Real Estate News

Budapest (Credit: Pixabay)

Budapest (Credit: Pixabay)

In the elegant Hungarian capital of Budapest, it’s good news for home sellers and not so good news for buyers.

No other city in the world saw prices climb higher than in Budapest in the third quarter of 2019. The price of a home rose 24 percent year-over-year, according to a Knight Frank study cited by Mansion Global.

It wasn’t a fluke for the city of 1.7 million — it topped Knight Frank’s list of highest-risers in the fourth quarter of 2018 and the first quarter of 2019. The report pinned Budapest’s upward trajectory on falling unemployment and growing wages.

That’s four times the rate of the U.S. city with the fastest rising prices, Phoenix, which experienced 6 percent year-over-year growth.

The city of Xi’an in central China overtook it in the second quarter, but fell back to number 2 with 15.9 percent growth in the third quarter. Another Chinese city, Wuhan, ranked third in the world with 14.9 percent growth. Russia’s Saint Petersburg and Moscow were both in the top 10.

Prices rose in 78 percent of the 150 cities included in the report, but the 3.2 percent global average is the slowest since the second quarter of 2015 and a number of top U.S. markets saw growth below that.
New York and Chicago saw prices move up by less than a percentage point. Prices rose 1.7 percent in Los Angeles and 3.1 percent in Miami. Prices fell 0.7 percent in San Francisco.
Prices also fell in some top-tier cities around the globe, including London and Hong Kong. Jerusalem saw the most significant drop, with prices falling 13.6 percent year-over-year. [Mansion Global]

The post This European city has the world’s fastest rising home price appeared first on The Real Deal Miami.

(Credit: iStock, Wikipedia)

(Credit: iStock, Wikipedia)

It’s time to share a conference room in the City of Brotherly Love.

CBRE’s first co-working location in the Northeast is set to open by the end of the year in Philadelphia.

The 50,000-square-foot location at Shorenstein Properties’ 1818 Market building is under CBRE’s Hana brand that the commercial giant launched last year, according to the Philadelphia Inquirer. CBRE has opened two Hana locations — in London and Dallas — and plans to open two others in Irvine, California and Arlington, Virginia.

Hana will offer most of the same services to users offered by co-working brands that have built the model, like Knotel and WeWork. Those companies typically lease space from a landlord at a monthly rate and then sublease that space out to its users at a premium.

Hana will not sublease — the landlord retains control of the space and Hana manage and brand it for a fee, giving the landlord a share of profits from subleasing.

That could be an attractive arrangement for landlords, particularly as demand grows for co-working-style spaces among traditional large office tenants. Hana CEO Andrew Kupiec said that arrangement “a more secure, overall more transparent model.”

CBRE’s venture into co-working hasn’t necessarily gone over well with its competitors. Knotel CEO Amol Sarva, whose firm just announced layoffs in New York, said last year that it would no longer work with CBRE. Bond Collective CEO Shlomo Silber called Hana a “conflict of interest” for the brokerage.

WeWork leases 1.3 million square feet in Philadelphia and is Hana’s biggest competition there.

Kupiec said that Hana wants to expand to other Shorenstein-owned buildings in the future. [Philadelphia Enquirer]

The post CBRE to open first Northeast co-working location in Philadelphia appeared first on The Real Deal Miami.

Crown Prince Sheikh Mohammed bin Zayed Al Nahyan of Abu Dhabi, Softbank CEO Masayoshi Son, and former British Prime Minister Tony Blair (Credit: Getty Images)

Crown Prince Sheikh Mohammed bin Zayed Al Nahyan of Abu Dhabi, Softbank CEO Masayoshi Son, and former British Prime Minister Tony Blair (Credit: Getty Images)

How much would it cost to build a brand new, 445,000-acre capital city from scratch in the 21st century? Indonesia figures about $34 billion, and the world’s fourth-most populous nation has tapped a strange collection of people to execute the plans.

The massive development project will be led by Crown Prince Sheikh Mohammed bin Zayed Al Nahyan of Abu Dhabi, according to the Associated Press.

Following a two-day meeting with President Joko Widodo, the crown prince has agreed to lead a committee overseeing the construction of a new capital city in the sparsely populated province of East Kalimantan on Borneo.

Committee members also include Softbank CEO Masayoshi Son and former British Prime Minister Tony Blair. The United Arab Emirates and Softbank, currently dealing with the fallout from Son’s disastrous bet on WeWork, will contribute funding to various subprojects included in the megaproject. The recently-established U.S. International Development Finance Corporation is set to provide funding as well.

Only about 19 percent of the funding is planned to come from Indonesia’s state budget, according to the AP. The rest will be funded by direct investment from government-run companies, the private sector, and other sources. It’s to be built as a smart city, with sensors and big data utilized to realize efficiencies.

For context, the $34 billion price tag is half the early estimates for California’s now-scrapped San Francisco-to-Los Angeles high speed rail project. It’s also about half the money that Brazil spent to build its capital Brasilia from scratch in the late 1950s, accounting for inflation.

Indonesia wants a new capital because its current capital on the island of Java, Jakarta, faces a number of existential threats. Uncontrolled groundwater extraction is causing the city to sink and its rivers are highly contaminated. It’s also overcrowded, and prone to earthquakes and flooding. Congestion costs the economy an estimated $6.5 billion each year, according to the Associated Press. [Associated Press]

The post Masa Son, the crown prince of Dubai and Tony Blair walk into a bar and decide to build a $34B city in Asia appeared first on The Real Deal Miami.

Treasury Department watchdog is investigating the Opportunity Zone program (Credit: iStock)

Treasury Department watchdog is investigating the Opportunity Zone program (Credit: iStock)

 

The Treasury Department’s investigation into the Opportunity Zone program will weed out the bad apples but won’t derail the federal tax incentive initiative, investors and developers say.

Instead, the probe could provide a way for companies with Opportunity Zone funds to promote the social impact of their investments, and could push to strengthen reporting requirements on those investments.

“The more that’s cleaned up the better the program is going to do in the long term,” said Gray Lusk, a founding partner of Sola Partners, which has raised $100 million for affordable housing projects in Opportunity Zones. 

Introduced as part of the Trump administration’s 2017 tax overhaul, Opportunity Zones were meant to spur investment in low-income communities across the U.S. by allowing investors to defer or forgo paying capital gains taxes on developments in designated areas.

The program caught the attention of institutional investors but has also faced mounting criticism for serving as a tax break for wealthy developers and politically-connected insiders looking to build luxury projects in upscale areas.

Treasury’s investigation — launched this week by the deputy inspector general — will only look into whether some census tracts were selected improperly, according to several Opportunity Zone experts. The program itself, whose guidelines the government has updated twice, will remain intact, they say. The government has not provided details on the investigation.

“Even in the worst case scenarios, you are talking about a couple [census] tracts out of about 8,700,” said Steve Glickman, an architect of the Opportunity Zones legislation who now consults businesses on the  program. Another expert, Neisen Kasdin, agreed, saying inquiry is “just looking at bad actors.” Kasdin is managing partner at the law firm Akerman in Miami, whose firm has been involved in several Opportunity Zone deals

Under the microscope

The government investigation was launched at the request of three Democrats: New Jersey Sen. Cory Booker — who co-authored the Opportunity Zones legislation — Congressman Emanuel Cleaver II of Missouri and Congressman Ron Kind of Wisconsin. The group said it wants to know whether certain Opportunity Zone designations benefited firms or individuals with ties to political leaders, following reports by ProPublica and the New York Times.

In one example, a 700-acre industrial development in Nevada — part-owned by billionaire financier Michael Milken — became eligible for a tax break after the Treasury Department overrode its own rules to designate the area as an Opportunity Zone. A report by the Times revealed that Treasury Secretary Steve Mnuchin, who has close ties to Milken, personally intervened to designate the area, a move that troubled Treasury officials.

Other firms with links to the Trump administration have been similarly scrutinized. The family development firm owned by Jared Kushner, a senior adviser to President Trump and his son-in-law, has properties in Opportunity Zones that include $13 million of New Jersey beachfront.

“The whole thing is structured for favoritism and insiders,” said Greg LeRoy, founder of Good Jobs First, a watchdog of state and local economic development subsidies. “You allow one person discretion over big federal tax breaks, it’s a blueprint for mischief.” 

Painting a broad brush

But proponents argue that these criticisms paint a broad brush over a program that is attracting private investment into long overlooked parts of the country such as Birmingham, Alabama, where a long vacant building in an Opportunity Zone will be turned into 140 units of workforce housing.

“When you look at the facts, it does not support the narrative that some are trying to make,” said Jill Homan, the co-founder of Javelin 19 Investments. The Washington, D.C.-based commercial real estate investment company has a focus on Opportunity Zones.

The new investigation could also lead to tougher reporting mandates in Opportunity Zones.

Sen. Tim Scott of South Carolina and a group of fellow Republican senators introduced a bill in December seeking to enhance reporting requirements to help reduce fraud and abuse regarding Opportunity Zone investments. Scott co-authored the original Opportunity Zones legislation with Booker. Their bill adds penalties for individuals and investment funds that fail to accurately and appropriately file the required returns or statement. Democratic Sen. Ron Wyden of Oregon put forward a separate bill requiring OZ investors to report more information about the impact of their investments.

Opportunity Zones investment has surged in recent months thanks in part to the government’s release of its final set of regulations meant to provide investors and developers.

Close to $2.3 billion was put into Opportunity Zone funds between early December and early January, according to a survey from accounting firm Novogradac, a 51 percent increase over the prior month. In October, the firm found that 103 Opportunity Zone funds had raised just 15 percent of what fund managers expected. It knew of 285 Opportunity Zone funds in the U.S., though many have not shared fundraising metrics.

But others have been far more successful. 

Last year, Bridge Investment Group deployed $950 million from its Opportunity Zone fund into 20 projects across eight states and the District of Columbia. David Coehlo, chief investment officer for the Salt Lake City-based firm’s Opportunity Zone program, said he expects to deploy a similar amount this year, largely because competition has eased as smaller funds are facing challenges raising capital.

“We see no reason to pull back this year from a deal standpoint,” he said. 

On a smaller scale, Los Angeles-focused Sola Partners expects to double its equity deployment in Opportunity Zones this year to $67 million, according to founding partner Gray Lusk. 

Not all investors are as enthusiastic. Cadre, a real estate investment startup that Jared Kushner co-founded and remains an investor in, is planning to scale back its Opportunity Zone investments. 

People familiar with the company said the firm invested more than $200 million across five Opportunity Zone projects in 2019. This year, it plans to only invest in one to three projects, they said, as a December 2021 tax benefit deadline approaches.

The post Opportunity Zone investigation won’t derail developer investment, experts say appeared first on The Real Deal Miami.

2001-2005 West Cypress Creek Road, Alex D. Zylberglait

2001-2005 West Cypress Creek Road, Alex D. Zylberglait

An office complex next to Fort Lauderdale-Hollywood International Airport sold for $7.2 million.

Capital Cypress LLC, managed by Jonathan Cohen and Fanny Cohen, purchased the Cypress Creek Professional Buildings at 2001-2005 West Cypress Creek Road. Bananco LLC, led by Aziz Ali, sold the property.

The three buildings total 49,867 square feet, equating to a sale price of $144 per square foot, records show.

Alex D. Zylberglait and Michael Crocchiola of Marcus & Millichap represented the seller.

2001 & 2003 Cypress Creek were built in 1975 while 2005 Cypress Creek was built in 1985. The buildings are between I-95 and Florida’s Turnpike.

The office buildings are 91 percent occupied by a technology company, doctors, dentists and accountants, according to marketing materials from Marcus & Millichap. The building has a value-add opportunity with 4,637 square feet of vacant space.

Investors’ interest in properties near Fort Lauderdale-Hollywood International Airport remains high. Privé Group recently purchased a Hampton Inn near the airport for $17.3 million. Spirit Airlines is seeking to build a new headquarters, projected to cost $250 million, in Dania Beach, just south of Fort Lauderdale-Hollywood International.

The post Office complex near Fort Lauderdale airport sells for $7M appeared first on The Real Deal Miami.

CEO and chairman of Bank OZK, George Gleason

CEO and chairman of Bank OZK, George Gleason

Bank OZK, which has been behind some of the largest condo loans in New York and Miami, reported a drop in fourth-quarter net income and reported the rating on one of its loans had been downgraded. The Arkansas-based bank’s stock fell 5 percent shortly after news of its earnings was released Friday morning.

Bank OZK’s earnings are closely watched since they are viewed as an indicator of the condo market and the demand for large-scale construction loans.

The bank’s net income declined in the last three months of the year compared to the previous year. It reported a 12.4 percent drop, to $100.8 million from $115 million over the same period in 2018. Diluted earnings per common share fell 12.4 percent to 78 cents.

The bank attributed some of the decline due to “the large volume of loan repayments of non-purchased loans, the pay-downs in our purchased loan portfolio,” as well as a “competitive environment for loans and deposits.”

The company’s loan originations in its real estate lending division, RESG, increased to $1.44 billion in the fourth quarter, up from $1.08 billion in 2018. But its overall real estate lending is still down significantly from two years ago when it totaled $2.56 billion in the fourth quarter of 2017.

The drop in the past two years could signal the growing competition from debt funds in construction lending, as well as the weakening demand for new ground-up luxury condo developments in New York and Miami.

“Our focus has been, and will continue to be, on maintaining our credit quality and return standards, even if maintaining those standards adversely affects our origination volume and non-purchased loan growth,” the company said in management comments following its earnings release.

The earnings also revealed that one of the bank’s loans had been downgraded from “watch” to substandard, which means that the bank has a greater chance of taking a loss on it. The loan was for $55.7 million, and the bank first reported the issues with it in 2018. The loan originated over a decade ago.

“This downgrade was primarily due to several sales which had been expected to close in late 2019 being canceled or delayed, as well as a lower than expected volume of pending lot sales going into 2020,” according to a company’s management comments.

Bank OZK, under the leadership of its CEO George Gleason, rose to become one of the most active condo construction lenders in the country. The bank’s real estate lending strategy is based around lending to high-quality developers as the sole secured lender at low leverage points.

In 2018, the bank provided the largest condo construction loan in Miami-Dade County history, a $558 million loan to the Trump Group for its Estates at Acqualina condo project in Sunny Isles Beach, Florida. In October, Bank OZK provided a $664 million loan to a mixed-use project in Tampa.

The post Condo lender Bank OZK reports lower profits in Q4 appeared first on The Real Deal Miami.

A rending of the the project

A rending of the the project

REI is trekking down to South Florida.

The outdoor retailer signed a lease for a 23,000-square-foot store in Boca Raton that’s expected to open this fall, according to a press release. REI Co-op will open at Uptown Boca, a retail and apartment development at Glades Road and 95th Avenue South, east of U.S. 441.

Schmier Property Group, Giles Capital Group and Rosemurgy Properties, in partnership with Wheelock Street Capital, are developing the 38-acre project with 155,000 square feet of retail space and 456 luxury apartments. Apartment leasing is expected to begin in the next few months.

REI’s Uptown Boca location will include a bike shop and personal outfitting services. REI’s other Florida stores are in Jacksonville and Winter Park, near Orlando. The company has 162 stores in 39 states, according to its website. It’s planning to open stores in Gainesville in the spring and in Tampa next year. REI said it’s the largest consumer co-op with more than 18 million members.

The retail component of Uptown Boca is 98 percent leased, according to the release. Tenants include Naked Taco, Sloan’s Ice Cream, Sport Clips, The Joint, Tide Cleaners, L’Eggspress, Chick-fil-A, Silverspot Cinema, Lucky’s Market, Lynora’s Osteria, Olive U Mediterranean Grill, F45 Training, Tipsy Salonbar, Bolay and BurgerFi.

Uptown Boca’s developers closed on a $125 million construction loan for the project last year from Jutland Finance, a subsidiary of British Columbia Investment Management Corp.

They paid $38 million for the agricultural land on the southwest corner of Glades Road and 95th Avenue South, in June 2018.

The post REI to open first South Florida store in Boca Raton appeared first on The Real Deal Miami.

An illustration of Ryan Serhant and the note sent to Silverback Development (Credit: Getty Images, iStock)

An illustration of Ryan Serhant and the note sent to Silverback Development (Credit: Getty Images, iStock)

Was it a joke, or for real?

That question made the rounds in broker circles after photos posted on Instagram last month showed celebrity agent Ryan Serhant giving $10,000 to a developer.

“Instead of sending you a phone charger or a bottle of champagne, here is $10,000 in cash. Happy holidays,” read a card addressed to Silverback Development’s head of marketing, Jenna Segal, and signed by Serhant and his team.

A second photo, posted by Silverback, showed a wad of $100 bills held together by an elastic band with the caption “Best holiday gift.”

The knee-jerk reaction was shock.

“What? $10,000 in cash?” said Steve Wagner, a partner at Wagner Berkow & Brandt. “Wow… It looks like a bribe.”

(Credit: Silverback Development/Instagram)

(Credit: Silverback Development/Instagram)

One broker who said he saw the photos on Serhant’s Instagram said it surprised him.

“What kind of message are you trying to send out?” the person asked. “The message was like, Work with Ryan Serhant and he’ll give you $10,000 in cash when the holidays come up.”

Both Silverback and Serhant said the money was fake, and the developer, who had hired Serhant and his team to handle sales and marketing at a Long Island City project, produced a photo of the card with a post-script written below in the same scrawl.

“P.S. the money isn’t real, but my dedication to your business is!” it read. Both parties said the message had not been visible in the photos on social media.

Serhant said he sent out wads of pretend cash to all of his developer clients this holiday season as a gag gift. He claimed that several clients besides Silverback posted photos of the gift on social media, but declined to name names except for The Real Deal’s publisher, who confirmed receiving $10,000 in fake bills.

“People don’t want to be in The Real Deal for gifts I send them,” Serhant said. “It’s so weird… It was never meant to go on social media.”

Serhant said that his past holiday gifts were more traditional — Cartier pens, a porcelain duck-shaped piggy bank from Tiffany’s — and that this year the play money was inspired by his agent-incentive video for Magnum Real Estate’s 196 Orchard, which involved $50,000 in real cash. He said that after the shoot he learned that he could have bought realistic fake money.

Wagner, the attorney, noted that even if the greenbacks had been real, the present would not have been illegal. A gift of cash under $10,000 does not have to be reported under federal law and, so long as there are no strings attached, is fully legal.

Serhant said he has no regrets and won’t be deterred by his critics. “Those people are stupid,” he said. “It’s funny. Next year I’m going to send a fake $1 million to everybody.”

Write to Erin Hudson at ekh@therealdeal.com

The post Why Ryan Serhant sent $10,000 “cash” to clients appeared first on The Real Deal Miami.

Glenn Straub (Credit: iStock)

Glenn Straub (Credit: iStock)

UPDATED, Jan. 17, 5:25 p.m.: Prominent Wellington developer Glenn Straub was charged with larceny and is out on bond after he turned himself into the Palm Beach County Sheriff’s Office on Friday morning.

Straub, who owns part of the Palm Beach Polo and Country Club, was charged in relation to an alleged fraudulent lien on an ex-girlfriend’s property. The Palm Beach Post first reported the news. Straub posted $11,000 in bail.

In addition to being charged with filing a fraudulent lien, Straub was arrested and charged with the unlawful filing of false documents or records against real or personal property, and with grand theft. The false liens are valued at $77,380, according to the sheriff’s office.

Straub’s ex-girlfriend, Jessica Nicodema, alleged Straub filed fraudulent liens on her home in 2017 after Straub was upset with her for breaking up with him, according to court documents.

A spokesperson for the Wellington developer said Straub “will fight the charges and he will be exonerated.”

“Here we have a vindictive ex-girlfriend who has turned a simple civil dispute over her unpaid construction bills into a criminal complaint by spinning false tales to law enforcement,” according to the spokesperson.

Elizabeth Parker, the lawyer representing Nicodema, said in a statement that the evidence in the criminal case shows that the liens filed by Straub and his company were fraudulent. Straub allegedly told Nicodema that he filed the liens to control her, in a phone call recorded by the Palm Beach County Sheriff’s Office, Parker said. “The criminal charges send a strong message that Glenn Straub is not above the law,” she added.

Last year, Straub sold a 150-acre portion of the Palm Beach Polo and Country Club property in Wellington for $16 million. His companies paid $27 million for the 2,250-acre club at a government auction in 1993.

Straub has another ongoing appeal in federal court over his alleged bid to buy the failed Palm House hotel in Palm Beach. Straub claims he holds a defaulted $27.5 million mortgage on the property. In February, a federal bankruptcy judge ruled against Straub’s no-cash bid to buy the unfinished property.

Straub sold the former Miami Arena in downtown Miami for $35 million in 2012. In 2016, he paid $82 million for the former Revel casino, in Atlantic City.

The post Wellington developer Glenn Straub charged with larceny appeared first on The Real Deal Miami.

(Credit: iStock)

(Credit: iStock)

Miami’s Planning, Zoning & Appeals Board backed two proposed ordinances that will put the brakes on new storage facilities in the city of Miami.

The first rule, banning storage facilities near mixed-used residential areas zoned T5 and T6, passed unanimously during the board’s meeting on Wednesday.

A second piece of legislation, a 270-day moratorium on any new storage facilities throughout the city, barely squeaked by with a vote of 5 to 4, pending a “comprehensive review.”

Planning board member Chris Collins said he was confused as to why the board was asked to ban storage facilities from T5 and T6 areas and then be presented with a city-wide moratorium. “It just seems like we are throwing random darts at that use, and I don’t understand the process,” Collins said.

Esteban Ferreiro, chief of staff for Miami City Commissioner Manolo Reyes, said his office wasn’t even aware that the storage facility ban for T5 and T6 areas was being addressed at the meeting until the agenda came out.

However, he said both actions arose due to concerns over the proliferation of storage facilities in the city, as well as incidents of illegal dumping, which tend to occur near storage areas.

Other cities have placed moratoriums on self-storage development, such as Pompano Beach, which placed a six-month freeze in September.

Miami Assistant City Attorney Amber Ketterer said there has also been discussion about requiring a “special warrant” for new facilities wishing to build in industrial D1 and D2 districts.

In recent years, self-storage facilities have been one of the hottest property types in South Florida. A recent Green Street Advisors analysis revealed that storage facilities have been far more profitable than other commercial properties.

Yet, it’s because of that popularity that Miami has sought to curb the development of new facilities. In March 2017, the city passed legislation mandating that new storage facilities in T5 and T6 have ground-level retail and be at least 2,500 square feet apart.

Ines Marrero-Priegues, a Holland & Knight attorney who said she represents several self-storage companies, told the board she had no objections over either rule. However, she wanted to be sure that the moratorium would be added onto the amount of time an unnamed client had on a special warrant to build a facility at 2915 Northwest 25th Street.

Board member Alex Dominguez said demand for storage facilities may actually increase in Miami as more people move in. He also worried that a moratorium will provide an excuse for storage facility owners to raise their rates. “If only eight companies are doing it, and they know there’s no [other] competition. What’s to stop them from raising their prices?” he asked, later adding: “I just think it’s draconian to say no [new facilities] throughout the entire city. [Why not] in industrial areas? Why wait 270 days?”

Both ordinances must be passed by the Miami City Commission prior to becoming law. However, the board’s passage of the moratorium will prevent applications for new facilities from being processed due to the city’s zoning-in-progress law.

The post Miami board OKs self-storage freeze appeared first on The Real Deal Miami.

Knotel CEO Amol Sarva (Credit: iStock)

Knotel CEO Amol Sarva (Credit: iStock)

UPDATED, 11:39 a.m.: Knotel laid off as much as a third of its New York market-focused staff, as the company faces high vacancy rates and a drop in leasing activity.

Close to 20 people were fired this week from the co-working company’s office at 22 West 38th Street, former employees told The Real Deal. The location focuses on the firm’s New York market, and had between 50 and 60 employees.

The move follows the departure of the firm’s head of corporate finance last week.

A Knotel spokesperson confirmed that the layoffs had occurred but said it was “significantly lower” than a third of the New York office. The spokesperson would not say how many people were laid off, or if more were expected to be let go.

“Knotel has grown from two employees in one city to 500+ people in 17 cities over the past four years to become the leading global flexible workspace platform,” a statement from the company said, acknowledging the layoffs. “Our business will continue to evolve and change to best meet the needs of our customers.”

Employees are expected to hear from leadership today at a global all-hands meeting. Among those let go were sales representatives, customer service employees, a construction project manager and three employees who worked for the firm’s furniture business, known as Geometry, the former employees said. Knotel has a second New York office at 29 West 35th that houses human resources and business operations.

The layoffs come just six months after the firm announced it had reached a $1 billion valuation after raising $400 million. The funding round, which was backed by Kuwait’s sovereign wealth fund Wafra and Japan’s Mori Trust, Itochu and Mercuria Investment, was celebrated at an office party in August with flowing champagne, according to people who attended.

“We thought it was going to make a lot of things better, but things only got worse,” said a former employee.

However, reports of high vacancy rates at the company’s locations have dogged the firm’s performance in recent months. Toward the end of last year, Knotel had 800,000 square feet of vacant space in New York, Crain’s reported. And last week, CNBC revealed that the firm’s leasing activity had dropped 80 percent in the fourth quarter of 2019 to 67,000-square feet.

The recent headlines about the company bring to mind the downfall of Knotel’s biggest competitor, WeWork. In six months, WeWork was forced to abandon plans for an IPO, forced out its CEO and co-founder Adam Neumann, and laid off thousands of employees. WeWork’s largest investor, SoftBank, is in the process of extending a $9 billion lifeline to the company to save it from potential bankruptcy.

Knotel has been similarly criticized for expanding at a rapid rate, without disclosing clear financial performance metrics.

Knotel’s leadership, including CEO Amol Sarva, has previously taken aim at WeWork. At the start of 2019, when WeWork laid off more than 300 employees, Sarva poked fun at the co-working giant, tweeting:

@WeWork layoffs. Sorry folks. We didn’t mean to. Meanwhile, @Knotel is hiring. Text me. +1-530-727-8277 pic.twitter.com/6aXgmLuH6T

— Amol Sarva (@amol) March 2, 2019

A year later, things have changed.

“There was a lot of shade thrown on other businesses,” a former Knotel employee said. “But it was the exact same business model.”

This is a breaking story. Check back for updates.

The post Knotel lays off up to a third of its New York-focused staff: sources appeared first on The Real Deal Miami.

From left: Publisher and founder Amir Korangy, Editor-in-chief Stuart Elliott and VP of Corporate Development Yoav Barilan

Publisher Amir Korangy started The Real Deal out of his Brooklyn apartment nearly two decades ago, shortly before he was joined by Editor-in-Chief Stuart Elliott and Yoav Barilan, who today helps oversee sales operations. The publication was initially a Variety-style tip sheet with columns of text packed onto the cover. But a lot has changed since then: TRD is now a multifaceted media company known for award-winning investigative stories and the most popular real estate news site on the web, having complemented the New York City base with operations in South Florida, Chicago and Los Angeles. To mark TRD’s 250th issue, Korangy and Elliott sat down in the publication’s Hudson Yards headquarters to discuss the evolution of the company and some of their favorite war stories.

Stuart: Do you remember how you first pitched the magazine?

Amir: There were pubs out there like Real Estate Weekly, GlobeSt.com and Real Estate Forum, but I thought they were either not good enough or too divided and not the whole of real estate. They only focused on leasing or just one part of the business.

I envisioned real estate to be all one community. Residential impacted commercial and lending impacted both, and development changed everyone and everything involved — basically what The Real Deal is today. Initially, I came up with the idea of what I thought the front cover should be. I decided on a Variety-style magazine, which is tabloid-size glossy. I created that front cover. Then I made a list of all the communications departments at all the different firms to go and tell them about what I was starting and for them to share their info with us. Back then people faxed stuff. Of course, it was hard to get those meetings. I remember going to some places and pretending like I had a meeting. Sometimes that worked or people would just agree to meet with me. There were a lot of rejections and they were defeating, so to encourage myself I used to have a cheesy mantra I repeated to myself: “The belief of one man is stronger than the doubt of a thousand.” And it actually worked.

I remember going to Rubenstein and meeting with Alan Segan, who is a true gentleman. He said that he thought this was great and was surprised no one had thought of it. He was one of the first people to book me big clients for interviews. He was great. My pitch was that I wanted to create something for the real estate universe as Variety was for Hollywood. People liked the idea. Some people didn’t know Variety, so I would use Crain’s [as an example].

Yoav sold our first ad, and I couldn’t believe it because the magazine didn’t exist. And the advertiser agreed to do it at full rate. I just couldn’t believe that someone would take a full-page ad at full rate without the magazine even existing.

Stuart: Our first big get was in our third issue — the Donald Trump interview.

Amir: The fourth. We had done a story about how Trump was going to get a reality TV show, and you wrote something that the bigger [real estate] families in New York don’t consider Trump one of the skyline builders. Trump made the effort of ripping the page out and with a black Sharpie writing on it, “Why all the anger, Stuart? Love, the Donald.” And he ripped it out and found our office in Brooklyn and had it delivered to us. So we reached out and we were like, “Look there’s no anger — we would love to do a story of you on the cover.” And he agreed to be on the fourth edition.

Stuart: So at that time, like starting in 2003, it was a huge boom that lasted five years. And you would see crazy things, like there would be lines at new condos like the night before [sales offices opened]; people were buying off blueprints. And then there were sales centers that were open 24 hours a day. And it was just kind of this hysteria that was going on, and we kind of rode that wave.

Amir: And the parties that were happening back then were surreal. I mean, I remember [Extell Development’s] Gary Barnett, he had Sting at one of his parties, and Michael Shvo had John Legend for his Armani party down in FiDi.

Stuart: And actually one of the things that happened right when we started up was the Time Warner Center opened [in 2003], and [the previous building there]  was a huge eyesore and this was a huge project. I think it was the biggest building since 9/11. And I remember Jewel and Jon Stewart being onstage and the real estate crowd there, they were just ignoring them. And that was my first taste of the real estate crowd that you see at the REBNY gala. Like they’ll just network through anything and they just are not fazed.

Amir: So, you know, we always get inspiration for different features in the magazine from other publications. Graydon Carter had some great ideas and the Proust questionnaire at the back of Vanity Fair; we thought we should have our own interview [on the last page] of the magazine. And [an editor], Tom Acitelli, said — without even blinking — “The Closing.” And I thought that just was the best name for it. So we started doing the Closing interview, and I remember in 2007, right before the market collapsed, Charlie Kushner had just come out of prison. And he agreed to have the very first interview that he does being with The Real Deal, which I thought was great.

