CoreLogic, a financial services and analytics firm, notified clients of the request this week, according to Inman. The company stated that the Justice Department had asked for MLS data relating to buyer broker commissions and its policy language around the appropriate handling of the data. Other vendors have also received similar requests, the outlet reported, citing a blog by 7DS Associates.

The goal of the inquiry was not immediately clear, but it follows a class action lawsuit filed against the National Association of Realtors, accusing it of conspiring with the country’s largest brokerages to determine buyer agents’ compensation. The suit, led by multiple home sellers, named Realogy, HomeServices of America, RE/MAX and Keller Williams as co-defendants.

Earlier this month, CoreLogic was targeted in a lawsuit brought by the Austin Board of Realtors in Texas, which accused the firm of selling home sale data to a local appraisal organization. [Inman] — David Jeans


Joe Carollo and a Coconut Grove House

Joe Carollo and a Coconut Grove House

It looks like Miami Commissioner Joe Carollo’s outspoken goal to enforce code violations in Little Havana has come back to haunt him.

Miami government officials went to Carollo’s home in Coconut Grove on Monday and found five violations for work done without permits, according to the Miami Herald.

The Herald obtained an email showing that employees from the city’s code compliance, building and public works departments on Monday noticed violations on Carollo’s homes for work down on a wood lattice, rooftop deck, carports, a trimmed banyan tree and concrete pavers – all of which required permits.

Bill Fuller, a Little Havana developer, was the first to point out Carollo’s code violations in a press conference outside Miami City Hall two weeks ago.

Fuller and Carollo have been in a public feud since 2017, which Fuller claims started after he supported an opponent of Carollo in an election.

The commissioner has sent code enforcement officers to a majority of properties tied to Fuller, and he has gone on Spanish radio to accuse Fuller of wanting to “de-latinize” Little Havana. He also allegedly pressured a former aide to lie about his interest in code issues on Fuller’s properties.

Carollo has defended his late-night visits to Ball & Chain to find violations.

Last year, Fuller and his business partner Martin Pinilla filed a lawsuit against Corollo in federal court, alleging the commissioner violated their right to free speech, using code enforcement to retaliate against them for supporting his opponent, Alfie Leon, in last year’s election. [Miami Herald]Keith Larsen

The welcome message plastered above the Las Vegas convention center said what people in the retail industry have had a hard time coming to terms with in recent years: “Less traditional. More innovative.”

As bankruptcies, store closings and e-commerce have increasingly dragged revenues away from retailers, attendees of this year’s International Council of Shopping Centers convention expressed unwavering optimism.

“Retail has always had to reinvent itself,” said Dan Spiegel, the managing director of Coldwell Banker Commercial. “We are now just going through a faster rate of change.”

Following the traditional Sunday festivities that kick off the annual conference at hotel pool bars, Monday morning was anything but a sleepy start. Close to 30,000 people flowed through convention center that day, while a never-ending line outside the center’s only Starbucks outpost continually formed. By midday, much of the New York crowd headed to Meridian Capital Group’s lunch event, which featured a smorgasbord of food trucks.

Speaking about New York in particular, Jeffrey Roseman, a vice chairman at Newmark Knight Frank, described owners as generally “cautious” and said they were no longer holding out for big rents, while most retailers are “being smarter and a little more conservative” with how they spend their money on brick-and-mortar.

Crowds formed at panels that were largely dedicated to innovative concepts that can drive retail tenants back to storefronts. One talk included a Q&A with heads of startups that are disrupting the space, including StoreFront, whose CEO Mohamed Haouache describes the company as the “Tinder of retail” because of it matches tenants with landlords.

Still, some noted an observed lower number of attendees this year in comparison to 2018.

“It looks not as crowded as it has been in other years,” said Maurice Nieman, an executive managing director of Savills’ capital markets group in Los Angeles.

Thomas Lorenzo, Hilton’s managing director of developing in the northeast U.S. and Canada, echoed the sentiment, calling Monday’s crowd, which is typically the peak, “definitely lighter.”

However, those observations didn’t ring true at the major commercial brokerage booths. CBRE and JLL had sprawling setups facing one another that were each filled with hundreds of people dealmaking across tables.

While waiting for a meeting at Cushman & Wakefield’s booth with Starbucks for a shopping center client, Kelly Rule from Pappas Investment described the conference as “crazy.” She said she’s been coming for 10 years but this year “it’s just been shoulder to shoulder.” When she heard others’ reported less people, she said “talk to some brokers.”

CoStar Group, which has the only two-story booth in the convention, this year converted the upper floor into a television studio, where CEO Andrew Florance was seen being interviewed. Downstairs, he was later playing cards with other CoStar executives. Similar to last year, a Model S Tesla with $25,000 in cash spread inside the dashboard was on display. CoStar auctioned it off on Tuesday afternoon.

On Tuesday, as per usual, many attendees headed home. But some dedicated folk stayed on.

Brandon Singer, a leasing broker at Cushman whose clients largely comprise new-age, retail disruptors, was still taking meetings in the firm’s bustling booth late that morning.

He said many of his clients – which include Showfields, the self-proclaimed WeWork of retail, and 3den, an amenitized rest space – didn’t attend the conference themselves because of scale. They’re working on a handful of deals as opposed to the dozens larger retailers may be ironing out, he explained, “it’s a long flight for one meeting.”

“It probably seems like it’s quieter,” he said. “[But] this year, I actually felt momentum was up.”

Simon Ziff of Ackman-Ziff Real Estate Group had a different takeaway: “This year more of our meetings were about capitalizing mixed-used projects and significant redevelopments with retail as a smaller component.”

Photos by Erin Hudson. 

Ashley McHugh-Chiappone contributed reporting.

Marcelo Kingston and a rendering of 57 Ocean (Credit: DBOX)

Marcelo Kingston and a rendering of 57 Ocean (Credit: DBOX)

The developer of a boutique luxury condo project in Miami Beach is adding units based on increased demand, a rarity during a condo market slowdown.

Multiplan Real Estate Management is adding 10 “sky residences” to 57 Ocean, now a 71-unit development planned for 5775 Collins Avenue, managing partner Marcelo Kingston said. That brings the number of sky residences to 18, up from 8.

Penthouse Living Room Wine Cooler (Credit: DBOX)

Penthouse Living Room Wine Cooler (Credit: DBOX)

Kingston said the developer decided to reconfigure the building’s design after selling more than half of those units, which range from $6.95 million to $8.5 million. The “sky residences” have more than 5,000 square feet of indoor and outdoor space, four bedrooms, a family room, and 12-foot-deep terraces facing the city and the ocean. They’ll be located on the south and north corners on the upper floors of 57 Ocean.

Kingston said the project’s presales speak to the quality of the building in an oversaturated marketplace. Developers have largely held off on launching new condo projects in Miami’s high-end, coastal markets due to the slowdown in new development condo sales.

But Kingston said that he’s seeing an increase in buyers from New York. That could be due to an increase in “tax refugees” – a.k.a. ultra wealthy buyers who are flocking to states with no income tax like Florida due to changes in the tax code.

Gourmet Kitchen (Credit: DBOX)

Gourmet Kitchen (Credit: DBOX)

Penthouses at 57 Ocean range from $15 million to $35 million. And a penthouse duplex, which can be customized by size, is also available.

Multiplan, led by Brazilian billionaire José Isaac Peres, launched sales of 57 Ocean with Fortune Development Sales in October and unveiled a multimillion-dollar sales center in January.

The beachfront property was previously home to the Marlborough House condo building, which unexpectedly collapsed at once during its planned demolition last year, killing a project manager. Earlier this year, the family of that project manager filed a wrongful death lawsuit against the contractor and subcontractors, as well as the developer.

Miami skyline (Credit: iStock)

Miami skyline (Credit: iStock)


After a rough first quarter, residential sales in Miami-Dade increased slightly in April, up 1.1 percent year-over-year to 2,629 closings. The total sales volume in April was $1.23 billion, compared to $1.19 billion a year earlier.

Single-family home sales rose nearly 4 percent to 1,265, while condo sales decreased by 1.4 percent to 1,364, according to the Miami Association of Realtors. In March, condo sales rose sharply, up 18 percent year-over-year.

Prices increased as well, up 3.2 percent in April for single-family homes to $356,000, and up 2.8 percent to $248,000 for condos.


Residential closings rose in Broward as well, increasing by 4.4 percent year-over-year to 3,141 sales. That’s thanks to an 11.8 percent jump in single-family home sales, up to 1,541 closings. Condo sales in Broward fell by nearly 2 percent to 1,600 closings.

The total sales volume passed the $1 billion mark, totaling $1.1 billion in April, up from nearly $987 million.

Despite the jump in single-family home sales, the median price of a house rose only 1.3 percent to $360,000. The median price of condos increased by 5.3 percent to $170,000.

Palm Beach

Residential sales were essentially flat year-over-year in Palm Beach County, increasing by 0.03 percent or one sale. Single-family home sales rose to 1,714 closings, up 1.4 percent. Condo sales fell by 1.6 percent to 1,384.

Sales volume also remained flat at $1.4 billion, as did the median price of single-family homes, which was $350,000 in April. Condo prices increased slightly, by 1.8 percent, to $185,000.

Ben Carson (Credit: Getty Images and iStock)

Ben Carson (Credit: Getty Images and iStock)

Milk’s Favorite Cookie, better known as Oreo, took center stage in a congressional hearing Tuesday morning.

Housing and Urban Development Secretary Ben Carson could not come up with a definition for the common real estate foreclosure term, REO, instead confusing it with the tastier alternative, Oreo cookies.

REOs, Rep. Katie Porter pointed out, is an abbreviation for “real estate owned.”

The California Democrat was attempting to ask Carson about the difference in REO rates between Federal Housing Administration loans and Fannie Mae or Freddie Mac loans. When she asked him if he knew what an “REO” is, he responded, “an Oreo?”

Carson was able to come up with two out of the three words in the acronym, incorrectly stating that “REO” stands for “real estate organization.”

Like most political slips of this kind, the exchange is now trending on Twitter. After the hearing concluded, Carson tweeted a photo of himself with a pack of Double Stuf Oreos he sent to the congresswoman.

(Credit: Twitter)

(Credit: Twitter)

Carson, a former Republican presidential candidate, is exploring the option of staying on for a second term as secretary, he previously told The Real Deal. He’s met opposition recently over his department’s plan to roll back subsidies for low-income residents and undocumented immigrants. [BI] — Natalie Hoberman

Dean Trantalis, Ken Valach, and a Alexan Tarpon River rendering

Dean Trantalis, Ken Valach, and a Alexan Tarpon River rendering

When Trammell Crow Residential brought plans to bring a new 21-story, 180-unit apartment tower in downtown Fort Lauderdale in 2017, the project seemed like a sure thing.

Two city committees had found the project to have largely met the city’s guidelines. It also received approval from the historic preservation board. But a year later, under a new mayor and new city commissioners, the Alexan Tarpon River project never received approvals from the city and the project never got off the ground.

Edgewater Condo Association, which represents the unit owners of the existing building at 501 Southeast Sixth Avenue, filed a lawsuit this month against the city of Fort Lauderdale in federal court alleging the city discriminated against the project. It further alleged “the Commission acted arbitrarily and capriciously and in furtherance of no legitimate government interest.”

Developers often grow frustrated at city officials for halting their planned development projects. The lawsuit shows, however, that these tensions may be escalating under Fort Lauderdale Mayor Dean Trantalis and the commissioners, who are more reluctant to approve new real estate development than previous administrations.

In March 2018, the design review board approved plans for the Alexan Tarpon project, a decision that would become final 30 days from then unless the commission decided to review the application. In order to review the application, the commission would first have to find that the project “misapplied or failed to apply one or more” of the city’s requirements, according to the lawsuit.

The commission then called the project up for another hearing in May 2018. At this meeting, the developer proposed reducing the height to 14 stories to alleviate some of the neighborhood’s concerns.

Also during this meeting, the complaint alleges that commissioner Steve Glassman’s misgivings about the project came from his constituents, who told him “don’t forget why we voted for you, we voted for you…. To slow down development.”

The developer did not receive approvals for the project in May and attempted to reduce the number of units to 120 its next meeting in June. The committee pushed for another meeting in August.

This time, the developer went back to proposing to build 180 units and the commission ultimately denied the application by a vote of 3 to 2.

The lawsuit alleges the commission never stated how it failed or misapplied its requirements with the city. It also alleges that the city approved four other developments, including a 374-unit, 32 story residential building at 419 Southeast Second Street that were indistinguishable from Trammell Crow’s project.

The condo association claims it has been deprived of its “basic fundamental rights of equal protection and procedural due process under the law.”

A spokesperson for Trammell Crow Residential declined comment citing pending litigation. The city of Fort Lauderdale did not respond to a request for comment.

David Beckham, Jorge Mas and a rendering of the Overtown stadium

David Beckham, Jorge Mas and a rendering of the Overtown stadium

David Beckham and his partners will close on a site in Miami’s Overtown neighborhood, even as they forge ahead with their plans to build a mega-soccer stadium complex on a different property near Miami International Airport.

According to a statement from Inter Miami CF, the Major League Soccer team owned by Beckham, Jorge and Jose Mas and others, the group remains “fully committed to bringing Major League Soccer to the City of Miami and creating Miami Freedom Park, as approved by 60% of Miami voters” but will close on the $9 million purchase of the Overtown property.

Miami Beckham United LLC has been under contract to buy the county land, putting a $450,000 deposit down so far. Another payment of $901,500 was due in June 2018 before Miami-Dade Mayor Carlos Gimenez agreed to extend the deadline until litigation over the no-bid land deal was resolved.

Activist Bruce Matheson sued to undo the deal but failed to win at trial and on appeal. Last week, the Florida Supreme Court declined to hear an appeal by Matheson. Miami Beckham United was facing a seven-day deadline from that decision to notify the county whether it wants to surrender the three acres or pay $901,500 to keep the county land under contract.

In March, Jorge Mas told the Miami Herald that the land in Overtown was a backup stadium site if the group fails to negotiate a deal to build a stadium at the city-owned Melreese golf course in Miami.

Mas said in a statement that Inter Miami CF is still set on the Melreese property. “Our vision includes a 58-acre public park, soccer stadium with a great fan experience and high-paying jobs on the Melreese site,” he said.

Miami-Dade County Mayor Carlos Gimenez told the Herald that Mas and his partners plan to seek building permits for a stadium on the Overtown land. He also said they discussed building other projects on the property, including affordable housing.

The county commission would have to approve a change in the intended use of the property if the group decides to move forward with a project other than a stadium.

At the same time, Beckham and his partners are planning to build a temporary home for their soccer team.

Miami Beckham United also signed an agreement with the city of Fort Lauderdale to replace city-owned Lockhart Stadium with a training facility and an 18,000-seat stadium where its MLS team would play in its first two seasons in 2020 and 2021.

Dressbarn is set to close down 650 stores (Credit: iStock)

Dressbarn is set to close down 650 stores (Credit: iStock)

Dressbarn is the latest casualty of the retail apocalypse.

Ascena Retail Group announced on late Monday it planned to wind down operations for its Dressbarn chain and close all of its 650 stores, according to a press release. The company did not give a date as to when it would officially close its stores. Ascena Retail Group also owns the Justice, Lane Bryant, and Catherines clothing store brands.

“This decision was difficult, but necessary, as the Dressbarn chain has not been operating at an acceptable level of profitability in today’s retail environment,” said Steven Taylor, CFO of Dressbarn, in a statement.

The women’s clothing retailer, founded in 1962 by Elliot and Roslyn Jaffe in Stamford, Connecticut, has about 6,800 employees, according to its website. Dressbarn has eight stores in South Florida, including two in Miami, one in Boca Raton and one in West Palm Beach. The company also has 10 stores in New York City and one in Los Angeles, according to its website.

Retailers like Dressbarn have faced significant challenges due to the rise of e-commerce and new fast-fashion brands such as H&M and Zara.

Over the past year, a number of retailers have shed hundreds of stores or filed for bankruptcy amid slowing sales. In February, Payless ShoeSource announced its plans for bankruptcy resulted in the closure of all of its 2,300 stores.

