Real Estate News

181 Northeast 82nd Street (Credit: Google Maps)

A Haitian American nonprofit plans to construct a 96-unit mixed-use apartment building in Little Haiti.

The Haitian-American Community Development Corp. filed the plans with the city of Miami for a new eight-story building at 181 Northeast 82nd Street, the site of the organization’s current headquarters.

The local nonprofit, which focuses on building affordable housing in the area, also included 8,000 square feet of ground-floor retail in its plans filed with the city. The project will total 159,000 square feet.

The nonprofit has owned the property since 2000, records show.

Affordable housing is a pressing issue in South Florida, especially in Little Haiti, as concerns grow about major development projects that could displace residents.

Venture Capitalist Bob Zangrillo and Metro1’s Tony Cho are planning to build a $1 billion mixed-use project in Little Haiti called the Magic City Innovation District. It’s planned for land between Northeast 60th and 64th streets and Northeast Second Avenue to the railroad tracks. The 17-acre project plans to include studio space, an innovation center for startups, an office tower, retail space and workforce housing.

Residents of the area, however, are worried about gentrification and rising rents and property values that could come with the new developments.

Haitian-American Community Development Corp.’s other affordable housing projects in the area include Bel House East, a 45-unit building at 13925 Northeast 6th Avenue in North Miami, as well as the Bel House West, a 20-unit building at 13990 Northeast 6th Avenue in North Miami.

Marriott expects to add between 275,000 and 295,000 rooms to its portfolio by 2021. (Credit: Getty Images)

Marriott is in expansion mode. The hotel giant plans to open more than 1,700 hotels over the next three years.

The hotel company expects to add between 275,000 and 295,000 rooms to its portfolio by 2021, according to the Wall Street Journal. It could take in $400 million in fee revenue from the new rooms that year, and up to $700 million annually when stabilized.

The plan assumes that comparable hotel revenue per available room (RevPar) will rise by between 1 and 3 percent.

Marriott, which owns the Ritz-Carlton and St. Regis brands, also said it could have earnings between $7.65 and $8.50 a share by 2021 and between $7.6 and $9 billion in stock buybacks over the next three years. The company, led by CEO Arne Sorenson, also said it would return $11 billion to shareholders by 2021.

Manhattan’s hotel market turned a corner last year after spending years being weighed down by new rooms pouring in, with revenue per available room growing for the first time in three years by 3.4 percent. [WSJ]Eddie Small

A rendering of a pedestrian walkway along NE 123 Street and a rendering of the corner of NE 123 Street and NE 10th Avenue

The North Miami City Council gave the green light to Residences at NoMi, a planned $50 million mixed-use senior apartment complex.

The 175-unit project, developed by Trise Development, has been in the works for three years. It has been delayed due to neighborhood objections to the original plan which many residents considered too massive.

Residences at NoMi, at 950 Northeast 124th Street in North Miami, will consist of three apartment buildings. They will include a seven-story, 96-unit building with 8,925 square feet of retail on the ground floor; a three-story, 38-unit building with 12,000 square feet of professional office space, mostly medical; and a six-story, 41-unit building above part of the 220-space parking garage. The project will be built on a 1.95-acre site.

The complex will have affordable, workforce and market rate units.

The three apartment buildings will be connected by corridors. The garage will have a green roof with recreational amenities, including a pool, playground, gym and yoga studio.

The size of the project has been reduced considerably since it was first conceived. In this latest version, a 70-bed assisted living facility has been scrapped. The tallest part of the development, an apartment building facing 124th Street, was reduced from 10 stories to seven stories. The height of the building along 123rd Street went down from six stories to three. A planned ground-floor 3,600-square-foot event space will be replaced by 1,000 square feet of community space on every floor, which will feature card and computer rooms and laundry facilities.

“We dedicate almost one-third of the site to open space, including pedestrian promenades, recreation areas and an art and sculpture courtyard along 123rd Street,” said Markus Frankel, the project’s architect.

Developer Moe Yaghoubi said that he expects to break ground on the project by the end of the year or the beginning of 2020. But he said that he didn’t yet know how the development would be financed.