Stuart: But I remember that period in 2007 we had a cover, I think it was in September 2007, which was when the subprime crisis happened. It was a funny period from a news point of view, because you saw when the stuff hits the fan, lawsuits start to proliferate. People need to read news [even] more. You know, we were writing about the Interstate Land Sales Full Disclosure Act, which was the most ingenious thing. It was Adam Leitman Bailey, the lawyer, coming up with this obscure federal statute, which required [developers] to disclose something about swampland in Florida, but it was a federal statute. And none of the developers here had added it to their projects’ disclosure forms. So he basically figured out a way to get all his condo buyers out of the projects or get price reductions by saying, you didn’t [adhere to] this [1968] law about swampland.

Amir: And I remember that Howard Lorber was just starting to invest with developers through his New Valley subsidiary, and he really didn’t want us to write that story because he thought other people are going to find out about [ILSA] and then pull out of their contracts [to buy new development condominiums]. And we still wrote the story, obviously, and people did pull out of their contracts. And that really damaged our relationship for several years.

Stuart: Luckily, we didn’t have to make any layoffs during that period [when the recession hit].

Amir: In fact, we ended up hiring people. The [New York] Sun closed down, and we were able to get a lot of great journalists from there.

Stuart: In the early years we had these covers that had a lot of stories on them. We would have six or seven stories on the cover. We were trying to jam-pack as much information as we could just because we were always nervous. Like, will people see the value in [the magazine] if we don’t include as much information right on the cover as possible?

Amir: The idea was to be a Variety-style publication. And then for our 10-year anniversary, for the first time we did a single story on the cover. And then we went back to doing the regular Variety style. And then I get a call late one night from [Donald Trump’s attorney] Michael Cohen. He was like, “Why don’t you guys come in and do a story? We’ll show you all of our paperwork on what the Donald is worth and how we came to this $8.5 billion valuation.”

Stuart: The documents they said they were going to give us never materialized. So we were like, how do we do this story? It was tough.

Amir: But we did all these photos of him and we were like, “How should we post them on [the cover]?” And we decided to just put half of his face on there. And from that point we continued to do single-story covers.

Stuart: We did one of the first profiles of [WeWork co-founder] Adam Neumann, and I remember one of the anecdotes in this story was him at the Woolworth Building, where he was doing a handshake deal. And it just came across that he was this charismatic guy. So even then, he seemed like just this, like outlier, this guy could come in and shake hands with people and do these megadeals. But what I loved about the cover story we did on him: It was the first and only time that I saw Neumann in a suit.

With all these TV shows and movies and books coming about him, I know the opening scene is going to be him barefoot. Just want to put that out there.

And around this time, too, we also started doing a lot more investigative stories. Foreign buyers had been in the market for a while. We started doing a lot more investigative stories about money laundering. I remember we had a headline “Developers’ hidden money backers exposed.” It just really formed the basis of a lot of the deep-dive stuff we did over the subsequent years.

Amir: One of the first sort of social [issue] stories that we had on the cover was talking about diversity in the real estate industry, and I was surprised. I didn’t think that many people would be interested in it. The amount of feedback we got was tremendous.

One of the covers I really enjoyed, and we went back and forth on this a lot, was Steve Croman, who was a major landlord who ended up going to jail for a brief period. And we put him behind bars with cornrows. It was an illustration.

Stuart: One of the funny things is you ran into him at a dinner [after he had gotten out of jail].

Amir: And I thought, he’s going to lash out at me. He turned out to be a huge fan of The Real Deal, and he actually loved the cover.

One of [my favorite] covers was Harry Macklowe, about his divorce [and the real estate implications of it]. And I remember he found out that we were going to do a cover story on him and he sent me this beautiful, eloquent letter explaining his reasoning of why we shouldn’t cover the divorce. And I was really touched by it, but of course we had to cover it.

Stuart: To me, Harry Macklowe is the ultimate real estate figure. You can’t get any more archetypal as a real estate player than that. And to write a story about his divorce, where he was also arguing that he was worth no money and basically had to portray how bad a businessperson he was, it was mind-boggling.

So I just think it’s such an interesting time for real estate now.  On the one hand, you have legislators talking about why is there for-profit housing at all? It’s a kind of Marxist, socialist point of view. And then on the other hand, we had somebody in the industry saying Amazon not coming to New York was 9/11 all over again. Just incredibly tone-deaf. So you kind of have these two poles that are existing right now, and they’re not talking [to each other] yet. Part of our role in the coming period of time is where we kind of sit in the middle of these two groups and we’re writing about the dialogue between them — or the lack of dialogue.

The post <i>TRD’</i>s founders share war stories from over the years appeared first on The Real Deal Miami.

From left: Zahi Hagag, Doug Eisenberg, David Kramer, and David Schwartz

From left: Zahi Hagag, Doug Eisenberg, David Kramer, and David Schwartz

As the new decade gears up, most VIPs are rolling in for TRD’s Future City 2020. We’re excited to announce new attendees including tech CEOs, mega landlords, developers, and titans of brokerage.

Future City’s square footage keeps growing, with new developers joining daily. A few recent additions include:

  • Major landlord Doug Eisenberg, who owns over 17,000 apartments through A&E Real Estate Holdings;
  • David Schwartz, principal partner at Slate Property Group, whose development projects are collectively valued at $1B;
  • Zahi Hagag, the largest and most prolific developer in Israel;
  • David Kramer, president of innovative housing developer Hudson Companies;

And more!

These cutting-edge developers will join Michael Stern, Gil Dezer, Sharif al-Gamal, and more to discuss how technology has changed the development process, from innovations in design to new management platforms and marketing techniques.

From the technosphere, innovators from Brivo, Doorkee, and ButterflyMX will represent the fast-growing world of cloud-based security technology. Fintech CEOs include Joseph Ben-Zvi of Vero, which purports to bring a “new era of leasing” with a platform that alters the financing process.

And of course, TRD invited some of the biggest names in financing and brokerage. Woody Heller of Savill’s Capital Markets group will attend, along with Cushman Wakefield’s chair of Global Brokerage Bruce Mosler and Simon Ziff, president of capital advisory firm Ackman-Ziff.

These attendees join an already stellar lineup including architect Kobi Karp, REBNY president Jim Whelan, and developer Young Woo.

If you are interested in learning more about Future City or think you may be a candidate for attendance, check out our website here or email FutureCity@TheRealDeal.com.

The post More VIPs join <i>TRD’s</i> exclusive prop-tech retreat appeared first on The Real Deal Miami.

David MacNeil, and 13700 Quarter Horse Trail, Wellington

David MacNeil, and 13700 Quarter Horse Trail, Wellington

The founder of a car mat empire bought an equestrian estate in Wellington.

David MacNeil, the CEO of WeatherTech, bought the estate at 13700 Quarter Horse Trail in Wellington for $23.2 million, records show. The property totals 163,476 square feet, equating to a sales price of $141 per square foot.

Elite Equestrian Estates LLC, which lists its address as North Haven, Connecticut, sold the property.

The property includes a main house, caretakers’ quarters, barn, sand arena, and paddocks. The house on the property was built in 2018 and has four bedrooms and four-and-a-half bathrooms.

The property was last purchased in 2017 for $12 million, records show. The estate was listed by Carol Sollak of Engel & Völkers Palm Beach & Wellington.

MacNeil started the car floor mat manufacturing company Weathertech, which is based in Bolingbrook, Illinois. He is also an avid car collector and reportedly purchased a 1963 Ferrari 250 GTO for $70 million in 2018.

Wellington is considered the winter equestrian capital of the world and is home to the who’s who of power players who have equestrians in the family. The families of billionaires such as Bill Gates, Michael Bloomberg and the late Steve Jobs, as well as celebrities Billy Joel and Bruce Springsteen, all have homes in the village.

Last month, Oscar-winning actor Tommy Lee Jones sold his Wellington equestrian estate at 12550 40th Street South for $11 million.

The post WeatherTech founder buys Wellington estate for $23M appeared first on The Real Deal Miami.

Florida Gov. Ron DeSantis

Florida Gov. Ron DeSantis

Florida Gov. Ron DeSantis announced the state will purchase 20,000 acres of wetlands in the Florida Everglades from a private landowner.

Kanter Real Estate owns the land, located in a water conservation area within the Everglades protection area in western Broward County. The Kanter family will sell the land for $16.5 million before June 30, or $18 million after that date, according to the Miami Herald.

The governor’s office said the sale would be the largest wetland acquisition in a decade and will protect the wetlands permanently from oil drilling, which was the Kanter family’s intention. With the acquisition, nearly 600,000 acres of wetlands will be preserved.

The Florida Department of Environmental Protection, the agency that reached an agreement with Kanter Real Estate to purchase the land, had previously denied a permit for exploratory oil drilling on the site west of Miramar. Last year, an appeals court ordered the DEP to issue the permit, reversing the agency’s denial of a permit.

An expert hired by Kanter Real Estate testified at the time that there was a 23 percent chance of finding oil on the company’s site. When the Kanter family purchased the land decades ago, it planned to build a new city in the Everglades.

“Floridians know that oil drilling and exploration in the Greater Everglades is dangerous and must be stopped – it threatens our water supply and fragile ecosystems, especially in the face of climate change impacts,” said Cara Capp, senior Everglades program manager for the National Parks Conservation, in a press release.

The post Florida to buy 20K acres of Everglades wetlands appeared first on The Real Deal Miami.

From top: Miami Produce Center, Mana Wynwood and Magic City Innovation District

From top: Miami Produce Center, Mana Wynwood and Magic City Innovation District

Special Area Plans have enabled developers to build massive projects in the city of Miami like Brickell City Centre, River Landing Shops and Residences, Mana Wynwood, the Miami Produce Center, and Magic City Innovation District.

SAPs have also antagonized neighborhood activists who fear that such massive developments destroy the character of low-rise neighborhoods and speed up the displacement of individuals and families who can’t afford the skyrocketing rents or property taxes.

Now, the Miami Planning, Zoning and Appeals Board is recommending that no other SAPs be approved.

By a vote of 6 to 3 on Wednesday, the board approved a resolution to repeal the Special Area Plan provision that enables property owners who assemble more than 9 acres of land to seek extensive zoning changes.

Such a repeal still needs to be approved, twice, by the Miami City Commission, which is embarking on its own review of the entire Miami 21 zoning code, including SAPs.

Planning board member Adam Gersten cast one of the dissenting votes, saying he feared that commissioners may simply ignore a recommendation to repeal, and advocated for a moratorium on SAPs instead. As part of that moratorium, the board could recommend reforms, including that the SAP causes no net loss of affordable housing in the surrounding area, Gersten suggested.

Chris Collins, another dissenting voter, agreed. “I think it would be more proactive and go a longer way if we specify what we want to change and how to change it,” Collins said.

But board member Alex Dominguez said that while the city tries to “workshop this thing to death,” more people are being displaced by legislation that encourages land speculation. “If you do a moratorium… it’s like putting lipstick on a pig, and at the end of the day, it’s still a pig,” Dominguez said.

He also argued that many real estate developers “don’t even want to touch SAPs” because of the community opposition they tend to attract. “It’s not a big deal to repeal SAPs from Miami 21,” Dominguez said, adding that “keeping it alive and tweaking it is affecting a hell of a lot more people negatively rather than positively.”

Neisen Kasdin, a land use attorney affiliated with Akerman, rose in defense of SAPS, arguing that the legislation has enabled “good” projects like the expansion of Ransom Everglades private school in Coconut Grove and the ongoing construction of an EmpathiCare Village for Alzheimer’s patients at Miami Jewish Health Systems in Buena Vista. SAP developers must also offer “community benefit agreements” in exchange for approval, Kasdin added.

“If you pass this legislation, you are not just throwing the baby out with the bath water, you are throwing out the baby,” Kasdin said.

But Marleine Bastien, executive director of Family Action Network Movement, said one of Kasdin’s clients, Magic City Innovation District, is an example of a “bad SAP” that has already indirectly led to the displacement of several residents and small businesses. That project, which was approved by the city commission last June, is being challenged in court by Warren Perry, a Little Haiti resident affiliated with FANM. One of the project’s initial investors, Robert Zangrillo, is also fighting charges from the U.S. Attorney’s Office related to the college admission fraud scandal, as well as charges from the Federal Trade Commission that he co-owned fraudulent websites.

Leonie Hermantin, a board member of Concerned Leaders of Little Haiti, said that although her organization supported the Magic City Innovation District, the group is also in favor of repealing the SAP provision.

“We know that the impact of multiple SAPs in our community will be detrimental,” Hermantin told the board. “I agree with Mr. Kasdin. There are good SAPs and there are bad SAPs. The problem is, unfortunately, that bad SAPs have been allowed to go through.”

The board has kept one controversial SAP in limbo: Eastside Ridge, a proposed 5.4 million-square-foot project that will be built less than a mile from the 8.2-million-square foot Magic City Innovation District and across the street from Miami Jewish Health. The planning board has continued the project five times, with members demanding improvements. In response, SPV Realty, Eastside Ridge’s developers, filed a lawsuit demanding that the board make a decision on the project — either recommending for or against it — so that it can be heard by the Miami City Commission.

Board member Anthony Parrish said Eastside Ridge helped make up his mind on whether or not to support repealing SAPs.

“One attorney of a major project said, ‘Just deny us. We just want to get to the commission,’” Parrish said. “That is what provided, at least for this member of the board, a need to repeal this.”

The post Miami board votes to repeal Special Area Plans appeared first on The Real Deal Miami.

A former Fannie Mae employee to get 76 months for fraud

A former Fannie Mae employee in Orange County was sentenced for fraud involving bribes and kickbacks.

For years, Fannie Mae employee Shirene Hernandez would assign real estate brokers choice listings on foreclosed homes, and in return, they would pay her cash kickbacks stuffed into envelopes and delivered in parking lots, airports and coffee shops.

When the crime was finally exposed, Hernandez’s role amounted to more than $3 million in corrupt commissions to brokers.

On Monday, the former Fannie Mae employee was sentenced to more than 6 years in federal prison, after a jury convicted her last year of two counts of wire fraud. Hernandez, who worked out of the Orange County office, was also ordered to pay Fannie Mae close to $1 million in restitution, the U.S. Attorney’s Office said in a statement.

Hernandez, who had been a sales representative for the government-sponsored enterprise, was entrusted with buying foreclosed homes from banks then selling the parcels. She also got to hire the listings brokers she wanted on the deals.

Hernandez, prosecutors said, ended up selling scores of foreclosed homes for a total of $120 million — well below market rate — and collecting hundreds of thousands of dollars in kickbacks from the brokers.

One of them was Peter Michno. Between 2011 and 2015, Hernandez assigned Michno over 200 foreclosed properties to sell, which Michno sold for a total of $48.9 million, prosecutors said.

He earned $1.2 million in commissions, about a 2.5 percent cut from each sale, the government said. In exchange, he paid Hernandez 25 percent, about $300,000.

But Hernandez didn’t just illegally sell properties, she also bought one. The wire fraud conviction included charges she purchased a foreclosed home in Sonoma, then apparently sold it to a company affiliated with Michno in an attempt to hide the transaction.

He then transferred the property to Hernandez’s sister-in-law, “who paid for the property with a duffel bag filled with $286,450 in cash from Hernandez,” prosecutors said. Michno cooperated with the government and accepted a plea agreement just before Hernandez’s trial in February 2019. No other real estate agents were named.

A message left with a representative for Fannie Mae was not immediately returned.

The post Ex-Fannie Mae employee in LA sentenced in bribery, kickback scheme appeared first on The Real Deal Miami.

The property and Jonathan Salk (Credit: Google Maps)

The property and Jonathan Salk (Credit: Google Maps)

Liberty Property Trust sold an industrial property in Fort Lauderdale for $6.3 million, amid continuing demand in South Florida for warehouse space.

Liberty, soon to be acquired by Prologis, sold the two-building industrial/office complex, Fort Lauderdale Commerce Center, at 5410-5430 Northwest 33rd Avenue. GDF Properties, a Puerto Rico-based investment firm, bought the property, said Roberto Susi, principal of Axiom Capital Advisors.

Jonathan Salk of Axiom Capital Advisors represented the seller in the off-market deal. Reshma Parvani of Parvani Commercial Group represented the buyer.

The buildings total 63,266 square feet on 5.24 acres, records show.

Liberty paid $4.75 million for the property in 1997. The buildings were built in 1984, according to records. Currently, only two tenants occupy the property, a forensic engineering firm and a digital printing company. A tenant that had occupied 42,000 square feet recently left, Susi said.

“The buyer thought it was a good time to purchase this property due to the increasing rental rates in this market and the ability to reposition this big vacancy,” he said.

In October, Prologis agreed to acquire Liberty Property Trust in an all-stock deal valued at $12.6 billion, including the assumption of debt. The deal is expected to close in the first quarter. At the same time, Prologis said it plans to dispose of $3.5 billion of assets, including $2.8 billion of logistics properties and $700 million of office properties.

The South Florida industrial market has seen growing demand, due in part to the growth of e-commerce.

Warehouse asking rents in Broward County have continued to rise even as an influx of new industrial product is coming to the market. In the third quarter of last year, average industrial asking rents rose to $8.89 per square foot from $8.16 per square foot in the same period of 2018, according to Colliers International South Florida.

The post Liberty Property Trust sells Fort Lauderdale industrial buildings appeared first on The Real Deal Miami.

Broadstone City Center with Alliance Residential’s Bruce Ward and Nuveen CEO Jose Minaya

Broadstone City Center with Alliance Residential’s Bruce Ward and Nuveen CEO Jose Minaya

Global asset manager Nuveen Real Estate paid $103.49 million for a luxury apartment project in West Palm Beach.

Records show Broadstone City Center LLC, a company tied to Alliance Residential, sold the 315-unit Broadstone City Center at 499 Evernia Street. The mid-rise development, which spans a city block in downtown West Palm Beach, traded for about $329,000 per rental.

Avery Klann and Hampton Beebe of Newmark Knight Frank represented Alliance Residential, a Phoenix, Arizona-based multifamily investor and developer, according to a press release.

Alliance paid $10 million for the development site and financed construction with a $50 million loan from Citizens Bank. The building, which includes a three-story clubhouse, rooftop deck and pool with cabanas, was completed in 2018. The average monthly rent at Broadstone is $2,190, or $2.67 per square foot.

It was 91 percent leased when it sold, a spokesperson for Newmark Knight Frank said.

Chicago-based Nuveen, the investment arm of TIAA, is one of the largest investment managers in the world with $989 billion in assets under management, according to its website.

The West Palm Beach deal is the largest multifamily sale to close so far this year in South Florida.

The building is being rebranded as Sole at City Center. It’s next to Virgin Trains’ station and near the Related Companies’ Rosemary Square.

Development is booming in West Palm Beach. The Related mixed-use property, previously called CityPlace, is undergoing a $550 million redevelopment. The New York developer secured approval in late 2018 to build a 21-story apartment building on the site of a former Macy’s building at CityPlace.

The post Nuveen pays $103M for West Palm luxury apartments appeared first on The Real Deal Miami.

Donald Trump with Rep. Emanuel Cleaver II, Rep. Ron Kind and Sen. Cory Booker (Credit: Getty Images, iStock)

Donald Trump with Rep. Emanuel Cleaver II, Rep. Ron Kind and Sen. Cory Booker (Credit: Getty Images, iStock)

The Treasury Department is investigating a federal tax break that was designed to help low-income communities, but has proved to be a windfall for the rich.

The inquiry into Trump’s Opportunity Zone program was instigated after three Democratic lawmakers — Sen. Cory Booker, Rep. Emanuel Cleaver II and Rep. Ron Kind — called for it.

The request followed probes by the New York Times and ProPublica, which raised questions about who was benefiting from the program.

Passed in 2017, the tax break was designed to bolster investment in low-income neighborhoods, helping the economy by bringing businesses and jobs. Investors were able to defer capital gains taxes from selling stocks or other investments as long as they put the money into federally designated Opportunity Zones.

But wealthy developers, some of whom have ties to the administration, have sought to benefit. In some cases, funds eligible for the tax break have gone to luxury projects in affluent areas.

Rich Delmar, the Treasury Department’s deputy inspector general, said in a statement that the department’s internal watchdog expects “to complete our work and respond to the congressional requesters in early spring.”

The inquiry was first reported by NBC. [NYT] — Sylvia Varnham O’Regan

The post Trump’s Opportunity Zone program is under investigation appeared first on The Real Deal Miami.

321 North Federal Highway and a rendering of the project (Credit: Google Maps)

321 North Federal Highway and a rendering of the project (Credit: Google Maps)

Dania Beach approved a 105-room hotel on Federal Highway that would operate under the midscale Avid brand, amid a surge of new development in the city.

Commissioners Tuesday night unanimously approved a site plan for the six-story Avid Hotel at 321 North Federal Highway, together with multiple variances. The approval is conditioned on the developer’s responses to unanswered technical questions posed by staff from the city’s development review committee, which reviewed the hotel project July 25 and Sept. 26.

Commissioners agreed to variances from the city’s land development code, including a 20-foot-wide driveway at the hotel (25 feet is the required width) and an awning that would cover less than 80 percent of the hotel’s perimeter (80 percent is the minimum the code requires).

Dania Beach commissioners also approved a proposal to omit from the site plan any “street trees” along Federal Highway. Although the city’s land development code requires street trees along Federal Highway, the Florida Department of Transportation has resisted approving the trees because they could obstruct the visibility of motorists turning onto the busy road from the hotel’s 66-space surface parking lot.

“It may be overkill by FDOT, but that’s how they tend to operate … They’re much more stringent than they used to be,” Leigh Kerr of Leigh Robinson Kerr & Associates told commissioners. He is a Fort Lauderdale-based planning consultant that proposed the site plan on behalf of the owner of the property, Miami-based Comerlat Hospitality 1, LLC.

County property records show that Comerlat bought the site, a former gas station location, from Boca Raton-based AVS Property, LLC, for $2 million in June – 263 percent more than the $550,000 acquisition price that AVS paid in 2015. Comerlat is managed by Juan J. Ferraez and AVS by Alexy Shchetnikov, according to state records.

The developer and city staff are in talks with FDOT to win the state agency’s approval for the inclusion of street trees in the Avid Hotel development, city planning and zoning manager Corrine LaJoie told commissioners. “We’re having a lot of difficulty at the moment working with FDOT,” she said. “The applicant is still in negotiation with them because there has been some precedent set with the hotel to the east side of Federal Highway, a Comfort Inn where they did allow trees.”

An architectural variance approved along with the hotel site plan allows the omission of a pitched roof with overhangs, a code requirement, because the “Avid brand requires a flat roof with no pitches,” LaJoie said. InterContinental Hotel Group introduced its Avid Hotel brand in 2017 as a lower-priced complement to its midscale Holiday Inn Express brand.

The Avid Hotel project is part of a wave of real estate development in Dania Beach that includes the 102-acre, mixed-use Dania Pointe development, where Spirit Airlines is preparing to build a new corporate headquarters as part of a $250 million campus.

The post Dania Beach approves Avid Hotel on Federal Highway appeared first on The Real Deal Miami.

Hilton CEO Christopher Nassetta and Arianna Huffington (Credit: Getty Images)

Hilton CEO Christopher Nassetta and Arianna Huffington (Credit: Getty Images)

Hilton is striving for balance, or at least a better night’s sleep.

The hospitality giant is starting the new decade by tapping into the wellness craze with yet another new hotel brand geared toward travelers on a budget and a health regime, according to Phil Cordell, Hilton’s global head of new brand development.

Dubbed Tempo by Hilton, it is Hilton’s 18th brand and the fourth launched by the company in the past two years. On the question of oversaturation, Cordell said the audience is broad enough to support all those titles.

In the case of Tempo, a limited-service concept with a twist, it’s targeting “modern achievers” who want to feel healthy wherever they go.

The brand’s distinct features were shaped by a survey of 10,000 people conducted by Arianna Huffington’s health and wellness company, Thrive Global. The company tackles stress and burnout through a combination of workshops, pumping out content for various partner websites, an app and now hotels.

As a result of Thrive’s findings, 25 percent of the space in Tempo’s 330-square-foot rooms will be dedicated to a “Get Ready Zone” and Thrive has created a custom set of “rituals” for guests to follow morning and night. Rooms are also specially adjusted for optimal sleeping — a key issue for Huffington, a self-described “sleep evangelist.”

A fast-casual cafe and bar on the ground floor will serve $10 to $12 healthful food items and drinks, notably mocktails designed for the 40 percent of Tempo’s target audience more interested in drinking if they can stay sober. There’s also a 1,000-square-foot fitness center.

Hilton expects to be flying its new flag at 500 hotels by 2030 and has 30 projects committed with 10 owners in markets including New York City, Boston, Dallas, Maui, Louisville and Del Mar, California. Cordell said about 30 more deals are in talks in cities including Chicago, Los Angeles and Miami.

The average Tempo hotel will consist of about 200 rooms priced at roughly $180 per night: Price-wise, Tempo is meant to fit between the Hilton Garden Inn and Canopy brands, Cordell noted. The properties are designed to be run with a team of 30 to 35 full-time employees.

Though the growth of revenue per available room has been lackluster throughout 2019, Cordell said Hilton is “optimistic.”

“We know that some of the fundamentals of travel are still good,” he said.

He also noted that most Tempo hotels will be new buildings, so there will be a lag time because of construction. He added that in his experience, development often relies on local banking relationships rather than big institutions “less susceptible to those ups and downs.”

Write to Erin Hudson at ekh@therealdeal.com

The post Hilton unveils new brand, with a hand from Arianna Huffington appeared first on The Real Deal Miami.

Brent Baker and a Pulte single-family home

Brent Baker and a Pulte single-family home

PulteGroup bought 20 acres in Lauderdale Lakes for a new housing community, as homebuilders in South Florida scramble to find land to build new homes.

PulteGroup acquired the property on the corner of Oakland Park Boulevard and Northwest 31st Street for $1.72 million or $86,000 per acre. The new development will be known as Cassia Estates and will have 77 single-family homes with a gated entrance. Sales are expected to start in early 2021, according to a press release. Prices for the new homes have yet to be announced.

Atlanta-based PulteGroup has made a big push in Broward County in recent years by acquiring former golf courses and turning them into home communities. It is building the 645-home Parkview at Hillcrest in Hollywood. The company is also building Enclaves at Woodmont in Tamarac and a new home community on the former Oak Tree Golf Course in Oakland Park. PulteGroup bought 139 acres in Oakland Park last year for the planned 400-home community.

PulteGroup’s South Florida operations are based in Palm Beach Gardens. Its projects include Boca Flores in Boca Raton, The Fields in Lake Worth, Ancient Tree in Palm Beach Gardens, and Sonoma Isles in Jupiter.

Homebuilders across the country are buying golf courses as the sport’s popularity has declined and the supply of available land continues to shrink, especially in South Florida.

The post PulteGroup nabs 20 acres in Lauderdale Lakes for new home community appeared first on The Real Deal Miami.

Nationwide foreclosures are at a 15-year low (Credit: iStock)

Nationwide, foreclosures are at a 15-year low (Credit: iStock)

Vulture funds and homebuyers seeking distressed properties at bargain-basement prices may have to keep waiting.

Last year saw the fewest foreclosure filings since at least 2005, according to a newly released report. Overall, foreclosure property filings in the U.S. dropped to 493,066 in 2019, down 21 percent from 2018, according to the report from Attom Data Solutions. Meanwhile, lenders repossessed just 143,955 properties through foreclosure in 2019, down 37 percent from 2018.

The data from Attom show that foreclosures continue to drop, and despite signs that the housing market is cooling down, borrowers are still able to make their mortgage payments.

Some of the country’s largest metro areas followed this trend. In Miami, foreclosures dropped to 16,583, down 14 percent from 2018, while those in New York City fell 33 percent to 39,554. In Los Angeles, foreclosures declined 17 percent to 11,439, while in Chicago they fell 17 percent to 27,049 filings.

“The continued decline in distressed properties is one of many signs pointing to a much-improved housing market compared to the bad old days of the Great Recession,” Todd Teta, chief product officer for Attom Data Solutions, said in a statement. “That said, there is some reason for concern about the potential for a change in the wrong direction, given that residential foreclosure starts increased in about a third of the nation’s metro housing markets in 2019.”

Indicators over the past two years had shown that the post-crisis housing boom would come to an end. But home prices continue to rise and homebuilders such as Lennar Corp. are continuing to see growth in new home deliveries.

The post Foreclosures nationwide fell to 15-year low in 2019 appeared first on The Real Deal Miami.

South Florida skyline (Credit: iStock)

South Florida skyline (Credit: iStock)

Residential sales rose in the fourth quarter in South Florida’s top markets, according to the latest Elliman Reports.

The reports, authored by Jonathan Miller of Miller Samuel, showed that Miami and Miami Beach, which have lagged behind other cities in South Florida in recent years, outperformed the rest. The figures do not include new development sales.

Miller said that sales have increased and inventory has declined over the past two years. “Now we’re starting to see more and more instances of inventory declining, which tells us two things: that sales are burning off supply to a modest degree, and also overpriced product is being removed from the market,” he added.

Some exceptions to the upward trend in the fourth quarter were Jupiter and Palm Beach Gardens, where home and condo sales fell, and in Manalapan, Hypoluxo Island and Ocean Ridge, where home sales fell, year-over-year.

Coastal Miami mainland
On the coastal mainland, which includes Aventura, downtown Miami, Brickell, Coconut Grove, Coral Gables, South Miami, Pinecrest and Palmetto Bay, residential sales in the fourth quarter totaled 3,754, a 6.7 percent increase from the previous year. The median sales price was $335,000, up 4.7 percent from the fourth quarter of 2018.

The listing inventory declined by 9.5 percent to 10,954 residential properties.

Condo sales rose 7 percent to 1,886; with the median price increasing by less than 1 percent to $250,500. Single-family home sales rose 6.4 percent to 1,868; and the median price rose 5.2 percent to $405,000.

Miami Beach and the barrier islands
In the fourth quarter, residential sales grew by 14.3 percent in Miami Beach and the barrier islands, year-over-year, to 775 closings.

Elliman defines this market as including Bal Harbour, Bay Harbour Islands, Fisher Island, Golden Beach, Indian Creek, Key Biscayne, Miami Beach and Miami Beach’s Mid-Beach, North Beach and South Beach neighborhoods, North Bay Village, Sunny Isles Beach and Surfside make up Miami Beach and its barrier islands. South Beach includes properties in the 33139 ZIP code and those in the 33140 ZIP code south of 30th Street.

Residential properties sold for a median price of $400,000, up 5.6 percent from the same period in 2018. The listing inventory also declined on the beaches, down 3.2 percent to 6,452 houses, condos and townhouses.

Condo sales jumped 15.3 percent to 699 closings. The median price for condos increased by 6.1 percent to $350,000. Single-family home sales also rose, by 5.6 percent, to 76 closings. But the median price for houses dropped by 18.3 percent to $1.3 million, which could be a sign of fewer waterfront properties trading hands.