Real estate investors and developers are still trying to figure out what to do with distressed retailers and how to reposition the space caused by these closures. A report from CBRE found that fitness, furniture and entertainment businesses are likely to fill the vacant spaces in the Greater L.A. retail market.

CBS 5-17-19 No Exit Paramount Miami Worldcenter from World Satellite Television News on Vimeo.

A very Jetson future is here, and it’s live on television. Paramount Miami Worldcenter was featured on CBS Sunday Morning for its flying carport amenity.

Developer Dan Kodsi has modified the condo tower’s design to fit a 5,000-square-foot skyport on top of the 60-story, 530-unit building. While it would be years before flying cars reach Miami, the condo association could vote to convert what will be a rooftop pool into a rooftop landing pad for passenger drones.

Kodsi told CBS that worsening traffic makes the Jetsons-style living appealing. “We just don’t have room to grow our roads anymore,” he said.

When asked if buyers take it seriously, he said: “Some question it. I don’t think they understand it enough.”

Kodsi is co-developing Paramount with Worldcenter developers Art Falcone and Nitin Motwani. It’s set to be delivered this year. [CBS]Katherine Kallergis

Rotem Rosen and Zina Sapir

Rotem Rosen and Zina Sapir

Another real estate romance is ending in divorce.

Israeli-born developer Rotem Rosen and Zina Sapir-Rosen, daughter of the late real estate mogul Tamir Sapir, are splitting after 12 years of marriage.

The couple, who married in 2007, reportedly have two children. Their lavish wedding took place at Mar-a-Lago, and featured a fireworks display and performances by Lionel Ritchie and the Pussycat Dolls. (President Trump, a “good friend” of both the bride’s father and Rosen was in attendance.)

According to court records, Sapir-Rosen filed for an uncontested divorce last month — meaning a division of the couple’s real estate and other holdings won’t play out in court. The couple owns a sprawling Upper East Side penthouse where the “Wolf of Wall Street” was filmed. Sapir-Rosen bought the condo at 300 East 55th Street for $7.6 million in 2005, property records indicate.

Sources said Rosen’s relationship with his wife’s brother and former business partner, Alex Sapir, had strained the couple’s marriage.

Sapir-Rosen, 44, is being represented by Patricia Hennessey, who represented Vanessa Trump in her divorce from Donald Trump, Jr. Steven Silpe and Marc Kasowitz, President Trump’s former lawyer, is representing Rosen, 42. The attorneys did not immediately respond to a request for comment.

Rosen made a name for himself as CEO of Africa Israel USA, a holding company controlled by Russian oligarch Lev Leviev. He held that job from 2005 to 2009, when he was named CEO of the Sapir Organization, working closely with Alex Sapir, then president of the family firm.

In the wake of the financial crisis, Rosen and Sapir restructured the family’s portfolio, notably by recapitalizing and leasing 11 Madison, which the company and minority partner CIM Group sold to SL Green Realty for $2.6 billion in 2015 — which that year was the largest single-asset trade and at the time set a record the second-highest sale price for a U.S. office building. They sold 50 Murray and 53 Park Place to David Bistricer for $560 million in 2014. That year, they also also picked up the Mondrian Soho Hotel (formerly owned by Morgans Hotel Group) for $205 million. The Sapir Organization also developed the 26-story condo-hotel Trump Soho.

Shortly after Tamir Sapir died in 2014, Rosen and Alex Sapir went on to purchase ASRR Capital, a publicly-traded Israeli company with developments in Miami and New York.

Last year, Rosen and Alex Sapir split — with Sapir buying out Rosen’s stake in ASRR for $70 million. (Kasowitz represented Rosen in that breakup, too.) The company changed its name to Sapir Corp. Ltd. in 2018.

Last year, Rosen co-founded MRR Development with billionaire industrialist Anand Mahindra and Jerry Rotonda, former CFO of Deutsche Bank of the Americas. Rosen subsequently bought out Rotonda’s stake and recently tapped Danny Avidan — ASRR’s former CEO — as CFO of MRR, according to filings on the Tel Aviv Stock Exchange.

William Bishop and 11656 Lake House Court (Credit: Vimeo)

William Bishop and 11656 Lake House Court (Credit: Vimeo)

It looks like William Bishop found himself a nice treat after he sold his Blue Buffalo pet food company to General Mills for $8 billion last year.

The trust of the founder and former CEO of the Connecticut-based company paid $6.4 million for a home in North Palm Beach, property records show.

Phyllis Palmer sold the 4,345-square-foot home at 11656 Lake House Court to Bishop for $1,472 per square foot. Records show Palmer initially purchased the house for $5.5 million in 2006.

The four-bedroom, four-and-a-half home was built in 1999 and is next to the Lost Tree Club, a Jack Nicklaus signature golf course.

Bishop started Blue Buffalo in Wilton, Connecticut, in 2002 and served as the president from 2007 to 2012, according to Bloomberg. The company was able to garner market share from large competitors like Purina with its healthy and natural dog food flavors.

Bishop previously co-founded SoBe Beverages in 1995 which was ultimately sold to PepsiCo in 2001 for $370 million.

The Lost Tree Golf Course has attracted a number of wealthy buyers. Thomas Hagerty, managing director at private equity firm Thomas H. Lee Partners, and his wife Jeanne, paid $7.25 million last year nearby for a home at 12087 Turtle Beach Road.

US President Donald Trump and Chinese President Xi Jinping (Credit: Getty Images and iStock)

US President Donald Trump and Chinese President Xi Jinping (Credit: Getty Images and iStock)

While the stock market at large took a beating amid last week’s escalation of the U.S.-China trade war, one sector continued to show strong growth: real estate.

By offering investors more exposure to domestically-oriented businesses, real estate investment trusts have largely established themselves as a safe haven from global supply-chain disruptions, the Wall Street Journal reported.

“Our conclusion is that for U.S. REITs, it is mostly a nonevent,” Amanda Black, managing director of investment-management firm Jaguar Listed Property told the Journal.

In trading on May 10 and 13 — the day President Trump announced new tariffs on Chinese goods, and the following Monday — REIT shares rose by 0.9 percent while the S&P 500 fell 2.1 percent. Manufacturing companies took a bigger hit, with Caterpillar and Boeing each falling by about 4.5 percent.

The safe-haven status of REITs varies by sector, with residential and health-care considered the most defensive since their strength is tied more to demographic growth than the economy.

On the other hand, hotel and retail REITs are likely to suffer more from an economic slowdown. Data-center REITs like Equinix, which has properties in 24 countries, potentially have more exposure to geopolitical turmoil but have yet to see a major impact.

The most directly-impacted sector may be construction, though the reaction there has also been mixed so far, as The Real Deal detailed last week.

Real-estate stocks are more vulnerable to another type of economic uncertainty, however. Given the industry’s dependence on debt financing, rising interest rates can have a significant impact on stock prices. The Federal Reserve has so far indicated that it not planning further interest rate hikes. [WSJ] — Kevin Sun


James Reyes and 560 Island Drive (Credit: Realtor)

James Reyes and 560 Island Drive (Credit: Realtor)

A member of a Chicago billionaire beer distribution family bought a waterfront mansion in Palm Beach’s Everglades Island for $12.5 million.

James Reyes and Jennifer Ruth Blair bought the 6,314-square-foot home at 560 Island Drive for $1,979 per square foot, records show. The two bought the property from trucking magnate Fred Barbara and his wife Lisa Humbert, who list their mailing address as 561 Island Drive, across the street.

The Reyes’ new home has six bedrooms and eight-and-a-half bathrooms. It was built in 1997, property records show.

The Reyes family owns the largest beer distributor in the U.S., Reyes Beverage Group. It also owns, Martin Brower, the biggest food distributor to McDonald’s. Forbes estimated that the family had a net worth of more than $8.6 billion in 2015. James Reyes is in charge of Reyes’ real estate portfolio which includes 65 facilities and over 6 million square feet of office and distribution space in North America, according to Bloomberg.

Barbara and his family ran a Chicago-based trucking company that made millions from lucrative contracts with the city. He is the grandson of early Chicago mobster Bruno “The Bomber” Roti Sr. and the nephew of Chicago alderman Fred Roti, who the FBI accused of being a “made” member of the Mob, according to the Chicago Sun Times.

The seller was represented by Paula Wittmann of William Raveis South Florida, while the buyer was represented by Kim Raich of Sotheby’s International Realty.

Palm Beach’s Everglades Island sits on the west side of Palm Beach. Among sales in the last few months, the widow of an heir to the Colgate-Palmolive fortune sold her estate at 655 Island Drive for $12.68 million. In February, Malasky Homes sold a 5,769-square-foot spec home at 608 Island Drive on Everglades Island for about $2,695 per square foot.

Omni founder Thomas McLeod and Clutter co-founders Brian Thomas and Ari Mir

Omni founder Thomas McLeod and Clutter co-founders Brian Thomas and Ari Mir

UPDATED, May 21, 10:35 a.m.: A few months after a cash infusion courtesy SoftBank, Culver City-based storage startup Clutter has swallowed up a competitor.

Clutter has purchased the storage business of Bay Area-based Omni for an undisclosed sum, according to TechCrunch. Omni will remain an independent company and now focus on its platform that allows people to rent personal items from other users. Omni launched in Los Angeles last month.

Some of that acquisition cash likely came from the $200-250 million it raised in a SoftBank-led round of funding in February. The firm previously raised $64 million in 2017.

At the time, Clutter wouldn’t say how it would use the money, but Clutter CEO Ari Mir told TechCrunch on Friday that the company has been working on the deal since at least March.

For the user, Clutter functions much like traditional moving and storage companies — employees show up, pick up items, and store them until you want them back.

Behind the scenes it’s a little more complex. Clutter takes photos of stored goods, catalogues them digitally, and stores them in large facilities in cheaper markets outside metro areas. In theory, that should allow Clutter to cut down on costs.

Clutter is one of dozens of real estate tech — also called proptech — that’s attracting venture capital cash. L.A. is a popular market for startups and many are based in the area. Last month, commercial platform Truss launched in the city after raising $15 million. [TechCrunch]Dennis Lynch

Doral View with Jonathan Gray, Jorge Perez and Bill Walton

Doral View with Jonathan Gray, Jorge Perez and Bill Walton

Blackstone Group paid $208.75 million for a pair of neighboring apartment complexes in Doral, marking the largest multifamily deal in South Florida so far this year.

The Related Group and Rockpoint Group sold 720 units, split between Doral View at 901 Northwest 97th Avenue and Town Fontainebleau Lakes at 1062 Northwest 87th Avenue. Blackstone paid about $290,000 per apartment.

Cushman & Wakefield’s Robert Given, Troy Ballard, Zachary Sackley, James Quinn and Neal Victor represented Related and Rockpoint, according to a release.

The garden-style communities, which sit on 33 acres just south of the Dolphin Expressway, were built in 2014 and 2016 and are 95 percent leased, Cushman said. They hit the market in February.

Property records show the Doral View site last sold for $20.5 million in 2012 and the Town Fontainebleau Lakes site sold for $19.8 million in 2014.

The 720 units range from one to three bedrooms and average 954 square feet. Amenities include three resort-style pools, 24-hour fitness centers with yoga and spinning rooms, tennis courts, a jogging trail, business center, cafe and summer kitchens.

The average rent at both properties is about $2,000 a month, according to a Cushman spokesperson. Monthly rents at Doral View range from $1,600 to $2,655 a month, according to At Town Fontainebleau Lakes, they range from $1,695 to $2,625.

Miami-based Related was a co-developer of CityPlace Doral, a mixed-use retail, residential and office development at 8300 Northwest 36th Street in Doral.

As the Miami condo market has slowed down, Related has ramped up its multifamily and mixed-use development in South Florida and elsewhere outside of the state. In 2017, the company expanded to the Southwestern U.S. to build new apartment projects in Phoenix, Denver, Las Vegas and major Texas markets. And last year, Related and Boston-based Rockpoint announced they were creating a new division within Related to focus on acquiring value-add multifamily properties in Florida and throughout the Sun Belt.

Blackstone, a private equity firm with roughly $512 billion in assets under management, is currently involved in another high-profile sale in South Florida. It’s under contract to sell the waterfront 1,047-room Boca Raton Resort & Club to billionaire Michael Dell’s MSD Partners. The deal, which could topple $1 billion, is expected to close at the end of the second quarter.

Macerich shopping malls and Macerich's Jesse Franklin (Credit: Macerich and CREtech)

Macerich shopping malls and Macerich’s Jesse Franklin (Credit: Macerich and CREtech)

As e-commerce continues to kill brick-and-mortar stores, some landlords appear to be embracing the new reality for retail.

“The retail apocalypse is a good thing,” said Jesse Franklin, the vice president of investment and innovation at retail giant Macerich, during a panel Monday at the International Council of Shopping Centers convention in Las Vegas.

“It’s calling out all of those retailers that haven’t invested in their brand, that aren’t connecting with their customers, and it’s going to allow us to bring in a new set of retailers that are actually much more connected to customers, and allow our centers to thrive.”

At the panel, which focused on innovative products and opportunities landlords are seeking as the retail markets decline, Franklin was joined by JLL Spark’s head of growth Andrea Jang, Fifth Wall Ventures’ co-head of retail investments Dan Wenhold, and Zach Aarons, the co-founder of tech-accelerator Metaprop.

Franklin pointed to the trend of customers who have drifted from brick-and-mortar stores that sell products and instead turned to online sellers.

“If we had a diaper store, then that diaper store is going to die,” he said.

Instead, he highlighted the role Amazon has played in propelling digitally native and consumer-savvy companies to brick-and-mortar storefronts — something that Macerich has tried to do at its own properties.

“Amazon itself has opened a door to a variety of digital brands that are all now looking to go omni channel,” he said. “And as they start opening doors, you see the center start to come to life.”

Panelists echoed the optimism expressed by Franklin, and said that the rate of change being experienced by the retail industry was driving the demand for new innovation products. JLL Spark’s Jang noted that just 10 percent of retail is conducted online, and that Amazon makes up only 4 percent of that volume.

Metaprop’s Aaron, whose firm has invested in over a dozen real estate tech startups, offered one solution to push back against the retail industry headwinds.

“The solution to the retail apocalypse is just block-chaining all the malls in America, right?” said Metaprop’s Aarons, before qualifying, “I’m just kidding.”

Macerich, which is the third largest shopping mall owner in the United States with 65 million square feet across 63 malls, has in the past year sought alternatives for its retail spaces by partnering with co-working firms to fill some of its retail space. The company announced a partnership with flexible-office-space provider Industrious in August last year, and launched its first location in Arizona.

Despite those efforts to activate its vacant spaces, Macerich has been forced to offset significant declines in revenue. The company’s net income in the last quarter of 2018 was down 64 percent, to $11.7 million, compared to $32.7 million the year before. In the first quarter of 2019, its revenues totaled $7.8 million — an improvement from a year earlier but down from the previous quarter.

Trammell Crow Residential CEO Ken Valach and 339 North State Road 7 Plantation

Trammell Crow Residential CEO Ken Valach and 339 North State Road 7 Plantation

Trammell Crow Residential paid $11 million for two Plantation office buildings, with plans to build an apartment complex.

The Dallas-based real estate development firm bought the 9.45-acre property at 339 North State Road 7 for $1,164 per acre, records show. The seller is Kisco, New York-based Parkstone Capital.

Trammell Crow previously received approval from the city of Plantation to build eight apartment buildings with 248 units and a two-story, 10,500-square foot clubhouse.

Trammell Crow Residential scored a $38.35 million construction loan from CrossFirst Bank to build the apartments, records show. Parkstone Capital bought the property out of foreclosure in 2016.

Trammell Crow Residential has developed more than 250,000 units in major markets, according to its website. The real estate firm tried to build a 21-story, 181-unit apartment tower in downtown Fort Lauderdale, but the city council voted against the project in August.

Condo sales held steady last week.

A total of 132 condos sold for $65.5 million in Miami-Dade County, a slight increase from the previous week’s 126 closings for $62 million. Condos last week sold for an average price of about $496,000 or $354 per square foot.