“We expect to get bank financing backed by governmental agencies. But the financing environment has changed a lot since we started working on the project,” he said. “Senior housing is in demand, especially in North Miami, but the federal tax incentives are worth less because the formula has changed. Because banks can claim less of a paper loss, there is less incentive” for them to participate in affordable housing developments.

The Renaissance Cruise Port Hotel in Fort Lauderdale and Howard Wurzak (Credit: Hospitality Online)

Wurzak Hotel Group bought the Renaissance Fort Lauderdale Cruise Port Hotel for $62.2 million, signaling growing interest for hotel properties in Broward County.

The Philadelphia-based hotel group bought the 236-room hotel near Port Everglades at 1617 Southeast 17th Street for about $262,000 per room. Wurzak bought the Marriott-branded hotel from Atlanta-based Noble Investment Group, records show.

The hotel sold for a sharp increase compared to the last sale price. Noble Investment Group bought the property for $48.1 million in 2015, records show. The hotel was built in 2001 and totals 254,606 square feet. The hotel also has a 3,784-square-foot ballroom and a restaurant, Bistro 17.

Wurzak secured $42.2 million in financing from Barclays Capital Real Estate to purchase the property.

Wurzak owns hotels largely in Philadelphia in the Hilton Worldwide and Starwood Hotels and Resorts brands.

Demand for hotels is growing in Fort Lauderdale due to the city’s growing economy and destination as a cruise hub. In 2018, the two biggest hotel sales in South Florida were in Broward County, including Brookfield Asset Management’s $170.6 million purchase of the Hilton Fort Lauderdale Marina.

Dr. Alice Moore Apartments rendering

Miami-based Carrfour Supportive Housing Inc. is developing an affordable apartment building in West Palm Beach with on-site services to support mentally ill residents.

The Dr. Alice Moore Apartments will have 36 units, including 26 designated for adults with severe mental illness who need supportive services to live independently.

Construction of the Dr. Alice Moore Apartments began Thursday at 335 27th Street in the Northwoods Shore neighborhood of West Palm Beach.

All 36 units will be available to residents earning no more than 60 percent of the area’s median income.

Carrfour is developing the apartment building together with the Jerome Golden Center for Behavioral Health, a not-for-profit agency that has provided mental health services in Palm Beach County since 1970.

Tenants who reside in the building’s studios and one-bedroom apartments will have access to amenities including an outdoor green space, a library and business center, and a gym.

Tenants also will have on-site behavioral health and primary care services. The property manager will be Crossroads Management LLC, a wholly owned subsidiary of Carrfour Supportive Housing Inc.

Funding sources for the $17.5 million development include the Florida Housing Finance Corporation and the City of West Palm Beach. Bank of America provided construction financing. – Mike Seemuth

 

6555 and 6557 Garden Road and 3541 MLK Jr. Boulevard in Riviera Beach

A three-building portfolio of industrial property within an Opportunity Zone in Riviera Beach sold for $11.7 million, or $73 per square foot.

When the sale closed, the buildings were 98 percent leased to tenants including the City of Riviera Beach, Saf-Glas and Palm Beach Laundry.

Interstate Industrial Park Holdings, LLC, led by Harry Spitzer, bought the three-building portfolio from The Silverman Group of Palm Beach.

The 160,302-square-foot portfolio includes buildings at 6555 and 6557 Garden Road and 3541 M.L.K. Jr. Boulevard in Riviera Beach.

The one-story building at 6555 Garden Road was developed in 1987 on a three-acre site. Two one-story buildings at 6557 Garden Road and 3541 M.L.K. Jr. were developed in 1968 on a two-acre site.

Located equidistant to the Interstate 95 interchanges at 45th Street and West Blue Heron Boulevard, the industrial buildings are within the Census Tract 13.02 Opportunity Zone. Investors in Opportunity Zones can defer payment of federal taxes on capital gains.

“The fact that the assets are located in an Opportunity Zone, potentially affording tax advantages, drove further interest from potential buyers,” Scott O’Donnell of brokerage firm Cushman & Wakefield said in a prepared statement.