Fort Lauderdale
In Broward County’s Fort Lauderdale, condo sales totaled 492 in the fourth quarter, an 8.4 percent year-over-year increase. The median sales price was $300,000, a 3.2 percent drop. The condo inventory fell by nearly 9 percent to 1,430 properties on the market.

Single-family home sales increased 15.7 percent to 464; with a median sales price of $414,500, a 15.2 percent increase.

West Palm Beach
Condo sales rose in West Palm Beach to 646 closings, a 6.6 percent jump. The median sales price fell by 4.3 percent to $129,250. The listing inventory declined by 5.5 percent to 1,153 condos.

Single-family home sales totaled 464, a 7.2 percent drop. The median price rose by 10.2 percent to $304,500.

Boca Raton and Highland Beach
The condo market outperformed the single-family home market in Boca Raton and Highland Beach. Condo sales rose by 8.4 percent to 682, while single-family home sales increased by 1 deal, to 564.

The median price for a condo was $225,000, up 2.3 percent year-over-year. For single-family houses, it was $475,000, a 5.6 percent increase.

Listing inventory fell for both condos and houses: down 4.1 percent to 1,348 condos; and down 20.4 percent to 1,071 houses.

Palm Beach
In the small town of Palm Beach, 14 houses sold in the fourth quarter – just one more than in the fourth quarter of 2018, but marking a 7.7 percent increase. The median price fell by 14.6 percent to $3.83 million.

Condo sales took a tumble, dropping 10.4 percent to 60 closings. The median condo price increased by 7.6 percent to $633,750.

The listing inventory of condos rose by 3 percent to 311, while the inventory of houses fell by 6.3 percent to 148.

The post Resi sales rise throughout South Florida in Q4: Elliman appeared first on The Real Deal Miami.

Harbor Group International’s CEO Jordan Slone and Phoenix, Arizona (Credit: iStock)  

Harbor Group International’s CEO Jordan Slone and Phoenix, Arizona (Credit: iStock)

Two years ago, Harbor Group International acquired a 9,600-unit apartment portfolio, paying $1.8 billion for properties across the East Coast and in Chicago.

Now, the Virginia-based real estate investment firm has gone even bigger. Harbor has closed on one of the largest apartment portfolio deals ever, paying $1.85 billion for 13,243 units, most of them across the South and Southwest.

The portfolio encompasses 36 properties in eight states: Arizona, Colorado, Florida, Georgia, Missouri, New Mexico, Texas and Utah.

The seller was Aragon Holdings. The deal accounted for most of Aragon’s $2 billion sale of its entire apartment portfolio, consisting of 15,000 units across the U.S.

The acquisition highlights increased investor demand for multifamily properties, especially in the South where occupancy rates remain high and the population is growing.

“Harbor Group targets value-add opportunities, making this an ideal transaction for both firms,” Larison Clark, founder and CEO of Los Angeles-based Aragon, said in a statement on the deal.

Aragon assembled the portfolio over the last decade. The properties average about 350 units each, comprised of two- and three-story buildings in suburban areas.

Newmark Knight Frank represented the seller in the sale and the buyer for the debt financing.

Harbor, led by CEO Jordan Slone, has a portfolio of assets valued at $12.5 billion, according to a release.

The post Harbor Group’s 13K-unit apartment purchase is one of largest ever appeared first on The Real Deal Miami.

David Edelstein and a rendering of the Wynwood site

David Edelstein and a rendering of the Wynwood site

Developer David Edelstein sold an assemblage in Wynwood to multifamily giant AMLI Residential, The Real Deal has learned.

Edelstein of New York-based TriStar Capital sold the “45 Winwood” development site to AMLI for $35 million. Together, the properties are zoned for 669,600 square feet and 321 residential units. The assemblage, at 45 Northwest 24th Street, between Northwest Second Avenue and North Miami Avenue, is currently home to five buildings with 41,000 square feet of commercial space.

AMLI plans to develop the land into a mixed-use project with 321 residential units and 45,000 square feet of retail, Edelstein said.

Cushman & Wakefield’s Robert Kaplan, Robert Given, Errol Blumer, Mark Rutherford and Ricky Giles represented TriStar Capital in the deal. Edelstein received interest from Toll Brothers, Hines and Related to purchase the site, he said. AMLI’s plan is “super creative” for the neighborhood, Edelstein added.

Edelstein, who owns the W South Beach, spent about six years assembling the properties. Last year, he paid $6.5 million for the parcels at 97 and 101 Northwest 24th Street. In all, property records show companies tied to TriStar spent nearly $15 million for lots on 24th and 25th streets since 2013.

TriStar also owns the building at 261 Northwest 26th Street in Wynwood where Lebron James’ Unknwn store is located.

Chicago-based AMLI has owned and developed thousands of apartments in South Florida. In Miami, it’s currently building AMLI Midtown Miami, a 719-unit complex at 3000 Northeast Second Avenue.

Edelstein, meanwhile, is shifting his focus to Wynwood’s Fifth Avenue. In 2018, he entered a contract to spend $32 million to buy a large assemblage west of the AMLI assemblage with plans to develop it into a mixed-use project. He closed on the first piece in 2018, spending $18 million for the properties at 2641 and 2661 Northwest Fifth Avenue, and said he plans to close on the second piece in April.

There, Edelstein is planning 350,000 square feet of residential and office development. Nearby, Sterling Bay is currently building 545 Wyn, a 10-story, 325,000-square-foot office building at 545 Northwest 26th Street.

On the West Coast, Edelstein is a landlord to major tech companies like Amazon and Facebook in Seattle, and Apple in Sunnyvale, California.

The post David Edelstein sells Wynwood site to AMLI for $35M appeared first on The Real Deal Miami.

Clockwise from left: Los Angeles, Miami, New York, and Chicago (Credit: iStock)

Clockwise from left: Los Angeles, Miami, New York, and Chicago (Credit: iStock)

The U.S. apartment market should see more new units in 2020 than in any year since the 1980s, but these pads aren’t for the great unwashed.

The country should see 371,000 new rental units this year, a 50 percent increase over last year, according to the Wall Street Journal, citing data from RealPage. Some major cities like Houston and Los Angeles will see more than double the amount of new homes this year than they did last year, in part due to projects planned around the rental market’s 2015 peak finally nearing completion.

Luxury developments will comprise up to 80 percent of the new supply this year, with developers saying they represent the best opportunity to make money given rising construction and land acquisition costs. Some analysts say this could still have a positive impact on middle class renters, as wealthier renters could “move up” to nicer apartments and leave more room for poorer renters in cheaper homes.

The gap between rents at luxury properties compared to one rung below has hit an average of $500, up from about $300 10 years ago. It is even higher in Los Angeles at $880 per month.

“A lot of these properties are competing for a small group of renters,” RealPage chief economist Greg Willett told the Journal. “A typical renter can’t afford this brand new product.” [WSJ] — Eddie Small

The post Tons of apartments will hit the US market this year. They’re for the rich appeared first on The Real Deal Miami.

John Gallant and the Florida Keys

John Gallant and the Florida Keys

UPDATED, Jan. 16, 11 a.m.: Engel & Völkers is island hopping.

The brokerage opened a new office at 90773 Old Highway in Islamorada, marking its expansion into the Florida Keys.

John Gallant, who owned Blue 9 Realty, the brokerage that previously operated in the same space as Engel & Völkers’ new office, will lead the branch as license partner and broker, according to a press release.

The office will host a grand opening on Feb. 22.

Blue 9 Realty, previously Heritage Realty, had three locations, including Islamorada, West Palm Beach and one in Cartagena, Colombia. Gallant has nearly 10 years of real estate experience.

Peter Giese, chief growth officer of Engel & Völkers Florida, said in a statement that the brokerage is focused on entering markets such as Big Pine Key, Key Largo, Key West, the Lower Keys and Marathon.

The new office adds to Engel & Völkers Florida’s franchise locations, which are spread throughout the state and include Boca Raton, Wellington, Delray Beach and Fort Lauderdale. Timo Khammash and Oliver Tonn co-own Engel & Völkers Florida, the master franchise partner.

A year ago, developer Tricia Ward-Holloway joined Engel & Völkers Palm Beach as a license partner, in addition to acquiring the rights to Engel & Völkers Banner Elk in North Carolina, where a number of South Florida residents have vacation homes. Since then, Ward-Holloway relinquished ownership of the Palm Beach office to focus on Banner Elk, a spokesperson said.

Last month, Engel & Völkers expanded to St. Augustine with license partner and broker Jenn Bryndall and her husband, Greg Bryndal.

The Florida Keys, like other parts of South Florida, is grappling with an affordable housing crisis and vulnerability to sea level rise. Monroe County was seeking a portion of the $633 million Florida’s Department of Economic Opportunity received from U.S. Department of Housing and Urban Development to raise roads and elevate buildings and homes.

The post Engel & Völkers expands to the Florida Keys appeared first on The Real Deal Miami.

Home 61's Olivier Grinda

Home 61’s Olivier Grinda

Home61, South Florida’s homegrown tech brokerage, has shut down.

The Midtown Miami-based firm, led by co-founder Olivier Grinda, closed its doors in December, as first reported by the South Florida Business Journal. Grinda said he will re-open the company as a 100 percent commission brokerage beginning on Thursday, under a new business model.

Home61 launched in September 2014, with the goal of disrupting the real estate industry. The startup said it differentiated itself from the competition with its back-end technology and lead-generation.

In recent years, the brokerage industry has seen increased consolidation due to the high cost of operating brick-and-mortar locations, competition from the internet, and rising commission splits.

Home61 ultimately closed its doors due to high fixed costs, including technology and support staff, its co-founder said. The firm offered commission splits that were 50-50 for deals involving leads generated in-house, and 75-25 for agent-generated deals. Home61 generated 14,000 leads a year, but that wasn’t enough, Grinda said.

“Our model was always profitable on a per-agent business but we had difficulty finding enough agents,” he said. “We would have needed about 100 agents active, ideally 150, and we would have been doing well… It was really meant for scale.”

Over its five-year lifespan, Home61 raised $5.3 million, including money from Grinda, who built several startups in his native Brazil: e-commerce sites like Shoes4You, ClickOn and BrandsClub. Other investors include FJ Labs, Founders Fund, Kima Ventures, TA Ventures, Rok Acquisitions, and German Ventures.

Home61 completed 2,301 closings and was involved in over $200 million in sales. Last year, it tripled its margins and closed $60 million in sales volume. “In 2019, we worked a lot on sales management. We were able to triple our results, unfortunately a little too late,” Grinda said.

At one point, Home61 had 120 agents, but only about 20 were active. Last year, it had about 50 active agents out of 106.

Now, Grinda said he will operate Home61 as a 100 percent commission brokerage in the long term, meaning the agents keep full commissions and pay a $199 subscription fee, per-transaction fees and payments other à la carte services. Once Home61 sells its domain name, which belongs to the investors, Grinda said he will change the name of the company. Other assets that Home61 is selling include lead generation websites and IT.

Grinda said it was important for him to be able to close the office “properly” with some cash in the bank that he gave to employees, giving agents and staff time to find a new brokerage. Instead of throwing a year-end holiday party, he threw a party to celebrate the company.

Grinda said he was humbled by his investors’ support and that he plans to sell the assets and return the proceeds to them.

“We’re a start-up. Sometimes we win, sometimes we don’t,” he said.

The post Home61 shuts down, to reopen as 100% commission brokerage appeared first on The Real Deal Miami.

Michael Comras and 1500 Washington Avenue (Credit: Google Maps)

Michael Comras and 1500 Washington Avenue (Credit: Google Maps)

Michael Comras is looking to sell a retail property on Miami Beach’s Washington Avenue.

The Comras Company is listing a 7,116-square-foot building at 1500 Washington Avenue that is anchored by the popular fast casual restaurant Five Guys. The property is hitting the market for $9.9 million or $1,391 per square foot, according to a release.

Drew A. Kristol and Kirk D. Olson of Marcus & Millichap are representing the seller in the deal.

Kristol declined to disclose the seller, but property records show that Comras owns the property. Five Guys recently invested over $600,000 into their leased space, according to the release.

The property is close to Lincoln Road Mall and is next to a public parking lot on 16th Street. It also has 5,000 square feet of additional buildable area, according to the release.

The building was built in 1948 and was last purchased in 2003 for $1.74 million, records show.

The Comras Company was recently tapped to lease the retail component at the 27-acre mixed-use Miami Worldcenter development near downtown Miami. Comras founded Comras Company in 1992 and specializes in the leasing and sale of urban and suburban retail properties.

Washington Avenue is undergoing major redevelopment amid the city’s approval in 2015 of measures designed to increase hotel space and retail and dining opportunities on the street. Lightstone Group is building a 202-key hotel at 915 Washington Avenue. Nearby, at 601 to 685 Washington Avenue, Imperia Companies’ Michael Fascitelli and Eric Birnbaum are building a seven-story, 300-key hotel.

The post Comras looks to sell Five Guys property on Washington Ave appeared first on The Real Deal Miami.

Lightbox CEO Eric Frank and ClientLook CEO Michael Griffin (Credit: iStock)

Lightbox CEO Eric Frank and ClientLook CEO Michael Griffin (Credit: iStock)

A Silver Lake Partners-backed real estate data company that is sizing itself up against Moody’s Analytics has purchased a commercial broker software platform.

The firm, Lightbox, is attempting to build out a real estate data and information service akin to the Bloomberg Terminal. And it has been on an acquisitions tear over the last year – in 2019, Lightbox acquired four firms, including EDR and ExactBid, at a cost of $200 million.

The latest acquisition, announced on Tuesday, is for ClientLook, a company that provides customer management software to commercial real estate brokers. The firm was founded by real estate data executive Michael Griffin, who worked at CoStar for a decade and then had a stint at Xceligent, the real estate data firm that shut down after copyright lawsuits filed by CoStar. Griffin will be joining Lightbox, he said on his LinkedIn account.

Eric Frank, Lightbox’s CEO and founder, declined to disclose the acquisition price, though an estimate by Crunchbase pegs ClientLook’s annual revenue at around $1 million. While the acquisition is small when compared to Lightbox’s previous acquisitions, the ClientLook’s platform will draw more commercial real estate brokers to Lightbox’s platform.

Since launching in 2017, Frank has built Lightbox around the idea of streamlining siloed workflow and information services in real estate, in the same way that the financial services industry has adopted Bloomberg, S&P and Moody’s.

But the firm, which has received cash infusions from investors Silver Lake and Battery Ventures, is entering a space occupied by much bigger players. Moody’s Analytics last year launched a portal called Reis Network, and has made a series of investments and acquisitions that has allowed it to build a portal of services, including those provided by data firms Rockport VAL and CompStak.

And CoStar Group, the grandfather of commercial real estate data, has in recent years taken similar steps to build out a singular portal of information services to serve the sector, including the acquisitions of Apartments.com and Loopnet. Last year, CoStar acquired U.K.-based commercial real estate marketplace Realla and Off Campus Partners, a student housing listing service that has contracts with 132 universities.

The post Venture-backed Lightbox acquires broker software startup ClientLook appeared first on The Real Deal Miami.

The Center at Miami Gardens (Credit: iStock)

The Center at Miami Gardens apartments (Credit: iStock)

The Latigo Group scored a $50 million construction loan for its apartment project that will be part of a major mixed-use development in Miami Gardens.

The Los Angeles-based real estate firm scored the loan from 3650 REIT to construct its 259-unit project at 19279 Northwest 27th Avenue in Miami Gardens.

Called the Center at Miami Gardens, the project will have three residential buildings as well as a clubhouse, and will sit on about 10 acres of land. It is adjacent to a Super Walmart and south of the Hard Rock Stadium.

The first apartment units will be delivered in late 2020. Rents will range from $1,700 to $2,300 per month depending on the unit type, size, and features, according to a spokesperson for 3650 REIT.

The apartments are part of a bigger development known as the Pomelo that will include a 37,000-square-foot building on a 4.63-acre parcel that will be leased to 24 Hour Fitness. It will also include a 1.39-acre parcel that will be leased to Murphy Oil USA for 20 years, according to Latigo Group’s website.

The Latigo Group is a privately-owned residential, mixed-use real estate development and investment company.

The post Latigo Group scores $50M loan for Miami Gardens apartments appeared first on The Real Deal Miami.

Due to relatively high income levels and low transportation costs, New York City is the eight most affordable of 20 major cities (Credit: iStock)

Due to relatively high income levels and low transportation costs, New York City is the eight most affordable of 20 major cities (Credit: iStock)

UPDATE, Jan. 14, 2020, 2:33 pm: It may sound hard to believe, but New York is the eight most affordable city of the 20 biggest cities in the U.S.

That’s in part because low transport costs balance out high housing costs, according to a new study from the Citizens Budget Commission, a business-backed, fiscally conservative watchdog group, which used data from the 2016 Census to measure “location affordability” based on housing costs, transportation costs and income.

Click to enlarge (Credit: Citizens Budget Commission)

Click to enlarge (Credit: Citizens Budget Commission)

The study found that housing costs in New York were the fifth most expensive, with the “median household” spending 30.8 percent of its income on housing. (A“median household” is defined by HUD as a couple making the area’s median family household income who have two children.) Transport costs, on the other hand, were the lowest of the group — the median household spend was just $832 a month — while household income ranked eighth highest.

The study found that median households in 15 of the 20 cities spent more than 45 percent of their household income on housing and transportation costs. By this measurement, Chicago was the 10th most affordable, Los Angeles 12th, and Miami 18th.

Only five cities — Washington DC, San Jose, San Francisco, Boston, and Minneapolis-St. Paul — fell below the 45 percent level and could be considered “affordable,” by the study’s measurement, because they had relatively high household incomes.

So, in other words: despite placing eighth, New York isn’t really all that affordable. Despite New York’s relatively competitive position in the list, the study warned that it might not stay that way.

“High housing demand in relation to slow housing production and the Metropolitan Transit Authority’s fiscal and operational woes may increase costs and negatively affect New York City’s location affordability competitiveness,” the report said. [Citizens Budget Committee] – Sylvia Varnham O’Regan

The post NYC is the 8th most affordable big city in America* appeared first on The Real Deal Miami.

Naranja Plaza, Westlake Plaza, and Marcos Puente

Naranja Plaza, Westlake Plaza, and Marcos Puente

MMG Equity Partners paid $12.7 million for two shopping centers in southwest Miami-Dade County.

MMG closed on Naranja Plaza at 27000 to 27100 South Dixie Highway for $7.1 million, or $139 per square foot. It also purchased Westlake Plaza, at 10969 Southwest 40th Street, for $5.6 million, or $128 per square foot, according to a press release.

The real estate investment company financed the deals with a $9.5 million acquisition and construction loan from Amerant Bank.

Property records show D&G Properties sold Naranja Plaza, a 51,246-square-foot strip mall. The shopping center is anchored by Dollar General. It last sold for $650,000 in 1993. The building was developed in 1980 on 4 acres along South Dixie Highway. It’s fully leased, according to the release.

JLS Const. Corp. sold the Bird Road property, Westlake Plaza. The company is also tied to Sevell & Duncan Realty Services. Westlake Plaza has 43,781 square feet of retail space across five buildings, with Presidente Supermarket as an anchor tenant. The 3.2-acre property was developed in 1959.

Both shopping centers are in Urban Town Center Zoning Districts. Marcos Puente, director of acquisitions for MMG, said in the release that the value-add strip centers are “a rarity in today’s market,” as both are in infill locations, also known as mostly developed areas.

“The potential for both properties is enormous, given that our average net rents are $9.50 and $14/psf at Naranja and Westlake, respectively,” Puente said in the release. “Market rent at each is more than double our current rates. We look forward to significantly renovating both assets and seeing the finished product within the next 2-3 years.”

MMG, led by CEO Gabriel Navarro, who previously led Navarro Discount Pharmacies, has been buying up shopping centers throughout South Florida.

In November, the firm paid $16 million for the Centre at Cutler Bay shopping center in Cutler Bay. Months earlier, MMG, CREC Capital and Highline Real Estate paid $62.2 million for one of the largest shopping centers in south Miami-Dade County, the Homestead Pavilion at 2400 Northeast 10th Court.

The post MMG buys two strip malls in southwest Miami-Dade appeared first on The Real Deal Miami.

Ben Carson (Photos by Stephen Voss)

Ben Carson’s office is what one might expect from a former neurosurgeon: clean, with few distractions, in a sterile, hospital-like setting. The Secretary of the U.S. Department of Housing and Urban Development has routinely characterized the agency’s 1960s-era concrete semi-circular structure — the Robert C. Weaver Federal Building — as the ugliest in Washington, D.C.

One of the few paintings in his office is of members of the president’s original cabinet, including Carson, crossing a swamp behind the White House in a boat. It is signed by Donald J. Trump, his political rival-turned-ally. Just four years ago, when they were both seeking the Republican nomination for president, Trump was bashing Carson, claiming the doctor had never created a job in his life. Now, Carson is one of Trump’s few remaining original cabinet members.

At HUD, Carson oversees a budget of $44 billion and a staff of more than 6,500 people. He’s tasked with running an agency that makes housing policies for more than 9 million low-income Americans through rental assistance. Under his tenure, HUD claims it has reduced regulatory barriers and Obama-era rules that discouraged investment in distressed areas.

But critics, including many Democrats and housing advocates, accuse Carson of repealing crucial protections for marginalized communities. Some have also dismissed him as woefully unqualified for the job since he had never worked in government and had no background in housing policy.

Carson, meanwhile, has faced his share of controversies. In 2017, HUD ordered a $31,000 dining set for his office, which Carson later canceled and was cleared of wrongdoing on.  And the Washington Post reported this September that Carson had made disparaging remarks about the transgender community, telling HUD staffers he was concerned about “big hairy men” staying at women’s homeless shelters. He later defended the remark, saying, “political correctness is going to destroy our nation.” He’s also had a fair share of gaffes, notably confusing the real estate term REO with the cookie Oreo.

But despite the criticism, Carson’s life trajectory has been indisputably impressive. Born into poverty, he won a scholarship to Yale University and then went to the University of Michigan Medical School before becoming one of the youngest chiefs of pediatric neurosurgery in the country at age 33. He was also the first neurosurgeon to successfully separate conjoined twins at the back of the head. Carson and his wife, Candy, have three grown children and a reported net worth of $20 million, according to Forbes. So why did he take the position at HUD? That’s something Carson seems to wonder himself.

Was there any part of your childhood growing up in a low-income neighborhood in Detroit that led you to [HUD]? Well you know, Detroit wasn’t that bad at the beginning. My parents lived in a little G.I. home — it was 700 square feet, but it was our 700 square feet. When my parents got divorced for a little while [when I was eight], we were homeless. My mother eventually moved in with some relatives in Baltimore in a very typical tenement there. There were rats and roaches and crime, and both of my older cousins were killed. It was that kind of place. I had the opportunity to see first-hand what it was like to live in those conditions, and the thinking of people who lived in those kinds of conditions. How they thought about life. Did they think about getting out of there?

What’s your view of Detroit today? Detroit has had many sputtering starts. People were going to do this, they were going to develop the harbor [terminal], but it never really took hold until recently. The mayor now, Mike Duggan, seems to have a much better grasp of how to get things done. He was a hospital administrator. He had to deal with business and he knows the value of people being able to see progress.

Your late mother was a big inspiration for you. Did she say anything that motivated you to take a role in federal government? She was constantly saying from the time I was a little kid, “Ben you are smart. You can do anything anyone else can do, but you can do it better.” That is always what she said. But she fully understood the need to take care of people. Even though we were poor ourselves, she was always trying to help other people.

I remember one time there was this homeless guy and he was so hungry and she said, “I am going to fill that guy up until he feels like he is going to burst.” And she did. That’s the kind of person she was, even though she had a very difficult life herself. She grew up in a huge family in rural Tennessee, got married when she was 13 and then found out her husband was a bigamist.

Was there any inspiration from faith or from the Bible that pushed you into this position? There is no question that I have a belief in the Bible. And the Bible talks a lot about our obligations to the poor. … It says in James 1:27 to visit the fatherless and their widows and to keep oneself unspotted from the world, which means you take care of the poor people, and you don’t act like the rest of the politicians.

What was it like going from running against Trump to working for him? During the campaign, [Trump] and I became friends, because philosophically, we are very much the same. Personality-wise, we are extremely different. He’s actually a lot of fun when he’s in a pleasant setting and not being attacked. He’s very good to work with because he trusts my judgement. Even if there are  disagreements, he says, “I know that you have thought this through, and I am sure you know what you are talking about.”

What was your impression when he first called you? Where were you and what did he say? Actually, I was in Trump Tower, and I was going to talk to him about some various issues — what kind of things we could do to get the country back on the right track. Vice President Pence was there, and [former] Chief of Staff Reince Priebus was there, and who is the guy who played such a big role in the beginning and then left?

Bannon. Steve Bannon. Yeah, and Steve Bannon. After they listened for a little while, they said, “You really should consider a cabinet position, you would be so good at this.” Somehow they managed to convince me even though I really didn’t want to come into government. You know, I had a very comfortable life. I was making a ton of money [from writing books and sitting on boards] and could do anything I wanted to do, so to give all that up, I said, “Oh boy, do I really want to do this?” My wife wasn’t too sure either, except when the grandchildren started coming over, she said, “absolutely we should do this because we’ve got to make sure they have the same opportunities.”

Did your wife talk you into this? Well, I was leaning toward it. But I wasn’t going to do it if she didn’t want it. I realized that it would have an impact on my kids, too. Not only will certain people go from loving you to hating you, but also because one of my sons [Ben Carson Jr.], in particular, is a very successful businessman and is involved in lots of ventures. And now everything he does is examined under a microscope. But you have to weigh that against what is going on in our country. A long time before we came along, there were people who made a lot of sacrifices to make sure that we had the freedom we have now.

You are one of the few original Trump cabinet members that are still here. Why do you think that is? It’s not that [people] didn’t try to get rid of me. If you remember with furniture-gate they tried to get me to resign. A couple of months ago, they said, “Carson should resign because Carson thinks women’s shelters are for women.” That’s crazy stuff. I don’t listen to that mess. Some of the cabinet members have had to leave simply because they couldn’t withstand the financial burden. Because when you are accused of something, you have to hire these $900 per hour lawyers.

But then why are you still here? I can afford $900 [per hour] lawyers. And I don’t listen to the garbage. My mission here is to change this agency from a place that just sort of puts people in shelters and puts them in different programs to a place that gets people out of poverty.

Do you ever miss neurosurgery? It was very nice. There was no question. You go into the operating room and you are in the sanctuary. You don’t have to worry about anything except that patient, and sometimes you are in there for many, many hours. But you are only affecting one life at a time. In this job, you are affecting hundreds of thousands of people.

In a previous interview, you said running HUD was more intricate and complicated than brain surgery. What did you mean? In the sense that there are more things here that don’t make sense.

What doesn’t make sense? For instance, if you are getting housing assistance and you earn more money, you have to report that, so your rent goes up. That doesn’t make any sense. Because why would anyone be trying to improve themselves if they can’t get ahead.

What is the most challenging part of the job? The most challenging part in government is dealing with bureaucracy. Because bureaucrats are people who care more about dealing with the rules than they do about the goals. If you know anything about surgeons, they are just the opposite. They say: What is it that we are trying to do? Let’s fix everything else and make sure we can get to that.

One recent report said the 100-plus Opportunity Zones funds that sought to raise $22.7 billion have only raised about $3 billion so far. Do you still believe OZs are a $100 billion investment opportunity? I think there are somewhere between $49 billion and $60 billion right now. Will it get to $100 billion? Yeah, I think that it will go far beyond that. The American business community is very entrepreneurial and innovative. As they become more familiar with something and figure out how they can use it to their advantage, they will as long as you don’t overregulate it.

Where are you getting those [$49 billion to $60 billion] estimates from? This is what I have been told from various sources.

Critics say that under your leadership HUD has rolled back fair housing protections, including repealing an Obama-era rule around disparate impact. Critics say it will lead to more discrimination by developers and lenders on marginalized communities. What do you say to that? I expect criticisms. People are creatures of habit. They don’t like change. What are we trying to accomplish with Affirmatively Furthering Fair Housing? [Critics] are trying to stop segregation and in order to do so, create these massive surveys. They come up with all kinds of statistics but nothing changes. We are saying, why is there segregation? People can’t afford to live anywhere except in certain areas. There is no way for them to get into affordable housing. Why don’t we use AFFH to encourage local jurisdictions to remove those barriers to fair housing so that people do have the ability to move to areas that have opportunity?

Do you believe that discrimination is widespread in housing? I don’t know if I would say it is widespread. Does it exist? Of course, and that is the reason the Office of Fair Housing and Equal Opportunity is so active and has cleared out a backlog of cases. You never hear that from the people who say we are backing off.

HUD reached an agreement earlier this year with the New York City Housing Authority to oversee the agency. Who is to blame for the problems at NYCHA, and what have you done to curtail fraud and abuse in the program? The problems at NYCHA have been chronic. They have been neglected. I am sure you know the story about the cases of lead testing. We were able to negotiate with [Mayor Bill] de Blasio. I said: “Forget about politics, let’s talk about the people.” Let’s have everything we do be aimed at them. Knowing [the people at NYCHA] have traditionally neglected their duties, we couldn’t just take their word that they were going to change. That’s why we put in a federal monitor there.

Are there any parts of your time as a neurosurgeon that have helped you navigate bureaucracy? Well, just learning to take an overall type view as opposed to a very specific. It goes back to the beginning: What is the goal here as opposed to what are the rules here?

What’s next for Ben Carson, neurosurgeon, presidential candidate and HUD Secretary? I hope to retire at some point. I failed at that the first time. But I will probably never fully retire because I will still be doing a lot of public speaking and writing books and doing board work.

I’ve read that you’re a vegetarian. I am not a strict vegetarian, but I prefer a vegetarian diet.

Any reason for that? Yeah, because my wife is a vegetarian and I don’t like to cook.

How do you want to be remembered? I get the legacy question all the time and I answer it the same way. It’s really not about me. It’s about the people … we have a large segment of people in the country who are not realizing the American Dream and we need to find a way to change that.

Do you have any plans to get into real estate? I don’t think I will be getting into real estate, but who knows?

— Edited and condensed for clarity.

Correction: The Real Deals November cover noted that Carson is getting ready to step down, but while the HUD Secretary says he hopes to retire at some point, he did not specify when.

The post Ben Carson vs. the critics appeared first on The Real Deal Miami.

Shaun Osher, CORE CEO (Credit: Getty Images and iStock)

Shaun Osher, CORE CEO (Credit: Getty Images and iStock)

Boutique residential brokerage CORE is heading to the beaches of South Florida, where competition continues to grow fiercer.

The brokerage, which is 50 percent owned by Related Companies, is expanding into new markets including Florida, CORE’s founder and CEO Shaun Osher confirmed.