A unit at Apogee South Beach sold for $7.25 million, or more than $2,300 per square foot. Nelson Gonzalez brokered both sides of the deal for the three-bedroom, 3,103-square-foot unit. The 17th floor unit features a flow-through floor plan, high-end finishes, an open-style kitchen, summer kitchen and 11-foot-wide balconies.

The second most expensive sale was at 1 Hotel & Homes. Penthouse unit 1612 traded hands for $5.7 million, or more than $2,200 per square foot, after 262 days on the market. Tracy Galya was the listing agent, and Katarina Conhyea represented the buyer.

Here’s a breakdown of the top 10 sales from May 12 to May 18. Click on the map for more information:

Most expensive
Apogee #1702 | 393 days on market | $7.25M | $2,336 psf | Listing agent: Nelson Gonzalez | Buyer’s agent: Nelson Gonzalez
Least expensive
One Paraiso #3304 | 209 days on market | $920K | $547 psf | Listing agent: Milagros Arraez | Buyer’s agent: Alfredo Ferro
Most days on market
Apogee #1702 | 393 days on market | $7.25M | $2,336 psf | Listing agent: Nelson Gonzalez | Buyer’s agent: Nelson Gonzalez
Fewest days on market
The Ritz-Carlton, Bal Harbour #2204 | 42 days on market | $3.3M | $1,463 psf | Listing agent: Linda Gustafson | Buyer’s agent: Linda Gustafson

Rena Kliot, Mitash Kripalani and 2927 Northeast Fourth Avenue

Rena Kliot, Mitash Kripalani and 2927 Northeast Fourth Avenue

UPDATED, May 20, 6:16 p.m.: A large development site in Edgewater near the Related Group’s Paraiso development just sold for $13.65 million, The Real Deal has learned.

Edgewater 29 LLC, tied to DLC Capital Management, a family office in Miami, bought the property at 2927 Northeast Fourth Avenue. Property records show the seller is AR Edgewater Investments, which is controlled by Juan Agudelo Restrepo.

The zoning allows for at least 36 stories, records show.

The property was listed by Mitash Kripalani of Colliers International South Florida. The buyer was represented by Rena Kliot, the owner of Pulse International Realty.

It sold for $248 per square foot, which Kliot said is “substantially lower than comparables in the neighborhood.”

Jamie Mandel, president and general counsel at DLC Capital Management, and Brian Gallagher of Lower Gwynedd, Pennsylvania, control the buying entity, according to state records. 3350 Biscayne LLC, also controlled by Mandel, bought six parcels nearby on Biscayne Boulevard and 34th Street in September for $11.5 million.

A number of large condo and apartment projects nearby are currently under development in Edgewater.

Two Roads Development is building its 57-story, 100-unit Elysee condo project at 788 Northeast 23rd Street. At 777 Northeast 26th Terrace, Russian billionaire Vladislav Doronin’s OKO Group is building the 57-story Missoni Baia condo tower.

Last year, Related completed the bayfront Paraiso District, a group of four condo towers on Northeast 31st Street.

Correction: An earlier version of this story misidentified the buyer as a retail developer. 

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The world’s largest retail real estate convention kicked off poolside on Sunday, giving brokers, executives, lawyers, title insurance agents a few hours to trade gossip, talk shop and source deals.

Day one of the International Council of Shopping Centers’ event in Las Vegas centers around the Wynn’s pool, with companies leasing out cabanas and hosting roped-off gatherings where prominent retail players mingle with both clients and competitors alike.

Though the number of attendees registered for the annual event is on par with last year’s numbers, the parties, private meetings and dinners held along the Strip remain the big draw for those who making their annual pilgrimage to the desert.

By the Wynn’s European pool, where bathing suit tops are optional, Winick Realty Group hosted a cabana with stacks of monogramed hats. Nearby, billionaire real estate investor Jeff Sutton lounged on a beach chair. A few feet away, Kent Services’ Alon Alexander, a brother of Douglas Elliman’s Tal and Oren Alexander, chatted with Aurora Capital Associates’ Jared Epstein on why ICSC continues to be a must-attend event.

Alexander, who runs a building security services company, said it was his sixth year attending the conference and he comes “to see people and build relationships. It’s a contact sport.”

Epstein, whose firm has significant retail holdings in the Meatpacking District, concurred. “You meet the top to the bottom,” he said. “Vegas can change your career.”

For others, the show represented an opportunity to get away from New York for a few days. “The only reason I’m here is because I have four kids under the age of seven,” said David Zar, who runs New York City-based family office, Zar Properties.

Under a central cabana, card tables were set up in the shaded area around the bar. Hanging out in the midst of the crowd was Joe Pizzutelli of M&T Bank, James Nelson, head of Avison Young’s tri-state investment sales and Cohen Equities’ Meir Cohen.

Prominent female brokers and attorneys circulated through the crowd, too. Last year, women represented a quarter of ICSC’s registered attendees.

Compass’ commercial division’s Adelaide Polsinelli made an appearance early in the day with Ronda Rogovin, while Laurie Golub, currently at Square Mile Capital and formerly HFZ Capital’s chief operating officer, appeared to move through the crowd alongside a group of other women, including Olshan Real Estate’s Nina Roket.

Meridian Capital Group, Thor Equities and B6 Real Estate Advisors also reserved cabana space alongside the Wynn’s standard pool–where all coverings are required. Within the crowd outside Meridian and Thor’s spaces, Meridian’s CEO and chairman Ralph Herzka mingled with guests until he and two associates hunkered down in a tight circle to hammer out pricing on a deal.

Meridian’s Ronnie Levine, donning dark shades and a baseball cap, agreed with brokers who told The Real Deal ahead of ICSC that they would pursue shorter-term leases with online tenants. “That’s going to grow,” he said, noting that leases with rolling cancelations were cropping but up but it’s not the norm yet. “Retail is still evolving,” he added.

Both Levine and B6’s Paul Massey said they believe that neighborhood mainstays like pizza shops and nail salons were not going anywhere. Massey, standing in the sparsely populated shady area outside his firm’s booth said “Local retail is not dead,” he said.

Michael Bird, Jefferson Brackin and 40 Alton Road

Michael Bird, Jefferson Brackin and 40 Alton Road

UPDATED, May 20, 9:23 p.m.: Fwd Group paid $5.35 million for a building near an upcoming Crescent Heights project in South Beach where it’s planning an adaptive reuse project, The Real Deal has learned.

Seven Forty Central Corp., led by Boris Shvartsman, sold the property at 740 Alton Road to 740 Alton Rd LLC, which is led by Jefferson Brackin.

Fwd Group, founded by Brackin and his partner, Michael Bird, is an investment, development and management group that includes other partners. Brackin said a medical, health and wellness company is leasing the space, which the group plans to convert by the third quarter of this year.

The building, constructed in 1950, is temporarily leased to a Firestone but was historically known as Central Cab Company’s garage in Miami Beach where taxi cabs would get repaired. The building eventually fell into disrepair, and the distressed nature of the property made it a good opportunity for Fwd Group, Brackin said.

Russell Galbut’s brother, Abraham, who appears on corporate records, is Fwd Group’s attorney, Brackin said, but is not involved in the property.

It last sold for $200,000 in 1975, according to property records.

The property is on the same block as a portion of Russell Galbut’s Crescent Heights major mixed-use project. Between 500 and 700 Alton Road, Crescent Heights is moving forward with plans to the Park on Fifth, a 46-story, 337-unit residential tower, a 15,000-square-foot retail pavilion, a 578-space parking garage, and a new three-acre park with elevated pathways.

Last year, Crescent Heights completed the building at 709 Alton Road, where Baptist Health South Florida opened a four story, 60,000-square-foot facility.



MiamiCentral office space – Shorenstein | $159.4M
The parent company of VirginTrains USA, Florida East Coast Industries, sold the office portion of its MiamiCentral station for $159.4 million.

Coral Gables-based FECI sold the ground floor retail, two office buildings and the parking space at 600 Northwest First Avenue to San Francisco-based Shorenstein, property records show.

Wells Fargo provided a $126 million mortgage to Shorenstein to finance the acquisition.

The buildings, 2 MiamiCentral and 3 MiamiCentral, are leased to tenants that include Viacom, the Confederation of North Central America and Caribbean Association Football (CONCACAF), Carlton Fields and Atlantic | Pacific Companies.

The Quay

The Quay

The Quay – Mast Capital | $43M
Mast Capital paid $43 million for The Quay, a waterfront mixed-use shopping center in Fort Lauderdale, marking the Miami developer’s first big investment in Fort Lauderdale.

The company purchased the 73,000-square-foot shopping center at 1515 Southeast 17th Street for $589 per square foot, according to a press release.

The property is currently 100 percent leased, with tenants including Boatyard restaurant, United States Postal Services and Chipotle. The 7-acre site also includes a marina and a two-story office building. The property is close to Pier Sixty-Six Hotel & Marina, Port Everglades and the Greater Fort Lauderdale/Broward County Convention Center.

Sedan's anchored shopping center

Sedan’s anchored shopping center

Pembroke Pines shopping center – Longpoint Realty Partners | $37.5M
Longpoint Realty Partners paid $37.53 million for a Sedano’s-anchored shopping center in Pembroke Pines, as it boosts its retail investments in South Florida.

Sterling Organization, a West Palm Beach-based private equity real estate investment firm, sold the 158,463-square-foot Pembroke Place at 10101 Pines Boulevard for $237 per square foot.

The shopping center is 99 percent leased to tenants that include Crunch Fitness and Vargas University, according to a release.

318 Lincoln Road

318 Lincoln Road

318 Lincoln Road – Aby Rosen | $20.5M
A company tied to Aby Rosen’s RFR Holding paid $20.5 million for a building on Lincoln Road in Miami Beach, property records show.

Luis E. Barreto, acting as a trustee under the Louise Z. Osius Irrevocable Inter Vivos Trust, sold 318 to 344 Lincoln Road to 318 Lincoln LLC, a Delaware company that is controlled by New York-based RFR. The buyer financed the deal with a $17 million loan from Argentic Real Estate Investment LLC.

RFR is an investment, development and management company founded by Rosen and Michael Fuchs. In South Florida, the firm also owns 800 Lincoln Road and 140 Northeast 40th Street in Miami, and was a co-developer of W South Beach.

18335 Northwest 27 Avenue, Miami Gardens

18335 Northwest 27 Avenue, Miami Gardens

Miami Gardens Shopping Center – Efraim Brody | $9.5M

MGP Partners sold a Miami Gardens retail shopping center for $9.5 million.

Efraim Brody of Miami bought the 95,570-square-foot property at 18335 Northwest 27th Avenue for $99 per square foot, records show. The property sits next to the North Dade Regional Library.

MGP Partners bought the property for $11.5 million in 2007, which means the investment group sold at it a significant loss.

555 Arvida Parkway, Manny Medina and Audrey Ross (Credit: Concierge Auctions)

555 Arvida Parkway, Manny Medina and Audrey Ross (Credit: Concierge Auctions)

Miami technology billionaire Manny Medina is going straight to auction with his Gables Estates mansion.

Medina, whose property at 555 Arvida Parkway is listed for $17.5 million, plans to sell the 14,329-square-foot home in late June without a reserve, according to a release. Audrey Ross of Compass is the listing agent.

In 2011, Medina sold his company, Terremark, to Verizon Communications for $1.4 billion. He also started Cyxtera, a cyber security firm based in Miami, and is the founder and managing partner of Medina Capital. He is also is the founder and chairman of the board of eMerge Americas.

Medina’s Coral Gables home will be auctioned between June 21 and June 25. It features a boatlift and private dock for a 101-foot yacht, a 5,000-bottle wine room, a heated pool and outdoor kitchen, a chef’s kitchen, guest suite, gym, spa, billiards room and home office. Other features of the Palladian-style mansion include high ceilings, and stone, marble, tile and wood flooring.

Medina paid $7 million for the 1-acre property in 2013, records show. The home was built in 1990.

Frustrated with their long-lingering listings, an increasing number of high-end homeowners are opting to auction off their homes through auction houses.

The nearby mansion at 41 Arvida Parkway – once listed for $68 million – recently sold at auction for $25.5 million.

London’s office market has proven to be surprisingly resilient (Credit: iStock)

London’s office market has proven to be surprisingly resilient (Credit: iStock)

Developers are starting to bet big on London again despite Brexit.

London’s office market has proven to be surprisingly resilient in the face of the United Kingdom’s vote to leave the European Union, convincing many developers that it is time to break ground on new projects in the city, according to Bloomberg.

Land Securities Group, for instance, is now redeveloping the London building at 1 Sherwood Street, the first time in roughly five years the firm has launched a project without first securing tenants. British Land Co. has also submitted plans to construct its biggest development ever in the city’s Southwark neighborhood.

A Deloitte report found that developers started working on 37 projects spanning 3.5 million square feet in the six-month period through March, the most since the beginning of 2016. And data from broker Savills Plc. found that London development plots with enough space for roughly 6.7 million square feet of development were traded or put up for sale since the beginning of the year, a record number.

“Across Central London, the appetite for development and refurbishment opportunities is almost unabated,” Savills director Robert Buchele told Bloomberg. [Bloomberg] – Eddie Small

Easton & Associates president Jose Hernandez-Solaun and rendering of Interglass Corporation's new location

Easton & Associates president Jose Hernandez-Solaun and rendering of Interglass Corporation’s new location

A new 65,500-square-foot industrial building is coming to Hialeah Gardens amid a wave of new industrial development.

CanPen Holdings is building a 65,500-square-foot warehouse at 14600 Northwest 112th Avenue. It marks the first development project for Medley-based CanPen Holdings, whose principals are Jose “Pepi” Cancio Jr. and Mario Penzo.

Cancio’s father, Jose Pepe Cancio Sr. founded and served as CEO of Central Concrete Supermix, which became one of the largest concrete companies in the U.S.

Interglass Corporation, a Miami-based tempered-glass distributor and fabricator, has already signed a deal to move its entire manufacturing operation to the Hialeah Gardens development, according to a release. It will be leasing the entire building. Easton & Associates president Jose Hernandez-Solaun represented both the landlord and tenant in the 25-year lease deal.

Records show CanPen paid $991,000 for the 3.76-acre property in 2018.

CanPen is planning to develop a separate parcel in Hialeah Gardens into a warehouse project with 26 bays that are 2,800 square feet each, Hernandez-Solaun said in the release. Easton has also been tapped to lease that property.

The industrial market has arguably been South Florida’s best performing asset class in recent years. However, some indicators suggest that market is cooling off due to high land prices and increased supply.

According to a recent report by Colliers International South Florida, in Miami-Dade County, vacancy rates for industrial properties rose to 4 percent, up 0.1 percent from the fourth quarter of 2018. Rents decreased to $9.47 from $9.70 during the first quarter of 2018, due to an increase in warehouses being delivered, according to the report.

Alan Kleber

Alan Kleber

UPDATED, May 21, 11 a.m.: The downtown Miami office market took a beating in the first quarter, despite the opening of new state-of-the-art buildings like the office portion of the Virgin MiamiCentral train station.

According to a JLL report prepared for the Commercial Industrial Association of South Florida, downtown Miami experienced a negative absorption of nearly 18,000 square feet during the first quarter, mostly due to the departure of two law firms that occupied a total of 10,300 square feet at 19 West Flagler Street.

As a result, the vacancy rate jumped to 27.2 percent, a four point increase compared to the first quarter of 2018. Asking rents stagnated, hovering at $41.52 a square foot, a 0.3 percent increase over 2018 first quarter rates.

A trio of lease deals at one of the MiamiCentral office properties is softening the blow to the downtown office market, said JLL managing director Alan Kleber, a panelist during CIASF’s May 16 office report event. Viacom is taking 23,700 square feet at 2 MiamiCentral, which is 86 percent leased. The other new tenants are law firm Carlton Fields, which signed up for 50,000 square feet, and coworking firm Spaces, which is leasing 19,500 square feet.

The two office buildings at MiamiCentral, 2 MiamiCentral and 3 MiamiCentral, sold in May to San Francisco-based Shorenstein for $159.4 million. 