O’Donnell and three other members of Cushman & Wakefield’s Capital Markets Team – Greg Miller, Dominic Montazemi and Jason Hochman  – along with Robert Smith and Kirk Nelson, negotiated the sale of the three buildings on behalf of The Silverman Group.

Adam Robbins of ARC Equities, LLC, represented Interstate Industrial Park Holdings, LLC, in the transaction. – Mike Seemuth

(Credit: Pixabay, iStock)

New analysis shows that real estate teams have made dramatic gains in market share since the housing crisis a decade ago.

The sales volume of the best teams increased nine times faster from 2011 to 2017 than the volume of the best individual agents, according to a study by brokerage industry veteran Russ Cofano, host of a real estate podcast called “Gradually … Then, suddenly!”

Based on his analysis of data from REAL Trends, the number of closings by the top 250 teams in the United States grew from 61,000 in 2011 to 133,000 in 2017 – a 115 percent increase.

During the same period, the number of closings by the top 250 individual agents grew 13 percent from 45,000 to 51,000.

The growth rates from 2016 to 2017 were lopsided, too. Team sales increased by 13 percent and individual agent sales by 4 percent.

The faster growth in team sales volume is challenging brokerages because team sales “have significantly better profit margins than brokerage companies do,” Cofano told Inman.

He also said the trend probably applies not only to the best teams and individual agents but across the board.

In a recent survey by the National Association of Realtors, 26 percent of the respondents identified themselves as members of a team.

The proliferation of teams may stem from a brokerage model that RE/MAX introduced. Top agents pay a monthly “desk fee” plus an unusually low share of their commission income to RE/MAX franchisees.

Cofano said that type of business model effectively shifts the ownership of consumer relationships from brokerages to their agents.

Customer-relationship software and other technological advances have led the best agents to seek other ways to improve their performance, and “teams are a natural outgrowth of that,” he said.

By providing sales leads, technology and training, leaders of real estate teams collect large shares of the commission income of less experienced team members that previously went to their brokerages.

As a result, some brokerages now see internal teams as direct competitors but cede control to them, anyway, because they close so many sales, Cofano said. [Inman] Mike Seemuth

Travis Kalanick is moving one of his Spanish-based startups to London (Credit: Getty)

Spotahome, a five-year-old rental property platform backed by Uber co-founder Travis Kalanick, is relocating its headquarters from Madrid to London.

Spotahome expects to disrupt the residential rental market in Europe with its website and app, which link landlords to potential tenants and display videos and floorplans of available properties.

Spotahome founder Alejandro Artacho said Brexit – the UK’s pending exit from the European Union – has not hindered the company’s ability to attract talent to London, where it plans to hire 200 staff.

Artacho said some of some of the top executives of Spotahome already live in London, and others prefer London to Madrid.

Spotahome, which raised $40 million from investors last year, plans to open its London headquarters and introduce a new management team within a few months.

The company’s website and app for landlords and tenants are modeled after the Uber ride-hailing app.

In addition to Kalanick, the Uber co-founder, investors in Spotahome include Dropbox co-founder Drew Houston, London-based venture capital firm Passion Capital,  an unnamed Facebook executive and Kleiner Perkins, a California-based venture capital firm. [Financial Times]Mike Seemuth

Gary LeVox of Rascal Flatts and Toby Keith (Credit: Getty, Pixabay)

An Arizona man in the Federal Witness Protection Program has taken money from broken restaurant-development projects across the country, the Arizona Republic daily newspaper reported.

Frank Capri was behind the collapse of a restaurant chain named after country music recording star Toby Keith. Starting in 2009, Phoenix-based companies controlled by Capri opened 20 restaurants under the name Toby Keith’s I Love This Bar and Grill.

But by 2015, 19 of the 20 restaurants had closed. Developers sued Capri, claiming he failed to pay contractors, broke agreements to lease space in shopping centers, and took millions of dollars that were supposed to cover construction costs.

But bad publicity from that litigation didn’t prevent Capri from planning the development of another restaurant chain named after country band Rascal Flatts.

He was behind projects to open Rascal Flatts restaurants in 19 cities, including Chicago, Orlando, St. Louis and Pittsburgh. But only one Rascal Flatts restaurant opened, then closed after about a year in business.