He said that the expansion has been in the works for about five years and was prompted after the firm won several new development projects outside New York City.

Hints of CORE’s new ventures began appearing on Osher’s personal Instagram account in October when he posted a photo of himself during a site visit in Miami along with the caption “What’s behind door No. 1? We’ll show you soon.”

A month later, another not-so-subtle post on Osher’s account told followers that CORE was working on a project in New Jersey. And in early January, CORE announced that it would be producing quarterly reports on Miami’s new development market.

Though Osher was tight-lipped on details, he said CORE’s services would be consistent with the firm’s offerings in New York City.

“We’ve waited for the right opportunities. We’re not a company that’s all things to everyone,” he said.

Osher declined to elaborate on forthcoming projects, clients and new markets. He also declined to say if CORE would hire agents and staff those new markets, or if offices had yet been established. He said he would announce more details about the expansion later this quarter.

CORE is among the better-known boutique Manhattan brokerages that specialize in selling luxury condo product. CORE was ranked ninth on The Real Deal’s annual brokerage ranking in 2019, with nearly $450 million in closed sales in Manhattan.

The move comes amid a softening luxury market and an outflow of wealthy residents and real estate investors, often to lower-tax states such as Florida. But Osher denied CORE’s expansion is motivated by these conditions.

“We’ve been approached over the course of the past five years by developers, national developers,” he said. “It wasn’t necessarily a byproduct of people moving in and out of the city of New York.”

It’s a crowded new development marketing field in South Florida. New York rival Douglas Elliman already has a strong foothold in the market, and One Sotheby’s International Realty and Fortune International Group are among the new dev top firms. Venture-backed Compass, Brown Harris Stevens and the Corcoran Group are also vying for a piece of the action, but haven’t achieved that level kind of volume.

Write to Erin Hudson at ekh@therealdeal.com

The post CORE becomes latest NY resi brokerage to expand into South Florida appeared first on The Real Deal Miami.

Sen. Lindsey Graham and the Hudson Yards development (Credit: Getty Images, iStock)

Sen. Lindsey Graham and the Hudson Yards development (Credit: Getty Images, iStock)

EB-5, the federal visa program that helped fund development projects like the massive Hudson Yards in New York, has been fading recently and on the ropes, a result of fraud and its own popularity. But it still has supporters, and they are now looking to Lindsey Graham, Chuck Schumer and other powerful elected officials to help ease newly-passed rules, according to the Wall Street Journal.

The rules took effect in November, and were meant to crackdown on abuse and pull the 30-year-old program into the 21st century.

Sen. Graham of South Carolina and Sen. Schumer of New York are its co-sponsors; its sponsor is Sen. Mike Rounds of South Dakota. The bill would lower the minimum amount that foreign investors have to pour into some projects in order to receive a green card. It would also allow some investors to stay in the U.S. as they wait for their visas, according to the Journal.

EB-5 allows foreign investors the ability to obtain a green card in exchange for investing and creating jobs in the U.S. Developers latched onto the program as a way to obtain cheap financing for ground-up construction, but investor demand has waned due to visa backlogs and fraud and misuse in the program.

Under the new EB-5 regulations, investment requirements rose to $900,000 from $500,000 for a project in a low employment zone, which are known as targeted employment areas. The investment amounts also climbed to $1.8 million from $1 million in all other areas.

The new rules also prohibit developers from what had become a common practice of tacking on a sliver of a targeted employment area to a project that is in a wealthier area in order to qualify for the lower amount.

But opponents of the new rules say that it will discourage investment and ultimately cut down on development. A Florida regional center recently went to federal court to seek in order to halt enforcement, alleging the new rules violate the U.S. Constitution, were not property reviewed for potential fallout and would end up killing his business.

Nicholas Mastroianni II, chief executive of U.S. Immigration Fund — an EB-5 regional center — gave Graham a $5,000 campaign contribution in September and Aaron Grau of the EB-5 trade group Invest in the USA, donated $2,000 to the senator, according to the Journal, citing the Center for Responsive Politics. [WSJ] — Keith Larsen

The post New EB-5 rules targeting abuse may be eased appeared first on The Real Deal Miami.

Rendering of Missoni Baia with a concrete truck and Vlad Doronin (Credit: Getty Images and iStock)

Rendering of Missoni Baia with a concrete truck and Vlad Doronin (Credit: Getty Images and iStock)

UPDATED, Jan. 15, 11:40 a.m.: Two months after scoring a construction loan, the developers of Missoni Baia will begin a 12-hour, 5,825-ton concrete pour for the condo tower’s base.

The concrete pour starts at 7 a.m. on Wednesday and will end at 7 p.m. Nearly 300 trucks working in groups of 30 or 40 will deliver and pour roughly 2,600 cubic yards of concrete and 750 tons of rebar for the project. Ant Yapi/Civic Joint Venture LLC is the general contractor handling the pour, according to a spokesperson.

Billionaire Vlad Doronin’s OKO Group, Oleg Baybakov’s OB Group and Cain International are developing the 57-story, 249-unit building at 777 Northeast 26th Terrace in Edgewater. In November, they scored a $243.3 million construction loan from Security Benefit Life Insurance Corporation for the project.

The concrete pour will create the bottom mat foundation of Missoni Baia, which will be used to support the vertical building structure, including columns, walls and the elevator shaft, according to a release. Construction has been underway on the project and the seven-story parking garage has topped off.

Missoni Baia will also include an amenities deck with a flow-through pool deck, cabanas, an Olympic-sized pool, plunge pools, children’s areas, and an elevated tennis court. Units are priced from the $500,000s and up, and range from one to five bedrooms, and from 775 square feet to 3,788 square feet.

Missoni Baia is being designed by New York-based Asymptote Architecture, led by Hani Rashid and Lise Ann Couture, a firm known for such projects as the Yas Hotel Abu Dhabi that straddles a Formula One racetrack. Interiors will be designed by Paris Forino, and Enea Garden Design is handling the landscaping.

The building is expected to be delivered by the middle of 2021.

OKO Group’s other South Florida projects include Una Residences, a condo building planned for Brickell, the office tower 830 Brickell, and an Aman-branded hotel and condo project at 3425 Collins Avenue in the Faena District.

Correction: An earlier version of this story misstated the total tonnage due to incorrect information from the developer. 

The post 5,800-ton concrete pour set for Missoni Baia condo tower appeared first on The Real Deal Miami.

The Sapir Organization's Alex Sapir (Credit: Getty Images and iStock)

The Sapir Organization’s Alex Sapir (Credit: Getty Images and iStock)

The Sapir Organization has a leak problem – and not the kind you find in shoddy condo buildings.

A legal assistant employed by one of Sapir’s subsidiaries has allegedly been hoarding trade secrets that competitors could use to undercut Alex Sapir’s real estate empire, a new lawsuit claims.

Patricia Lemanski, who’s worked for Sapir’s SFM Realty Corp. since 2011, allegedly sent “countless files, agreements and other trade secret and confidential information” to her personal Gmail account, according to a Federal lawsuit SFM filed against Lemanski in New York’s Southern District last week.

Those documents include business contact information, operating agreements, leases, vendor agreements, loan agreements and other info on Sapir’s operations that others could use to gain an unfair competitive advantage against the company, the lawsuit claims.

Some of the documents could even be considered “inside information” under the securities laws of Israel, where the Sapir Corp. is listed on the Tel Aviv Stock exchange, according to the complaint.

Representatives Lemanski and Sapir did not immediately respond to requests for comment

While the lawsuit doesn’t name any specific competitors that Lemanski could leak information to, Sapir is asking the court to grant a temporary restraining order preventing her from sharing any sensitive documents.

And while Lemanski worked as paralegal for the company, Sapir claims she didn’t work directly on any of the documents she emailed to her personal account – an apparent effort to get ahead of an argument claiming she had a justifiable reason for stockpiling the trade secrets.

“There is no possible legitimate reason [Lemanski] could have to forward these documents to her personal email account,” the lawsuit claims.

The Sapir Organization and Tel Aviv-listed Sapir Corp. are run by Alex Sapir, son of self-made billionaire real estate mogul Tamir Sapir.

Sapir office properties like the 28-story building it’s headquartered in at 261 Madison Avenue and hospitality assets like the NoMo SoHo hotel.

He is also developing the 16-unit Arte residential condominium in the town of Surfside north of Miami Beach.

Sapir Corp. last year was looking to sell a Murray Hill development site at 218 Madison Avenue where it had planned a residential condo building.

Sapir’s stock price in Tel Aviv fell about 18 percent at the end of the year when the company reported a loss of more than $5 million in the third quarter.

The post Sapir claims employee stole trade secrets appeared first on The Real Deal Miami.

Town & Country Crossing in Town & Country, MO; The Crossroads in Royal Palm Beach, FL; and Mission Bay Plaze in Boca Raton, FL

Town & Country Crossing in Town & Country, MO; The Crossroads in Royal Palm Beach, FL; and Mission Bay Plaze in Boca Raton, FL

While mall landlords have struggled to stay ahead of a challenging retail environment, owners of a less glamorous type of American shopping center have maintained modest growth. And now, even foreign investors are interested.

Real estate investment trusts that own open-air strip centers have seen their share prices rise by 7.7 percent over the past year, the Wall Street Journal reported, citing data from FactSet. While that trails overall stock market growth by a significant margin, it’s still far better than mall REITs, which declined 20.2 percent over the same time span.

The open layout and more mundane tenant mix of strip centers have proven to be an advantage at a time when more specialized retailers are increasingly moving online.

“Retailers want their stores in the line of sight when people are dropping the kids off, or going to the gym,” RPT Realty CEO Brian Harper told the Journal. New York-based RPT owns 48 open-air or grocery-anchored shopping centers across 13 states.

In December, RPT created a $244 million joint venture with GIC — Singapore’s sovereign wealth fund — for a portfolio of five open-air shopping centers in Florida, Missouri and Michigan.

While mall operators generally aim to attract customers who will browse the property’s stores for at least an hour, strip centers — which are generally smaller and more locally-oriented — offer services like groceries, gyms and dentist offices that can keep shoppers coming back on a regular basis. Analysts say this makes them more resistant to competition from e-commerce, as well as to the risk of a recession. [WSJ] — Kevin Sun

The post Here’s why open-air strip centers are outperforming enclosed malls appeared first on The Real Deal Miami.

11300 Northwest 25 Street and Telefonica CEO José María Álvarez-Pallete López (Credit: Google Maps) 

11300 Northwest 25 Street and Telefonica CEO José María Álvarez-Pallete López (Credit: Google Maps)

Telefonica sold its data center in Doral for $44 million, amid booming demand for such real estate.

Telefonica sold the 153,000-square-foot property at 11300 Northwest 25th Street for $288 per square foot, records show. Daytona US Partnership LP, which lists its address in Madrid, Spain, bought the property.

Telefonica is a Spanish multinational telecommunications company, also headquartered in Madrid. The company’ largest commercial presence in the United States is in Miami, where it operates the data center that provides cloud and security services, according to its website.

The building was constructed in 2001, records show. It sits on a 4.3-acre lot. The property was last purchased for $24.6 million in 2004. The South Florida Business Journal first reported the news.

Interest for data center real estate is growing due to the increasing demand for data storage and driverless vehicles, artificial intelligence and other technological advances that require more power supply.

Investors are betting on this new demand. In 2018, an affiliate of Brookfield Asset Management agreed to buy a data center portfolio from AT&T Communications for $1.1 billion. Last year, Google announced it plans to spend more than $13 billion in data centers and offices across the U.S.

The post Telefonica sold its Doral data center for $44M appeared first on The Real Deal Miami.

Aaron Kirman (Credit: Getty Images)

Aaron Kirman (Credit: Getty Images)

Los Angeles luxury agent Aaron Kirman has chosen to accept this mission: He must sell a $13.9 million “sandwich box” beach house that has been on the market for 1,000 days with zero offers. Its owner got the house as part of her divorce settlement and she is motivated to sell, but has cycled through three listings brokers before settling on Kirman. If he succeeds, the commission is a cool $347,500.

That’s the setup for the first episode of CNBC’s new real estate-focused reality show, “Listing Impossible,” which premiers Wednesday.

It follows Compass star broker Kirman as he tries to sell luxury homes in the L.A. area that have languished on the market. The show is timely, with some of the West Coast’s most expensive homes sitting for months, and as spec developers scramble to find buyers amid the softening market.

The show was actually first announced a year ago — it was supposed to air in May 2019 — as part of a package of real estate-focused programming that would occupy CNBC’s Thursday night lineup. It follows in the footsteps of Bravo’s “Million Dollar Listing” shows that have propelled the careers of celebrity brokers like Ryan Serhant and Fredrik Eklund.

The First 7: The Cold Box on the Beach from CNBC.

In the seven-minute preview for the first episode of “Listing Impossible,” Kirman’s 60-plus-person team is pictured in their Beverly Hills office. The camera does quick cuts to one agent on her computer — dog in lap — then another deep in a forehead stress rub, and another bouncing on a mini trampoline, hands and head pointed to the ceiling. The luxury real estate world is no leisurely cruise along PCH, people.

After driving his Porsche convertible to the Dana Point beach house listing with agent Neyshia Go, Kirman sits down with the owner and doesn’t pull any punches. He calls her furniture “hideous,” and refers to one of the bedrooms as a “sex dungeon.”

“Everything is wrong with this room,” he tells her.

At one point, Kirman highlights how deck chairs are facing into the neighbor’s master bedroom and scolds his client: “You lost your $13 million moment on this.”

Kirman, one of the biggest brokers in L.A., placed fifth in The Real Deal’s 2019 ranking with more than $260 million sell-side deals. But he has also faced his share of troubled listings, including the infamous Mountain of Beverly Hills. That 157-acre parcel was asking $1 billion when Kirman first listed it in 2018. It finally sold in August in a foreclosure auction for $100,000.

Write to Erin Hudson at ekh@therealdeal.com

The post Aaron Kirman’s “Listing Impossible” is a beach house “sex dungeon” appeared first on The Real Deal Miami.

Condo sales in Miami took a tumble in the first full week of January, but were led by a pricey resale at the Four Seasons Residences at The Surf Club.

A total of 73 condos sold for $41 million last week, compared to 92 units that sold for a combined $51.4 million the previous week.  Condos last week sold for an average price of about $561,000 or $337 per square foot.

At The Surf Club, records show Barry Weisfeld, managing member and chairman of the Strategic Vision Group, an investment management firm, sold his 5,822-square-foot, five-bedroom unit to Sheryl Salter of the Salter Family Trust for $12.65 million, or nearly $2,200 per square foot. Jill Hertzberg represented the seller, while Oren Alexander brought the buyer. Unit 821 in the north tower was on the market for 730 days before it sold.

The second priciest sale was the $4.3 million closing of Jade Signature unit 4903. The three-bedroom, 3,260-square-foot unit was listed for 48 days before selling for $1,319 per square foot. The listing agents were Sandra Chartouni, Rita Collins, and Fabia Castro, and the buyer’s agent was Karina Marx.

Here’s a breakdown of the top 10 sales from Jan. 5 to Jan. 11. Click on the map for more information:

Most expensive
Surf Club Four Seasons #N-821 | 730 days on market | $12.65M | $2,173 psf | Listing agent: Jill Hertzberg | Buyer’s agent: Oren Alexander

Least expensive
Brickell House #3403 | 353 days on market | $552K | $513 psf | Listing agent: Jill Penman | Buyer’s agent: Sebastian Acosta

Most days on market
Surf Club Four Seasons #N-821 | 730 days on market | $12.65M | $2,173 psf | Listing agent: Jill Hertzberg | Buyer’s agent: Oren Alexander

Fewest days on market
Jade Signature #4903 | 48 days on market | $4.3M | $1,319 psf | Listing agent: Rita Collins | Buyer’s agent: Karina Marx

The post $13M resale at Surf Club Four Seasons tops Miami’s weekly condo sales appeared first on The Real Deal Miami.

Brightline president Patrick Goddard and Park-Line Miami (Credit: iStock)

Brightline president Patrick Goddard and Park-Line Miami (Credit: iStock)

Brightline’s apartment towers have arrived at Virgin MiamiCentral.

Park-Line Miami, at 100 Northwest Sixth Street in Overtown, is part of the mixed-use development that is home to MiamiCentral. The project adds two 30-story towers with a combined 816 luxury apartments to the project, and the Greater Downtown Miami multifamily market overall.

Leasing begins this month with rents starting at $1,900 a month, according to a press release. The Bozzuto Group’s Bozzuto Management Company, led by president Stephanie Williams, will manage the rentals. The buildings have studio apartments, and one-, two- and three-bedroom units.

The towers sit on top of Brightline’s rail platform at MiamiCentral. Amenities include a 2-acre amenity deck, pool and Jacuzzi, cabanas and day beds, a lap pool, an outdoor movie theater, a 3,500-square-foot gym, and a running track. The buildings also have outdoor dining areas with grills, a dog park and a pet spa, a business center, club room and bike storage.

Late last year, after Suffolk Construction Co. and others reached a multimillion-dollar settlement over construction issues at MiamiCentral, Suffolk filed a lawsuit against two subsidiaries of FECI, alleging the development group failed to give Suffolk an extension and increase the construction budget for the apartment towers, despite weather delays.

Brightline, which is expected to rebrand as Virgin Trains USA later this year, began operating its train service between Miami and West Palm Beach in 2018, when it opened three mixed-use stations in Miami, downtown Fort Lauderdale and West Palm. Brightline’s parent, Florida East Coast Industries, is backed by the private equity firm Fortress Investment Group. The rail service is expected to expand to Orlando, as well as make additional stops in Aventura and Boca Raton.

Last year, FECI sold the office portion of MiamiCentral for $159.4 million to Shorenstein. The deal included the ground-floor retail space, two office buildings and parking at the project.

MiamiCentral also includes the Central Fare food hall.

The post Brightline launches leasing of apartment towers at MiamiCentral appeared first on The Real Deal Miami.

The Real Deal is preparing the 15th edition of its Data Book, the most comprehensive collection of information on the New York–area real estate market. Included in the 2020 Data Book will be a ranking of Manhattan’s top residential brokerages, Brooklyn’s most active developers, the city’s biggest real estate loans of the year and more!

With data pulled, vetted and analyzed on all major aspects of the industry, the Data Book provides vital information for top dealmakers and for those who are looking to understand the ever-changing New York City real estate market. Jam packed with statistics, market overviews and rankings, the Data Book serves as a reference point for the current year and years past.

The Data Book will arrive with the February issue of The Real Deal.

Until then, check out last year’s data book here.

For editorial inquiries, email News@TheRealDeal.com. To learn more about marketing opportunities in our Data Book, please call (212) 254-7400 or email Advertising@TheRealDeal.com.

The post Coming soon: <i>The Real Deal</i>’s 2020 Data Book appeared first on The Real Deal Miami.

Alex Zylberglait of Marcus & Millichap and 2020 Northeast 163rd street

Alex Zylberglait of Marcus & Millichap and 2020 Northeast 163rd street

An Argentine investor bought a North Miami Beach office building in an Opportunity Zone for $6 million.

2020 Office Nmb LLC, managed by Ezequiel Schmuckler, bought the building at 2020 Northeast 163rd Street. Office 2020 LLC, managed by Alejandro Araujo, sold the property.

The three-story office building totals 31,145 square feet, equating to a sale price of $192 per square foot, records show. The building could be redeveloped into a mixed-use project up to 20 stories or 255 feet high with more than 300 residential units. It sits on 1.34 acres of land.

Alex Zylberglait of Marcus & Millichap represented the seller in the deal.

Zylberglait said the buyer purchased the property for the steady cash flow along with the building’s redevelopment potential. The office building is 94.24 percent occupied with only 1,402 square feet of available space, according to a listing on LoopNet. The furniture company Veneta Cucine occupies most of the first floor.

The building was last sold for $4.2 million in 2008, records show. It was built in 1968.

North Miami Beach has seen much more mixed-used development over the past few years after the city allowed for more residential development.

In 2018, the North Miami Beach City Commission approved a 2.5-million-square-foot mixed-use project to be built on an 18-acre property known as the TECO Gas Site.

The post Argentine investor nabs North Miami Beach Opportunity Zone property appeared first on The Real Deal Miami.

Harbourside at Hidden Harbour is a mixed-use development with about 300 residential units next to a canal in Pompano Beach.

Many of South Florida’s finest waterfront homes have sweeping views of the Atlantic Ocean or the Intracoastal Waterway, the inland waterway along the East Coast. Farther down the food chain of waterfront homes are those along South Florida’s lakes and rivers. Canals, however, rarely serve as the focal point of real estate developments in the tri-county area. These artificial waterways protect South Florida from flooding but also can stink, turn brown and draw mosquitos — or worse.

“If they’re connected to other waterways, you could have alligator problems at certain times of year,” said Jack McCabe, a Deerfield Beach-based real estate consultant. Still, “there’s a premium placed on water views in Florida,” he said. And as land availability dwindles in South Florida, the lowly canal is getting more love, especially in Broward County, where several developments on canal-front sites are underway — each within easy boating distance of the Intracoastal.

Canal-front projects are part of a broader trend toward urban infill development, according to Mitash Kripalani, a South Florida broker for Colliers International. “I see more and more people looking to go after land zoned for industrial or marina and get them upzoned for residential … You’re seeing more urban infill as land becomes scarcer,” he said.

Redevelopment along South Florida canals may become more common in the decades ahead if sea level rise persists as predicted, said Dan Kodsi, one of the developers behind the Paramount Fort Lauderdale and Paramount Miami Worldcenter condominium projects.

“You’re going to see some development along canals. It’s just inevitable,” Kodsi said. “Over the next 40 or 50 years, there’s probably going to be some low-lying areas where you’re going to have to knock down the older homes that are below flood level and build new homes that are above flood level.”

The Broward Riviera?

The canal-side project furthest along in Broward County is Las Olas Walk, a 456-unit apartment development now rising around the Himmarshee Canal in downtown Fort Lauderdale. The developer, Orlando-based ZOM Living, expects to finish construction of the two-building, eight-story project next summer. Amenities will include a courtyard along the canal and a shop with kayaks, paddleboards and life jackets for those who want to navigate the waterway, which connects to the New River and the Intracoastal. At least 150 of the apartments will have views of the canal from a U-shaped building. Monthly rents will range from $1,900 to $4,800, and tenants will pay an undetermined premium for apartments with a view of the canal, said ZOM Living CEO Greg West.

“We are basically surrounding the canal on two sides,” said Tom Brink, vice president of CallisonRTKL, the architecture firm that designed Las Olas Walk. The old canal needed a $2 million rehab. It was built as a stormwater relief valve in the oldest commercial section of downtown Fort Lauderdale, the Himmarshee Historic District. When Las Olas Walk development began, the canal “wasn’t very pleasant,” Brink said. “At various times, it was muddy and didn’t always smell good.”

The site didn’t come cheap, despite the original condition of the canal. ZOM paid $33 million in January 2018 for the 17-acre development site — a prime downtown location near a popular dining and shopping area along Las Olas Boulevard.

For developers, canal-front prices are more affordable in the seaside suburbs of Fort Lauderdale, where some see opportunity in redeveloping marine-related commercial property.

In Pompano Beach, for example, a marina owner is co-developing Harbourside at Hidden Harbour, a mixed-use complex designed for about 300 residential units and about 65,000 square feet of commercial space on a canal-front site just east of Federal Highway. Construction could start sometime next year, said James Sturner, who owns the development site and an adjacent marina, Aquamarina Hidden Harbor, which will continue to operate there. The development would replace a boatyard and other commercial properties.

Sturner paid about $16 million in 2008 for 9 acres including the canal-front development site and his adjacent marina business, which he built and opened in 2009. Seth Platt of LSN Partners, a consultant Sturner retained, said Sturner started the mixed-use project after city officials suggested it, seeking greater exposure for a canal largely hidden from public view.

“They wanted to see this type of development there … a mixed-use development with a view corridor looking down the canal, activating the waterfront,” Platt said.

Canal developments on the horizon

In Dania Beach, a recent rezoning could spark residential redevelopment of an entire city block along a canal, starting with an eight-story, 302-unit rental apartment building. Miami-based developer Asi Cymbal proposed the rezoning on behalf of all four property owners on the 11-acre block, which includes several marine-themed businesses.

Cymbal has a contract with one of the property owners to buy a vacant 2.4-acre site across the street from New York-based Kimco Realty’s 102-acre Dania Pointe mixed-use development. There, Cymbal plans to build a 302-unit multifamily project. The other three owners are boating-related companies that may eventually take advantage of the rezoning and sell their properties for residential redevelopment, Cymbal said. “They have been looking at other waterfront properties for their businesses that are in less expensive industrial zones,” he said.

Monthly rents are expected to range from $1,195 for studios to $2,575 for three-bedroom apartments. Half of the apartments will have views of the canal and command premium rents. The canal itself is in “great shape,” said Cymbal, who expects to spend $500,000 to beautify areas along its edge.

Dania Pointe’s proximity is the main reason Cymbal chose the development site at 150 South Bryan Road, but he also plans to make the most of the canal-front location. His unnamed apartment building will offer rental boats and docking space to tenants and the general public through a membership-based boat club. In addition to beautifying the canal, he said,“We’ll also make sure there’s great visibility to the canal for our tenants. There’s going to be a pedestrian pass in the back and a new dock that we’ll install.”

Kimco, for its part, may feature a now-obscure canal as it redevelops its aging Oakwood Plaza shopping center in Hollywood, located just south of Dania Pointe. Paul Puma, president of the southern region at Kimco, said, “I would consider the canal to be an amenity for Oakwood.”

The post Broward developments test the appeal of living canal-side appeared first on The Real Deal Miami.

Jeffrey Dagowitz, Ophir Sternberg and 100 21st Street (Credit: Getty Images, Google Maps)

Jeffrey Dagowitz, Ophir Sternberg and 100 21st Street (Credit: Getty Images, Google Maps)

In the biggest hotel sale in Miami Beach so far this year, partners Lionheart Capital and Actium Development Co. sold the Seagull Hotel Miami Beach for $120 million, The Real Deal has learned.

JHG Holdings Miami Owner LLC, a joint venture between Lionheart, led by Ophir Sternberg, and hotelier Jeffrey Dagowitz’s Actium, sold the waterfront hotel to BHI Miami Limited, according to sources. The Delaware entity is led by Nabil Kobeissi, records show.

The hotel at 100 21st Street traded two years after Lionheart and Dagowitz bought it at auction for $31.1 million.

The $120 million price tag for the 172-room South Beach equates to about $698,000 per key. It was built in 1948, records show. Sources said it will be redeveloped into a luxury hotel.

The Lionheart and Dagowitz joint venture had purchased the 1.23-acre property in December 2017 in a deal that included a ground lease that expires in 2049. The court-ordered sale followed litigation among the property’s seven previous partners.

The waterfront site is across a parking lot from the W South Beach and next to the Setai Miami Beach. Records show BHI made a loan to the sellers in September as a precursor to the deal.

BHI’s Kobeissi, who is also CEO of Blue Horizon Advisors of London, could not be reached for comment. Sternberg declined to comment and Dagowitz did not immediately respond to a message left at Actium.

Dagowitz is the founder of New York-based JHG Holdings, and has been responsible for the acquisition, development and financing of luxury hospitality real estate valued at more than $1 billion, according to Actium’s website. In 2017, he bought 83,000 square feet of air rights in New York’s Chelsea, assembling a development site with 243,000 buildable square feet.

Miami-based Lionheart Capital, along with Elliott Management Corp., recently completed the Ritz-Carlton Residences, Miami Beach, a luxury condo project in Mid-Beach.

Other hotels have recently sold for high prices in Miami Beach. Last year, Michael Shvo and his partners bought three neighboring hotels on Collins Avenue in South Beach, with plans for a 200-foot-tall residential project. In February, they bought the 83-room Raleigh Hotel for $103 million, or $1.24 million per key, from Tommy Hilfiger and the Dogus Group. The group later purchased the Richmond and South Seas hotels for nearly $88 million and $52 million, respectively.

The post Lionheart and Jeffrey Dagowitz sell Seagull Hotel Miami Beach for $120M appeared first on The Real Deal Miami.

Mayor Bill de Blasio, 40 Wall Street, and President Donald Trump (Credit: Getty Images, 40 Wall St. via the Trump Organization)

Mayor Bill de Blasio, 40 Wall Street, and President Donald Trump (Credit: Getty Images, 40 Wall St. via the Trump Organization)

The Trump Organization blasted the New York City mayor for saying his probe of the company turned up evidence of a possible crime.

Following a news report late last year that President Donald Trump’s development firm reported different income figures to lenders and the government for the same real estate, Mayor Bill de Blasio launched an investigation. The mayor said Friday that some of his administration’s findings had been referred to Manhattan District Attorney Cyrus Vance for possible criminal prosecution.

A spokesperson for the Trump Organization lashed back Monday, saying the mayor is the “last person to be pointing fingers,” given the “rash of investigations” against the mayor’s presidential campaign, which ended in September. (Previous fundraising efforts by de Blasio were also scrutinized by Vance and federal prosecutors, resulting in harsh criticism but no charges.)

“The allegations are unfounded and clearly motivated by politics,” the Trump spokesperson said in a statement to The Real Deal.

The mayor’s office followed up with its own barb.

“President Trump is a con artist and his refusal to release his tax returns says more than enough about what he is trying to hide,” Freddi Goldstein, the mayor’s press secretary, said in a statement.

In October, ProPublica and WNYC reported that the Trump Organization had reported lower income figures at some of its buildings to the Department of Finance, which oversees property taxes, than it did to potential lenders.

The ProPublica-WNYC report cited experts that suggested the practice used at the Trump Organization’s 40 Wall Street could amount to fraud.

On Friday, de Blasio said during an interview with WNYC that “at least one piece of what was found was serious enough to be referred to the D.A.” A person familiar with the probe said it was passed on to Vance in November.

A spokesperson for the district attorney’s office said the office does not confirm investigations, and declined to comment further.

Landlords of all sizes challenge their property assessments in an effort to lower their real estate taxes, including by arguing that they do not produce as much income as the assessment assumes. Reporting robust income to lenders can entice them to provide larger loans to the property owner. In the case of a discrepancy between the two income numbers, prosecutors could evaluate whether there was an attempt to defraud either the government or the lenders.

The post Trump Org blasts NYC mayor for criminal referral of tax findings appeared first on The Real Deal Miami.

Susan Gale and the South Beach hotels

Susan Gale and the South Beach hotels

A Miami Beach investor is looking to sell two boutique hotels he owns in South Beach.

Scott Weinberg of Azco Realty owns Hotel La Flora at 1238 Collins Avenue and Hotel Impala at 1228 Collins Avenue, property records show. Both are now on the market with Susan Gale of One Sotheby’s International Realty for a combined $23.5 million, or $490,000 per room, according to a spokesperson.