While the downtown Miami office market is hurting, Kleber said major corporate tenants are gravitating to office buildings like 2 MiamiCentral because of the amenities packages and the close proximity to mass transit hubs. “The definition of Class A in this market used to be a handful of buildings where you have unobstructed ocean views,” Kleber said. “From a user perspective, the tier one market class is no longer defined by what you see out the windows.”

Viacom is relocating from a sixth floor space at the Herzog & De Meuron-designed 1111 Lincoln Road building in Miami Beach to a new Class A building that does not offer a similar view. “They are bringing 500 people and growing their space by 4,000 square feet,” he said. “That is mind-blowing.”

Carlton Fields shareholder Yolanda Strader said her law firm has been headquartered at the Miami Tower at 100 Southeast Second Street for two decades. “It’s all glass and offered unobstructed views,” Strader said. “We had to think long and hard on where we wanted to transition. This building stood out because of the amenities, the transit and the access to the highway.”

The CIASF report also shows the Miami office market is becoming heavily reliant on co-working firms. The largest tracked lease in the Brickell office market during Q1 was a 35,800-square-foot expansion by Regus at 801 Brickell. On the same block, WeWork signed a lease for 146,000 square feet at 830 Brickell, an 80-story building with 550,000 square feet of office expected to be completed in 2022. WeWork will account for 27 percent of the building.

In the first quarter of this year, the Brickell office market had a 12.5 percent vacancy rate and average asking rents increased 6.7 percent year-to-year to $48.10 per foot.

In other submarkets, Coconut Grove experienced a positive absorption of 7,660 square feet, the vacancy rate is at 6.5 percent and asking rents are averaging $46.51 a foot, an 18 percent year-over-year increase. The Gables submarket had a positive absorption of 92,460 square feet, but the vacancy rate inched up to 10.9 percent from 9.4 percent. Asking rents jumped from $39.64 in the first quarter of 2018 to $45.73 per square foot.

Correction: An earlier version of this story incorrectly identified the vacancy rate in the Brickell office market. 

Corcoran’s new office and Pam Liebman

Corcoran’s new office and Pam Liebman

The Corcoran Group is skipping the bridge and opening an office in West Palm Beach.

The New York-based brokerage, led by president and CEO Pam Liebman, opened its third office in Palm Beach County and in South Florida at 480 Hibiscus Street, Unit 115, according to a release. Corcoran, with 190 agents in South Florida, also has locations in Palm Beach and Delray Beach.

Liebman said in the release the move was based on “organic growth” to West Palm. Residential development is growing in West Palm Beach, where the Bristol is being completed and a new condo project, La Clara, was recently launched.

Realogy-owned Corcoran announced its plans to open in West Palm Beach more than a year ago. Managing director Kerry Warwick and John Hackett will run the office, a 2,375-square-foot space that can house more than 30 agents.

Last year, the brokerage – one of New York City’s top firms based on annual sales – promoted Hackett, previously managing director of the Delray Beach office, to regional senior vice president in South Florida, taking over Bill Yahn’s former position.

Corcoran competitor Compass, which has been expanding throughout Miami-Dade, Broward and Palm Beach counties, hired Elizabeth DeWoody, a top producer at Corcoran, in February 2018 when it acquired a boutique firm in Palm Beach.

In October, Realogy Holdings said it plans to franchise the Corcoran brand beyond its stronghold on the East Coast to “global megacities” and leisure markets. Liebman said the company was looking to open a company-owned office in Miami.

Rendering of Arte by Antonio Citterio and Alex Sapir

The Sapir Corp. has closed on a $32 million refinancing from the estate of Tamir Sapir to pay back Israeli bonds that are due next year, The Real Deal has learned.

Alex Sapir, chairman of the company and executor of his father’s estate, said it was a “good time to perform the refinance.” The company, which is publicly traded on the Tel Aviv Stock Exchange, was facing an April 2020 maturity deadline for Series D bonds in the amount of 115 million shekels, or the equivalent of roughly $32 million.

“The bonds were close to full repayment anyway,” Sapir said. “The new loan provides better flexibility without the currency risk.”

The financing from Tamir Sapir’s estate will be due in April 2021 and has a fixed interest rate of 6.94 percent, according to Sapir Corp. It will not have a prepayment penalty, “which eliminates our need for hedging, and is a better fit for the project which is nearly complete,” said Baruch Itzhak, CEO of Sapir Corp.

Sapir is hoping to deliver Arte, a 16-unit, 12-story condominium building at 8955 Collins Avenue, this summer. Sales at the project, designed by Italian architect Antonio Citterio, launched with Corcoran Sunshine during Art Basel Miami Beach in December.

Alex Sapir has sold at least two units — to his mother, Bella, and to his sister, Ruth Sapir-Barinstein, for a combined $20 million for the entire eighth floor of the project. Earlier this year, the company sought shareholder approval to use the deposits to help fund construction costs tied to completing the development.

Units at Arte start at $10.2 million, and range from 3,150 square feet to 7,550 square feet. Amenities will include a 75-foot indoor swimming pool, an outdoor pool, rooftop tennis court, a fitness center and yoga studio, sauna, steam room and meditation pond, a children’s playroom, residents’ lounge and a catering kitchen.

The loan is secured by a 75 percent interest in Arte, which includes Sapir Corp.’s 62.5 percent and Alex Sapir’s 12.5 percent ownership interests.

2914 Washington Road (Credit:

UPDATED, May 20, 11:40 a.m.: The sale price of a new mansion in West Palm Beach easily set a record, even though it is 15 percent below the initial asking price in 2017.

The $11.5 million sale price of the 9,364-square-foot residence at 2914 Washington Road is the highest ever for a single-family home in West Palm Beach.

The new record price is more than double the old record set last year in the $5.02 million sale of 5615 South Flagler Drive.

The newly built mansion on Washington Road has seven fireplaces, six bedrooms, an elevator, a library, wine vault, and two-story living room. The seller’s initial pre-construction asking price in 2017 was $13.5 million.

The developer, Aquantis Group, completed construction of the house in September 2018, and the asking price dropped to $12.9 million in March.

The buyer was Barbara Seymon-Hirsch, trustee of the Edgewater Trust. Douglas Elliman agents Ashley McIntosh and Burt Minkoff had the listing for the newly built mansion. Minkoff also represented the buyer.

Liam Bailey, head of global research at London-based Knight Frank, said during a recent visit to Palm Beach that wealthy individuals are taking a slower, more selective approach to buying luxury real estate.

That may explain why some pricey homes like the Ziff estate in Manalapan remain listed for sale for years. The asking price for the Ziff estate is $137.5 million, well below the initial $195 million ask. [Palm Beach Post]Mike Seemuth

High Tower (Credit: David Kubiczky)

Los Angeles may have a reputation for its over-dependence on cars, but there’s one Hollywood Hills community that’s turning that image on its head.

At High Tower, a small hillside neighborhood located in Hollywood Hills residents aren’t allowed to drive cars to get to their homes, the Wall Street Journal reported. Instead, they have to climb hundreds of steps.

A dated, five-story elevator is the only alternative, but only if your residence is part of the High Tower Elevator Association and you have your own private key. Despite the fact that the 1920s-era elevator breaks down frequently, residents claim it’s helped create a close-knit, ultra-exclusive feel to the neighborhood.

Over the years, High Tower’s celebrity residents have included film director Tim Burton, actor Timothy Hutton, musicians Courtney Love and Kurt Cobain, and magician David Copperfield.

The neighborhood’s unusual topography and limited access has also made it difficult for large-scale projects to rise. One resident, developer Ari Heckman, said renovations at his home cost about 10 percent higher than usual because of how challenging it was for contractors to get materials up to the site. [WSJ] – Natalie Hoberman

PDVSA Flag (Credit: iStock)

A Miami investment manager pleaded not guilty of charges that he supported a $1.2 billion money-laundering ring with links to the socialist government of Venezuelan president Nicolás Maduro.

Gustavo Hernandez Frieri, 45, appeared Friday in a federal courtroom in Miami for his bond hearing and arraignment. Colombian-born Hernandez was extradited to Miami this month after his arrest last July during a family vacation in Italy.

He is charged with helping to launder at least $12 million in bribes paid to a former executive of PDVSA, the national oil company in Venezuela.

The former PDVSA executive, Abraham Edgardo Ortega, pleaded guilty in October on charges that he accepted $12 million of bribe money. Prosecutors say Hernandez charged a fee to put the bribe money in a phony mutual fund to make it look legitimate, then laundered the money by depositing it in U.S. banks.

Ortega accepted the bribes in exchange for allowing a ring of criminals to embezzle hundreds of millions of dollars from PDVSA and put the money into luxury real estate in South Florida and in U.S., Caribbean and European bank accounts.

Ortega, a former executive director of financial planning who had worked for PDVSA for more than 10 years, allowed the embezzlement via lending and currency-exchange schemes. Most members of the ring that embezzled PDVSA remain at large.

President Maduro is a suspect in the ongoing federal investigation of the ring. His three stepsons also are under investigation.

Caracas TV mogul Raúl Gorrin faces charges in a separate federal case of conspiring with the Alejandro Andrade, a former national treasurer of Venezuela, to embezzle more than $1 billion from the government. Andrade got a 10-year prison sentence in November after pleading guilty to a charge of money-laundering conspiracy. As part of his guilty plea, he agreed to forfeit his assets, which included 17 champion show horses and five real estate properties in Palm Beach County.

Magistrate Judge Jacqueline Becerra granted Hernandez a pretrial bail arrangement that requires the defendant to post a $1.5 million bond and to make a down payment of 10 percent. The judge also required a $25 million surety bond to be co-signed by the defendant’s brother, Cesar Hernandez Frieri, and his brother-in-law Juan Carlos Gomez.

In addition, Hernandez must surrender his passport and his three children’s passports.

His wife, Olympia, refused to help him post bond. His defense attorney, Michael Pasano, told the judge, “It’s likely that they’re going to get divorced.” [Miami Herald]Mike Seemuth

Peerage's Miles Nadal and the Vancouver Skyline

Peerage’s Miles Nadal and the Vancouver Skyline

A private equity firm with a taste for real estate just acquired the Canadian arm of Sotheby’s International Realty, which has 540 agents and 32 offices in Canada.

The new owner is Peerage Realty Partners, a subsidiary of private equity firm Peerage Capital.

“The addition of an international luxury brand has been a key part of our growth strategy for many years,” Gavin Swartzman, president and CEO of Peerage Realty, said in a statement.

Peerage acquired Sotheby’s International Realty to expand its collection of luxury real estate brands. Peerage currently has 72 realty offices with 1,840 sales representatives in North America and claims $9.6 billion in closed sales. Terms of the acquisition were not disclosed.

Other brokerage under Peerages’ control include Denver-based Madison & Cos., Chestnut Park Real Estate in Toronto, Baker Real Estate, Fifth Avenue Marketing and StreetCity Realty Inc.

Don Kottick, a Peerage executive, will serve as the new president and CEO of Sotheby’s International in Canada.

Kottick is a director of the Canadian Real Estate Association and previously has served as president of the Real Estate Institute of Canada and as a director of the Toronto Real Estate Board. [Inman] – Mike Seemuth

(Credit: iStock)

(Credit: iStock)

Many of the world’s largest institutional investors are moving closer to their portfolio allocations for real estate assets, which may slow the pace of their property acquisitions, according to a new report.

Survey data and interviews from IPE Real Assets show that 53 percent of top institutional investors expect to be net buyers of real estate assets in 2019 and 32 percent neither net sellers nor net buyers.

“There is no necessity to either actively increase or reduce real estate exposure,” said Rutger van der Lubbe, head of global real estate investment strategy at APG, which manages investments for pension funds in the Netherlands. “Our clients’ real estate exposures are currently within their targeted weightings.”

Johan Temse, real estate investment manager at Swedish pension fund AP1, says the fund is within its target allocation of 13 to 14 percent for real estate, so its property acquisitions are “limited” and “selective.”

“We’ve been very active through 2015 to 2018 but are looking at a slightly active year for real estate equity in 2019,” said Mikko Antila, head of international real estate at Finnish pension insurer Ilmarinen. “We anticipate to be quite active in real estate debt, however.”

The largest pension fund manager in Germany, Bayerische Versorgungskammer (BVK), expects to actively push its portfolio allocation to real estate above 20 percent. The regulatory limit in Germany is 25 percent. “While we are today at approximately 21 percent, we’re still having room to grow,” said Rainer Komenda, head of real estate funds at BVK.

But Komenda also said BVK this year will be “investing a little bit slower and continuing to be very selective,” with a new focus on “value creation themes.”

Allianz Real Estate, which handles the property investments by the Allianz group of insurance companies, also is shifting its attention to the value-add side of the real estate market and away from core assets, its historical focus.

The biggest institutional investors in real estate assets, as ranked by IPE, were Allianz Real Estate ($72.4 billion), China Investment Corporation ($52.9 billion), Abu Dhabi Investment Authority ($51.2 billion), APG in the Netherlands ($48.38 billion) and TIAA ($47 billion).

The average return expectations hovered around 7 percent, though Allianz generated a 10 percent return last year. It expects returns between 4 and 6 percent this year. [IRE Real Assets] – Mike Seemuth

Hazel Goldman with Evan Goldman (left) and Anthony Askowitz

Miami brokerage firm RE/MAX Advance Realty (RMA) honored agents Hazel Goldman and Frederick Viener as its top producers of commission income last year.

Goldman received the firm’s Diamond Award for generating more than $1 million of gross commissions last year. Viener got the Titan Award for ranking as the second-highest producer last year. RMA, which has 165 agents, closed more than $525 million of sales last year, or $3.2 million per agent.

Nine RMA agents received the firm’s Platinum Award for earning gross commissions of $250,000 to $499,999 last year.

The nine Platinum Award winners are: Carolina Arceo, Geri Brodie, Lisa Dority, Hal Feldman, Lizette Gonzalez, Neal Kleinman, Hamne Raez, Corey Schwartz, and Paul Silverstein.

Kleinman also received the firm’s Lifetime Achievement Award, for agents that who have at least a seven-year tenure with RMA and have generated more than $7 million of gross commission income.

RMA also gave its Spirit Award to Cecilia Cardozo, its Hustle Award to Alexis Zamundo-Vanegas, and its Eagle Award to Toni Keel in recognition of her leadership and production during more than 30 years with the firm.

RMA announced the award winners during the brokerage firm’s annual meeting at the Coral Reef Yacht Club.– Mike Seemuth

Lone Star's John Grayken (Credit: Getty Images and iStock)

Lone Star’s John Grayken (Credit: Getty Images and iStock)

The Texas teachers’ retirement fund is betting big on the international real estate market.

The $3 billion Teacher Retirement System of Texas announced it will invest over $500 million with Dallas-based private equity firm Lone Star Funds, plus another $150 million for an infrastructure fund, according to IP&E Real Assets.

About $300 million will be invested into Lone Star’s Real Estate Partners VI fund, which is seeking $3 billion for property investments in Western Europe, North America and Asia. The pension fund will also invest $200 million into the firm’s Residential Mortgage Fund II, which will invest in the U.S. mortgage industry.

The pension fund will also invest about $10 million into CBRE’s French Logistics Feeder, another real estate investment vehicle. The pension fund last year committed over $100 million to the investment pool, according to IP&E.

On top of it’s real estate investments, the retirement system will inject $150 million into the Global Energy & Power Infrastructure Fund III.

American public pension funds have increased their real estate investments by a measure of six times between 2006 and 2016. [] The funds are now seeking riskier, more opportunistic real estate deals as a means of closing funding gaps.

Manhattan real estate has been a target of public pension funds, but the strategy has not been adopted by New York City’s retirement systems. Instead, the city invested $4 billion of its pension funds into climate change solutions. [IP&E Real Assets] — Joe Ward

Chris Cuomo and his wife, journalist Cristina Cuomo (Credit: Getty)

CNN anchor Chris Cuomo and his wife, journalist Cristina Cuomo, have found a buyer for their Southampton home that was last listed for $2.9 million, according to Behind the Hedges.