The Arizona Republic reported that Capri used is girlfriend, Tawney Costa, and her business associate, Chris Burka, as fronts in the Rascal Flatts restaurant projects.

Ray Roshto, who owns Ussher Construction in Glendale, Arizona, said Capri hired him to build Rascal Flatts restaurants in five cities. Roshto also told the newspaper that Capri insisted on keeping his name off contracts and paying for construction work through a company called RF Restaurants.

Capri declined requests from the Arizona Republic for interviews. The newspaper reported that in 1999 the federal government gave him the name Frank Capri, along with a Social Security number and a 1967 birthday.

His original name was Frank Gioia Jr., and he was a member of the Lucchese crime family in New York City who committed murder and trafficked illegal drugs. To avoid prison, he cooperated with federal prosecutors and helped them convict more than 70 Mafia members in the 1990s and the 2000s.

Prosecutors rewarded him by giving him a new identity and putting him in the Federal Witness Protection Program.

In 2008, Capri began to present himself as a commercial developer of a chain of indoor playgrounds. He offered long-term leases to mall owners in exchange for upfront cash payments, but never built the promised playgrounds.

In similar fashion, Capri opened and closed Toby Keith restaurants, broke leases and prevented developers from getting paid. Dozens of lawsuits ensued, and by 2017, courts across the country had ordered him or his companies to pay civil judgments totaling at least $65 million.

In August 2017, RF Restaurants opened its first and last Rascal Flatts restaurant in Stamford, Connecticut. It closed about a year later amid claims that RF Restaurants owed more than $1.1 million of unpaid rent.

RF Restaurants was sued after it terminated Rascal Flatts restaurant projects in Pittsburgh, Gainesville, Florida; and Hollywood, California. Mall owners and developers involved in the Rascal Flatts projects claimed that RF Restaurants broke contracts and failed to pay rent. [Arizona Republic]Mike Seemuth

An exterior shot of the Vessel and a kiosk as Hal 9000 at Hudson Yards (Credit: Wikipedia)

In a scene from “Gattaca,” the dystopian 1997 film set in the “not too distant future,” dozens of people are seen entering the Gattaca Aerospace Corporation headquarters using their genetic fingerprint to pass security clearance. It may seem like a far-flung sci-fi reference, but at Hudson Yards, the gargantuan “smart city” that officially opened Friday on the Far West Side, there are elements of art-meets-life.

Related Hudson Yards president Jay Cross (Credit: University of Toronto)

“We said, ‘What should technology be able to do at Hudson Yards if it’s truly a smart city?’’” said Jay Cross, president of Related Hudson Yards, the project’s developer.

Related says its use of technologies will make life better for those who work, live or shop in the 16 buildings planned for the $25 billion development. But the company’s decision to hold user data indefinitely, as well as its partnership with the firm behind the controversial LinkNYC kiosks, has sparked alarm among surveillance and data privacy watchdogs.

Related says it hasn’t yet determined exactly what it will do with data it collects from people in the neighborhood, or movements its cameras record. “But from our point of view, the data is our data for the purposes of allowing us to make Hudson Yards function better,” said Cross.

One example is Related Connect, an app for residents at 15 Hudson Yards that replaces the apartment key with a smart-phone. Another feature is Pass, a system in the office buildings that scans a biometric handprint to allow tenants into the building; their guests are provided access by using a QR code.

“The data is our data for the purposes of allowing us to make Hudson Yards function better” said Jay Cross

A third technology is a yet-to-be-named “content management system” which includes 30 kiosks dotted across the 26-acre site. This is the most visible element of Related’s use of technologies for its smart city, and the one that has sparked the greatest concern from data privacy advocates.

Similar in appearance to LinkNYC towers, these 10-foot tall rectangular figures contain interactive touch screens on either side that can be used to book restaurants, buy tickets for “the Vessel” or get directions, and send alerts to your phone.

Less known is the inclusion of two tiny cameras on each side and sensors that track atmosphere levels. Cross said the cameras will be primarily used to relay pedestrian figures to advertisers.