Weinberg’s 1238 Collins Ave Corp. paid $1 million for the three-story, 31-room Hotel La Flora in 1997. His Azco Investments LLC paid $4.5 million for the 17-room, two-story Hotel Impala in 2016, records show.

The 15,000-square-foot Hotel La Flora building was built in 1924 on a 7,000-square-foot lot. A buyer could increase the room count to 45 rooms, the building’s original unit count, Gale said. The building includes a lobby bar and cafe, and the property comes with a liquor license.

The second hotel has 14 guest rooms and three suites, and a courtyard garden. Spiga Ristorante Italiano is a tenant of Hotel Impala. The 8,414-square-foot building was originally built in 1931, also on a 7,000-square-foot lot. The property’s zoning allows for an additional 5,000 square feet of development.

Spiga pays about $150,000 a year in rent, Gale said.

The hotels can also be sold independently. Gale said the seller has owned hotels for nearly 30 years, and these are his last two properties in Miami Beach. “The story is that he’s been doing it for a long time, like many other sellers, and he is ready to move on in his life,” Gale said.

Gale’s other listings include the two hotels at 1320 Ocean Drive and 1435 Collins Avenue for a combined $42 million.

In October, SMS Lodging listed the 29-room hotel at 336 Collins Avenue. The listing brokers now expect that property to sell for $9.5 million, or about $325,000 per key. It’s on the market with CBRE.

The post South Beach hotels hit the market for $24M appeared first on The Real Deal Miami.

Charles Cohen, Design Center of the Americas

Charles Cohen, Design Center of the Americas

Design Center of the Americas, the high-end showroom in Dania Beach, avoided foreclosure after Cohen Brothers Realty Corp. reached a financial settlement with its lender.

The lawsuit ends a long, drawn-out legal battle over the property’s debt, and puts to rest a $172.9 million foreclosure lawsuit from Wells Fargo, acting as a trustee for lender GE Commercial Mortgage Corp.

Property records show that a company tied to Fortress Investment refinanced the mortgage for $112 million on Friday.

“DCOTA’s mortgage has been successfully refinanced and all foreclosure litigation has been withdrawn and settled,” Charles Cohen of Cohen Brothers Realty Corp. said in a statement. Cohen remains 100 percent owner of the property, according to a release.

The 782,986-square-foot property at 1855 Griffin Road was built in 1985. Originally geared to high-end designers, architects and decorators, the property converted much of its design center space to office property, leasing 100,000 square feet for the headquarters of online pet retailer Chewy.com.

But the property has struggled to attract other tenants. It was only 64 percent occupied in the third quarter of 2018, the financial data provider Trepp reported. A spokesperson for DCOTA said the property is now 80 percent occupied.

In June, an appraisal of the property was cut by more than half from $250.35 million to $115 million.

As occupancy remained low, the property faced challenges with its two loans. In December, an $86.5 million loan was marked delinquent, according to Trepp. Then in February, a second loan of $86.5 million was marked delinquent.

DCOTA’s troubles with its debt date back to 2012, when a note went into special servicing and terms of the loan had to be modified. The loan’s interest rate was lowered and its maturity date was extended for a two-year term that ended in August 2017. It was then later extended until March 2019.

New York-based Cohen Brothers Realty Corp. is a commercial real estate development and management firm with a portfolio of over 12 million square feet of office towers and design center buildings. Its portfolio includes Manhattan’s renowned Decoration & Design Building, Southern California’s Pacific Design Center in West Hollywood and Decorative Center Houston.

The post DCOTA refinances, avoids foreclosure appeared first on The Real Deal Miami.

Chris “Birdman” Andersen and William Meyersohn (Credit: Getty Images)

Chris “Birdman” Andersen and William Meyersohn (Credit: Getty Images)

Former Miami Heat player Chris “Birdman” Andersen finally sold his Pinecrest home, The Real Deal has learned.

Andersen, who played for the Heat between 2013 and 2016, sold the six-bedroom, six-bathroom house at 5826 Southwest 107th Street for $2 million, a steep discount off the original asking price.

The now-retired player paid $1.89 million for the 6,513-square-foot home in 2013. In 2016, he was traded to the Memphis Grizzlies, and a year later listed the house for $4.55 million. He eventually lowered the price down to $2.25 million in September 2019, according to Realtor.com.

Brown Harris Stevens Miami’s William Meyersohn took over the listing last year. He represented the buyer and seller in the deal, which closed on Thursday, according to a spokesperson for Brown Harris Stevens Miami.

The 0.9-acre property features a lighted tennis/basketball court, a patio, gazebo and pool. The house includes a chef’s kitchen, 10-foot ceilings, a family room with a fireplace, and a one-bedroom, one-bathroom apartment above the two-car garage.

Last year, the Heat’s former star player, Dwyane Wade, listed his home at 5980 North Bay Road in Miami Beach for $32.5 million after retiring from the NBA.

The post Chris “Birdman” Andersen sells Pinecrest house for $2M appeared first on The Real Deal Miami.

Greystar’s Bob Faith, The Mile (Credit: BuzzBuzzHome)

Greystar’s Bob Faith, The Mile (Credit: BuzzBuzzHome)

Greystar Real Estate Partners sold the luxury apartment development The Mile near Coral Gables for $40 million.

Charleston, South Carolina-based Greystar sold the 120-unit building at 3622 Southwest 22nd Street in Miami for $333,333 per unit, records show. Miami-based Acumen Real Estate purchased the property.

Cushman & Wakefield’s Robert Given, Troy Ballard, Zachary Sackley, Calum Weaver and James Quinn listed the property in September.

Monogram Residential Trust, which Greystar acquired in 2017, had paid $48 million for the site and three nearby properties in 2015, records show.

Built in 2016, The Mile totals 234,992 square feet, records show. It sits on a 0.87-acre lot.

The Mile includes 3,000 square feet of ground-floor retail space, a resort-style pool, deck, gym, lounge, and a gated parking garage. Rents average $2,200 a month, or $2.50 per square foot, at the building. Units average just under 900 square feet, and the building is about 95 percent occupied, Cushman & Wakefield said in September.

Greystar is one of the most active multifamily investors in South Florida and nationally, completing more than $14 billion of rental housing projects in the United States. In July, Greystar Real Estate Partners sold a 214-unit apartment development near Lake Worth Beach for $47.8 million.

In May, Greystar sold a North Lauderdale apartment complex to Eaton Vance Management for $46 million.

Acumen Real Estate owns the 149-unit The Fountains at Delray Beach and the 208-unit apartment complex Sunset Gardens in Southwest Miami-Dade County.

The post Greystar sells The Mile apartments for $40M appeared first on The Real Deal Miami.

A rendering of the Tampa Bay Rays' plans for a new ballpark in Tampa's historic Ybor City (Credit: iStock, WJCT)

A rendering of the Tampa Bay Rays’ plans for a new ballpark in Tampa’s historic Ybor City (Credit: iStock, WJCT)

UPDATED, Jan. 14, 4:35 p.m.: Banks may soon have the incentive they need to sink huge amounts of money into Opportunity Zones, the controversial Trump administration tax abatement program that has seen tepid investment levels to date.

The federal government plans to give commercial banks credit for issuing loans in low-income communities as part of a larger reform to a 1970s-era law called the Community Reinvestment Act. This is the first direct regulatory incentive for banks to lend in Opportunity Zones and could be a game-changer for the program, according to some experts.

“CRA is a big motivator for inter-activities at banks,” said Steve Glickman, one of the architects of the Opportunity Zone initiative, which gives massive tax deferments and tax breaks to those who invest in projects in designated low-income neighborhoods across the country. “They are going to have institutional interest in all of this.”

Glickman, who founded and runs Opportunity Zone consultancy firm Develop LLC, said that the reformation of the CRA and the recent finalization of the program’s rules should spur banks to direct investor money into qualifying projects. Banks’ own asset management arms could begin to deploy more money into Opportunity Zones as well, he said.

For banks, lending in Opportunity Zones would allow them to fulfill elements of a government mandate that they lend in poor communities.

Although many bankers and developers believe the combination of expected CRA reforms and finalized Opportunity Zone regulations could lead to substantial investment in poor communities, finance watchdogs are wary about the types of projects that qualify.

What the CRA is and why it matters

The CRA was crafted in 1977 under President Jimmy Carter and was designed to incentivize banks to lend in low income communities and prevent redlining, or the practice of not lending to minority communities.

A poor rating on the CRA can prevent a bank from opening new branches or completing a merger. It also invites heavier scrutiny from regulators if a bank has a bad rating.

But some bankers argue the law is out of date, especially in the age of digital banking and the lack of brick and mortar branches. Under a more banker-friendly Trump administration, two regulators, the Office of the Comptroller of the Currency and the FDIC, are now looking to revamp the rule and change how the CRA looks at geographic areas where the banks take in deposits. The regulators are also looking to combine Opportunity Zones into the CRA rules under a proposal released by the OCC and the FDIC.

This inclusion of Opportunity Zones in the revamp, however, has also drawn the most criticism from those who are skeptical of the proposed CRA changes.

One section of the proposed regulation mentions that banks can receive credit for lending to athletic facilities in Opportunity Zones. In other words, a bank could potentially receive credit on their CRA exam for financing the proposal to build the Tampa Bay Rays stadium in Ybor City, Florida, that was estimated to cost nearly $900 million.

“The Baltimore Ravens Stadium would qualify as a credit. We have got to look at the large scale projects that might not have localized community impact,” said Nikitra Bailey, the executive vice president of the Center for Responsible Lending.

Giving credit to sports stadiums in Opportunity Zone projects amplifies the argument of critics who claim that the program is effectively a tax break for wealthy developers masquerading as a benefit for the poor. Critics have pointed to Richard LeFrak’s $4 billion mixed-use project Sole Mia in an Opportunity Zone in North Miami as well as Kushner Companies plans to build a 1,100 unit-luxury apartment building in Miami’s Edgewater neighborhood. (SoLe Mia has not taken any Opportunity Zone money and the project’s plans predates the Opportunity Zone program, according to a spokesperson for LeFrak. LeFrak’s executives, however, did seek to get city officials in North Miami to nominate the properties surrounding the site as an Opportunity Zone, according to Bloomberg and the New York Times).

Opportunity Zones developers have largely focused on building projects in gentrifying areas and in projects that were already planned before the Opportunity Zone legislation was released. The Department of Housing and Urban Development under Sec. Ben Carson said the agency is giving preferences on certain credits for developers who build affordable housing in Opportunity Zones. But so far, large-scale investment in affordable development in these areas has yet to materialize.

Lending in the land of OZ

The Opportunity Zone program became the arguably most talked about program in the real estate world over the last two years. Tucked away in President Trump’s tax plan, it offers developers and investors the ability to defer or forgo paying capital gains taxes for investment in one of the more than 8,700 federal Opportunity Zones across the country. Treasury Secretary Steven Mnuchin even said it could result in $100 billion in private investment.

Despite the hype, investor interest in hasn’t quite materialized.

Many funds have had trouble raising capital. Of a sampling of 103 Opportunity Zone funds that sought to raise $22.7 billion, only $3 billion was raised, according to an October report by accounting firm Novogradac & Co. One notable pullback is Anthony Scaramucci’s SkyBridge Capital, which first sought to raise $3 billion, but is now seeking just $300 million.

But there are signs that the finalization of program rules has already contributed to an uptick in investment. At least $2.3 billion was put into Opportunity Zone Funds between early December through early January, according to a survey from Novogradac, a 51 percent increase over the prior month. (It should be noted that investors had to commit their capital by the end of 2019 to receive the full benefit of the program, which is likely a bigger reason for the increase in investment.)

Brett Forman of Trez Forman, a nonbank lender based out of Boynton Beach, said he is skeptical of some of the proposed projects in Opportunity Zones. So far, some of the borrowers that have approached him are less experienced in real estate development and are sometimes ones that wouldn’t be able to land bank financing.

“They think that a nonbank lender will jump on it,” said Forman.

Avra Jain, a Miami-based Opportunity Zone developer, however, has previously told The Real Deal that the program makes financing for certain projects more accessible, such as her group’s 15-story office building in Miami’s Midtown neighborhood.

Shane Neman, who purchased a cold-storage facility in an Opportunity Zone in Miami’s Allapattah neighborhood, said he is now considering refinancing the property. Neman said the property’s position in an Opportunity Zone makes it more attractive for getting financing from lenders.

“I even have private lenders and funds that are coming to me with loans that are beating the terms of regional banks, which usually give the best deals,” said Neman.

Some banks have already started investing in Opportunity Zones themselves, such as PNC Bank which has established an Opportunity Zone fund to invest in affordable housing, economic development and revitalization projects. In July, the bank provided $15 million in funding to repurpose a vacant, nearly century-old office building into workforce housing in downtown Birmingham, Alabama.

There’s also Woodforest National Bank, of Woodlands, Texas, partnered with a Community Development Financial Institution (CDFI) and a commercial real estate group to create a $20 million Opportunity Zone fund.

John Hope Bryant, an entrepreneur and the founder of the economic empowerment nonprofit Operation HOPE has been pushing for CRA reform. He recently went on a five-city tour over the summer with Comptroller of the Currency Joseph Otting to discuss potential changes. Bryant said that adding Opportunity Zones to the CRA modernization can only help encourage lending in low-income communities.

“You are creating a magnet and pointing capital and equity there and saying, ‘Go and invest there.’”

Have something to say about Opportunity Zones? You can reach Keith Larsen at kl@therealdeal.com

The post The obscure reason banks will finally embrace Opportunity Zones appeared first on The Real Deal Miami.

Faith Hope Consolo (Credit: Getty Images, iStock)

Faith Hope Consolo (Credit: Getty Images, iStock)

She positioned herself as a child of privilege, a product of the right schools and someone very much at home in the tony world of luxury New York City real estate.

But in reality, Faith Hope Consolo grew up on a dead-end street in Brooklyn’s Sheepshead Bay, born to a father with an extensive criminal background and a mother who was a hairdresser, according to the New York Times. And Consolo, who chaired Douglas Elliman’s retail division until her death in 2018 and brought top global brands to the city’s real estate market, fiercely guarded those secrets from nearly everyone in her life, including her close friends and business partners.

Her father was not a real estate executive who died when she was a toddler but a serial swindler who lived to 94 and did time in a federal penitentiary in Kansas and at Alcatraz for gambling, armed robbery and dealing heroin, the Times reported. Her mother was not an acclaimed child psychiatrist as Consolo claimed, but a hairdresser at a Downtown Brooklyn department store.

She also claimed that she had started both a modeling agency and an interior design business on the West Coast in the 1970s. The newspaper could find no records to corroborate that.

Joseph Aquino, Consolo’s longtime business partner at Elliman, never knew the truth about his “work wife” — including that the two grew up just blocks from each other and that Consolo attended the school of the church where Aquino had his confirmation.

In 2016, Aquino and Consolo got into a bitter legal dispute over what he claimed was her lavish spending.  (The suit was settled.) And throughout her career, Consolo was dogged by accusations from competitors that she was addicted to the press and often took credit for others’ deals.

The Times was alerted to the fabrication by a childhood friend of the late broker.

Although Consolo’s pedigree was fake, many of her achievements were real: She brokered deals for top international brands such as Cartier, Zara and Louis Vuitton, and represented landlords such as Harry Helmsley, Larry Silverstein and Donald Trump.

“She really changed the retail marketplace,” Rudin Management’s Bill Rudin told the newspaper. “Her street smarts and entrepreneurial spirit and flair — even the way she dressed and communicated — attracted an amazing clientele, some of the great international brands, to New York.” [NYT] — Georgia Kromrei

The post The real story behind Faith Hope Consolo’s glamorous life appeared first on The Real Deal Miami.

The Abaunza Group

The Abaunza Group

A top producer at One Sotheby’s International Realty is rebranding and started her own team.

Saddy Abaunza, known by her married name as Saddy Delgado, is partnering with her sister, Valeria Kelly, and her mother, Saddy L. Abaunza to launch the abaunza.group, based out of One Sotheby’s Coral Gables and Brickell offices.

The team also includes Ani de la Fe, Daisy Blanchard, Hector De La Canal, Raiza Carnevalli and Emilia Torres.

Abaunza, the daughter, has closed $263 million in sales over her career, according to MLS data pulled by One Sotheby’s. Abaunza, 55, got her license at 18 years, but said she launched her brand after she got divorced at 33. She’s worked with celebrity buyers and sellers who include Gloria and Emilio Estefan, Sylvester Stallone and Dwyane Wade.

Abaunza has been known throughout her career as Saddy Delgado, but said she has slowly been changing her name on social media. Launching the new team, which includes rebranding all marketing materials, will mark the end of that, she said.

Kelly has closed $45 million in sales over her 13-year career. Kelly said that while they helped each other with various deals, the three family members worked independently.

Together, “we’ve got the three generations, we reach all kinds of buyers,” Kelly said. The group focuses on luxury single-family and condo sales in Miami Beach, Fisher Island, Coconut Grove, Coral Gables, Gables Estates and Pinecrest.

In 2019, Abaunza, opened a satellite office in Mexico City. The new group is also offering commercial services, Abaunza said.

“I’m getting a lot of commercial clients, especially from Latin America, since they’ve created all this wealth we’re guiding them on income-producing commercial properties,” she added.

The post Top producer at One Sotheby’s forms new team appeared first on The Real Deal Miami.

(Illustration by Daniel Gray-Barnett)

UPDATED January 7, 11:45 a.m.: At the corner of Malaga Avenue and Ponce de Leon Boulevard, work crews recently topped off a Class A office building and an apartment tower that make up the first phase of the Plaza Coral Gables, the largest commercial project in the city’s history. Agave Holdings, a commercial real estate firm that includes the family behind the Jose Cuervo spirits brand, is making a $600 million gamble that Coral Gables can absorb 2.25 million square feet of new construction that entails a 242-key hotel, 174 apartments, 161,000 square feet of retail space, roughly 450,000 square feet of office space and more than 2,000 parking spaces.

In a city that once kept a tight leash on development, Agave’s gargantuan complex would have been enough for one cycle. Instead, the City Beautiful is in the midst of a boom that is adding roughly 1,500 apartments, approximately 800 hotel rooms,  more than 500,000 square feet of office space and more than 300,000 square feet of retail by 2022. Other developers such as NP International, Terranova Corporation and Hersha Hospitality are building large and medium-scale mixed-use projects incorporating hotels and apartments in a 1.5-square-mile area between U.S.1 and Miracle Mile, representing nearly $1.5 billion in new construction.

It’s a development wave predicated on attracting new residents, corporate tenants and travelers who want to avoid the traffic-congested confines of downtown Miami, its neighboring Brickell district and unincorporated south Miami-Dade. The Real Deal interviewed brokers and developers in Coral Gables to find out how each market segment will be able to absorb so much new inventory in a two-year window.

Taking office

The Plaza Coral Gables project is already having an impact on local office leasing, according to Maggie Kurtz, a senior vice president with CBRE’s Miami office. Agave Holdings’ high asking rates for the 290,000 square feet of office space due for early-2020 completion come at a time when rates are already rising due to a number of office building sales in the past year, she said.

“They are quoting $55 to $57 a square foot,” she said of Agave’s project. “As a result, others that were quoting around $40 are now quoting $48 to $50.”

According to an Avison Young market report from the third quarter of 2019, the local office leasing rate averaged $40.34, while downtown Miami’s rate hit $42.96 and Brickell’s was $47.31.

Historically, Coral Gables is one of the healthiest office markets in South Florida, Kurtz said.

“The Gables has always fared well and has one of the lowest vacancy rates,” she said. In the third quarter of 2019, that rate was 8.2 percent, compared to 9.2 percent in Brickell and 19.6 percent in downtown Miami, the Avison Young report found.

But Kurtz is concerned that new Plaza Coral Gables office space may overtake demand. “It’s a decent amount of office space to come online at the same time,” she said.

Still, Coral Gables is an attractive city for owners of small to medium-sized companies relocating their businesses. Two local office buildings CBRE handles leasing for have seen an uptick in leasing by financial services and law firms that have left Miami’s central business district. “They are tired of the traffic and the high rents,” Kurtz said.

In addition, more wealth management firms from the Northeastern U.S. are relocating to Coral Gables. “It all has to do with our beautiful weather, and the taxes are just too much in New York and Connecticut. It is as simple as that,” Kurtz said.

Phil Gutman, president of Brown Harris Stevens’ Miami office, has noticed a similar trend at the office condo project Ofizzina at 1200 Ponce de Leon Boulevard, where the brokerage is handling sales.

“We started with CEOs who live in Coral Gables who were fed up with the traffic situation in downtown and Brickell,” he said. “Now we are getting people from New York who have figured out the ramifications of tax reform has made Florida a much more attractive place.”

The multifamily way

A steady rise in the local population has kept multifamily developers confident about their projects. In the first 10 months of 2019, more than 34,300 individuals migrated to Miami and Coral Gables. That’s nearly 5 percent more than in the same period in 2018, according to a third-quarter multifamily report from Berkadia.

Over that same time period, developers delivered 797 apartments in Coral Gables, while the market absorbed 680 units, or 85 percent of them, Berkadia found. The average monthly rent in Coral Gables was $1,892, the third highest among 22 South Florida submarkets.

Considering that employers also added 15,200 jobs to local payrolls in 2019, developers like Henry Torres, principal of the Astor Companies, believe multifamily projects will continue to be a sure bet.

“These are people who don’t want to drive to work,” he said. “They want to be able to get to their jobs in 10 minutes or less.”

Astor developed the 227-unit Merrick Manor condominium at 301 Altara Avenue. Due to the slowing luxury condo market, the firm converted 50 of the units into rentals.

“We leased all of them within a couple of months after listing them,” Torres said. “A lot of people are still hesitant to buy, but they will rent a nice condo fairly quickly.”

NP International is more than a year into construction of Gables Station, a transit-oriented development near U.S. 1 and Ponce de Leon Boulevard with 444 apartments, 66 hotel rooms and 20,000 square feet of retail. One of the project’s three structures will house 400 beds managed by Ollie, a company that provides co-living studios and shared suites with hotel-like services. Just a few blocks south on U.S. 1, the firm is also building Paseo de la Riviera, an apartment-and-hotel project spanning 2.66 acres.

The neighborhood amenities of Miracle Mile and the Shops at Merrick Park are sweeteners for renters seeking a relatively low-key central location, Torres said.

“There are three different golf courses and everything is close by, including the airport,” Torres said. “And it’s not the hustle-bustle of downtown Miami, where you stand in traffic for 20 minutes to travel three blocks.”

Resto-retail

Coral Gables has been teaming with new restaurants and casual dining spots ever since the completion of a Giralda Avenue pedestrian mall.

Close to a dozen more new eateries have opened in storefronts along Giralda and Miracle Mile, with nearly a dozen more slated for 2020 openings, said Venny Torre, a custom home developer who is president of the Coral Gables Business Improvement District, or BID.

According to Colliers International’s Q3 South Florida retail report, Coral Gables has a retail vacancy rate of 3.7 percent, compared to 11.3 percent in Brickell and 22 percent in downtown Miami. The averaging asking rent of $49.51 is about $20 cheaper than Brickell but $3 more expensive than downtown Miami.

The streetscape project, coupled with a BID marketing campaign promoting downtown Coral Gables, has helped property owners along Miracle Mile and Giralda fill empty spaces, Torre said.

“A lot of developers are seeing the benefits,” he said. “There is more activity and people downtown. You see it just driving by Miracle Mile.”

Meanwhile, projects like the Plaza Coral Gables will bring in entertainment-style retail that will attract more people to the city’s downtown, Torre said. For instance, bowling and entertainment company Pinstripes has inked a lease for 30,000 square feet on two stories of the project.

“There is already a great amount of employment downtown that is driving development,” Torre said. “You already have a good number of people who work and live here. It is only going to get bigger.”

Correction: This story has been amended to reflect that some retailers previously reported as opening on Giralda and Miracle Mile are not yet opened.

The post Can Coral Gables absorb all the new development underway? appeared first on The Real Deal Miami.

Meadowlands Arena (Credit: Google Maps and iStock)

Meadowlands Arena (Credit: Google Maps and iStock)

Of all of the creative adaptive reuse projects that have sprung up across the country over the last several years, the most creative might be sitting next to Metlife Stadium in the swamps of East Rutherford, New Jersey.

Meadowlands Arena, the former home of the New Jersey Nets and New Jersey Devils, has new life as a soundstage for entertainment giant NBCUniversal. NBC has invested more than $750,000 since mid-2018 to turn the defunct stadium, also called the Izod Center, into a soundstage for its prime-time dramas, according to the New York Times.

Several vacant arenas across the country have been transformed for other uses, but the high ceilings and ample open space are ideal for the needs of television production. The Meadowlands Arena’s sky boxes were transformed into offices and the former Nets locker room was turned into the headquarters of the costume department.

The New York metro area has becoming increasingly popular as a production locale, thanks partly to the viewing public’s seemingly insatiable appetite for content. NBC is leasing the disused stadium, which closed in 2015, from New Jersey’s state sports authority, fitting with Governor Phil Murphy’s initiative to make the state the next big thing in television and film production.

NBC has the arena through at least March. The ultimate fate of the stadium is uncertain, though. Meadowlands Chamber of Commerce president Jim Kirkos has sent proposals to Gov. Murphy to turn it into a destination venue for an act like Cirque du Soleil or repurpose it as a convention center. Both would fit into a wider plan to revitalize the site, anchored by Triple Five’s neighboring American Dream mall. [NYT]Dennis Lynch

The post NBC spends $750K to transform arena in New Jersey swamp appeared first on The Real Deal Miami.

Kansas City (Credit: iStock)

Kansas City (Credit: iStock)

Denizens of the Midwest and the South, take heed: tech bros in zip-up hoodies may be at their standing desks, searching for their perfect startup office in your city right now.

Affordability, less competitive markets for talent, and liveability all make metros like Kansas City, Oklahoma City, and St. Louis ripe for tech industry growth, a new study from Zillow suggests. The study measured those and other factors that could appeal to startups and growing tech companies in 42 metro areas around the country.

Traditional tech markets like San Francisco and Seattle, as well as large cities that have experienced rapid growth recently in the sector, including Los Angeles and New York, were at the bottom of the list.

“Rapid housing cost growth in these areas and a saturation of firms competing over limited pools of tech talent may instead push tech companies to shift their gazes elsewhere,” the report said.

By comparison, the cities that landed on the top of the list tend to have a healthy stock of lower-priced homes, growing economies, and less drastic shortages of college-educated workers.

The study also measured how “hot” each city was by comparing the number of locals searching for homes outside that metro area with the number of outsiders searching for homes within it. By that definition, Las Vegas, Jacksonville, and Tampa ranked the “hottest” markets in the country.

Generally, more people are looking to get out of traditional tech hubs than they’re trying to get in — the Bay Area, New York, and Washington, D. C. all have between four and five people looking for homes outside those areas for everyone one person looking for a home in those areas.

Commute times and internet speeds also factored into the ranking. Kansas City, Zillow’s top pick for growth, has some of the best internet infrastructure in the country and relatively short commutes. Raleigh and Salt Lake City also ranked high in those respects. [Zillow]Dennis Lynch

The post Silicon Prairie could be the Silicon Valley of the 2020s appeared first on The Real Deal Miami.

The Wizarding World of Harry Potter (Credit: Getty Images)

The Wizarding World of Harry Potter (Credit: Getty Images)

Dragons, magic wands, and whimsy are rare topics for discussion at New York City community board meetings, but they were this month.

After a Tuesday night debate, Manhattan Community Board 5’s landmark committee voted against a proposal to build an elaborate Harry Potter-themed retail store — that includes a fiberglass dragon — on Broadway in the Flatiron District, according to the New York Post.

The proposal came from Warner Bros. Entertainment, which wants to add six “wand-style” flagpoles along with the dragon to the facade of the landmarked Mortimer Building, a late 19th century office building a block away from the Flatiron Building.

The proposal is part of Warner Bros. planned “Wizarding World” store and attraction. The company also wants to serve food and drinks, set up a service window on Broadway, and create a sidewalk cafe.

But the committee was most concerned about the plans for the nearly 160-year-old building’s facade. Allowing the dragon and the flagpoles would open the floodgates for retailers to engage in all sorts of aesthetic perversions, some on the board said.

“If Harry Potter can put a dragon, then Nike can put a shoe, then a bakery down the block could put a croissant, and then where do you stop?” said committee chair Layla Law-Gisiko.
The committee will send its recommendation to the full community board for a vote later this month. The issue then goes to the city’s Landmarks Preservation Commission for a binding vote. While community board recommendations aren’t themselves binding, the LPC and local city councilmember typically give weight to them. [New York Post]Dennis Lynch

The post Harry Potter-themed store probably won’t get its dragon appeared first on The Real Deal Miami.

Seattle, Washington (Credit: iStock)

Seattle, Washington (Credit: iStock)

In the market for an affordable home or a house on the West Coast? Good luck, there aren’t many out there.
There were fewer homes for sale across the country in December than there has been in three years, according to a National Association of Realtors count cited by Mansion Global. Overall supply across the U.S. fell 12 percent year-over-year last month and drops were recorded in every price segment.

The report found the dearth in listings was more significant at lower price points, as low mortgage rates motivate buyers to snap up more affordable homes. Since December, mortgage rates have fell below 3.70 percent.
NAR’s lowest price segment — under $200,000 — saw an 18.1 percent drop in listings year-over-year, while homes between $200,000 and $750,000 dropped 10.2 percent. Listings over $1 million fell 4.4 percent.

Inventory fell in 47 of the nation’s 50 largest metro areas and the drop was most significant in tech-oriented West Coast markets — the San Jose, Seattle, and San Francisco metro areas each saw 30 percent declines in listings. Median prices rose 7.5 percent, 5.8 percent, and 5.7 percent, respectively.

The three U.S. metros with more homes on the market were San Antonio, Minneapolis, and Las Vegas. All three metros saw median listing prices drop year-over-year.

The U.S. housing market is likely to continue to tighten, as the level of new listings also fell 11.2 percent year-over-year. [Mansion Global] – Dennis Lynch 

The post Good luck buying an affordable home in these US cities appeared first on The Real Deal Miami.

Pope Francis (Credit: WIkipedia, iStock)

Pope Francis (Credit: WIkipedia, iStock)

Catholic church dioceses across the country are moving around their real estate portfolios and using Chapter 11 bankruptcy to protect assets in sex abuse lawsuits.

Over the last decade and a half, the U.S. Catholic Church has shielded more than $2 billion worth of assets from people who were abused by clergy, according to a Bloomberg Businessweek report. In some cases, that has significantly reduced the amount of money available to compensate those victims.

More than 20 dioceses have chosen to go the bankruptcy route since 2004 rather than face lawsuits.