The final sale price wasn’t immediately available. Cuomo and his wife, who founded the Hamptons wellness publication Purist, listed the home at 74 Corrigan Street back in February with Harald Grant of Sotheby’s International Realty. The couple bought the 0.6-acre estate in 2005 for $1.3 million, according to property records.

In 2008, they built a 3,000-square-foot, shingle-style home with five bedrooms, four bathrooms, a covered front deck and a living room with a fireplace. Outside, the property has a vegetable and cutting garden along with a shower, pool and hedges. [Behind the Hedges]Aidan Gardiner

Read more of our Tri-State coverage here.

Donald R. Horton and a D.R. Horton home interior (Credit: D.R. Horton)

Homebuilding giant D.R. Horton has paid its founder’s children millions of dollars to buy land to develop over the last two years.

Federal securities filings reviewed by Bloomberg show that the Texas-based company purchased $8-million-dollars-worth of land from companies led by the two sons of Donald R. Horton and that is has agreements to pay $114 million more for properties they own.

The filings note that a compliance officer with the publicly traded company and independent directors reviewed some of the sales and the company said its disclosures were appropriate.

In three instances, the elder Horton lent money to his sons to buy land that Horton later agreed to buy.

In the largest deal, the elder Horton lent $77.5 million to a company owned by his sons to buy 119 acres in Arizona. D.R. Horton then agreed to a pay an annualized return of 16 percent to the company for an option to buy the land.

Based on a company timeline to buy the land, the sons would take in around $7 million from a sale planned this fall. The filings do not indicate if the deal was reviewed.

D.R. Horton is one of the country’s largest homebuilders and is active across the country. It recently purchased large tracts of land in Miami.

The filings don’t indicate how those deals were made and whether or not D.R. Horton got the best deal possible. Donald Horton told Bloomberg that his sons did the deal “cheaper than other people would.” [Bloomberg] – Dennis Lynch

Jeff Bridges and his Montecito estate (Credit: Getty Images)

Jeff Bridges and his Montecito estate (Credit: Getty Images)

Apparently when it comes to his Montecito real estate holdings, the dude does not abide.

Oscar-winning actor Jeff Bridges has put his four-acre compound in Montecito on the market for $8 million, the Los Angeles Times reported. The property on San Leandro Lane includes a 100-year old Spanish Revival-style home, guesthouse, pool house, carriage house and horse facility.

Bridges and his wife, Susan Geston, purchased the compound in 2014 for $6.9 million, and remodeled the interior in 2016.

It was built in 1919 by James Osborne Craig. The 3,300-square-foot main home has one story with three bedrooms and three bathrooms. The property features a brick patio, pool and spa, as well as gardens, redwoods, oak groves and orchards.

Bridges previously lived in a another Montecito pad for more than 20 years. He sold the 19.5-acre vineyard estate in Villa Santa Lucia for almost $16 million in 2017, the Times reported.

Bridges, son of actor Lloyd Bridges, starred in “Crazy Heart,” “The Big Lebowski” and “True Grit.” He and his brother Beau also inherited a Malibu beach pad from their mother, who purchased it in the 1950s.

Montecito frequently attracts celebrity homebuyers like Rob Lowe, Oprah Winfrey and Natalie Portman, and it still does despite devastating mudslides a year and a half ago. Most recently, Ellen DeGeneres purchased another mansion there for $27 million, and adult film company owner Bill Asher bought a compound for $15 million. [LAT]Gregory Cornfield

David Beckham and rendering of the soccer stadium his group planned to build in Overtown.

David Beckham and his partners have less than two weeks to pay $901,500 and keep three acres of county-owned land in Miami under contract for a soccer stadium.

The Beckham group owns six acres in the Overtown area of Miami and contracted to buy another three acres from Miami-Dade County to build a 25,000-seat stadium for its Major League Soccer team.

Miami Beckham United, LLC, has a contract to buy the county land for $9 million and has paid $450,000 so far.

Another installment payment of $901,500 was due in June 2018 before Miami-Dade Mayor Carlos Gimenez agreed top extend the deadline until a resolution of litigation over the no-bid land deal.

Activist Bruce Matheson sued to undo the deal but failed to win at trial and on appeal. The Florida Supreme Court declined on Thursday to hear an appeal by Matheson.

The Beckham group has seven days after the end of the legal challenge to notify the county whether it wants to surrender the three acres or pay $901,500 to keep the county land under contract, according to a letter to the group from Deputy Mayor Jack Osterholt dated June 6, 2018.

If Miami Beckham United wants to keep the land under contract, it would be required to pay $901,500 no later than five days after notifying the county of its intent to do so.

In a March interview, the lead local partner of Miami Beckham United, Jorge Mas, said the land in Overtown was a back-up stadium site if the Beckham group fails to negotiate a deal to build a stadium at the city-owned Melreese golf course in Miami.

Miami Beckham United has signed an agreement with the Fort Lauderdale government to replace city-owned Lockhart Stadium with a training facility and an 18,000-seat stadium where its Major League Soccer team would play in its first two seasons in 2020 and 2021. [Miami Herald]Mike Seemuth

Softbank's Masayoshi Son (Credit: Getty Images and iStock)

Softbank’s Masayoshi Son (Credit: Getty Images and iStock)

Softbank might have a junk-level credit rating and is fresh off a stock market beating this week, but banks have never felt safer lending to the telecommunications operator-turned venture capital giant.

The price of a five-year Softbank credit default swap dropped from 2.9 percent last year to about 1.8 percent this month, a sign of growing confidence the Tokyo-based firm won’t default on its debt, according to the Wall Street Journal.

One factor could be the massive fees banks reap from a relationship with Softbank. The company paid nearly $900 million in investment banking fees last year, more than any other firm by far.

Softbank is taking punishment from its 16.3 percent stake in Uber, which tumbled in value since it went public last week. In turn, Softbank saw its own stock price contract by more than 11 percent this week.

But other companies it backs, like Guardant Health and the Indian hotel booking app Oyo, have fared better and helped Softbank maintain investor confidence, the Journal reported.

Originally a technology company, Softbank took on a new life in 2017 when it launched its $100 billion Vision Fund, backed by Saudi Arabia’s sovereign-wealth fund. Last week, it announced its plans to launch another fund of the same size. [WSJ] — Alex Nitkin

(Credit: iStock)

(Credit: iStock)

Uncertainty over Brexit is helping turn some of London’s prime neighborhoods into true buyers’ markets.

Home prices in some of the city’s most sought-after districts fell by the most in a decade during the first quarter as worried sellers cut prices in order to find buyers, according to Bloomberg. That led to a sharp rise in transactions as buyers flooded the market looking for deals.

With British politicians unable to agree on a way to formally exit the European Union, almost half of sellers of homes under 2 million pounds ($2.6 million) were cutting their asking prices before finding buyers, according to data from LonRes cited by Bloomberg. Buyers got an average 13.4 percent discount on properties in the area known as prime central London, the data showed.

Properties over 5 million pounds saw prices decrease 6.6 percent and sales rise 3 percent in the first quarter year on year, the first gain in more than a year, the data show.

The situation in London is just one of the wide-ranging effects of the Brexit turmoil on real estate in Europe.

As the U.K.’s struggles to exit the E.U. continue, financial industries are moving shop to the Irish capital of Dublin, fueling a property boom that lenders and investors want to cash in on.

In Frankfurt, prices for office properties have increased to record levels on speculation that Brexit will lead professional talent and financial capital to relocate to Germany. [Bloomberg] — John O’Brien

President Donald Trump addresses the National Association of Realtors on Friday (Credit: Getty Images)

President Donald Trump addresses the National Association of Realtors on Friday (Credit: Getty Images)

“I feel like home,” President Donald Trump said as he took the podium in front of a crowd of real estate agents on Friday.

Trump received a warm welcome from the National Association of Realtors at the trade organization’s Legislative Meetings and Trade Expo in Washington, D.C., where he spoke for more than an hour. He is the first sitting president to speak at the conference since George W. Bush spoke in 2005.

Trump — whose namesake firm has seen some of its properties struggle as of late — said he’s “always looking at the real estate” he passes while he’s driven around in the presidential limousine.

“I’ll never get it out of my blood, its in our blood right?” he said to cheers.

Early in his speech, Trump announced that the U.S. had come to agreement to lift tariffs on steel and aluminum, which have driven up costs for building materials and put a strain on developers.

“I’m pleased to announce we’ve just reached agreement with Canada and Mexico,” he said. “We’ll be selling our product into those countries without the imposition of tariffs.”

He also said he wants to re-privatize mortgage giants Freddie Mac and Fannie Mae, calling it a “pretty urgent problem” that he has “many geniuses” working on, including “some incredible talent from Wall Street.”

He said the government-sponsored enterprises lack competition and aren’t run as well as they could be. Earlier this year he signed a directive instructing government offices to develop a plan to release the companies from government control.

Otherwise, he spent much of his time at the podium touting the strong economy, specifically high employment rates.

“Many of those people are going to go out and buy houses, right Tracy?” Trump said, gesturing to Tracy Kasper, NAR’s vice president of advocacy.

Trump also pointed to the benefits of the 2017 tax reforms, which gave way to the federal Opportunity Zones program, which provides capital gains tax breaks to investors who fund developments in economically depressed or stagnant areas.

“We gave you one hell of a tax cut and the regulation cut may be more important,” he said.

Along with slashing corporate tax rates, the Tax Cut and Jobs Act capped state and local tax deductions at $10,000, meaning high-net worth individuals in states with high local taxes like New York and California pay significantly more in taxes each year.

That has prompted some of those high-net worth residents to flee to states with lower tax rates, like Florida.

Later on, Trump reminisced about his days in real estate, during which he claimed he was “famous” for skimping, or trying to skimp, on paying commissions. He said he paid brokers just a 1 percent commission fee instead of 6 percent, drawing boos from the crowd.

“Don’t worry. Nobody accepted it,” he said. “But I tried like hell. But I’d get it down to 4 or 5, that’s not so bad.”

But he also praised brokers he’s worked with in the past. “There’s nothing like a good broker, you’re like a good surgeon, its true,” Trump said. “You have to remember those people and reward those people properly.”

The party must go on: 2019's ICSC party list is here.

The party must go on: 2019’s ICSC party list is here.

While retail brokers may be chasing a different game ICSC this year, the parties remain the main attraction of the four-day conference.

Tens of thousands of real estate brokers are heading to Las Vegas for the event, which has 29,000 attendees signed up as of May 13.

While that figure is on par with previous years, a distressed climate within the retail sector has led some firms to trade big parties for intimate dinners or other more modest events.

See the list below for a look at what’s to come.

Saturday, May 18
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Sunday, May 19
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Monday, May 20
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Tuesday, May 21
[table “” not found /]

Almost 30,000 retail real estate professionals will descend on Las Vegas for ICSC. Here's what they expect.

Almost 30,000 retail real estate professionals will descend on Las Vegas for ICSC. Here’s what they expect.

Long gone are the days of the two-decade flagship lease. Now, brokers attending this year’s International Council of Shopping Centers conference in Las Vegas will be courting a new tenant: online companies seeking short, nimble leases.

This year’s event, which will be held from May 19 to 22, comes at a time when shopping malls across the country are shuttering, and global clothing retailers can’t afford the rents charged on Fifth Avenue in Manhattan.

Instead of the once-treasured 20-year retail lease, Robin Abrams, the vice chair of Compass’ commercial division in New York, said retail brokers this year will be chasing leases that that allow retailers to stick around for between one and three years.

“There is no norm anymore,” Abrams said. “It’s taken five years for the industry to see this.”

And as brokers and real estate professionals arrive from all corners of the country, and abroad, they are now targeting the same tenants: online companies.

“The native digital retailers who haven’t even begun to get to vertical, that’s our future,” said Joanne Podell, an executive vice chairman of Cushman & Wakefield’s retail division in New York. “As they grow they’ll realize that they need a brick-and-mortar retail presence.”

In Miami, Drew Schaul, a retail broker at CBRE, said he’s seeing online retailers actively pursuing lease deals in South Florida. “Digitally native retailers understand brick and mortar has to be apart of their growth strategy to be a true omni channel retailer … to maximize return on investment and expose the brand,” he said.

Brokers in Chicago said that despite the negative effects of e-commerce on the brick-and-mortar retail landscape, the city has experienced an uptick in activity in the past 60 days, according to Austin Weisenbeck, senior vice president for retail investments in Marcus & Millichap’s Chicago office.

“We’re going to be telling people that it’s still a great place to consider putting in money,” Weisenbeck said.

The sentiment has been echoed in Los Angeles, where the retail industry has struggled to fill stores along its main corridors in Downtown LA and the Bloc, alongside the rise of e-commerce.

“In the past couple of years, it was a bit of a shock as to what was happening,” said Jay Luchs, an executive vice chairman at Newmark Knight Frank’s Los Angeles office. “Now we’re kind of getting used to it.”

But while online stores may draw the attention of most brokers, Peter Braus, the managing principal of Lee & Associates in New York, is confident that there are still some big fish.

“There’s a high degree of confidence for an established brand,” he said. “If they are going to open, they will for 10 years.”

This year’s schedule of panels also reflect a push from the industry to seek out innovative ways to fill retail space. One panel featuring Brendan Wallace, the founder of Fifth Wall Ventures, which backs real estate-focused technology startups, will discuss examples of digital-native brands that have transitioned to brick-and-mortar storefronts.

Another panel featuring a Target executive will discuss how shopping malls are reinventing themselves, while a panel including leaders of fashion houses Tapestry Inc. and Guess, Inc. is expected to cover how retailers are using artificial intelligence to improve customer service.

“In previous years there’s been panels about flagship retail and the vibrancy of malls,” said Braus, of Lee & Associates. “Now the conversation has turned to what the fuck do you do with a class B and C mall?”

And, in line with the loosening of marijuana legislation, there is a growing demand for retail space to sell it. There’s a panel for that, too.

Additional reporting by Natalie Hoberman, Katherine Kallergis and Alex Nitkin.


The need to light up while at work isn’t the kind of thing that Silverstein Properties chairman Larry Silverstein “would be attracted to,” but, for his tenants, he puts personal taste aside.

In a one-on-one interview with The Real Deal‘s publisher Amir Korangy, Silverstein described how he’s convinced hip companies like Swedish music-streaming giant Spotify to move into the Financial District. The key, according to the 87-year-old developer, is accommodating their “different” needs for an office space. And, in the case of Spotify, that apparently means a designated smoking room in 4 World Trade Center‘s upper floors since it’s banned on the development’s grounds. Check out the video above to hear his thoughts on catering to tenants.

Text by Erin Hudson

IMC Equity Group Yoram Izhak and Flea Market USA

IMC Equity Group Yoram Izhak and Flea Market USA

IMC Equity Group bought the Flea Market USA property in the West Little River neighborhood of Miami for $13.5 million, where it plans to build a mixed-use project.

Carlos De J. Segrera, chief investment officer of IMC Equity, said the group plans to build a multi-phased mixed use project with retail and a residential portion with up to 2,500 units. He expects the building to break ground next year and the project could take five to seven years to complete.

Miami Merchants Mart LLC, led by New York developer Haim Chera, sold the 225,417-square-foot retail center at 3017 Northwest 79th Street for $59 per square foot. Chera partnered with the Nakash family, the owners of Jordache Jeans, to purchase the property in 2011 for $11 million. The Nakash family‘s spokesperson previously said they decided to buy the property after they found out that Walmart was scouting locations in Liberty City to open a super center.

The flea market building was built in 1970 and sits on a 15.4-acre lot that fronts the Northside Metrorail station.

North Miami-based IMC Equity also owns the Northside Centre shopping mall next door, which sits on 33 acres. The company could build mid-rise, market rate apartment buildings with retail space on the ground floor, Segrera said.

The flea market was a staple in West Little River, near Liberty City, since the 1980s. The large warehouse had a number of different jewelry stores, hair salons and retail vendors inside. It closed earlier this year.

IMC Equity has been aggressively buying up retail properties in South Florida. In December, the investment firm bought a 250,000-square-foot shopping center in Margate called Peppertree Plaza for $45.5 million. Led by Yoram Izhak, the company now has a portfolio valued at more than $1 billion, according to its website.