“We can say how many people looked at this ad, for how long. Did they seem interested, bored, were they smiling?” he said.

But they may have other uses, too. For example, they could track pedestrian traffic from the No. 7 subway. This information would then sit in a “data lake” to be used to enhance the experience for people in Hudson Yards, he said.

Though Related doesn’t currently have any plans to sell user information to third-party companies or government entities, Cross said the private developer could do so in the future.

“We can do with what we want with our data; we’re not averse to using it to help the city map the West Side.”

The city said it currently does not have a data sharing agreement with Related, nor are there any city laws regarding data collection that would apply to the real estate company.

“There are regulations regarding information the government collects, but not private businesses,” city spokesperson Jane Meyer said in a statement.

“Red flags” for privacy advocates

To develop the kiosks, Related hired urban technology firm Intersection. The company, which is owned by a subsidiary of Google, provides the content management system for the kiosks, and displays the advertisements and news features that appear on the screens.

Intersection has been criticized over data privacy matters before. It’s the company behind the LinkNYC towers, the kiosks that have replaced phone booths across the city and display advertisements, news alerts and provide wifi access.

In 2017, the firm received blowback from data privacy advocates who learned the towers were storing personal browser history indefinitely and tracking other user data without clear privacy policies in place. The company also initially said the towers “may” contain cameras, before updating its user policy to state that its cameras are active.

Ultimately, Intersection updated its policy for the kiosks and now can only keep footage for seven days. Information including web addresses, device type, device identifiers — data collected when a person signs onto its wifi — is now deleted after 60 days.

With the Hudson Yards kiosks, no such limitations exist, and the data will be collected and stored en-masse. Intersection will be privy to any data collected, but will not be allowed to use it for its own purposes, Cross said.

This has created some concern among data privacy and surveillance watchdogs. The New York Civil Liberties Union, which called out LinkNYC for its previously lax privacy policy, said Hudson Yards’ “embrace of manifold data collection” raised concerns.

NYCLU’s Daniel Schwarz (Credit: Twitter)

“Cameras, microphones, WiFi kiosks and other sensors leave visitors vulnerable to exploitative and invasive data collection methods that allow for the precise tracking of people’s identity, movement, interactions, and behavior,” said Daniel Schwarz, a privacy and technology strategist at the NYCLU. “Prior notice and consent should be a baseline requirement.”

Shahid Buttar, a director at the Electronic Frontier Foundation, an international digital privacy advocacy group that campaigned against LinkNYC, said that infinite data retention periods are a “red flag” for data privacy and the rights of individuals who do not opt-in to the technologies — for example, being filmed.

“This kind of technology, absent community control, can be pernicious,” Buttar said. “It might be a private neighborhood, but it’s still no more respectful of the individuals that are in it.”

In response to these concerns, Cross said that mass data collection is not of interest to the developer and that its capabilities to pool data is dwarfed by the scale of LinkNYC’s network of kiosks, which number almost 2,000.

“Prior notice and consent should be a baseline requirement.” said Daniel Schwarz

“For us it’s about running the campus better, it’s completely different from the world of big data,” he said. “We don’t have enough collection points.”

A lesson in Canada

Intersection’s chairman Dan Doctoroff is considered by many to be the initial mastermind of Hudson Yards — he even came up with the name while serving as deputy mayor of New York City under Michael Bloomberg. Doctoroff also doubles as chairman and CEO of Sidewalk Labs, a “smart city” urban developer that is the majority owner of Intersection and shares an office with the company at 10 Hudson Yards. Sidewalk Labs is owned by Alphabet, the parent company of Google.

Intersection’s chairman Dan Doctoroff (Credit: Wikipedia)

Doctoroff’s vision for a smart city has evolved through his work on a controversial project he’s spearheaded in Canada. Sidewalk Labs secured a tender to develop an 800-acre slice of land on the shore of Lake Ontario in 2017. The first neighborhood of the futuristic site, called Quayside, is expected to include heated sidewalks to melt snow, mostly timber buildings, self-driving cars and climate controlled public spaces that can block rain and snow.