Before filing for bankruptcy, many of those dioceses reorganize their structures and reclassified assets or transferred assets to separate entities. Some have broken off individual parishes into separate entities and transferred assets to them.

In 2012, the Archdiocese of Santa Fe began individually incorporating parishes and transferring assets to entities legally separate from itself. The archdiocese filed for bankruptcy in 2018 while facing several dozen abuse suits that later climbed to 375 claims.

The archdiocese is arguing in bankruptcy court that it was worth just $49 million and that another $178 million worth of assets associated with the archdiocese was owned by parishes or held in trust or foundation, so isn’t part of its estate.

Some bankruptcy judges have sided with victims. The Archdiocese of Milwaukee put $57 million into a trust fund in 2007 for cemetery maintenance, in what correspondence with the Vatican suggests was meant to shield it from legal claims. Victims’ lawyers successfully argued that money should be included in the archdiocese assets, making that money eligible to be used to compensate victims. [Bloomberg Businessweek] – Dennis Lynch

The post Unholy real estate strategy: Catholic churches shuffle properties to shield billions from sex abuse victims, report says appeared first on The Real Deal Miami.

(Credit: iStock)

(Credit: iStock)

Real estate seems the best way to amass a fortune in China, according to the country’s elite.

A UBS Group AG survey of 76 wealthy families found that 30 percent of respondents said they built their fortunes through real estate, twice the percentage of wealthy families elsewhere in the world, according to Bloomberg. Consumer discretionary and industrials were the next most common means of wealth-building in the country.

The average net worth of respondents was around $943 million and most families seem intent on accruing more wealth. Just 13 percent of respondents said they’ve adopted preservation-oriented strategy. The other 87 percent of respondents were split between growth-oriented or balanced approaches.

More wealthy families are founding or joining family offices to manage those fortunes. About a third of families manage their fortunes through single-family offices and another 16 percent manage through multi-family offices.

Family offices were historically not as common in China as they are in Western and some other Asian countries, so finding talent and experienced service providers is said to be a challenge.

Still, those family offices are doing well, earning an average return of 11 percent, twice the global average and above the 6.2 percent average in the Asia Pacific region.

While real estate is the basis for many fortunes in China, private equity performs better — direct private equity investments earn a whopping average return of 19 percent and private equity fund investments earn an average return of 15 percent.

Direct real estate investments are the next-best-performing assets with 14 percent returns, while real estate investments trusts bring in nine percent returns on average. [Bloomberg] – Dennis Lynch

The post Real estate created the Chinese elite. Here’s what happens next appeared first on The Real Deal Miami.

Cheung Chung-kiu and 2-8a Rutland Gate in London (Credit: Wikipedia, iStock)

Cheung Chung-kiu and 2-8a Rutland Gate in London (Credit: Wikipedia, iStock)

In the competition between the U.S. and the U.K. for the priciest home sale, the British may soon have the upper hand again.

A 45-room mansion in London’s Knightsbridge neighborhood is in contract to be sold for more than 200 million pounds, or $262 million, Bloomberg reported. Chinese property magnate Cheung Chung-Kiu, whose property firm briefly held the record for most expensive London office purchase, in 2017, is the buyer.

Elsewhere in the world, luxury properties in markets like Hong Kong and Monaco have traded for more than $300 million — heights which New York and London have yet to reach.

But upon closing, the property at 2-8a Rutland Gate would be the most expensive home ever sold in the U.K., and would surpass the U.S. record established last year when hedge funder Ken Griffin shelled out $238 million for the quadplex penthouse at Vornado Realty Trust’s 220 Central Park South.

The previous record home sale in the U.K. was for the 300-year-old Park Place estate in southern England, which fugitive Russian oligarch Andrey Borodin bought for 140 million pounds in 2012. The previous U.S. record was held by Jana Partners’ Barry Rosenstein, who paid $137 million for an estate at 60 Further Lane in East Hampton in 2014.

The Knightsbridge property, which overlooks Hyde Park, was previously home to the late Saudi crown prince Sultan bin Abdulaziz Al Saud and had been vacant since his death in 2011. Former Lebanese prime minister and billionaire businessman Rafic Hariri, who was assassinated in 2005, also once resided at the property.

Along with a swimming pool, private health spa and gymnasium, the mansion’s amenities include bulletproof windows.

Cheung may divide the property into luxury apartments or keep it as a single house with 62,000 square feet of living space, which is larger than an American football field. The seven-story building was converted from four homes into one massive residence in the 1980s, according to the Guardian.

Born in the city of Chongqing in western China in 1964, Cheung moved to Hong Kong in 1980 and got involved in the local real estate industry in the 1990s. In 2019, his Hong Kong–listed property company bought London’s Leadenhall Building, locally nicknamed the Cheesegrater, for $1.48 billion, making it the city’s most expensive office building for a time — although that record was broken by another Hong Kong firm months later.

Gary Hersham, the founder of Beauchamp Estates, had the listing for the Rutland Gate property. Elie Chamat, a Swiss wealth manager who manages the property on behalf of the previous owner’s heirs, told Bloomberg that the deal represents a bright spot for London’s challenging super-luxury market. [Bloomberg] — Kevin Sun

The post London megamansion sale bests NYC’s $238M condo record appeared first on The Real Deal Miami.

The agreement was signed today at UBC’s New York Council offices in Manhattan by Nathan Blecharczyk, Airbnb co-founder, Chief Strategy Officer, and Frank Spencer, General Vice President of UBC.

The agreement was signed today in Manhattan by Nathan Blecharczyk, Airbnb co-founder and chief strategy officer (right), and Frank Spencer, general vice president of the United Brotherhood of Carpenters.

Airbnb has partnered up with one of North America’s biggest trade unions as it deepens its foothold in real estate development.

Under the agreement, signed Friday in Manhattan, the startup agreed to use labor from the United Brotherhood of Carpenters and Joiners of America on real estate projects in which it invests.

Strategically, the alliance is a win for Airbnb as it looks for political allies following a major loss in Jersey City last November and statehouse and City Hall struggles in New York ahead of the company’s anticipated IPO this year.

Airbnb’s lobbying in New York often runs into opposition from the Hotel Trades Council, which unlike the startup has deep roots in city and state politics. But building trades unions also have political strength here, and its deal with the carpenters could give it some bona fides with organized labor. However, the carpenters’ New York affiliate broke ranks with other construction unions in 2018 by making a deal with the Related Companies for work at Hudson Yards while the unions’ umbrella was trying to reach an agreement with Related for all of the locals. A compromise was eventually reached after much strife.

Airbnb has been working with developers, including RXR Realty, and companies such as Lyric and Zeus for some time. It is now looking to increase its involvement by investing in developments to boost the number of short- and long-term rental units nationwide.

A representative said in a statement Friday that under the partnerships, “Airbnb does not own, lease, or operate any real estate projects, but instead works with partners to ensure new developments are optimized for home sharing.”

As part of the new agreement with the carpenters, when Airbnb invests in developments, it will partner with developers committed to using contractors employing the union’s workers. The agreement guarantees a minimum of 10 projects over the next three years.

Louis Coletti, president and CEO of the Building Trades Employers’ Association, whose contractor members are heavy users of union labor, called the deal a vote of confidence. “It sends a signal that owners are looking at who can best complete the job in a timely fashion, on schedule, on budget, at a quality I expect,” he said.

It is not the first time Airbnb has hooked up with unions. In 2018 it partnered with the Australian Transport Workers’ Union to promote fair pay and better labor standards. It announced a separate pilot in Australia with cleaners’ union United Voice the following year.

Airbnb co-founder and chief strategy officer Nathan Blecharczyk said in a statement Friday that the latest agreement would create valuable work for union members. The company declined to address the political significance of the alliance.

Write to Sylvia Varnham O’Regan at so@therealdeal.com

The post Airbnb hammers out partnership with carpenters’ union appeared first on The Real Deal Miami.

6205 Blue Lagoon Drive and Ivy Realty Co-CEO Russell Warren (Credit: Google Maps)

6205 Blue Lagoon Drive and Ivy Realty Co-CEO Russell Warren (Credit: Google Maps)

Ivy Realty sold an office building in the Blue Lagoon office park near Miami International Airport for $30.2 million, almost doubling its last sales price.

Montvale, New Jersey-based Ivy Realty sold the 129,444-square-foot office building at 6205 Blue Lagoon Drive for $233 per square foot, records show. JB Waterford LLC, which is tied to William Holly of Coral Gables, purchased the property.

The building, known as the Waterford Centre, sits on a 4-acre lot. Ivy purchased the property for $16.25 million in 2012.

The Class A office building was built in 1999 and is part of the same office park where Burger King has its headquarters. Lennar Corp. is also planning to move its headquarters to the office park.

Last week, Holly purchased the former headquarters of Shoma Development in Doral.

Ivy Realty is active in South Florida. In November, the company sold two Deerfield Beach office buildings for $27.65 million. In February, Ivy Realty sold four commercial buildings totaling about 247,000 square feet at 712 South Military Trail to Brookfield Property Partners for $36.3 million.

The post Ivy Realty sells Blue Lagoon office building for $30M appeared first on The Real Deal Miami.

Little Havana assemblage and Carlos Fausto Miranda

Little Havana assemblage and Carlos Fausto Miranda

UPDATED, Jan. 10, 11:25 p.m.: The owners of Presidente Supermarkets are looking to sell a 2.5-acre assemblage of land in booming East Little Havana, The Real Deal has learned.

Property records show Eight & First LLC owns the site at 702 West Flagler Street, which hit the market for $22 million. The company is controlled by Ana V. and Pedro O. Rodriguez, who own the grocery store chain.

The development site is on the market with Carlos Fausto Miranda, the broker and owner of Fausto Commercial, and Alessandro Lima, also with Fausto Commercial. The land is zoned T-6-12-O which allows for 386 units and up to 771 units with density bonuses. Retail, hotel, office and residential can be built on the properties.

Miranda said the owners are looking to sell due to a change in strategy. They originally planned to build a store, but are now expanding their chain “by focusing on solely renting stores in existing sites,” he said.

The supermarket chain has about 50 locations in South Florida. In November, two men were convicted in the killing of Camilo Salazar, a hit allegedly ordered by one of Presidente’s co-founders and a former owner of some stores, Manuel Marin.

Marin did not appear to be associated with the Little Havana land.

According to property records, Eight & First LLC paid $5.63 million for the assemblage in 2013. The seller was an entity led by NBA legend and entrepreneur Magic Johnson, which incurred a heavy loss: it paid more than $11 million for the assemblage six years earlier.

Two new residential projects were recently completed nearby: Havana Lofts, a condo building at 605 West Flagler Street, and Riverview One Apartments at 645 Northwest First Street.

Miranda said he’s recently sold a handful of sites on Flagler Street, including 1860 West Flagler Street for $2.49 million and 1782 West Flagler Street for $1.65 million.

He said the neighborhood is positioned to fill the demand for workforce housing.

Mast Capital is building a 688-unit apartment complex at 1001 Northwest Seventh Street.

Also along the Miami River, Avra Jain is partnering with investors who include Bob Zangrillo to build a mixed-use hotel and residential project with luxury condos.

Correction: An earlier version of this story incorrectly identified the property’s zoning, as well as details surrounding a former owner of Presidente. 

The post Presidente Supermarkets owner lists Little Havana assemblage for $22M appeared first on The Real Deal Miami.

Sandeep Mathrani (Credit: iStock)

Sandeep Mathrani (Credit: iStock)

Sandeep Mathrani is stepping down from his role as CEO of Brookfield Properties’ retail group.

Mathrani sent an email to colleagues this week saying the “time has come to embark on the train to the next stop,” Commercial Observer reported.

The email did not give any further details about why Mathrani is leaving.

Mathrani and Brookfield did not immediately respond to CO’s requests for comment.

Mathrani became head of Brookfield’s retail division after Brookfield acquired the mall REIT GGP in August of 2018 for $15 billion. Mathrani had been the CEO of GGP, which was then the country’s second-largest mall owner. [CO]Rich Bockmann

 

The post Sandeep Mathrani is leaving Brookfield appeared first on The Real Deal Miami.

 Don Shula and the Four Seasons Residences at The Surf Club

Don Shula and the Four Seasons Residences at The Surf Club (Credit: Getty Images)

Former Miami Dolphins head coach Don Shula purchased a luxury condo at the Four Seasons Residences at The Surf Club.

Property records reveal that a Delaware company that lists Shula’s Indian Creek Village address, paid $5.5 million for unit 205 in the south building of the Four Seasons development, at 9011 Collins Avenue in Surfside. The deal for the four-bedroom, 3,925-square-foot unit closed on Dec. 30.

The Pro Football Hall of Famer lives with his wife, Mary Ann Stephens, in a waterfront estate on Indian Creek Island. It was previously owned by Mary Ann and her ex-husband, oilman and investment banker Jackson T. Stephens.

Shula, who turned 90 last week, played for Cleveland Browns, Baltimore Colts, and Washington Redskins, but gained fame for his time as head coach of the Dolphins. He led the team to two Super Bowl victories and the only perfect season in N.F.L. history.

At the Four Seasons, Shula and Stephens will be rubbing elbows with buyers who include former head coach and current Miami Heat president Pat Riley and his wife, Christine; Harrison LeFrak and Richard LeFrak, in separate deals; former Publix CEO Charles Jenkins Jr.; billionaire real estate and casino tycoon Neil Bluhm; and Groupon founder Eric Lefkofsky, who paid nearly $31 million for a penthouse in the south tower in 2018.

Fort Partners developed the Surf Club, which includes 150 condo units, a 72-room Four Seasons hotel, a Le Sirenuse restaurant and a Thomas Keller restaurant. The oceanfront project was designed by New York architect Richard Meier along with Miami-based architect Kobi Karp.

Fort Partners also owns land next door to the Surf Club that it plans to develop.

The post Dolphin great Don Shula scores condo at Surf Club appeared first on The Real Deal Miami.

Citizen Rascoff. Spencer Rascoff is going into journalism publishing (Credit: Getty Images and iStock)

Citizen Rascoff. Spencer Rascoff is going into journalism publishing (Credit: Getty Images and iStock)

Spencer Rascoff, who co-founded Zillow and was its CEO for nearly a decade, is the ultimate tech industry insider.

Rascoff’s newest venture then, doesn’t seem like such a leap.

Nearly a year after he left as head of Zillow, Rascoff will launch a news site dedicated to covering the Southern California technology industry, with a focus on Los Angeles. Rascoff introduced the site, dot.LA, in a press release on Thursday. The Los Angeles Times first reported the story.

Calling it a startup, Rascoff said dot.LA just closed a $4 million seed round from a few dozen investors, including, presumably some local tech and venture capital companies dot.LA will report upon. They include: Snap Inc., GeekWire, and Jam City, as well as venture capital firms like Greycroft Partners and Upfront Ventures. Brendan Wallace, co-founder of VC firm Fifth Wall, is an investor; as is Brad Inman, founder of real estate news site Inman; Sean Rad, co-founder of Tinder; and Seattle Seahawks quarterback Rusell Wilson, and his wife, the singer Ciara.

Rascoff told the Times the startup will be “singularly focused on the greater L.A. area, and that focus will allow us to attract an audience and a brand more easily than general interest national tech press.” He added that the “L.A. tech community is big enough and the business community is big enough to support this financially.”

Dot.LA’s revenue model will rely on online advertising, sponsorships and community events, and will not be subscription-based. Rascoff will be the publication’s executive chairman and co-founder, while former L.A. Times entertainment editor, Joe Bel Bruno, will be the editor; five reporters have been hired.

Rascoff founded travel website Hotwire.com, before co-founding Zillow in 2005. He took over as CEO in 2010 and presided over a period of expansion in which Zillow acquired Trulia and New York City real estate search engine StreetEasy, among other companies.

Zillow’s first CEO, Rich Barton, replaced Rascoff early last year as part of a chain of several shake-ups. Since then, Zillow has upped the activity in iBuying, which Rascoff began. [LAT]Matthew Blake 

The post This just in: Zillow co-founder launches LA-focused tech industry news site appeared first on The Real Deal Miami.

111 Northwest 183rd Street (Credit: Google Maps)

111 Northwest 183rd Street (Credit: Google Maps)

TM Real Estate sold an office building in Miami Gardens that houses the Youth and Family center nonprofit.

The Coral Gables-based investment group sold the 72,407-square-foot office building at 111 Northwest 183rd Street for $6.1 million, or $84 per square foot, records show. Washington Square GP Management, which is managed by Zachary Preminger of Palmetto, Florida, bought the property.

The Class C office building, known as Washington Square, sits on a 3.5-acre lot. It last sold as part of a three-property deal in 2015 for $12.6 million.

TM Real Estate Group was founded by Matthew Pellar. In 2017, the company sold a 468-unit residential development at 10 Northeast 188th Street near Miami Gardens for $50 million.

Investors are increasingly looking to acquire industrial and office properties in the Miami Gardens area.

In September, private equity giant Blackstone bought two industrial properties in Miami Gardens for $13.6 million.

In July, Longpoint Realty Partners acquired an industrial park at 1400 Northwest 159th Street in Miami Gardens from ProLogis for $25 million.

The post TM Real Estate parts with Miami Gardens office building appeared first on The Real Deal Miami.

Ron Shuffield and Oscar Arellano

Ron Shuffield and Oscar Arellano

A top Fortune International Realty agent joined Berkshire Hathaway HomeServices EWM Realty, The Real Deal has learned.

Oscar Arellano, who was with Fortune for 17 years, joined EWM on Wednesday. He leads a group of five additional agents and an administrative person, all of whom are joining him at EWM.

Arellano said he’s closed more than $150 million in sales over the past five years. He said he was looking for a change, and spoke highly of his former employer. Arellano got into real estate in 2003 when he joined Fortune and said that the brokerage “has been the best to me.” Edgardo Defortuna leads Fortune International Group; Walter Defortuna heads Fortune International Realty.

Walter Defortuna wished Arellano all the best in his future endeavors. “Oscar has been a longtime member of the Fortune family and it has been a pleasure to watch his career develop and evolve,” he said in a statement.

Arellano said he typically closes between $25 million and $40 million in sales per year, focusing on single-family homes in Coral Gables starting in the $500,000s and into the millions of dollars.

The group will be based at EWM’s Coral Gables/South Miami office at 550 South Dixie Highway.

EWM joined the Berkshire Hathaway HomeServices network last year, though it was purchased in 2003 by HomeServices of America Inc., the parent company of Berkshire Hathaway HomeServices.

Arellano interviewed with other brokerages, but said EWM was a better fit for him. “I’ve always highly respected [EWM President] Ron Shuffield. I’ve never heard anyone say anything bad about him,” Arellano said. “Their agents are very, very professional.”

The post Longtime Fortune International Realty agent joins Berkshire EWM appeared first on The Real Deal Miami.

Here are some real estate worth attending next week:

Host: CRE Finance Council
Date: Jan. 13 to Jan. 15
Time: 7:30 a.m. to 11:30 a.m.

CRE Finance Council is holding its January Conference for 2020 at the Loews Miami Beach Hotel, 1601 Collins Avenue, from Jan. 13 to Jan. 15. This event will feature networking opportunities, along with discussions on the latest in commercial real estate legislation and the state of the industry heading into the new year. Speakers include Sean Ryan of JLL Capital Markets and Elizabeth King of J.P. Morgan.

Host: CREW Miami
Date: Jan. 13
Time: 11:30 a.m. to 1:30 p.m.

CREW Miami is hosting its luncheon on the 2020 Economic Forecast and Public Policy at the Four Seasons Brickell in Miami from 11:30 a.m. to 1:30 p.m. Come to this event for an economic and regulatory outlook from the perspective of the commercial real estate industry. Mary Moore Hamrick of Grant Thornton will be a speaker at the event.

Host: CIASF
Date: Jan. 16
Time: 11 a.m. to 1:30 p.m.

The Commercial Industrial Association of South Florida is holding its 2020 Industrial Market Report at the DoubleTree by Hilton Hotel in Miami from 11 a.m. to 1:30 p.m. This event will offer a trade fair and discussions on the prospects of the industrial space in 2020. Tom Dixon and Andrew Dixon of Dixon Commercial Real Estate will be among the speakers at the event.

To submit more industry events, please reach out to events@therealdeal.com.

The post Mark your calendars: These are South Florida’s top real estate events next week appeared first on The Real Deal Miami.

Craig Robins (Photos by Sonya Revell)

From paintings on the wall to colorful doodles on his desk, Dacra CEO Craig Robins’ office is a veritable gallery, where even the furniture carries an artistic pedigree.

Working out of the fourth floor of 3841 Northeast Second Avenue in the Miami Design District, Robins spearheaded the transformation of the once-gritty neighborhood into a luxury shopping, dining and cultural destination.

Robins, 56, began investing in the Design District in the mid-1990s, after success as one of the early South Beach redevelopers. With partners, he has developed hotels, offices, condos and retail spaces in Miami Beach, including some on Lincoln Road. “It was clear the next place Miami Beach needed to grow was over the bridge,” he said.

Robins and his partner, LVMH affiliate L Catterton Real Estate, each own 38.75 percent of the district, with Brookfield Property Partners owning another 22.5 percent.

Dacra and L Catterton have so far developed 1 million square feet in the Miami Design District, now occupied by 200 tenants, including retailers and restaurants. Robins said foot traffic in the district grew more than 40 percent in 2019 compared to the year before and that sales rose 30 percent year-over-year as well. Warby Parker and Alexander McQueen are among the retailers opening there soon.

The partners also hold development rights for another 2 million square feet in the neighborhood, where they can build hotels, offices and residential projects.

In addition, Robins is the chairman of DesignMiami/, an annual design fair in which galleries exhibit fine art, furniture and lighting during Art Basel. Ever since he began collecting during college in Barcelona, the Miami native has amassed a collection of more than 1,000 works, with 235 artworks on display in his companies’ two floors.

“Art defines what our business is about,” he said of his development firm, “because we invest equally in creativity and culture as we do in creative neighborhoods for creative businesses and creative people to work and live.”

Here are some of the most treasured items in Robins’ office.

Z-car
The late architect and designer Zaha Hadid designed the prototype for a car, which Robins bought from her dealer. “Zaha was a very close personal friend,” he said, calling her “one of the most creative talents of her generation in any category.”

A tree sculpture by Urs Fischer
“Urs is an extremely significant artist, and I collect him,” Robins said. Fischer designed the bus stop sculpture in the Design District, which features a skeleton lying down with a permanent puddle underneath it.

Portrait of Jack Tilton by Marlene Dumas
“He was a close friend and art adviser who passed away two years ago,” Robins said of Tilton. “It’s not only a beautiful work of art, but it’s a close friend who is no longer with us but is still with me.”

Solo cup sculpture by Paula Crown
Crown, who designed a large-scale Solo cup sculpture erected in the Design District in 2018, gave Robins the small cup sculpture as a gift

Doodles by Robins
He often draws on a pad when he’s on the phone. “Since law school, when I concentrate, I draw.”

Photo with his wife, Jackie Soffer
The photo was taken the day before their wedding at Blackberry Farm in Tennessee in 2015. Soffer is the CEO of Turnberry Associates, which has a majority interest in Aventura Mall. She is co-developing North Miami’s Solé Mia project with Richard LeFrak.

Clay chair by Maarten Baas
Baas won the DesignMiami/ Designer of the Year Award in 2009. “This is where I sit when I have meetings, little conferences,” Robins said.

The post Dacra’s Craig Robins on his most treasured office artwork appeared first on The Real Deal Miami.

WeWork co-CEOs Sebastian Gunningham and Artie Minson (Credit: Getty Images, iStock, Twitter)

WeWork co-CEOs Sebastian Gunningham and Artie Minson (Credit: Getty Images, iStock, Twitter)

WeWork appears to be pulling back in two major markets after a chaotic close to the year.

The number of leases it signed in New York and London slumped in the final quarter of 2019, Bloomberg reports, citing data from CoStar Group.

The 64,000 square feet of space WeWork leased in Manhattan represented the lowest in more than five years. In London, its 49,000 square feet leased were the fewest since the 2016 Brexit vote.

The slowdown followed a turbulent period after a botched initial public offering attempt in September led to the departure of CEO Adam Neumann, layoffs and a rescue package from SoftBank, which then took majority control of the humbled company.

In the lead-up to the planned IPO, the company signed a flurry of lease agreements, reportedly in an effort to impress investors. But the offering was canceled amid concerns over Neumann’s management and personal deal-making and the company’s forecast of losses as far as the eye could see.

Although the company’s new leaders are paring back its aggressive expansion, WeWork pointed out that it is still growing.

“Following a month of record new building openings in December, WeWork continues to grow our community globally, including in top markets like New York and London,” a spokeswoman told Bloomberg by email.

“The company is focused on profitable growth and expects to expand through new leases as well as asset-light strategies such as joint ventures and management agreements.”

[Bloomberg] — Sylvia Varnham O’Regan

The post WeWork lease-signings sink in New York and London appeared first on The Real Deal Miami.

Airbnb hosts gear up for Super Bowl LIV

Airbnb hosts gear up for Super Bowl LIV

Airbnb is gearing up to host more visitors in South Florida during Super Bowl weekend than during Art Basel.

Airbnb hosts have already picked up more than 34,000 bookings for the weekend of Super Bowl LIV, Jan. 30 to Feb. 2. That tops Art Basel weekend of Dec. 5-8, when the short-term rental company racked up 26,000 bookings, according to Airbnb spokesman Samuel Randall.
When Atlanta hosted the Super Bowl last year, the city experienced about 14,000 Airbnb bookings.

Yet, while hotels across South Florida are charging astronomical room rates for the weekend of the big game, Airbnb hosts will likely only experience small price gains, according to Airbnb representatives.

At an Airbnb hosting workshop Wednesday evening, Ben Breit, the company’s head of trust and safety communications, cautioned more than two dozen hosts to implement modest rate increases if they are planning to target visitors coming to South Florida for Super Bowl festivities. The game will be held Sunday, Feb. 2 at the Hard Rock Stadium in Miami Gardens.

“Where we see hosts get hurt is when they multiply prices by 20,” Breit said. “Those people don’t get booked. If you want to raise prices, that is your call. But I encourage you to be careful. Don’t go too crazy.”

Airbnb data shows that the average daily rate in Miami-Dade and Broward counties during Super Bowl weekend is currently $150 and $120, respectively. That’s much more affordable than the rates hotels are charging guests.

Hospitality data company STR recently released figures showing the average daily hotel room rate in the Miami market could reach more than $500 for the weekend of Jan. 31 to Feb. 2, which would be the most expensive in recent history for Super Bowl visitors.

Five-star packages at luxury properties such as 1 Hotel South Beach were listed at between $13,963 per night to more than $100,000 a night. Brokers listing mansions previously told The Real Deal that prices will jump by 50 percent to 75 percent more than the rate property owners typically charge during the prime winter season.

Airbnb’s Breit told workshop attendees they can fill the gap by providing reasonably priced accommodations. Miami-Dade and Broward county hosts are currently expected to make a combined $5.3 million during Super Bowl LIV weekend.

“We will see even higher demand after the NFC and AFC championship games and we know which two teams are going to play in the Super Bowl,” Randall said.

In addition to advising hosts on how much to charge guests, the workshop also offered them with tips on how to deal with rowdy guests who throw unauthorized parties, how to deal with a surge in attempted bookings, and a refresher course on Airbnb’s rules and regulations.

Paula Ugolini, the owner of Florida’s most popular Airbnb rental property listing, a 1920s cottage in Biscayne Park, said she increased her rate by a small amount for Super Bowl weekend. She ended up booking guests who are not attending the Super Bowl. “I adjusted my prices based on what the market was offering without getting too crazy,” she said. “I think it is a fair increase.”

The post Airbnb hosts score 34K bookings for Super Bowl LIV — more than for Art Basel appeared first on The Real Deal Miami.

Katerra CEO Michael Marks and one of the company's prefabrication homes in Saudi Arabia (Credit: YouTube, iStock) 

Katerra CEO Michael Marks and one of the company’s prefabrication homes in Saudi Arabia (Credit: YouTube, iStock)

A SoftBank-backed construction startup that has faced questions about its ability to deliver projects in the U.S., just secured a contract to build thousands of homes in Saudi Arabia.

The company, Katerra, confirmed to The Real Deal that it has entered a $650 million contract with the Saudi Arabia government to build 8,000 homes in the country. Katerra declined to comment further.

The Silicon Valley-based firm, said to be valued north of $4 billion, has a sprawling portfolio of construction projects across the United States, Saudi Arabia and India. Fueled by venture-capital funding, Katerra has grown at breakneck speed since launching in 2015. The company offers a vertically integrated model for construction, by providing design, software, pre-construction and construction services.

The Saudi Arabia contract, signed in recent weeks, is part of a larger, $40 billion non-binding agreement Katerra signed with the government in October 2018 to deliver hundreds of thousands of housing units in the country. As part of that broader agreement, Katerra signed its first contract in May 2019 to build 4,101 units in five regions of Saudi Arabia.

But back in the U.S., Katerra is grappling with a patchy track record of executing projects and maintaining clients. The company faced a turbulent end to 2019 after cutting 200 staff, closing a factory and a co-founder leaving the board.

Those events were the subject of an in-depth report by The Real Deal last month, which detailed how the company had walked from projects, faced massive cost overruns and struggled with logistical challenges with U.S. projects.

In December, Katerra told TRD that it had more than 300 projects in its pipeline, and was on track to complete more than two dozen by the end of 2019. However, the company could point to only one building it had delivered on time.

Its troubles echo issues at other SoftBank-backed firms, including co-working firm WeWork, hospitality startup OYO and robot food chain Zume Pizza, which seek to disrupt their respective industries by streamlining old-school business models with technology. Those firms have collectively laid off thousands of employees in recent months.

Despite Katerra’s setbacks, the company has doubled down on its international ventures. In addition to Saudi Arabia, the company merged with an India-based construction company to build projects there.

“Many people don’t realize Katerra is a diversified business with multiple revenue streams, of which international is a major component,” Travis Putnam, managing partner of Navitas Capital and Katerra investor, said in a statement. “We’re looking forward to continuing to support the business as it evolves and expands.”

Saudi Arabia has reason to ensure Katerra’s success: It is the largest backer of SoftBank’s $100 billion Vision Fund, which has poured almost $1 billion into the company. Last month, SoftBank acknowledged the connection and told TRD that it helps its “portfolio companies navigate entrance to new and promising markets, such as Katerra’s work for Saudi Arabia.”

Katerra previously told TRD that it plans to build two large factories in Saudi Arabia. As of last month, the company had two small, mobile factories up and running, with a third under construction. Katerra representatives indicated that it’s broken ground on one of the larger facilities.

In a December 2019 blog post, CEO Michael Marks said the company has “already delivered the first units” in Saudi Arabia, and by the second quarter of 2020 expects to deliver 10 to 15 homes per day.