Last May, IMC Equity Group bought the 37-acre Festival Flea Market in Pompano Beach for $25 million and paid an additional $31 million for the flea market business.

Sam Zell

Sam Zell

Sam Zell’s Equity International is considering taking four of its companies public in Brazil, Colombia, Mexico and India.

The Chicago-based investment firm is “seriously evaluating” initial public offerings for Indian lodging company Samhi, Colombian lodging company Decameron, Mexican mall operator Acosta Verde and Brazilian parking lot firm Estapar, Equity CEO Tom Heneghan told Bloomberg.

Estapar, a Sao Paulo-based network with more than 300,000 parking spaces, would be one of the first. Sao Paulo “has few parking spots and a heck of a lot of cars,” Heneghan said.

Equity International previously took Brazilian homebuilder Gafisa SA mall operator BR Malls Participacoes SA public.

In India, Samhi develops and operates 30 hotels with partners such as Hyatt and Marriott in major cities, Heneghan told Bloomberg.

Equity, which has investments in companies worth more than $12 billion, currently has 70 percent of its portfolio in Latin America.

The outspoken Zell, who made his fortune in real estate, has been bearish on the market lately, either selling or looking to sell stakes in at least four companies.

He recently cashed out of the Chicago office market entirely, and he’s resisted jumping on the industrial real estate bandwagon, even as e-commerce spurs unprecedented demand nationwide.

[Bloomberg] — John O’Brien


3921 Northeast Second Avenue and Alex Karakhanian

3921 Northeast Second Avenue and Alex Karakhanian

Investor and developer Alex Karakhanian closed on another property in the Miami Design District.

A partnership led by Karakhanian paid $12 million, or $1,445 per foot, for the 8,304-square-foot building at 3921 to 3925 Northeast Second Avenue, he said. Rammos HoldCo Inc., led by Bill Rammos, sold the lots, which total 9,240 square feet of land. Rammos will remain a partner in the property.

Tony Arellano and Devlin Marinoff of Dwntwn Realty Advisors brokered the off-market sale.

Karakhanian plans to lease the building to a showroom, gallery or pop-up retailer “given the existing structure has high ceilings and an open floor plan,” he said.

The building is sandwiched between the Design and Architecture Senior High School and a corner retail building leased to Luminaire.

Property records show the building was built between 1945 and 1951 and last sold for a combined $365,000 in the early 1990s.

Karakhanian has been active in the Design District and Midtown. Last year, he paid $5.5 million for the nearby building at 3622 and 3628 Northeast Second Avenue.

He’s also planning to build a mixed-use hotel at 51 Northwest 29th Street in Wynwood with Wynwood Investment Partners. That project calls for a 12-story hotel with more than 300,000 square feet of space, a 60,000-square-foot Class A office component and 20,000 square feet of ground-floor retail.

Keller Williams CEO Gary Keller (Credit: iStock)

Keller Williams CEO Gary Keller (Credit: iStock)

As Keller Williams pushes forward with its new focus on tech — launching a new iBuyer program and seeking to copy its competitors — the franchise also hopes to get an extra boost by scooping up other firms.

The Austin-based brokerage revealed that it was pursuing an aggressive merger and acquisition strategy in its first-quarter 2019 earnings report, according to Inman.

“With our recent moves, many are thinking that we’re just building Kelle, a CRM or a marketing platform, but what we’re really marching toward is a seamless transaction,” Keller Williams president Josh Team said in a statement Thursday.

“It is also why we’ve been aggressive about our tech acquisitions, purchased a mortgage company, launched an iBuyer program and are building our insurance marketplace, plus many others, so that everything works together creating one unified experience for the consumer,” Team added.

In the earnings report, Keller Williams also revealed that a sluggish housing market had put a damper on the firm’s business. The firm also revised its official agent count downward to to 157,377, after starting to account for as many as 15,000 inactive or unlicensed “ghost agents.”

Representatives for Keller Williams say that the acquisitions will complement the firm’s development of in-house technology and new product lines.

“Our criteria: If it’s faster and cheaper to buy than build a specific product or service, mold it to fit agent needs, and make it available for use as quickly as possible, then we pursue an acquisition,” Keller Williams spokesperson Darryl Frost told Inman.

Keller Williams, the largest franchise brokerage in the country, has been pushing to expand its tech platform amid aggressive poaching from rivals. Co-founder Gary Keller returned as CEO in January to lead the $1 billion drive, as The Real Deal detailed in a recent profile.  [Inman] — Kevin Sun

Stuart Miller and Silver Palms Royal Collection

Stuart Miller and Silver Palms Royal Collection

Lennar Corp. launched sales and broke ground on a new housing community in south Miami-Dade County near Princeton.

The Miami-based homebuilder said it will build 43 new single-family homes for its Silver Palms Royal Collection. The sales center will be located at 10700 Southwest 248th Street.

Lennar said the new homes will have four or five bedrooms, with three floor plans ranging from 2,244 square feet to 3,709 square feet. Prices will start in the mid-$300,000s.

The houses will be included within its a much larger 292-acre master planned Silver Palms community at Southwest 238th Street and 112th Avenue.

Amenities include a clubhouse, a fitness center and a pool.

In mid-2018, Lennar paid iStar $9.5 million for 32 acres at 11406 Southwest 248th Street to build the new Silver Palms Royal Collection, property records show.

Lennar’s latest sales launch highlights continuing demand for lower priced homes in Miami-Dade County. People are increasingly moving to the area near Princeton and Homestead because starter home prices have become unaffordable in other areas of the county.

Lennar has purchased several new home sites in south Miami-Dade County. In April 2018, Lennar paid $4.5 million for 32.7 acres of farmland near Zoo Miami. The company also spent $10.75 million in 2017 for about 77 acres in Homestead, just west of the Turnpike along Mowry Drive and Southwest 152nd Avenue.

President Trump and Mar-a-Lago (Credit: Getty Images)

President Trump and Mar-a-Lago (Credit: Getty Images)

President Trump’s Palm Beach County businesses lost $3.6 million last year, according to newly released financial disclosure forms.

Mar-a-Lago reported the biggest drop in revenue, down 10 percent year-over-year to $22.7 million in 2018, according to the Palm Beach Post. The report, filed with the Office of Government Ethics on Thursday, only shows asset values in ranges and does not include profits or losses. But it does show a year-over-year comparison between the first two years of Trump’s presidency.

In Palm Beach County, Trump’s income totaled $48.6 million last year, down nearly 7 percent year-over-year from $52.2 million in 2017. At Trump National Golf Club in Jupiter, revenue was $13.5 million in 2018, down from $14.6 million in 2017. At Trump International Golf Club in West Palm Beach, revenue dropped by $500,000 to $12.3 million in 2018.

The drop in revenue at Mar-a-Lago could be due to the cancellation of more than 20 charity events at the president’s private club after he made comments about the white-supremacist rally in Charlottesville, Virginia in 2017.

Only at Trump National Doral Miami, revenue increased by about $1.2 million to $75.9 million. That could be because the resort reported a drop in revenue and a decline in net operating income between 2015 and 2017, according to the Washington Post.

At Trump’s hotel in Washington, D.C., revenue rose by 1 percent, and at his golf courses in Bedminster, New Jersey, and in Northern Virginia, revenue also rose. [Palm Beach Post]Katherine Kallergis

Jorge Perez and One Ocean

Jorge Perez and One Ocean

Jorge Pérez’s effort to unload a four-bedroom penthouse he owns at One Ocean in Miami Beach may have just gotten more complicated.

Miami’s condo king just chopped nearly 50 percent off his original three-year-old asking price of $20 million on the unit, in response to the oversupply of luxury condos. Now, One Ocean’s condominium association is alleging Pérez’s firm, the Related Group, along with seven companies involved in the project’s construction, did a defective job building the 50-unit project at 1 Collins Avenue in Miami Beach’s South-of-Fifth neighborhood.

The association filed a lawsuit late last month in in Miami-Dade Circuit Court against the Related-owned entity that developed One Ocean, as well as project architects Ten Arquitectos and Sieger Suarez, general contractor Plaza Construction of Florida, and four subcontractors, alleging negligence.

A spokesperson for Related and Perez declined comment. A spokesperson for Plaza said the firm was just notified about the lawsuit. “We feel we have meritorious defenses against it,” she said. Plaza had no further comment, she added.

Executives for the six other defendants, including Sieger Suarez principal Charles Sieger and Ten Arquitectos owner Enrique Norten, did not respond to phone messages and emails seeking comment. An attorney for the condo association declined comment.

Since Related turned over control of the building in 2016 after it was completed, the condo association discovered a litany of design and structural defects, the lawsuit alleges. For instance, the association alleges it found deficiencies in the mechanical, electrical, plumbing and life-safety components of One Ocean. Specific damages include corrosion on sliding glass doors; cracked stucco, walls, ceilings, balconies and masonry; and deteriorated and defective balcony railings.

The association wants Related and the seven companies to pay for repairs to the building. Pérez, Related’s chairman and CEO, paid $4.2 million for the 3,528-square-foot penthouse on May 24, 2016. The top floor unit features a wrap-around terrace that overlooks the pool. He is currently asking $10.95 million for it, about 45 percent less than what he listed it for three years ago.

According to a Douglas Elliman’s first quarter sales report, 70 luxury condos sold in Miami Beach and the barrier islands, a 2.8 percent drop from the same period last year. Listings averaged 195 days on the market, a 41 percent increase compared to 2018’s first quarter.

Despite rising political and economic headwinds, the city’s leading developers remain high on the outlook for real estate in New York City. This optimism, tempered with a new dose of realism, was on display again and again at The Real Deal’s 12th annual New York Showcase and Forum on Wednesday.

In the first panel of the day, Larry Silverstein told TRD publisher Amir Korangy that he was still prepared to move ahead with 2 World Trade Center. When asked if he’d proceed without an anchor tenant, he simply said, “Watch the news.”

In a nod to the recent opening of Hudson Yards, Silverstein noted that New York has a unique capacity to absorb massive amounts new space.

“What other city in the world could accommodate 20 million square feet of new office space simultaneously?” he asked. “It’s an amazing thing.”

Some of the city’s top developers and brokers, as well as representatives of a new wave of innovation and technology in real estate, joined thousands of fellow industry professionals at the Metropolitan Pavilion in Chelsea for a day of panels and networking.

Amazon’s recent abandonment of plans to come to Long Island City was on everyone’s minds. In conversation with CBRE Tri-State CEO Mary Ann Tighe, RXR Realty boss Scott Rechler said he had “never seen a more challenging political environment,” pointing to the Amazon pullout and proposed prevailing-wage legislation as two major examples of the political shift.

Tighe responded that the industry would have to adapt to this new reality, and become more involved in local politics. “The difference in having one person on [a] community board who understands real estate — it’s night and day,” she said.

The topic of Amazon came up yet again in the following panel, with L&L MAG’s MaryAnne Gilmartin noting that Queens still has plenty of upside despite the reversal.

“I was 100 percent in, with or without Amazon,” she said of large mixed-use project her firm is developing on the LIC waterfront at 44-02 Vernon Boulevard. Her firm finalized the deal on Feb. 14, the very day that Amazon backed out of its headquarters plans.

Fellow panelist Vishaan Chakrabarti noted that economic realities made it difficult to meet the needs of lower- and middle-income New Yorkers. And he took a shot at criticisms of Billionaires’ Row, asking: “What are you gentrifying? Central Park South?”

Next up, TRD reporter David Jeans sat down with heads of flexible-space and traditional real estate firms to discuss the future of co-working and co-living, and their ability to withstand a downturn.

“My suspicion is that a recession would be painful for us,” Jamie Hodari, CEO of flexible-office firm Industrious said. However, he also noted that “a lot of clients say the recession will be when they double down on their outsourcing needs.”

Once again, long-term optimism shone through. “This space is going to grow because it’s what corporates have wanted for a long time,” said Bruce Mosler, chairman of global brokerage at Cushman & Wakefield.

Another sector likely to bear the brunt of shifting political winds is affordable housing. Two developers in that space, Ron Moelis of L&M and David Schwartz of Slate, sat down with TRD‘s Jill Noonan to discuss their outlook. The two agreed that while the barriers to entry in the affordable housing business may be higher, the risks are ultimately much lower. “There’s no risk that you’re not going to rent an $800 a month apartment,” Schwartz said.

Meanwhile, Moelis recommended a stint in politics as a good way to overcome the learning curve.

“I tell people — take a few years, work for the government, the housing agency, city planning or City Hall,” he said. “Get a feel for the political process and the complexity of the programs. A background in that really helps.”

The day wrapped up with a one-on-one conversation between TRD senior reporter E.B. Solomont and MetaProp’s Zach Arons, who shared his thoughts on the collision between venture-capital culture and New York real estate.

“The kind of tough talk that a New York real estate person brings is a lot of fresh air for these entrepreneurs,” he said, noting how a fake-it-until-you-make-it mentality pervades the VC world.

In any case, proptech remains a young industry with plenty of room for growth.

“People ask me all the time, “What inning are we in in the proptech evolution?” he continued. “There are some sectors we look at in proptech where forget inning; we’re not even in the stadium.”

“We’re like tailgating outside the stadium right now.”

A house with a real estate agent (Credit: iStock)

A house with a real estate agent (Credit: iStock)

The long knives are out again for one of American real estate’s oldest and most controversial traditions: requiring home sellers to pay the agents who represent the buyers of their properties.

A landmark suit filed in March alleged that the 1.3-million-member National Association of Realtors has conspired with local multiple listing services (MLSs) and with major realty brokerage companies to force sellers who list their homes on an MLS to pay a contractually specified percentage of the commissions to the broker/agent who brings in the ultimate buyer. Now two new class-action lawsuits have been filed with allegations along the same lines.

According to all the suits, an NAR rule prevents buyers from unilaterally altering the “split” stated in the listing contract. Say, for instance, you are a seller of a $500,000 home and agree at the listing to pay a total 5.5% commission, allocating 3% to the listing agent and 2.5% to the buyer’s agent. If the house sells for the full asking price of $500,000, that would mean the buyer’s agent would be due $12,500 at closing. If you thought this was more than you wanted to pay — especially given the fact that you knew part of the buyer’s agent’s job was to help your buyer obtain a lower price for your house — you might not be happy about having to shell out the $12,500. Shouldn’t the buyer pay this fee?

In March, the seller of a home in Shorewood, Minnesota, filed suit to challenge this NAR rule, arguing that, among other problems, this system of mandating compensation to the buyers’ agent raises total transaction costs. The rule “saddle[s] home sellers with a cost that would be borne by the buyer in a competitive market,” where buyers can opt to pay directly for their agents’ services. The U.S. market’s total transaction costs tend to be much higher than in most other industrial economies.

The original suit, which already ranks as the most significant antitrust litigation against Realtors in decades, is now pending in U.S. district court in Chicago, with NAR’s reply to the complaint expected shortly.

The two most recent class actions, filed in April, have different plaintiffs than the original suit but have nearly identical allegations. They come with proposed giant classes of alleged victims who have sold and paid millions of dollars in commissions via major MLSs to buyers’ agents across the country. NAR, which is the largest lobby in the real estate field, rejects the premises of the suits and pledges to fight them vigorously. The sheer costs for any single law firm to mount a credible antitrust case against a major lobby and the largest realty enterprises in the U.S. — plus no doubt the prospect of large payoffs and settlements — has apparently attracted the new actions. Sources tell me that it’s not unusual in wide-ranging cases like these for other law firms to jump in with nearly identical copy-cat filings.

Defendants in all three include NAR along with the giants of the brokerage industry: Home Services of America, Keller Williams Realty Inc., Realogy Holdings Corp. and RE/MAX Holdings Corp. Realtors tell me that an adverse decision in the cases would produce transformative changes in home-sale transactions nationwide. Some brokers say that it could create situations where first-time and other cash-short buyers might not be able to afford to pay for their agents’ services — creating a whole new obstacle to home ownership. Rather than buyers having their commissions paid for by the seller, they would now need to come up with that money themselves. Today, however, buyers don’t give it a thought, and in fact they often do not even know what commission split the buyer agent expects to receive.