The post Katerra signs $650M contract with Saudi Arabia to build 8,000 homes appeared first on The Real Deal Miami.

Royal Palm Residences and Ignacio Diaz

Royal Palm Residences and Ignacio Diaz

UPDATED, Jan. 9, 8:28 p.m.: A new luxury condo development will soon be rising near downtown Boca Raton amid a limited supply of high-end projects.

Group P6 launched sales for Royal Palm Residences, a 48-unit condominium with three nine-story buildings at the corner of Fifth Avenue and East Royal Palm Road. Royal Palm Residences will have three- to five-bedroom units ranging from 2,425 square feet to 7,168 square feet. Prices for the units range from $1.75 million to $3.9 million.

Each condo will have private elevator access directly into the unit, according to a release. The project is expected to break ground in June, with delivery in 2022.

One Sotheby’s International Realty is handling sales and marketing for Royal Palm Residences.

Ignacio Diaz, managing partner at Group P6, said the group is marketing the project to wealthy Northeasterners who are looking to move to Florida for tax advantages, as well as to estate owners in Boca Raton. He said the group already has eight units under contract.

“The typical buyer is people coming from a big house either in East Boca or West Boca,” Diaz said.

Amenities will include a wellness plaza, fitness center, pool with a heated spa and a club room.

Boca Raton-based design firm RLC Architects designed Royal Palm Residences and Suffolk Construction will be the project’s general contractor.

Group P6 recently completed 327 Royal Palm, a luxury condo development at 327 East Royal Palm Road in Boca Raton near Mizner Park.

The developer is also planning to build The Concierge, an 88-unit, 10-story building in Boca Raton that will offer a mix of assisted and independent living residences as well as memory care beds.

Boca Raton has only a limited number of luxury condo developments. Penn-Florida Companies is building The Residences at Mandarin Oriental, a 12-story, 92-unit luxury condo development. The company recently secured a $225 million construction loan from Madison Realty Capital.

In July, El-Ad National Properties closed on a $146 million construction loan for the first phase of Alina Residences, a luxury condo development at 200 Southeast Mizner Boulevard in Boca Raton.

The post Group P6 launches sales of new luxury condo project in Boca Raton appeared first on The Real Deal Miami.

One West Palm rendering and Jeff Greene

One West Palm rendering and Jeff Greene

UPDATED, Jan. 9, 4:28 p.m.: A construction worker was injured in an accident at developer Jeff Greene’s One West Palm project.

West Palm Beach Assistant Fire Chief Brent Bloomfield told The Real Deal the patient was in stable condition and was transported down via crane on Thursday afternoon to be transported to a trauma hospital. The Palm Beach Post first reported the news.

Bloomfield said a rebar wall that was being built fell on the worker on the 13th floor of the construction project at 550 North Quadrille Boulevard.

The mixed-use development is slated to have two 30-story towers with hotel rooms, residential units, retail and office space. Construction had reached the 13th floor, Bloomfield said.

Records show the developer, Greene’s 550 Quadrille LLC, filed a notice of commencement for the project in October 2018. Kast Construction is the general contractor.

Greene’s LLC paid $15 million for the site in March 2014.

This story will be updated as more information becomes available.

The post Construction worker injured at Jeff Greene’s project in West Palm appeared first on The Real Deal Miami.

Al Adelson and the Bristol

Al Adelson and the Bristol

Developer Al Adelson liked The Bristol so much that he bought himself a unit there.

Property records show Al and Linda Adelson paid $5.7 million for unit 1604 in the luxury condo tower at 1100 South Flagler Drive in West Palm Beach. Flagler Investors LLC, led by Adelson, sold the condo.

Adelson told The Real Deal that he bought the unit to live in it himself and declined to provide details about the condo.

The 25-story, 69-unit building is the first new luxury condo building to be delivered in West Palm Beach over the past decade. So far, 60 units have closed since the building was turned over to unit owners in 2018. Douglas Elliman handled the exclusive sales and marketing for the project.

Last fall, Elliman chairman Howard Lorber paid $6.87 million for unit 1601.

Adelson and his partner Gene Golub co-developed the building. Units range from 3,600 square feet to 14,000 square feet.

Roger Hertog, co-founded the investment firm Sanford C. Bernstein & Co., and his wife Susan paid $13.25 million for a unit at the Bristol just before the end of 2019.

Other unit owners include beauty mogul Sydell Miller, Miami developer James Harpel and New Jersey car dealer Robert Nitabach.

Adelson is reportedly planning a 16-acre development in Palm Beach Gardens, on Central Avenue between Hood Road and PGA Boulevard.

The post High on his own supply: The Bristol developer buys a unit at his condo tower appeared first on The Real Deal Miami.

Mark Wilf, and 310 Atlantic Avenue (Credit: Getty Images and Realtor)

Mark Wilf, and 310 Atlantic Avenue (Credit: Getty Images and Realtor)

A co-owner of the Minnesota Vikings sold his waterfront Palm Beach townhome for $7.7 million.

Mark Wilf and his wife Jane sold the 3,897-square-foot townhouse in the Villa Plati development for $1,975 per square foot, records show. David and Joan Henle purchased the townhome at 310 Atlantic Avenue.

The townhouse has three bedrooms and four-and-a-half bathrooms. The Wilfs bought the property in 2016 for $6.97 million, according to records. The townhome was built in 1992.

The unit features a library and den with elevated ceilings, elevator, private pool and waterfront views, according to a listing on Realtor.com

It was initially listed for $8.8 million in January by Lawrence Moens of Lawrence A. Moens Associates, according to Realtor.com.

The 15-unit Villa Plati development overlooks the Intracoastal Waterway. It has a waterfront swimming pool and tennis court.

Wilf and his brother Zygi own and oversee the operations of the National Football League’s Minnesota Vikings. Wilf helped bring Super Bowl LII to Minnesota. In March 2018, the club opened a new headquarters facility, Twin Cities Orthopedic Performance Center, in Eagan, Minnesota.

David Henle is a managing member of DLH Capital and was formerly the global head of private wealth management at Goldman Sachs in New York.

The majority of the priciest home sales in the tri-county region in 2019 were on the barrier island of Palm Beach. At the top of the list was the $105 million purchase of the 10-bedroom estate at 1415 South Ocean Boulevard by billionaire hedge funder Steven Schonfeld and his wife Brooke.

The post Co-owner of Minnesota Vikings sells Palm Beach townhome appeared first on The Real Deal Miami.

Sunflower Labs founders Alex Pachikov and Christian Eheim (Credit: Wikipedia, Pixabay)

Sunflower Labs founders Alex Pachikov and Christian Eheim (Credit: Wikipedia, Pixabay)

The latest in home security looks a lot like your garden.

Two new products — sensors dubbed Sunflowers and an aerial drone called The Bee — were launched this week at the CES conference in Las Vegas.

They are the brainchild of San Francisco-based Sunflower Labs, which was founded by Alex Pachikov and Christian Eheim in 2016. The company’s new security system includes Sunflowers, which are motion sensors that show cars, animals and people on a digital map in real-time. The Bee is an autonomous drone that can livestream video. (The aptly-named Hive is a charging station for the Bee.)

The products are billed as better than traditional, passive security systems since they can give property owners more detailed information. The Bee gathers data and “learns and reacts to its surroundings,” TechCrunch reported.

Sunflower Labs is part of a growing field (pun intended) of smart-home security systems. (In some cases, of course, only safe rooms will do.) To date, Sunflower Labs has raised just over $6 million in seed money from investors including General Catalyst. More expensive than your average gardening tool, the system starts at $9,950. The company is taking pre-orders, with a $999 deposit, and expects to deliver them in mid-2020.
[TechCrunch] — E.B. Solomont

The post Sunflowers and Bees are the latest in smart-home security appeared first on The Real Deal Miami.

University Park and Square Mile Capital CEO Craig Solomon (Credit: Zillow)

University Park and Square Mile Capital Management CEO Craig Solomon (Credit: Zillow)

A student housing complex in Boca Raton closed on a $71 million refinance, The Real Deal has learned.

A joint venture between Investcorp and The Preiss Company secured the loan from Square Mile Capital Management for University Park, near Florida Atlantic University.

The 11-acre complex, at 135 Northwest 20th Street, has eight, four-story buildings with 159 units and 598 beds. It was completed in 2015.

Rosemurgy Properties sold University Park to the joint venture in 2016 for $70 million, as part of a three-property sale for a combined $105.25 million.

JLL’s Michael Gigliotti and Jesse Wright arranged the refinancing, according to a press release.

University Park features a resort-style pool, a two-story fitness center and an outdoor courtyard. Units include washers and dryers and furnishings.

Investcorp, based in Bahrain, is an investment manager with offices in New York, London, Bahrain, Abu Dhabi, Riyadh, Doha, Mumbai and Singapore. It had $28.2 billion in assets under management as of June 30.

In 2016, Investcorp also purchased University View, a 55-townhome community adjacent to FAU for $20.5 million, as well as a 90-unit low-rise apartment complex at 200 Northeast 20th Street for $15 million.

Investors are continuing to purchase and develop properties in Boca Raton. In December, Blue Sky Hospitality bought the Embassy Suites by Hilton at 661 Northwest 53rd Street, right off of I-95 and West Yamato Road, for $29.5 million.

The post Boca Raton student housing scores $71M refi appeared first on The Real Deal Miami.

From left: Steven Spinola, Veronica Hackett and Joseph Beninati (Illustrations by Paul Kisselev)

Real estate is a famously fickle industry.

Today’s good investment can become tomorrow’s cautionary tale in the blink of an eye, and a career in the business is rarely a straightforward climb up the corporate ladder.

Kent Swig of Terra Holdings went from real estate royalty to an industry pariah after a series of defaults, development dramas and a very messy divorce in the late 2000s.

More recently, Bellmarc Realty co-founder Neil Binder inked a lucrative franchise deal with Coldwell Banker in 2013, but he was forced to close Bellmarc’s last office just three years later after an avalanche of lawsuits from Binder’s former agents, partners and lenders.

To kick off 2020, The Real Deal chased down several other figures in New York real estate who have had some of the more memorable rises and falls to find out what they’re up to these days.

Some are still involved in the real estate business, while others have moved on to other industries. Two people TRD looked at, Michael Smith and Steve Spinola, ended on high notes after a string of successes, but were included because they have stayed mostly under the radar since. All of them help disprove F. Scott Fitzgerald’s old axiom that there are no second acts in American lives.

Raphael Toledano
Still in the game and “surprisingly pleasant”

Raphael Toledano’s career so far has been best known for its controversies.

The founder and president of Brookhill Properties has made multiple headlines for allegations of tenant harassment, unpaid rent on his luxury apartment and a legal dispute with his uncle, Rosewood Realty Group’s Aaron Jungreis, who claimed Toledano squeezed him out of a roughly $100 million deal to buy 16 rental buildings in the East Village (the two ultimately settled).

The last time Toledano was in the news was this past June, when the New York attorney general’s office announced it had reached a $3 million settlement with him over accusations of tenant harassment and rent-law violations.

Toledano himself could not be reached for comment, and his attorney Ben Brafman declined to comment for this piece. But Brafman said in a statement at the time of the settlement that Toledano “looks forward to working carefully in the future and has the potential to be one of the most successful young real estate entrepreneurs in the city.”

These days, Toledano is focusing on fairly typical building sales and purchases, according to several sources who have worked with him before. So far, as promised, he is indeed “working carefully,” without the lawsuits and scandals that dogged him in the past.

David Schechtman, an investment sales broker at Meridian Capital, said his firm has represented Toledano on the sale of two small buildings in Manhattan, and working with him was not as difficult as the landlord’s history might suggest.

“Notwithstanding the fact that Rafi’s reputation is that of a little bit of a gangster, my dealings with him have been straightforward and surprisingly pleasant,” he said.

Part of Toledano’s recent, uncharacteristic discretion may be due to his settlement with the AG’s office, which requires an independent monitor to supervise his real estate business and bans him from direct contact with tenants for at least five years. If he violates these terms, Toledano could face a $10 million fine and a lifetime ban on working in real estate.

All three of his companies named as defendants in the settlement—Brookhill Properties, Adele Realty LLC and Regal Property Group LLC—are still registered as active in New York State.

One broker familiar with Toledano compared him to Steve Croman, in that they’ve both faced major legal consequences as landlords but have yet to throw in the towel.

“He’s still buying stuff. He’s in there rocking and rolling,” the broker said.

But the broker stressed that he has no desire to work with the purportedly reformed bad boy of real estate.

“I will deal with him never. I don’t like him. But he is active,” the broker said.

Michael Smith
From disrupting resi listings to selling “experience packages”

Michael Smith secured his place in New York real estate history by co-founding StreetEasy, which revolutionized the way city residents search for housing.

He served as the company’s CEO from 2005 to 2013 and as its chair from 2013 to 2014, after Zillow famously purchased it for $50 million.

In 2015, soon after leaving StreetEasy, Smith became CEO of String Discovery & Messaging, according to his LinkedIn profile. The company, which touts its app as “everyone’s personal concierge,”  allows users to search various cities and neighborhoods for entertainment options like restaurants, cafes and hotels. Users can also purchase “experience packages,” such as a personal concierge for a trip to Miami or a guide to high-end dining options in Washington, D.C.

Smith did not comment for this story, but in a 2018 interview with CNET, he billed String as a more exclusive, tailored version of review sites like Yelp and TripAdvisor.

“Both TripAdvisor and Yelp provide search results based on the ‘wisdom’ of the crowd — not personalized to individuals’ particular tastes and preferences,” he said. “Their search results are based on simple location data or cuisine and the highly irrelevant, passé ‘number of stars.’ But fundamentally, you trust your friends and certain brands for recommendations — not what the crowd thinks.”

String is a project of Tribeca Heavy Industries, where Smith has worked as a managing partner since 2004, according to his LinkedIn profile. The company’s website says it works with “a wide range of businesses” as a builder, consultant and investor, although String is currently the only business featured on the site. Tribeca lists phone numbers for offices in New York and Paris.

Smith founded String with Ari Horowitz, the former CEO of arts and culture publisher BlackBook Media. The two are also listed as executives at the company Hudson Palm on its website. Hudson Palm focuses on providing consulting and investment services to hospitality technology companies.

Andrew Heiberger
Serial entrepreneur expanding new luxe-lifestyle play

Andrew Heiberger has launched and led several companies, including listing site Citi Habitats and developer Buttonwood Development, and was most recently known for founding Town Residential, which did $14 billion in sales and 23,000 transactions before it abruptly shuttered its resale and leasing businesses last April.

The sudden nature of the closing, Heiberger told TRD, left him without much of a script for his next act.

“Since the decision that April was made pretty much the same day as the announcement, I did not have a ‘good next steps plan’ for my career,” he said.

Heiberger said that since the Town debacle, he’s been working on several new projects as well as managing Town’s remaining business and contracts, and he expresses an entrepreneur’s confidence in his prospects.

“I remained focused on the task at hand, acted in good faith and knew that I would once again find myself on top,” he said. “And that process is still unfolding.”

Most recently, Heiberger has focused on expanding his high-end lifestyle-management firm Luxury Attaché, where he serves as principal. The company offers services such as amenity-space management, concierge services and travel planning.

Luxury Attaché has offices in New York City, Boston, Miami, Los Angeles and San Francisco, and Heiberger hopes to expand the company further within those markets, he said.

Heiberger described the venture as the “frontrunner” among his various business projects, at least for now.

He said he even has a plan in mind involving real estate media, though he declined to share details with TRD.

Heiberger has been brokering occasional real estate deals as well, including retail leases, student housing and a luxury resort in Rhode Island, he said — and he’s not ruling out getting back into development through Buttonwood.

“I’m working every day, and I’m working to make short-term profits and also to have some sort of longer-term play where I can accumulate equity,” he said. “I’m not retired.”

Heiberger hasn’t let last year’s dramatic setback sap his morale, and he wants to put the real estate industry on notice that he’ll be back as a player.

“I will always make money, and I expect great things in 2020,” he said, “so stay tuned.”

Steven Spinola
Retired REBNY legend keeping his toe in the water

Steven Spinola was the longest-serving president in the history of the Real Estate Board of New York, holding the position from 1986 to 2015, when he retired from the role — some would say just in time.

His exit came not long before REBNY’s ignominious defeat in Albany last year, when legislators passed the most onerous rent-law reforms in recent memory. Not long after the unexpected thrashing, Spinola’s successor, John Banks, decided to step down, and it has cast the storied lobbying organization into the political wilderness now that an increasingly populist Democratic Party controls Albany.

Spinola acknowledged that that he may have dodged a bullet but said he still misses working for the group, where he remains president emeritus.

“Obviously, times have changed, and I jokingly say, ‘Well, it proves that the best thing that I have is timing,’” Spinola said, “but that’s not true.”

Spinola is still in touch with REBNY’s new president, James Whelan, and said he’s confident that the organization will regain its footing in the new leftward-sloping landscape.

Spinola currently serves on the boards of Lightstone Group and Plaxall and said he likes that the work helps him stay current on real estate issues.

In fact, his work with Plaxall even gave Spinola a hand in one of the biggest and most controversial real estate plays in recent memory, when he flew out to Seattle with other board members as Amazon mulled establishing a headquarters in Long Island City with a footprint that included some of Plaxall’s development sites in the neighborhood.

Spinola said he went to Seattle without any expectations, as he didn’t think the e-commerce giant was seriously considering Queens for its “HQ2.”

“We went there not believing we would reach a deal because we had no idea that we were high on the list,” he said, “and clearly had no idea at the time we were No. 1.”

But they came back to New York with a tentative agreement for the biggest development opportunity in recent memory — only to watch it crumble under a political assault that REBNY was unable to counter. Still, Spinola tries not to dwell on what could have been.

“There’s no sense looking back,” he said. “You’ve got to look forward: What could happen now? And we’re optimistic that City Planning is back on track with coming up with a good plan for LIC.”

Momentous business trips like that have been the exception to Spinola’s post-REBNY life rather than the rule, however. He has mainly spent the past few years enjoying conventional retirement pursuits like playing golf, taking trips and spending time with his grandchildren.

“That’s what I enjoy doing,” he said. “I’m just thrilled that I’ve found a mix of ability to enjoy myself and enjoy my family, but still stay in touch [with the real estate world] and learn.”

Veronica Hackett
Continuing Clarett and mentoring women in real estate

Veronica Hackett was a major player in New York real estate in the late 2000s and early 2010s, thanks to the Clarett Group, her residential and office development firm.

That seemed to end in 2011 with Hackett’s move to Brookfield Properties: TRD reported that Clarett had shuttered its New York office and that its Los Angeles and Washington, D.C., offices were rebranding. However, Hackett took issue with that characterization in a recent interview with TRD.

“I never really shut down Clarett Group,” she said. “I didn’t use it for a while because I obviously went to run Brookfield’s development business.”

After a little more than a year with Brookfield, however, Hackett said she started doing deals on her own again and working with other partners, and recalled that she still owned her earlier firm’s most important asset.

“I realized I didn’t sell the name ‘Clarett,’” she said. “And it’s got recognition, and we did some great work and some great projects, so I’ve just been using it.”

Hackett, who lives in New York, said that Clarett Group is still a going concern, although she doesn’t currently have any projects under construction. The firm is also no longer her sole focus, as she is now doing consulting work, serving on private boards and working to make the notoriously male-dominated real estate world a bit more diverse.

“I spend a good deal of my time these days mentoring women,” she said, “and I’m very active and involved in the women’s leadership initiative of the Urban Land Institute.”

Hackett is also involved with WX New York Women Executives in Real Estate, an organization focused on advancing women in the industry, and she volunteers as a speaker and mentor for women at LaGuardia Community College, she said.

Although she is proud of the work she is doing to bring more women into real estate, she acknowledged that the push for more gender equity in the industry remains an uphill climb.

“It’s still painfully slow,” she said. “We’d like to see a lot more of it, and we’re continually working on initiatives.”

Joseph Beninati
Still suing after all these years

Bauhouse Group’s Joseph Beninati dreamed of building a 950-foot luxury apartment tower in Manhattan’s tony Sutton Place neighborhood, but default and bankruptcy handed control of the site to lender Gamma Real Estate in early 2016.

However, some dreams never die, and Beninati has spent the past four years embroiled in multiple lawsuits over the site at 3 Sutton Place that he spent two years assembling with about $147 million in loans from Gamma.

Most recently, Beninati filed a new lawsuit in May 2019 against the law firm Herrick Feinstein, alleging that Herrick partner Richard R. Kalikow had a “close personal relationship” with Gamma CEO N. Richard Kalikow and that the pair (who are cousins) conspired to persuade him to take a loan from Gamma with the intent of eventually seizing control of the site in what Beninati called a “loan-to-own” scheme. The lawsuit seeks at least $270 million in damages.

Beninati had also filed a lawsuit against Herrick Feinstein and Kalikow in 2017 accusing the law firm of negligence when representing him, and that lawsuit also cited Richard R. Kalikow’s relationship with N. Richard Kalikow as a conflict of interest.

Both lawsuits have been dismissed, and both are now on appeal, according to Herrick Feinstein and court documents.

Gamma sued Beninati in 2016 over its loans, and a judge ruled in January 2017 that he and partners Christopher Jones and Daniel Lee had to pay Gamma about $24 million. Attorney Jay Neveloff, who represented Gamma in the case, said Beninati has yet to make any payments on that judgement.

Jones fled to Spain following the judgement, writing in court documents that he no longer lived in the United States and could not afford legal representation. Beninati did not make it quite as far but still left the Northeast for the South and  lives in Texas, according to Schechtman.

Schechtman, who helped broker the foreclosure auction of 3 Sutton Place that ultimately handed the property to Gamma, described Beninati as “semi-retired” with one foot in the New York real estate game, where he still has a few active investments.

Beninati and his attorney, James McCarthy of Buttafuoco & Associates, did not respond to multiple phone calls seeking comment. Beninati’s LinkedIn page still lists his location as New York and his job as managing member of the Bauhouse Group.

“At least with me, he was a straight shooter,” Schechtman said of his dealings with Beninati. He characterized the foreclosure process at 3 Sutton Place as “one of the most pleasant adverse experiences I’ve ever had.”

Correction: An earlier version of this story cited the rent law debacle as the reason for the departure of former REBNY president John Banks, but Banks has said that fallout from events in Albany had no bearing on his decision to step down.

The post Where are they now? Real estate figures who seem to have vanished appeared first on The Real Deal Miami.

Grove Central

When Pebb Capital principal James Jago attended Tulane University in the early 2000s, he lived in “a dumpy house” with three roommates.

But now, college students increasingly have the option to live off-campus in luxury student housing loaded with amenities like resort-style pools with cabanas, coffee bars, game rooms, movie theaters and fitness centers with yoga and indoor cycling studios. In Miami, near Florida International University and the University of Miami, developers are building high-end housing for affluent students. And when those students depart for the real world, they don’t want to downgrade their living arrangements.

“Students graduating have high expectations,” Jago said.

Therefore, Boca Raton-based Pebb Capital is investing in co-living developments, the grown-up version of dorm living that is taking off in South Florida. Pebb has injected $10 million into Property Markets Group’s 1,200-unit X Las Olas development, currently under construction in Fort Lauderdale, and plans to invest in the firm’s X project at 400 Biscayne Boulevard in downtown Miami.

Jago and other developers are betting on Florida’s growing population of recent graduates and those new to the workforce — specifically, those in the 25-to-35-year-old range — who want to live in the urban cores but can’t afford to pay sky-high rents. In the co-living buildings, renters pay about 20 percent less than they would for a studio apartment, but developers make more by fitting more bedrooms in one unit.

RELATED STORY: WATCH: Developers and co-living operators shed light on the growing industry

Typically housing three to four tenants, co-living units feature bedrooms that are much smaller than those in traditional apartments, but each usually has its own bathroom. 

And to sweeten the deal for tenants, co-living projects offer a slew of amenities. X Miami in downtown Miami boasts a gym, dog park, screening lounge, co-working lab and pool deck that’s known to host frequent pool parties. Cocktail bar Jaguar Sun is located in its lobby.

“What co-living does is it enables the elevation of their standard of living for young professionals. You can lower your monthly [cost] by renting a bedroom. It creates a sense of community,” Jago said.

Brian Koles, director of brand and marketing for Miami X developer PMG, said that while “we build buildings to make money, we firmly believe that it can be a win for everyone.”

PMG is the biggest developer of rent-by-the-bedroom apartment housing in South Florida and was the first to open a large-scale project when it delivered X Miami in 2018. The 32-story, 464-unit tower is now 97 percent leased.

Only 20 percent of PMG’s co-living projects — the three- and four-bedroom units — are actually reserved for co-living, Koles said. That allows renters to “graduate” from leasing bedrooms to their own units as they get promotions or move in with significant others.

Now that X Miami has been up and running for over a year, PMG is launching a division to expand across the country. The venture, called Society, includes X Las Olas, 400 Biscayne, a Wynwood project, one in Phoenix and another in Orlando. All five buildings will be branded Society. (See sidebar.)

But Koles and PMG will soon have some competition from another local developer who sees similar opportunities in the micro-apartment format. Miami-based Terra Group and Grass River Property, currently developing 401-unit Grove Central, inked a deal to bring in national co-living startup Common to manage a portion of the project — 22 units with 106 bedrooms.

“Co-living is supposed to garner more revenue in less space but at the same time deliver an affordable rent that is below the AMI [area median income] of a neighborhood,” said Terra Group president David Martin.

Co-living also allows multifamily developers to differentiate themselves from the competition, said Luis Flores, an attorney at Saul Ewing Arnstein & Lehr whose clients include PMG.

Even Richard Branson, who’s known to look into the future for his next big idea, will brand a Virgin hotel and residential tower with 150 furnished micro and co-living rental units, which will start at under 400 square feet. Scheduled for a 2023 delivery, the Brickell project is expected to break ground in 2020.

Startups surge

The affordability crisis nationwide and in Miami specifically creates an opportunity for builders and startup operators of co-living, who have been flocking to the region. According to an exclusive report from the Miami Herald, an October 2019 study by Florida International University’s Jorge M. Pérez Metropolitan Center found that more than half of cost-burdened renters — households that spend more than 30 percent of their income on rent — are spending more than 50 percent of their paychecks on rent.

Common Coliving Melrose

Startups like Common and Ollie are eager to swoop in with solutions. The two co-living operators have expanded throughout the U.S. and are now signing local long-term lease deals with apartment landlords and developers.

“You have a lot of supply that’s really geared toward luxury renters. It’s clear that there is really a need for affordable housing,” said Brian Lee, senior director of real estate at Common.

New York-based Ollie, which has raised $15 million, will manage 400 beds in one of three buildings at Gables Station, NP International’s mixed-use project in Coral Gables. Life Time Fitness is opening at the development, which will include about 120,000 square feet of retail space. (Read more about the project on page 46.)

Led by founder and CEO Brad Hargreaves, Common rents out rooms in furnished, shared apartments on flexible lease terms in 32 locations in New York City, Chicago, Los Angeles, San Francisco, Oakland, Seattle and Washington, D.C. It signs leases for ground-up new developments and will also work with owners of existing buildings to convert larger two-bedroom units into three-bedrooms, and so on.

It then leases out bedrooms for rents that are 15 to 20 percent below what a studio in the same neighborhood is being marketed for. Rents in Miami will start at about $1,000 a month, Lee said. Common uses technology that generates leads, matches roommates and schedules tours.

The company sells annual memberships to residents who can transfer between properties if they’re moving to another city with Common locations. It has more than 1,000 members, according to a spokesperson.

In October, Common investor Six Peak Capital announced it had hired Cushman & Wakefield to raise $1 billion in debt and equity to fund its expansion of co-living in the U.S. Common has raised over $65 million since it was founded in 2015, from investors that include Norwest, Maveron, 8VC and LeFrak.

Common has yet to open a location in Miami, but it has about 800 bedrooms in the local pipeline. It’s also negotiating deals for roughly 2,500 bedrooms throughout South Florida.

The startup’s first location will open in late 2020 or early 2021 in a cluster of homes in Little Havana that will total 130 bedrooms.

At Terra and Grass River Property’s Grove Central, where Common is leasing a small portion of the apartment component, workforce housing apartments and retail space are also part of the mix. The development features easy access to the Coconut Grove Metrorail station.

Construction at Grove Central is expected to go vertical in the second quarter of next year. Martin said the developers worked with Common to design the units with smart kitchens, shoe and shirt storage, suites for couples, efficient bathrooms and “as much community space as possible.”

The project will have theaters, gyms, lounges, co-working space and coffee shops in addition to the retail space that’s already planned.

‘Urbin’ infill

Though it’s more common in European markets, co-living is still a fairly new asset class in the U.S., so Terra said it is testing the market by leasing only 10 to 15 percent of the units to Common. Cities also have different caps on how many unrelated families can live in one housing unit, or do not allow co-living at all.

“It’s a test, but it’s also what I think works,” Martin said. “Traditional apartments have a certain cap rate. For co-living, there has not been that much trading. We don’t really understand how the capital markets are going to treat it.”

Martin is also an investor in Urbin, a co-living, co-working and wellness real estate platform led by developer Rishi Kapoor, the CEO of Miami-based Location Ventures. The company is moving forward with a co-living project at 1234 to 1260 Washington Avenue in Miami Beach after the City Commission there passed legislation allowing co-living in November 2019.

Urbin has raised $85 million in funding from the Murphy family of Coastal Construction, former NFL player Jonathan Vilma, Rudy Touzet of Banyan Street Capital and others. At least three locations are in the pipeline for South Florida, and Kapoor said he hopes to open 100 locations in the coming decade.

Mitash Kripalani, director of investment services at Colliers International South Florida, is listing the 61-bedroom building at 800 South Dixie Highway for sale. Location Ventures took it over two and a half years ago, renovated it and put an ad up on Craigslist to rent out the bedrooms, geared toward attracting students from the University of Miami. Kapoor said he used the building as a model for Urbin.

Co-living projects are in some cases getting “higher rents than Class A product in Brickell” because developers are able to rent a bedroom out for $1,300 a piece, according to Kripalani.

“Some people say it’s a fad,” Kripalani said. “But I think as rents grow, if you’re a young millennial and you want to live downtown for [$1,300] a month, your best option is co-living.”

The post Developers are banking on co-living, but will it catch on? appeared first on The Real Deal Miami.

Donald Trump and the Trump Hotel in Washington D.C. (Credit: Getty Images)

Donald Trump and the Trump Hotel in Washington D.C. (Credit: Getty Images)

Potential buyers have until January 23 to bid on the Trump Organization’s controversial Washington, D.C. hotel.

The firm marketing the Trump Washington hotel, JLL, is already seeing “robust activity,” the Wall Street Journal reported, and the Trump Organization hopes it can fetch $500 million for the ground lease. That price would represent $2 million per key, which would constitute a record in the nation’s capital.