In places like the United Kingdom and much of Europe, home sellers typically pay total realty fees of 1% to 3% versus the 5% to 6% average commonplace in the U.S. Critics of the American system have long argued that if home buyers paid the fees for the services rendered for them — and negotiated them with the buyers’ agents directly — total fees would be lower. On the other hand, sellers’ agents say that if the buyers-side commission is low under the current system, many buyers’ agents will not show houses because the compensation is not sufficient. In fact, discount realty firms have reported that sometimes they cannot get any of their listings presented to willing and able purchasers because buyers’ agents will not cooperate with them.

I. M. Pei (Credit: Getty Images)

I. M. Pei (Credit: Getty Images)

I.M. Pei, the architect who began his career designing buildings for William Zeckendorf and went on to bring to life some of the most iconic structures of the 20th Century, including the Louvre pyramid, died early Thursday. He was 102.

Pei emigrated from China to the U.S. in the 1930s and after attending Harvard’s Graduate School of Design worked in-house for Zeckendorf’s firm, Webb & Knapp. He then established his own practice in 1955 but continued to work on projects for Zeckendorf, such as Kips Bay Plaza and Silver Towers.

Over his career, Pei, who received architecture’s top honor, the Pritzker Prize, in 1983, designed globally renowned buildings such as the Museum of Islamic Art in Qatar, the Louvre Museum’s famous glass pyramid and Hong Kong’s Bank of China Tower. In New York, his works included the Javits Convention Center in the 1980s, and, more recently, Century Properties’ luxury condominium, the Centurion.

His other notable works in the U.S. include the East Wing of the National Gallery in Washington, D.C., and the Mesa Laboratory of the National Center for Atmospheric Research in Colorado, among others. Pei also designed the former Creative Artists Agency building in Los Angeles and the Miami Tower, an office tower in downtown Miami.

Pei celebrated his 102nd birthday last month. His firm is now known as Pei Cobb Freed & Partners, and Cobb is the only original founder still living. Two of Pei’s sons are architects and run their own New York City-based firm, Pei Partnership Architects. [NYT] — Erin Hudson

2125 Lake Avenue (Credit: Realtor)

2125 Lake Avenue (Credit: Paul Stoppi)

UPDATED, May 17, 10 a.m.: A Chicago buyer paid $19.15 million for a waterfront spec home in Miami Beach’s Sunset Islands.

Property records show Denise Vohra LLC, led by Dr. Ameet Vohra and his wife Denise, sold the seven-bedroom, 9,097-square-foot mansion at 2125 Lake Avenue on Sunset Island IV.

Ameet Vohra is the founder and CEO of Miramar-based Vohra Wound Physicians Management, one of the country’s largest physicians group focused on wound care, according to a press release. In 2017, the Vohras sold a waterfront home at 2108 North Bay Road for $14 million.

The Sunset Islands mansion sold to an undisclosed buyer from Chicago, according to a spokesperson for Villazzo Realty. Oren Alexander of Douglas Elliman represented the buyer, who paid all cash, and Lisa Blake of Villazzo Realty was the listing agent.

It traded hands for $2,105 per square foot, which is the highest sale on Sunset Islands III and IV, according to Villazzo.

Denise Vohra LLC paid $5.1 million for the 20,000-square-foot pie-shaped lot in 2013 and built a new home. The property features 150 feet of water frontage, a dock, outdoor kitchen, pool deck, marble floors and bronze metalwork.

Ultra-luxury home sales surged in Miami Beach in the first quarter of this year, which brokers attribute in large part to the December 2017 federal tax overhaul, which limited the ability of taxpayers to deduct state and local taxes — dubbed SALT — from their income in 2018. In the first quarter, nine single-family homes priced at $5 million and up in Miami Beach sold for a combined $120 million.

Correction: An earlier version of this story incorrectly listed the buyer’s agent as the listing agent and vice versa. 

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The United States housing market is up in April (Credit: iStock)

The United States housing market is up in April (Credit: iStock)

The U.S. housing market just received some much needed positive news.

Housing starts rose 5.7 percent in April, compared to March, to an adjusted annual rate of 1.24 million, according to data from the U.S. Census Bureau released on Thursday. This number includes both multifamily and single-family homes.

The news comes after numerous economic indicators have shown that the housing market is slowing down. Last month, single-family housing starts fell 0.4 percent to 781,000, the slowest pace since September 2016.

April’s numbers indicate that homebuilders could be back to constructing new homes due to lower mortgage rates. The 30-year fixed rate mortgage declined to 4.10 percent in April from a high of about 4.94 percent in November. Lower mortgage rates make home buying more affordable for buyers.

Building permits, an indicator for future new construction, also rose 0.6 percent to a seasonally adjusted rate of 1.3 million, the newly released data shows. But single-family housing permits fell, marking the fifth consecutive month of declines, suggesting there will be less new construction in coming months.

Affordability is one of the biggest challenges facing homebuilders. Buyers are unable to afford to buy homes in many metro areas such as Miami, New York and Los Angeles, while homebuilders are having a tougher time constructing less expensive homes due to rising labor and supply costs.

These pressures have caused many economists to wonder whether the post-recession housing boom is coming to an end. One indicator: the pace of home price growth of existing homes is slowing in many cities.

In Miami, about 88 percent of single-family homes were purchased after the seller lowered the price, according to the housing startup Knock. In Chicago, 82 percent of homes sold at a discount from the initial asking, while in New York, 77 percent of homes sold at a price reduction.

Victorino Noval and the Mountain of Beverly Hills (Credit: Getty Images)

Tower Park Properties’ Victorino Noval and the Mountain of Beverly Hills (Credit: Getty Images)

The long and complicated road to sell The Mountain of Beverly Hills has taken another sharp turn.

After a splashy entrance last summer, when the massive property was marketed for a whopping $1 billion, it was chopped down to $650 million earlier this year.

Now, the owner is facing a potential foreclosure at the end of this month, The Real Deal has learned.

Secured Capital Partners acquired the 157-acre spread — with the liens attached — from Tower Park Properties LLC in 2016 through a title transfer. While Secured Capital is the owner, Tower Park owes the lender. Both entities are tied to the family of Victorino Noval, a convicted fraudster.

Tower Park is at risk of defaulting on those existing four loans, according to property records.

Ronald Richards, an attorney for Secured Capital, said there is “zero chance” that the property will end up in foreclosure.

The bankrupt Tower Park entity is controlled by Noval and Atlanta investor Charles Dickens. Secured Capital is controlled by Franco Noval, Victorino Noval’s son.

The potential foreclosure comes as the massive Beverly Hills Post Office property struggles to get sold. The spread on Tower Grove Drive remains on the market, now listed at $650 million.

The story dates back to 2004. After failed attempts at building on the land, the estate of Herbalife founder Mark Hughes sold the property to Tower Park for $23.75 million that September. At the time, the buyers barely put money down, choosing instead to take out four loans with the Mark Hughes Family Trust. The loans, plus interest that accrued, add up to about $190 million.

The three entities — Tower Park, Secured Capital and Hughes Family Trust — are in the process of coming up with a solution, Richards added. There is a court date set for May 24, in which Tower Park will try to come up with a “payoff figure,” Richards said, that would release the new owners from any Hughes debt.

Richards added there is a dispute over the value of the loans, which are said to be closer to $130 million. Richards said he thought the May 30 deadline will be pushed back.

Lawyers representing Tower Park did not immediately return requests for comment. Listing agent Aaron Kirman declined to comment.

Gary Keller (Credit: Keller Williams and iStock)

Gary Keller (Credit: Keller Williams and iStock)

The sluggish housing market has put a damper on Keller Williams’ business.

In the first quarter, the franchise brokerage’s agents closed $63.5 billion in sales volume in the U.S. and Canada, down 1.9 percent from a year earlier, the company said in a statement. At the same time, the number of transactions dipped 1.7 percent, which Keller Williams attributed the decline to lower sales across the country.

“We expect to continue to see a year-over-year decline in total existing home sales in the U.S. throughout 2019, likely in the 2 to 5 percent range,” chief economist Ruben Gonzalez said in the statement. “Price growth is also slowing with median existing home prices tracking in the low single digits now.”

Existing home sales in the U.S. fell 6.6 percent in the first quarter, with sales volume declining 4.3 percent year over year, according to the National Association of Realtors.

The brokerage’s official agent count in the U.S. and Canada was 157,377 was of March 31, down from 159,447 agents on Jan. 31. Keller Williams said the count was revised downward to account for “agent roster cleanup.” Josh Team, Keller Williams’ president, told Inman in February that the company may have between 10,000 and 15,000 “ghost agents” — agents that are inactive or unlicensed.

Globally, the company saw an uptick in business as it expanded into Italy and opened 12 new offices. Outside the U.S. and Canada, agents closed $1.1 billion in sales volume, up 11.5 percent from a year earlier. The number of transactions rose 27.3 percent to 7,364.

Keller Williams, which is the largest franchise brokerage in the country, has been contending with aggressive poaching and the need to expand its tech, which The Real Deal detailed in a profile this month. Earlier this year, a report noted that Keller Williams is seeking to take on Redfin. Team noted that the brokerage thinks it can “copy the technology of Redfin before Redfin can take the market share.”

Keller Williams has viewed tech-powered brokerages like Redfin as rivals. Last year, the company acquired a startup specifically to help building a strategy to challenge aggregator listing portals. It also developed Kelle, an artificial intelligence-powered virtual assistant, which the company has compared to Apple’s Siri and Amazon’s Alexa.

At the same time, Keller Williams is also joining the iBuyer craze, alongside the likes of Opendoor and Zillow Offers. The company previously said it plans to spend $100 million through the program this year.

400 Ocean Palm Beach and Guy Millner (Credit: Getty Images)

400 Ocean Palm Beach and Guy Millner (Credit: Getty Images)

Former two-time Georgia gubernatorial candidate Guy Millner bought a waterfront condo in Palm Beach for $5 million.

Millner bought the 3,432-square-foot condo, unit 413-E, at 400 South Ocean Boulevard for $1,456 per square foot, records show. Millner bought the unit from Nancy Brougher of York, Pennsylvania.

Brougher had paid $225,000 for the condo in 1998, records show. The unit has four bedrooms and five bathrooms.

The building known as the 400 Building was constructed in 1965 by Edward Durall Stone and has 64 units. Amenities include a rooftop pool overlooking the ocean.

Millner ran to be Georgia’s Republican gubernatorial candidate in 1994 and 1998 but lost both races. He also lost a bid for a U.S. Senate seat in 1996. He had come close to winning the 1994 governor’s race, with 48 percent of the vote against incumbent Governor Zell Miller.

Millner is CEO and chairman of Atlanta-based insurance company AssuranceAmerica Corp. In 1961, Millner founded Norrell Corp., a temporary staffing company that had $1.4 billion in revenue in 1999 when it was sold to Interim Services for $650 million.

In 2012, Millner and his wife “Ginny” sold a 8,665-square-foot home at 631 Island Drive on Everglades Island in Palm Beach for $7.9 million, records show.

Next door to the 400 building, Chicago developer James Loewenberg sold a 2,500-square-foot waterfront condo at 360 South Ocean Boulevard for $7.8 million.

CompStak CEO Michael Mandel

CompStak CEO Michael Mandel

UPDATED, 12:50 p.m., May 15: CompStak, the real estate analytics firm that crowdsources leasing and investment-sales comps from brokers, has raised the another $12 million, the company told The Real Deal Wednesday.

The analytics firm has now raised $28 million since it launched in 2011. The latest Series B round was led by IA Capital, a New York-based investment firm that has backed insurance and financial technology companies.

Michael Mandel, the firm’s CEO and co-founder, said the new funding would be used to expand its sales and client services teams, and establish a deeper presence in all U.S. markets. He also said the firm increased its client-base goal for its Exchange platform from 20,000 to 150,000 users, but offered no timeline.

This year, CompStak launched an analytics platform that allows users to compare its leasing and property information in real time. It also hired a new chief commercial officer, Chris Aronson, the former CEO of EDR, a $200 million real estate due diligence and risk management platform.

Investors continue to show confidence in the real estate analytics and data space. Moody’s Analytics, which is a minority investor in CompStak, is currently building a portal called the Reis Network that offers real estate data services provided by CompStak and other firms, including Rockport VAL.

Last week, VTS, a cloud-based leasing portfolio management software, which also has an analytics platform, announced a $90 million funding round backed by Brookfield Asset Management, at a valuation of $1 billion.

Correction: A previous version of this story mischaracterized Aronson’s role at CompStak. He is chief commercial officer.

The Palm House Hotel

The Palm House Hotel

UPDATED May 17, 12:45 p.m.: The saga of one of the most troubled EB-5 projects in South Florida moves to a new chapter.

The Palm House Hotel at 160 Royal Palm Way in Palm Beach finally sold to a U.S. affiliate of the private real estate investment firm London + Regional Properties for $39.6 million.

The sale comes just weeks after the former developer of the property, Robert Matthews, pleaded guilty to money laundering and fraud charges over the luxury condo-hotel project. He is currently awaiting sentencing along with his wife Mia Matthews, who pleaded guilty to tax evasion.

The receiver of the 160 Royal Palm LLC, Carey Glickstein, sold the property, records show.

The sale of the property will result in about 80 investors and creditors – including the town of Palm Beach – receiving a substantial portion of the money they are owed through the bankruptcy court-ordered sale of the company’s primary asset, said Glickstein, court-appointed manager and former court-appointed receiver for 160 Royal Palm LLC, in a statement.

Marci H. Langley, a shareholder in the Boca Raton office of Greenberg Traurig, represented 160 Royal Palm LLC

The 54,038-square-foot hotel was built in 1961, but has been in disrepair and needs substantial improvements. It represents one of the few opportunities to bring a new hotel to the wealthy town of Palm Beach.

A bankruptcy judge previously approved the sale to London + Regional Properties in March. The London-based firm has almost $12 billion in assets, according to its website. It owns the 453-room London Hilton on Park Lane in London’s Mayfair neighborhood.

The judge declined to accept a last minute bid by Wellington developer Glenn Straub, whose lawyer said the developer was prepared to pay $40.6 million for the property. Related Companies also made a $32 million bid for the property in October.

The project first started soliciting EB-5 investment in 2012.

EB-5 is a federal program that allows investors to get a green card in exchange for investing at least $500,000 in a U.S. enterprise and creating at least 10 jobs. The development group was able to solicit more than $40 million of EB-5 money for the Palm House development. Almost none of the money went into the project and instead was siphoned off by Matthews and the EB-5 regional center developer, Joseph Walsh, according to a complaint by the Securities and Exchange Commission. Some of the money also went to pay for Matthews’ 151-foot yacht named Alibi, federal prosecutors said.

The Real Deal publisher Amir Korangy and Larry Silverstein (Credit: Emily Assiran)

The Real Deal publisher Amir Korangy and Larry Silverstein (Credit: Emily Assiran)

Since being stood up by Rupert Murdoch in 2016, Larry Silverstein has been searching in vain for an anchor tenant to commit to the final piece of the World Trade Center redevelopment. But if he doesn’t find a suitor, he might be willing to walk down the aisle solo.

“Is it a consideration?” he said when asked by The Real Deal publisher Amir Korangy if he would build 2 World Trade Center on spec. “Of course, it’s a consideration.”

The Real Deal publisher Amir Korangy and Larry Silverstein (Credit: Emily Assiran)

The Real Deal publisher Amir Korangy and Larry Silverstein

Silverstein and Korangy kicked off TRD’s 12th annual real estate showcase and forum at Manhattan’s Metropolitan Pavilion Wednesday with a wide-ranging discussion about Silverstein Properties’ WTC efforts, the political climate, and the evolution of New York’s Far West Side. The developer has been largely focused on rebuilding efforts ever since the 9/11 attacks, which occurred just six weeks after Silverstein secured the highly-coveted site.

“We couldn’t let the terrorists succeed,” Silverstein said, explaining his motivation for rebuilding. “And by putting the buildings back, we would defeat them.”

The complex is largely finished at this point, with the notable exception of 2 WTC. Murdoch’s News Corp. was planning to anchor the tower, which was to be designed by Bjarke Ingels, but pulled out of the deal.