Trump does not actually own the hotel, but leases the former Post Office from the federal government. In October, Eric Trump said that scrutiny of the hotel’s profits led the family to consider its sale.

In November, the Washington Post reported that the hotel experienced a 57 percent occupancy rate — compared to 75 percent among other high-end hotels.

A 2019 investigation by The Real Deal found that the Trump Hotel in Chicago has struggled to find retail tenants, with a large portion languishing on the market for a decade.

Sources familiar with the matter told the Journal that foreign private-equity firms and wealthy families are expected to bid, as well as major hotel brands like Hilton Worldwide Holdings and Marriott International.

The Trump Organization’s contract with the federal government – administered by the General Services Administration, the agency that oversees the federal government’s real estate holdings – is the subject of an ongoing investigation from the House Committee on Transportation and Infrastructure. The hotel lease prohibits any elected member of the federal government from profiting from the hotel arrangement.

[WSJ] — Georgia Kromrei

The post Deadline is set for bids on Trump’s DC hotel appeared first on The Real Deal Miami.

Roofstock CEO Gary Beasley (Credit: Roofstock, iStock)

Roofstock CEO Gary Beasley (Credit: Roofstock, iStock)

Roofstock, an online marketplace for buying and selling single-family rental homes, just raised $50 million to go after a bigger piece of the fast-growing market.

The round, led by SVB Capital, brings Roofstock’s total equity raised to $133 million, according to TechCrunch. Other participants in the round included Citi Ventures, Fort Ross Ventures and 7 Global Capital, as well as earlier investors Khosla Ventures, Bain Capital Ventures, Lightspeed Venture Partners and Canvas Ventures.

Based in Oakland, Calif., Roofstock was launched in 2015 by Devin Wade, Gary Beasley, Gregor Watson, and Rich Ford. The company, which claims to have facilitated $2 billion in deals, collects a 3 percent fee on each sale — 2.5 percent from the seller and 0.5 percent from the buyer.

Roofstock operates in 70 markets around the country and its marketplace enables buyers and sellers to transact even with tenants in place, allowing buyers to make money immediately. Under the terms, landlords need to honor existing leases, and can’t jack up the rent on Day 1.

This past summer, Roofstock also launched a marketplace where investors can buy a stake of a single-family rental — as low as 10 percent.

The company pegs single-family rentals as a $3 billion industry — and a market that is well insulated from a downturn.

“During the 2007 to 2011 housing downturn,” CEO Gary Beasley said, “rental rates [showed] positive rent growth despite broader economic conditions.” [TechCrunch] — E.B. Solomont 

The post Roofstock, a marketplace for rental homes, raises $50M appeared first on The Real Deal Miami.

Rendering of Life Time’s resort at The Falls

Rendering of Life Time’s resort at The Falls

Life Time Fitness will be bulking up the Bloomingdale’s space at The Falls, as malls around the country try to adapt to the changing retail environment.

The company plans to break ground on a 140,000-square-foot luxury athletic resort after Bloomingdale’s closes its doors later this month, a spokesperson for Simon Property Group confirmed. Simon owns the mall at 8888 Southwest 136th Street in Miami.

WPLG Local 10 reported that Bloomingdale’s would be closing Jan. 11 after operating that store for 35 years, and the South Florida Business Journal first reported Life Time’s plans last year.

The Life Time resort would be completed by 2022, according to a press release. It will feature fitness and training areas with group fitness, cycling, yoga, Pilates and Barre studios; a kids academy, spa, cafe, regulation-size basketball courts, an indoor aquatic center and a 40,000-square-foot outdoor beach club with pools, whirlpools, lounge areas and a bistro.

In Florida, Life Time has locations in Tampa and Boca Raton and others in the pipeline in Coral Gables and Palm Beach Gardens. Last year, Life Time’s CEO Bahram Akradi paid $10 million for a waterfront single-family home lot in Hillsboro Beach.

Other changes at The Falls include an expansion and renovation of Regal Cinemas, which will be completed this summer, according to Simon’s website.

The Falls, a 55-acre shopping center, has nearly 840,000 square feet of retail space and more than 100 stores and restaurants, as well The Fresh Market. Macy’s is an anchor tenant.

Macy’s, which owns Bloomingdale’s, announced recently that it plans to close 28 Macy’s across the country, including one in Pompano Beach.

The post Luxury athletic resort to take over Bloomingdale’s space at The Falls appeared first on The Real Deal Miami.

Lennar's Stuart Miller and a Lennar home (Credit: Lennar and iStock)

Lennar’s Stuart Miller and a Lennar home (Credit: Lennar and iStock)

Despite past indicators of a housing market slowdown, Lennar Corp. reported an uptick in fourth-quarter sales, as it pushes to sell lower-priced homes.

The Miami-based homebuilder’s new home orders jumped 23 percent, year-over-year, in the latest quarter, to 13,089 homes. Home deliveries rose 16 percent to 16,391 homes.

As a result, Lennar reported fourth quarter revenue up 7 percent to $6.9 billion, compared with $6.45 billion in the same period of 2019.

Lennar’s revenue jump reflects its move toward selling lower-priced homes, a segment in which demand from homebuyers remains strong. The average sale price of Lennar’s homes delivered in the fourth quarter decreased 7 percent to $393,000 from $421,000 in the fourth quarter of 2018, according to a release.

“It’s probably the most supply constrained [housing segment],” Lennar Executive Chairman Stuart Miller told analysts during an earnings call on Wednesday.

Lennar’s fourth quarter net income dropped to $674.3 million, or $2.13 per share, from $796.1 million, or $2.42 per share in the fourth quarter of 2018. But fourth quarter 2018 earnings included a gain of $187.5 million related to the sale of Rialto’s investment and asset management platform.

Lennar’s results pushed the company’s stock up 1.7 percent to $58.14 at 2 p.m on Wednesday. Other homebuilders’ shares also rose. DR Horton’s stock increased 1.1 percent and Toll Brothers’ shares ticked up 1.61 percent.

In the past two years, national indicators showed that the post-recession housing boom would come to an end, but Lennar executives say the housing market is still on solid footing.

“During the fourth quarter, the basic underlying housing market fundamentals of low unemployment, higher wages and low inventory levels remained favorable,” Rick Beckwitt, Lennar’s CEO, told analysts.

Lennar, one of the nation’s largest homebuilders, is known for its “Everything’s Included” model, which allows little customization in homes but a consistent standard product that keeps its costs low. In many areas, including South Florida, the company has gained a reputation as one of the most aggressive land buyers.

The post Lower-priced home sales drive Lennar’s Q4 revenue appeared first on The Real Deal Miami.

From left: Hernando Perez, Joe Rubin and Oscar Banegas, with 14255 – 14460 NW 22nd Avenue

From left: Hernando Perez, Joe Rubin and Oscar Banegas, with 14255 – 14460 NW 22nd Avenue

An apartment community in Opa-locka sold for $8.2 million, amid growing interest from investors in the financially troubled city.

Ingram Park Apartments LLC sold the 118-unit complex at 14255 to 14460 Northwest 22nd Avenue for $70,000 per unit, records show. SteelBlock, LLC, which is managed by Ignacio Murman, a former executive with Miami-based Black Salmon Capital, bought the property.

Steel Block is a local investment group serving as a conduit for South American private capital, according to a press release.

Franklin Street’s Hernando Perez, Joe Rubin and Oscar Banegas represented the seller. First Bank Florida provided a $5.85 million loan to SteelBlock to acquire the property.

The property last sold for $3.05 million in 2017, records show.

Ingram Park was built in 1952 and has a mix of one- and two-bedroom units. The complex is just two miles east of the Miami-Opa Locka Executive Airport and the newly completed Carrie Meeks Business Park, home an Amazon distribution center.

Opa-locka is facing serious financial challenges. A report last June from the state auditor found 99 issues of fraud and mismanagement in the city of Opa-locka. Some state regulators want the city’s residents to vote on dissolution.

In the past year, real estate investors, however, have been betting on Opa-locka’s industrial market.

In November, Panattoni Development Company paid $24.3 million for the 20-acre site of a dairy farm and plans to build a speculative warehouse project.

In October, a joint venture between BentallGreenOak and Bridge Development Partners bought most of a mixed-use business park next to the Opa-locka airport for $126 million, in one of the biggest industrial deals of the year.

The post Miami investor buys Opa-locka apartments for $8M appeared first on The Real Deal Miami.

Adam Neumann (Credit: Getty Images)

Adam Neumann (Credit: Getty Images)

Months after being forced out of WeWork, co-founder Adam Neumann is continuing an investment spree.

Through his family office, 166 2nd LLC, the 40-year-old is in talks to take part in a $4 million convertible note in Peach Street Inc., a startup that is focused on mortgage servicing, according to Bloomberg.

As part of his departure from WeWork, Neumann was given a $185 million consulting fee from the firm’s largest investor, SoftBank.

He has invested in other startups, including Selina, a co-working provider; Hometalk, which offers an online do-it-yourself home improvement service; and EquityBee, a network of employees in early-stage companies and investors.

Peach Street, a firm led by CEO Andrew Wang, is yet to launch. Once it gets off the ground, it will provide a portal that allows mortgage holders to make payments and access information.

“Andrew is a friend who worked for me for many years and is a world-class investor, operator and person,” Ilan Stern, the CFO of Neumann’s family office, told Bloomberg.

Neumann also reportedly invested in Peach Street’s $3.2 million seed round last July, alongside investors Jefferies, Kairos, Zigg Capital, Soros Fund Management and AlleyCorp. Jefferies is also reportedly discussing an investment in the latest round. [Bloomberg] — David Jeans

The post Adam Neumann’s next bet? Mortgage servicing appeared first on The Real Deal Miami.

Kobi Karp and the Miami Ad School property (Credit: Wikipedia)

Kobi Karp and the Miami Ad School property (Credit: Wikipedia)

UPDATED, Jan. 8, 3:20 p.m.: Miami architect Kobi Karp bought the Miami Ad School campus in Wynwood, but doesn’t yet have plans to move his firm from Edgewater.

Karp, who owns Kobi Karp Architecture & Interior Design, paid $6.7 million for the advertising school’s parcels at 588 and 570 Northwest 29th Street, as well as 571 and 565 Northwest 28th Street, property records reveal. They total 1.1 acres of land and 14,000 square feet of buildings.

The total price, which includes artwork the Miami Ad School is leaving behind, is closer to $13 million, Pippa Seichrist, a founder of the Miami Ad School, confirmed.

Jonathan Gerszberg of Marcus & Millichap represented the seller.

Advertising & Design Educational Corp. sold the campus to a Delaware company tied to Karp. The Wynwood school is in the northwest corner of the booming neighborhood, fronting I-95. New development, including Sterling Bay’s 545 Wyn office project, has started creeping west away from Wynwood’s core.

Miami Ad School was founded in 1993 in Miami Beach, and moved to Wynwood in 2013. Seichrist said she felt it was a good time to sell the Wynwood campus. The school will move to a new location of roughly the same size on the third floor of 3415 Northeast Second Avenue. It will relocate in April, she said. It signed a 10-year lease with renewal options at the Midtown location, which is owned by Avra Jain and partners.

The school has about 150 to 200 students enrolled, depending on the time of year, she said.

Miami Ad School now has 15 schools in 10 countries, including Germany, Argentina, Spain, Mexico, and Australia. In the U.S., it has locations in New York, San Francisco and Atlanta.

Seichrist said that the Wynwood property is “wild and crazy and interesting” inside and that the buyer wanted to keep whatever was left. One room, she said, is wallpapered with blue jeans.

“We’re taking some, but we’re leaving some, and excited to create an interesting experience,” she said.

Seichrist’s Advertising & Design Educational Corp. paid $2.85 million for the property in 2013.

Karp, whose firm is based in an office and retail building he owns at 2915 Biscayne Boulevard, said he has not decided what he will do with the new property — including whether he’ll move his office there.

“I like that location in Wynwood. It’s very nice. And I like my space here in Edgewater,” he said. “We’ll have to wait and see what works out.”

Karp’s company has worked on some of the biggest projects in South Florida. Among them: the Four Seasons Residences and Hotel at the Surf Club, Palazzo del Sol on Fisher Island, 1 Hotel South Beach and Panorama Tower.

The post Architect Kobi Karp buys Miami Ad School in Wynwood appeared first on The Real Deal Miami.

Hyde Beach House Resort & Residences, Carlos Rosso and Drew Sims

Hyde Beach House Resort & Residences, Carlos Rosso and Drew Sims

Sotherly Hotels closed on its acquisition of the hotel commercial space at Hyde Beach House Resort & Residences in Hollywood.

The Related Group’s 4000 South Ocean Property Owner LLC sold the commercial unit to an affiliate of Sotherly for $5.35 million, property records show. The deal was announced in September and closed on Dec. 26.

The sale includes the lobby, front desk, offices and other spaces, according to a press release. The deal did not include any hotel units, a spokesperson said. Hyde Beach House, a 342-unit condo-hotel at 4010 South Ocean Drive, was completed three years ago.

Williamsburg, Virginia-based Sotherly signed a 20-year management agreement for the parking garage and poolside cabanas at Hyde, and an agreement to operate and manage the condo association. The property also has a pool deck, sports and aqua club fronting the Intracoastal Waterway.

Sotherly Hotels was removed as the hotel manager of the similarly named Hyde Resort & Residences nearby in Hollywood, another Related Group-developed condo-hotel project. In a federal lawsuit filed on May 30, 2019, Sotherly accused the association’s president of using “commercial speech to defame and set forth falsehoods” about its management of the Hyde resort, as well as its executives and employees.

The association also sued Sotherly in Broward County Circuit Court, alleging the company and its affiliates engaged in a “pattern and practice of improperly utilizing [The Hyde association’s] funds to cover the overhead and expenses of unrelated hotel operations.”

The post Sotherly closes on acquisition of Hyde Beach House hotel space appeared first on The Real Deal Miami.

Orchard’s CEO and co-founder, Court Cunningham (Credit: iStock)

Orchard’s CEO and co-founder, Court Cunningham (Credit: iStock)

As the iBuying craze grips the residential real estate industry, a startup that says it does that and more has secured $36 million in funding.

New York-based Perch said Tuesday that it had secured the equity injection from a group of investors led by Navitas Capital. The firm, which this month rebranded itself as Orchard, provides a service that allows homeowners to buy a new home before they sell their own, and guarantees to purchase the property if it fails to sell.

Orchard’s CEO and co-founder, Court Cunningham, described the firm’s product as a vertically integrated model, to streamline the entire home buying and selling process. Among the features on its online portal is a search function that uses artificial intelligence to suggest properties to customers based on the images they view. It also provides a title service that allows transaction paperwork to be filed online.

The firm offers to purchase a customer’s home for a fee if the home is not sold within 90 days of being listed on its online portal. Cunningham said in an interview that 85 percent of owners sell their homes at market price before the deadline.

By offering an iBuying service — whereby it purchases a home and flips it — the company is also going head-to-head with other firms that have launched similar products, including OpenDoor, Zillow and Redfin.

Cunningham said the latest funding will allow the firm to double its employee headcount to 300 by the end of the year, expanding its data science, marketing and broker divisions. He would not disclose the firm’s valuation or revenue figures, but said it has “over 1,000” customers.

Perch is headquartered in New York, but piloted its platform in Texas in early 2018, launching first in San Antonio and then expanding to Dallas. The firm has now raised a total of $69 million in equity from investors including Juxtapose and FirstMark and Accomplice. Last year, it also raised a $200 million debt package from an undisclosed lender.

The post iBuyer startup Perch raises $36M, rebrands as Orchard appeared first on The Real Deal Miami.

Buyer sentiment was strong at the close of 2019 (Credit: iStock)

Buyer sentiment was strong at the close of 2019 (Credit: iStock)

The housing market is launching into 2020 with a flurry of activity as mortgage rates fell last week to the lowest level since October.

According to CNBC, there were a string of open homes held across the country this January— a rare occurrence for the time of year — as the average 30-year fixed mortgage rate dropped to 3.69 percent.

Buyer sentiment was strong at the close of 2019, according to the Home Purchase Sentiment Index, a monthly survey produced by Fannie Mae. Respondents expressed confidence in their incomes and employment, and said they didn’t anticipate mortgage rates to increase.

“The continued strength in the HPSI attests to the intention among consumers to purchase homes,” Doug Duncan, senior vice president and chief economist at Fannie Mae, told CNBC.

“The HPSI hit and remained near an all-time high in 2019, driven by the 16-percentage point year-over-year increase in the share of consumers believing it is a good time to buy.”

Demand for housing was also high, and national prices increased 3.7 percent annually in November, according to CoreLogic.

Frank Nothaft, chief economist at CoreLogic, said the figures showed that the slow sales seen early last year had rallied.

“The decline in mortgage rates, down more than one percentage point for fixed-rate loans from November 2018, has supported a rise in sales activity and home prices,” he said. [CNBC] — Sylvia Varnham O’Regan

The post Home buyers start 2020 with drop in mortgage rates appeared first on The Real Deal Miami.

3621 South Ocean and Corcoran's Jennifer Kilpatrick

3621 South Ocean and Corcoran’s Jennifer Kilpatrick

UPDATED, Jan. 9, 5:02 p.m.: The developers of a boutique townhouse project in Palm Beach County’s Highland Beach sold two units to a banking executive and a digital marketing investor.

Grafton Street Capital, led by Sean Posner and Jed Resnick, and Halstatt Real Estate Partners developed 3621 South Ocean. Property records show the group just sold townhouse 3 to JHJ Family Trust, managed by trustee Jeffrey Herzog, for $6.05 million. Herzog is chairman and CEO of ZD3 in New York, according to LinkedIn. He describes himself as an investor in the digital marketing space.

The development group also sold townhouse 4 to Christin and Joseph Kohls for $5.75 million.

Joseph Kohls was a senior managing director of Guggenheim Securities’ healthcare investment banking group. Before that, he was co-head of global healthcare investment banking at Bank of America Merrill Lynch.

3621 South Ocean recorded two previous closings in November 2018, including one sale to SBA Communications’ founder and chairman, Steven E. Bernstein, for $6.9 million.

The five-bedroom, six-bathroom, four-story townhomes each feature a pool, rooftop deck, high ceilings and two-car garages. Jennifer Kilpatrick of the Corcoran Group is handling sales of the six-unit project, according to a spokesperson. Two units remain unsold.

Posner is the grandson of the late real estate mogul and former corporate raider Victor Posner. Sean Posner’s past projects in South Florida include spec homes in Miami Beach, built in partnership with Todd Michael Glaser, one of which traded for about $30 million and another for $19.5 million.

The post Sean Posner, partners sell new Highland Beach townhouses for $12M appeared first on The Real Deal Miami.

(Illustration by Mengxin Li)

The luxury South Beach condominium One Ocean is among the Related Group’s signature projects of the most recent cycle. Completed in 2016, the 50 units in the eight-story boutique building sold at an average of between $2.1 million and more than $5.1 million each, or from less than $1,030 to nearly $1,700 per square foot. Martin Franklin, executive chairman and co-founder of consumer products company Jarden, plunked down $6.4 million for a seventh-floor penthouse. Another tycoon, financier and Tampa Bay Rays part-owner Randy Frankel, purchased the penthouse next door to Franklin’s at the same price. Even Related’s chairman and CEO, Jorge Pérez, bought himself a top-floor unit at One Ocean, although at a considerable discount compared to his customers, given that he paid only $4.3 million. (He has since listed it for sale.)

Yet in the past year, One Ocean has been among three Related projects dogged by construction-defect claims brought against the Miami-based development firm and the companies it hired to work on buildings it recently completed. And it’s far from the only developer that’s been slapped with such suits of late. Lawsuits filed in the past 12 months detail how other luxury developers such as 13th Floor Investments, Integra Investments, Property Markets Group and JMH Development allegedly cut corners and misled real estate investors who bought seven-figure units in luxurious condo buildings that upon completion, according to the plaintiffs, showed poor workmanship or did not match marketing and sales materials.

“It’s endemic to Miami,” said construction attorney Lana Naghshineh. “You had this boom, and everyone was so anxious to build that quality control went downhill. All these high-net-worth individuals from countries were desperate to buy here, and when they got their units they had buyers’ remorse.”

For Naghshineh and other lawyers who represent buyers, the blame lies with developers and construction companies under the gun to complete projects on schedule so that buyers don’t have a legal means to void a purchase contract. For lawyers representing the defendants, such as Brian Wolf of Smith, Currie & Hancock, the suits are practically a cottage industry for engineering consultants and attorneys who want to make money off suing developers and contractors.

“They are approached by firms specializing in bringing condo-defect claims based on the fact that they know a newly formed [condo] board has a duty to investigate the new construction,” Wolf said. “Law firms and consulting companies will go through a building and identify as many items as they can and then initiate a process to generate a recovery for the association.”

Wolf estimated that he’s had to defend more than two dozen construction-defect lawsuits in the past year. Typically, these cases are settled before trial, with developers and contractors agreeing to pay six- to-seven-figure sums to the plaintiffs to cover the costs of repairs. And those settlements are typically paid by surety bond companies that insure projects, so his clients typically don’t pay out of pocket, he said.

Both sides agree that lawsuits alleging construction defects and false advertising are on the rise, as condo associations of buildings completed in the most recent cycle have to beat the clock on the state’s four-year statute of limitations on such legal action.

“If people find out their neighbors are having similar issues with a developer, these lawsuits will continue,” Naghshineh said. “Nearly every new condo is going to end up in litigation.”

She is currently representing the buyer of a four-bedroom unit at One Ocean who sued Related, general contractor Plaza Construction, architect Sieger Suarez and three subcontractors for allegedly failing to fix numerous defects involving defective showerheads, improperly installed light fixtures and shower doors, a nonworking spa pump and two parking spaces that are too small.

Related and Sieger Suarez declined comment, but a Plaza spokesperson said in a statement that the company had complied with its warranty requirements.

“To the extent that Plaza Construction has warranty obligations, we always endeavor to respond to such requests,” the spokesperson wrote via email. “In this instance, Plaza Construction timely and properly responded to the claims [made by Naghshineh’s client].”

According to a Jan. 9 letter Plaza sent Naghshineh, the company inspected the unit after she provided a consultant’s report identifying 45 defects. Plaza agreed to fix some of the defects, but claimed most of the items were not part of the firm’s scope of work or had been done after the units were delivered.

Meanwhile, Naghshineh’s client is stuck paying legal fees for her own lawsuit even as One Ocean’s condo association is also pursuing legal action against Related, Plaza, Sieger Suarez and the project’s subcontractors. In May, the condo association filed a separate complaint accusing the developer and its contractors of causing numerous deficiencies in the three-year-old building, including corrosion on sliding glass doors; cracked stucco walls, ceilings, balconies and masonry; and deteriorated and defective balcony railings.

“Imagine how frustrating that is,” Naghshineh said. “Things fall by the wayside in an effort to finish a building before the one next door is. In some cases, developers are competing with themselves. Related has a project two streets down from One Ocean.”

False advertising claims

It’s sometimes unfulfilled promises rather than shoddy work that’s the subject of such suits. In the case of 300 Collins, a five-story luxury project built by a partnership between JMH Development and Dhruv Piplani, the finished product is allegedly nothing like what the developers advertised. They’re being accused of providing finishes and materials inferior to what was advertised in sales and marketing materials.

(Click to enlarge)

 

In September, five individuals who purchased units at the boutique building sued the partnership, alleging that common elements such as electric garage doors, elevators, the pool deck and an ornamental fountain were improperly and cheaply installed, have been prone to malfunction or were never completed at all. The lawsuit claims that Piplani and JMH have ignored correcting serious or life-threatening issues such as “loss of air conditioning for multiple days in the heat of summer, malfunctioning elevators, lack of water and security concerns.”

Lawyers for the buyers and representatives of the developers did not return multiple requests for comment.

Jason Kellogg, a partner with the law firm Levine Kellogg Lehman Schneider + Grossman, said more and more developers are chalking up these kinds of lawsuits as a cost of doing business. “A developer has typically set aside some reserves for dealing with these issues,” Kellogg said. “It has become a routine process.”

Naghshineh, the lawyer representing the disgruntled One Ocean buyer, said developers typically don’t have to bear the cost of paying for defects and alterations in a condo project.

“It doesn’t hurt them, because their insurers pay the settlements,” she said. “That’s the problem here. If you are not hitting someone in their pocket, then where is the lesson?”

RELATED: Buyer at Muse sues to get deposits back, alleges he was misled on size of condos

The post Related, PMG slapped with suits alleging faulty construction, false advertising appeared first on The Real Deal Miami.

As crowdfunding startups rethink their business model, many are becoming more like traditional real estate investment firms (Credit: iStock)

As crowdfunding startups rethink their business model, many are becoming more like traditional real estate investment firms (Credit: iStock)

Starting in 2012, a wave of crowdfunding startups sought to take advantage of new regulations to revolutionize real-estate investment in the same way that Airbnb and Amazon have upended hospitality and retail. But things didn’t work out that way.

Many crowdfunding firms from this first wave have gone out of business, while those that have survived have had to reconsider their strategies — often becoming more like traditional real estate firms in the process, the Wall Street Journal reported.

Crowdfunding in real-estate is “a revolution that ended up replacing the old guard with the same thing, which unfortunately happens more often than you would think,” industry pioneer Dan Miller, who co-founded crowdfunding firm Fundrise in 2012, told the Journal.

Fundrise has since abandoned the traditional crowdfunding model that lets investors pick and invest in individual projects via its website. Meanwhile, Miller has moved on to focus on assets aimed at socially and environmentally conscious investors, such as sustainable farms.

Some crowdfunding firms, like Kushner-backed Cadre, are targeting wealthier investors. Cadre requires a minimum investment of $50,000.

Most crowdfunding firms have targeted investors with an income of at least $200,000 or $1 million in net worth, but they have struggled to convince such investors that their model is superior to traditional investments, such as investing in REITs or rental apartments.

The abundance of other cheap financing options after 2012 also led crowdfunding firms to back riskier, less appealing projects.

As detailed in The Real Deal’s October issue, Prodigy Network chief executive Rodrigo Niño resigned amid multiple lawsuits from crowdfunding investors who fear they may lose all of their money.

“Democratizing real estate sounds great and it’s inspiring, but it’s tough when you go up against the titans of Wall Street,” said Ray Sturm, co-founder of the now-defunct crowdfunding firm RealtyShares. [WSJ] — Kevin Sun

The post To survive, crowdfunding firms are remaking themselves appeared first on The Real Deal Miami.

  • An aerial rendering
    An aerial rendering (Credit: LPG)
  • A rendering of the project
    A rendering of the project (Credit: LPG)
  • A rendering of the bedroom
    A rendering of the bedroom (Credit: LPG)
  • A rendering of the project at night
    A rendering of the project at night (Credit: LPG)
  • A rendering of a kitchen in the project (Credit: LPG)
  • A rendering of the project
    A rendering of the project (Credit: LPG)
  • A rendering of the pool at the project
    A rendering of the pool at the project (Credit: LPG)

UPDATED Jan. 8, 10:30 a.m.: Multiplan Real Estate Management, the developer of 57 Ocean in Miami Beach, is now betting on a boutique luxury condo project on Ocean Drive in the South-of-Fifth neighborhood.

José Isaac Peres

José Isaac Peres

The Brazilian real estate developer, led by José Isaac Peres, is launching sales of Ocean Park South Beach at 304-312 Ocean Drive in South Beach, The Real Deal has learned.

The four-story building will have 10 units, including two duplex penthouses. Prices range from $1.5 million to $6.8 million, said Marcelo Kingston, managing principal of Multiplan Real Estate Asset Management.

Eloy Carmenate and Mick Duchon

Mick Duchon and Eloy Carmenate

Douglas Elliman’s Eloy Carmenate and Mick Duchon are handling sales.

The project marks the first to launch in the luxury market so far this year. And despite the condo market slowdown, Kingston said Ocean Park South Beach’s location, across the street from the ocean and Marjory Stoneman Douglas Park and close to shops and restaurants, with little competition in new luxury projects, will give it an advantage. He said 20 percent of the units, or two condos, are under contract by friends and family buyers from Miami and Brazil.

“In our view, it’s good timing, a unique location, singular product and hard to replicate,” Kingston said.

Two- and three-bedroom units will range from 1,117 square feet to 1,715 square feet, with terraces ranging from 267 square feet to 1,194 square feet. Features will include private elevators, 10-foot ceilings, floor-to-ceiling windows, light solid oak wood and natural stone flooring, Wolf and Sub-Zero appliances, and kitchens by Poliform with Matte Touch cabinets.

The four-bedroom penthouses will each have 2,393 square feet with 1,564 square feet of terraces. The penthouses will include 12-foot ceilings, an upgraded appliance package with a tower wine cooler and double-refrigerator unit, and a rooftop deck with a private spa pool, summer kitchen and powder room.

Ocean Park South Beach will also have a second-floor amenity deck with a 36-foot pool, spa, Jacuzzi, poolside summer kitchen and outdoor dining area and lounge.

The project is designed by Revuelta Architecture International, with interiors by Marcela Lombana and landscaping by Gardner Semler Landscape Architecture.

Rio de Janeiro-based Multiplan is one of the biggest shopping mall owners in Latin America, and has also built a number of mixed-use projects connected to retail developments. In Miami Beach, Multiplan built Il Villaggio, a luxury condo and retail development at 1455 Ocean Drive. Forbes currently pegs Peres’ net worth at $1.7 billion.

The company is self-funding the Ocean Drive development, Kingston said. That allows the developer to “push the development schedule, not relying on banks, and takes away the lack of confidence buyers have not knowing the schedule.”

Construction is expected to begin in the fourth quarter, with completion in December 2021, he said.

Multiplan is also developing 57 Ocean, an 18-story, 70-unit luxury oceanfront condo project at 5775 Collins Avenue. Kingston said sales are approaching 50 percent. The project is starting to go vertical, and is expected to be completed in September 2021, Kingston said. Fortune Development Sales is handling sales.

The Ocean Drive project has been in the works for about a year, since Multiplan purchased the two adjacent empty lots for $10 million in December 2018. It’s within the Ocean Beach Historic District, and received approval from the historic preservation board last year.

Carmenate and Duchon have handled sales at other new Ocean Drive developments such as 1500 Ocean Drive, Il Villaggio and Glass. They said they will be targeting local buyers, including empty nesters from the surrounding areas who are looking for boutique buildings, as well as buyers from the Northeast.

“We find the South-of-Fifth area to be very active,” Duchon said.

“It’s priced right for the neighborhood,” added Carmenate. “You can’t get a three-bedroom for $2.65 million in new construction in South-of-Fifth.”

The post Multiplan launches sales of boutique luxury condo project on Ocean Drive appeared first on The Real Deal Miami.