Silverstein went through the phone call he received about that fateful decision. On Jan. 15, 2016, Murdoch essentially told him he did not like what he was seeing in the economy and the general state of the world at that time, which made him nervous about spending the amount of money it would take to move his company’s headquarters.

“Have you made a definitive, final decision?” Silverstein said he asked Murdoch. “He said, ‘We have made a definitive and final decision. We’re not going to take the move.’”

“It was unfortunate to lose them,” he continued.

Silverstein also weighed on Amazon’s abandonment of its plans to set up part of its second headquarters in Long Island City and the recently proposed and discarded pied-à-terre tax at the state level.

He blamed both the loss of Amazon and the idea for the tax on a general lack of knowledge among New York’s politicians.

“It’s these people who come into the metropolitan area of New York for a second home or whatever, who frequent the shops, who frequent the theaters, who like entertainment, who leave so much in the city by way of expenditures, which the city is dependent upon,” he said, “and so to lose them…it made absolutely no sense at all.”

Office space at the WTC complex has come online at roughly the same time as office space in Hudson Yards. Silverstein said he and Related Companies’ chair Steve Ross were fierce competitors, but he still respected what he has been able to accomplish on Manhattan’s Far West Side. He took the fact that both massive developments—along with Brookfield’s Manhattan West—have already been able to lease so much office space as a sign of the uniqueness of New York City.

“What other city in the world could accommodate 20 million square feet of new office space simultaneously?” he asked. “It’s an amazing thing.”

Govorner Ron DeSantis (Credit: Getty Images)

Govorner Ron DeSantis (Credit: Getty Images)

UPDATED, May 16, 3:07 p.m.: Gov. Ron DeSantis signed a law that will reduce the tax on commercial leases in Florida.

House Bill 7123, known as the business rent tax, lowers the commercial lease tax by 0.2 percent to 5.5 percent. Although the reduction is small, it marks the third such cut since 2018.

Florida is the only state in the U.S. that collects sales tax on commercial leases, according to NAIOP, the national commercial real estate development association. The state is otherwise considered a tax haven due to its lack of a state income tax.

In Florida, the commercial tax is imposed on the base rent, plus any additional rent or consideration the tenant is required to pay, said Darcie Lunsford, who has spearheaded reductions in the tax on behalf of the South Florida chapter of Herndon, Virginia-based NAIOP. It’s also applied to the tenant’s share of common-area maintenance fees and property taxes. Some Florida counties also tack on a local surtax, including Miami-Dade, Broward and Palm Beach counties.

The tax reduction becomes effective on Jan. 1, 2020 and is expected to generate annual savings of $64.5 million, according to the governor’s office. DeSantis, who won the endorsement of the Florida Realtors in his race for governor, was elected in November.

The tax applies to retail, office and industrial leases and does not include hotel or apartment leases.

Lunsford, a senior vice president at Butters Realty & Management, said reducing the tax helps to level the playing field when Florida competes for headquarters or major companies. It also “releases investment capital that companies can now use to grow our businesses, hire people, and invest in equipment,” she said.

Marvin Kirsner, a shareholder at Greenberg Traurig, said the reduction is minor. A previous bill, which did not pass, called for reducing the tax to 3.5 percent, which would have had a much bigger impact, in addition to taxing e-commerce, he said.

Still, Steven Hurwitz of Colliers International South Florida said that over time, additional rollbacks would have an impact on tenants reinvesting in their businesses and the local economy. “Any future movement definitely supports that sort of investment in our economy,” he said.

NAIOP’s Florida chapter has been lobbying the state to ratchet back the commercial lease tax for years and is hoping to wipe it out completely. Kirsner said that former Gov. Rick Scott attempted to eliminate the rent tax altogether.

“It’s definitely a senseless tax that we need to work on eradicating over time, which is what NAIOP’s been doing,” Lunsford said.

Other real estate-related bills are awaiting the governor’s signature. The Florida Legislature recently passed a bill that would make remote online notarizations legal, a move that could speed up foreign and out-of-state real estate investment in the Sunshine State.

Foreclosure starts are up in 17 states and a number of major cities. (Credit: iStock)

Foreclosure starts are up in 17 states and a number of major cities. (Credit: iStock)

Nationwide foreclosure numbers continue to trend downward, though Miami and Orlando are among the notable cities where warning signs persist.

There were 55,646 foreclosure filings in the United States in April, a 13 percent drop year over year and a 5 percent drop from March, according to a report from ATTOM Data Solutions released Thursday.

April marked the 10th consecutive month with year-over-year declines, according to the report, contributing to a positive outlook for the housing market. Despite a slight uptick in July, last year saw the lowest number of foreclosures since 2005, raising hopes that the worst effects of the housing market crash might be in the rearview mirror.

“While overall foreclosure activity is down nationwide, there are still parts of the country that we need to keep a close eye on,” Todd Teta, chief product officer at ATTOM, said in a statement.

Foreclosure starts, for example, are up in 17 states and a number of major cities. Miami saw a 45 percent increase in foreclosure starts in April, according to the report. Among major cities, it was only second to Orlando, which saw foreclosure starts rise 90 percent last month.

Many major American cities, however, have seen a drop in foreclosures.

Manhattan had no homes facing foreclosure, which is a drop of 8 percent year over year, the report said. Los Angeles County saw 0.4 percent of its homes face foreclosure in April, a decrease of 1 percent.

Despite Illinois having the fourth highest foreclosure rate of any state, Cook County saw less than 1 percent of its home face foreclosure last month, a decrease of 4.4 percent.

Falling nationwide foreclosure figures have been aided by a strong economy and dwindling mortgage delinquency rates, which hit a 12-year low in 2018. The good news on foreclosures comes despite at least one expert’s prediction that 2019 will be the worst year for the housing market since the crash, with increasing mortgage rates exposing the market’s affordability problem.

Luis Noronha and renderings of Galleria Village (Credit: LinkedIn)

Luis Noronha and renderings of Galleria Village (Credit: LinkedIn)

UPDATED May 16, 12:45 p.m.: Brazilian developer Luis Noronha is launching sales of a new townhome project near the Galleria Mall in Fort Lauderdale.

Noronha’s Lana Capital plans to break ground on the 24-unit Galleria Village development at 1245 Northeast 18th Avenue in east Fort Lauderdale in August, according to Dan Teixiera of Douglas Elliman. Teixeira and Megan Kowalchuk are handling sales of Galleria Village. Townhouses start at $640,000 and go up to $800,000.

The townhouses, in a gated community, each have three bedrooms and a den in more than 3,000 square feet, with a two-car garage and the option to build a pool. Douglas Strabelli, owner of Sagewood Construction, is co-developing the project. Sagewood is building it and Gustavo J. Carbonell is the architect.

Lana Capital has developed more than 30 projects in Brazil, New York and Miami, Noronha said. This marks the first for the developer in Fort Lauderdale.

“Development in Miami is quite challenging at this point,” he said. “There’s enough product and prices are going down.”

Lana Capital paid $2.8 million for the property in 2017, Noronha said.

The city of Fort Lauderdale has been investing in infrastructure in the area, where new restaurants, bars and grocery stores have been built. Last year, GreenWise Market inked a 28,000-square-foot, ground-floor lease at The Main Las Olas project, developed by Stiles and Shorenstein Properties, at 225 East Las Olas Boulevard.

Teixeira, a Fort Lauderdale resident, said Galleria Village stands out among the competition because the townhouses have the amenities of a single-family home, with larger garages, two stories instead of three, and the option for a private pool.

Buyers are required to put down 30 percent deposits during the construction phase. The project is expected to be completed within 14 months of breaking ground.

Teixeira said he’s seen interest from international buyers, including from Brazil. Brazilian buyers appear to be coming back to South Florida. In 2018, Brazil ranked as the top country buying South Florida homes, according to the Miami Association of Realtors.

Some in the industry say the situation with China has been up in the air for some time now (Credit: iStock)

Some in the industry say the situation with China has been up in the air for some time now (Credit: iStock)

The ongoing trade war between the U.S. and China took a turn for the worse Friday, when the White House more than doubled tariffs on $200 billion worth of Chinese goods. Amid faltering negotiations, it hinted at further tariffs Tuesday. For the real-estate industry, which relies on China for a big chunk of its building materials, the moves create a disturbing uncertainty.

Some in the industry say the situation with China has been up in the air for some time now, and the industry has already absorbed the impact.

“The threat of tariffs, and actually tariffs themselves, have been in the market now for a while,” said Brett White, CEO of Cushman & Wakefield, in the company’s earnings call last week. “And as we mentioned last year when this question came up, and I’ll just reiterate today, we haven’t seen any impact on our business either in greater China, or anywhere else for that matter really, based on the existence of increased tariffs or the threat of increased tariffs.”

Daren Hornig, managing partner of Hornig Capital Partners, said the broader questions surrounding trade were more worrying than the specific costs of materials like steel and glass.

“From a development perspective, you’re doing your deals two to four years out, so you want more predictability and less volatility,” he said. “If we could just put this one behind us and get this trade deal resolved, that would make a lot of people globally very happy.”

David Schwartz of Slate Property Group said the two countries’ actions have already driven up prices, to the point where his firm is now looking to buy more products domestically, or at least from countries other than China that aren’t subject to the tariffs.

These higher costs will ultimately hit the consumer via pricier rents and condos, Schwartz said. The increased jobs that may come from builders buying more materials domestically could be offset by higher construction costs that shrink projects, he added.

“There probably are some areas that will benefit,” he said. “But if overall costs go up, think about how many construction jobs are lost and how much more the end consumer needs to pay.”

John Robbins, who oversees U.S. real estate for consulting firm Turner & Townsend, said that contractors are already hedging their bets about future tariffs.

“We’re getting budget submissions from contractors that are building in some sort of allowance for tariff impacts, that obviously are just being passed on to owners, to clients that are going to be the ultimate occupier or user of the space,” Robbins said.

President Trump threatened Tuesday to extend the tariffs to another $300 billion in other goods, which would essentially mean a 25-percent levy on most imports from China. Meanwhile, the Chinese government has retaliated with tariffs impacting $60 billion in U.S. goods, including building materials like bricks, wood flooring, pipes and tubes.

Trump tweeted that “we can make a deal with China tomorrow,” later adding that “this must be a great deal for the United States or it just doesn’t make any sense.”

We can make a deal with China tomorrow, before their companies start leaving so as not to lose USA business, but the last time we were close they wanted to renegotiate the deal. No way! We are in a much better position now than any deal we could have made. Will be taking in…..

— Donald J. Trump (@realDonaldTrump) May 14, 2019

When the time is right we will make a deal with China. My respect and friendship with President Xi is unlimited but, as I have told him many times before, this must be a great deal for the United States or it just doesn’t make any sense. We have to be allowed to make up some…..

— Donald J. Trump (@realDonaldTrump) May 14, 2019

Maurice Regan, CEO of general contractor J.T. Magen & Co, said the White House didn’t seem to have any kind of cohesive strategy.

“Everything seems to be reactionary: Quick Draw McGraw, make something up, and all of a sudden there are these huge consequences from even just a tweet or a statement,” Regan said. “We’re kind of way down the food chain between our government and world superpowers playing a game of bluff, really.”

But he stressed the industry has weightier matters to grapple with.

“I think there are bigger pressures on the cost of construction at the moment, such as shortage of labor, the demand outstripping the supply, and limited good resources,” he said. Regarding tariffs, he estimated that “overall it’s going to be a two, three, or four percent impact – I’m guessing two – and I don’t see any of my clients reacting about this. It’s something that we are not actually going to have any control of.”

Others in the industry sounded more dire warnings.

“I think the minute that it’s announced it starts impacting the business, when it’s to the order of magnitude that they’re talking about at 25 percent,” said Richard Wood, CEO of Plaza Construction Group. “There are certain products where the delta may still be great enough that it still may pay to actually buy in China. But it’s going to be a much closer look than it was a year ago.”

“Beyond just metal products, we’ve even had situations where ceramic tile coming from China was held up at customs because no one was sure if it needed a tariff applied,” Robbins added. “So as you can imagine, there was a schedule impact because the contractor couldn’t get the tiles out of customs.”

Ultimately, it all comes down to the uncertainty. “Even if you’re planning a project down the road, nobody’s a clairvoyant and can predict whether or not these tariffs are going to be in effect when you’re actually getting ready to ship and are exposed to those tariffs,” Wood said.

“You have to consider those things and take them into consideration and not take the risk. So, yes, it will impact your decision making.”

Hello Alfred CEO Marcela Sapone and Greystar CEO Bob Faith (Credit: Getty Images)

Hello Alfred CEO Marcela Sapone and Greystar CEO Bob Faith (Credit: Getty Images)

One of the country’s largest residential landlords will outsource its building management services to Hello Alfred, a startup that uses technology to determine residents needs.

Greystar, the South Carolina-based landlord with more than 450,000 units in the United States, plans to roll out the platform across its entire portfolio, which will provide its multifamily residents with services like pet care, laundry and will purchase groceries through an app. The platform is currently in 200,000 units across the United States, including some of Greystar’s buildings.

Launched in 2014, Hello Alfred offers an alternative to the traditional property management firm in multifamily buildings. The firm has since raised $52.5 million, in rounds led by New Enterprise Associates, Spark Capital, Invesco and Greystar.

In 2017, the firm signed an agreement with Related Companies to roll out its platform in the landlord’s Manhattan buildings, but it came with an exclusivity clause that barred Hello Alfred from operating in any other Manhattan buildings. That agreement expires in September, said Hello Alfred’s chief executive Marcela Sapone, and it will be added to Greystar’s Manhattan buildings.

Greystar currently has $32 billion of assets under management including $12 billion of assets under development.

David B. Gordon and Jay Peak Resort (Credit: Orbitz)

David B. Gordon and Jay Peak Resort (Credit: Orbitz)

Beginning in 2006, more than 800 EB-5 investors thought they were investing in a promising new ski resort in Northern Vermont.

But years after investors started putting their money into the Jay Peak project, the Securities and Exchange Commission in 2016 alleged that the two developers ran a “Ponzi-like scheme.” It is considered the largest alleged EB-5 fraud to date.

Now the court-appointed receiver for the project, Michael Goldberg, is suing the developers’ and the receivership entities’ former law firm, Mitchell Silberberg & Knupp LLP and attorney, David Gordon, in federal court in Miami. Goldberg alleges legal malpractice and that the law firm was negligent in its fiduciary duties.

Jeff Schneider and Jason Kellogg of the Miami-based law firm Levine Kellogg Lehman Schneider and Grossman LLP are representing the receiver in the lawsuit filed last week. Schneider said damages are in the tens of millions of dollars.

Mitchell Silberberg & Knupp and Gordon did not respond to requests for comment.

The lawsuit alleges that the law firm and Gordon learned in 2013 that one of the developers of Jay Peak, Miami businessman Ariel Quiros, had misused some of the project’s funds to cover “construction shortfalls in the project.”

The law firm also allegedly learned that Quiros illegally financed the purchase of the resort in 2008 using EB-5 investor funds, according to the suit. It further alleges that the firm learned in 2013 that money was being “commingled” or that funds were being used for earlier phases of the project, and did not advise investors in the receivership entities, including Jay Peak co-developer Bill Stenger.

The suit alleges that the law firm acted in the best interest of Quiros but not of its other clients. More than a dozen receivership entities linked to Jay Peak were not counseled by the law firm or Gordon that securities violations were being committed by Quiros, according to the suit. Still, Gordon and the law firm continued to represent the receivership entities. This allowed investment into the project to continue, the suit states.

In May 2014, the law firm and Gordon represented Quiros at an SEC investigative session, and Quiros testified that $18.2 million of investor money earmarked to pay a South Korean firm for construction was instead transferred to a Raymond James account to pay down margin debt incurred in earlier phases, according to the suit. This was never mentioned to the receivership entities, the suit alleges.

EB-5 was once a popular federal program that allowed foreign investors the opportunity to get a green card if they invested at least $500,000 and the project created a least 10 jobs. In recent years, however, notable alleged fraud cases such as the Jay Peak case as well as a backlog of Chinese visas have slowed demand for the program.