But the project has received intense pushback from the local community who claim that Sidewalk Labs subverted the democratic process to win the tender and secure the site. The former Ontario Privacy Commissioner, Ana Cavoukian, who was hired to consult Sidewalk Labs, resigned from the project in October after she deemed it a “smart city of surveillance.” In December, the Ontario Auditor-General issued a scathing report that found the government body that granted Sidewalk Labs the land bypassed standard processes of awarding a tender and gave advanced time to the developer to prepare its application.

BlackBerry’s former co-chief executive Jim Balsillie (Credit: Centre for International Governance Innovation)

“You don’t have an option to opt out of a surveillance city,” said Jim Balsillie, the former co-chief executive of BlackBerry, who has been a vocal opponent of Sidewalk’s operation in Toronto.

In the past month, the project received negative coverage after a business plan leaked to the Toronto Star, outlining Sidewalk Labs aim to collect city payments for developing the neighborhood — another disclosure that outraged opponents of the project. Sidewalk Labs did not respond to requests for comment for this story. Intersection declined an interview with Doctoroff and directed inquiries to Related.

Hudson Yards, by comparison, has only elements of the technology expected to be deployed in Toronto. It was first mapped out in 2008 — the year after the iPhone was released — and not built from the ground-up with technology in mind. And, unlike Toronto, is built by a pure-play real estate developer, rather than a technology company.

However, it does have capabilities to advance its technological offerings. The cameras built into the kiosks do not currently have software to enable facial recognition, but are capable of supporting the feature — something Cross said there are no immediate plans for.

But also contained within the kiosks are small microphones that, when activated, will have voice recognition and the ability to talk with pedestrians.

“Eventually you’ll be able to talk to this,” said Cross. “It’ll be like HAL 2001.”

Housing and Urban Development Secretary Ben Carson (Credit: Getty)

Are Dreamers eligible for government-backed mortgages?

Federal agencies are sending mixed messages about Deferred Action Childhood Arrivals recipients’ eligibility for Federal Housing Administration loans, HousingWire reported.

That’s created confusion and essentially cut off FHA lending to Dreamers.

Several lenders and mortgage industry players said the Department of Housing and Urban Development sent a statement saying DACA recipients, or Dreamers, can no longer get FHA loans. According to HousingWire, one lender shared a message that appears to be from HUD and notes that Dreamers do not meet FHA guidelines because DACA doesn’t grant legal residency in the U.S.

According to HUD, “non-U.S. citizens without lawful residency in the U.S. are not eligible for FHA-insured mortgages.” But Dreamers were previously eligible under certain circumstances — such as when they were legally allowed to work in the U.S., as determined by the USCIS.

Another lender told HousingWire they contacted FHA directly and were told that Dreamers are not eligible for FHA mortgages. And still another lender said the FHA’s customer service team said, in response to an inquiry, “NO we do no(t) lend to DACA borrowers.”

Others have said they’ve gotten mixed messages from HUD, the report said. Not providing a direct answer means HUD is leaving mortgage providers to interpret how to approach the issue. The ambiguity is leading lenders to not write mortgages for DACA borrowers in case it gets denied by FHA.

HUD, FHA and the Department of Agriculture told HousingWire that they had not changed their policies regarding mortgages to DACA recipients.

One lender told HousingWire that only one investor is currently willing buy the mortgages, but only if they are conventional loans backed by Fannie Mae or Freddie Mac. [HousingWire] — Meenal Vamburkar

Mohamed Alabbar, chairman of Emaar Properties (Credit: Getty)

One of the largest developers in the United Arab Emirates plans to launch a loyalty program powered by blockchain technology.

Dubai-based Emaar Properties, which developed the Burj Khalifa skyscraper, said an initial coin offering in Europe will be considered within a year of its internal launch of its blockchain platform and community token, Arabian Business reported. Lykke, a Swiss-based online marketplace, is building the platform, which is based on the Ethereum blockchain and the ERC20 token framework.

Emaar’s community token will be accepted throughout the company’s various holdings in real estate, malls, hospitality, entertainment, facilities management and online shopping. The company’s assets are reportedly worth nearly $10 billion.

Emaar is partially owned by the Al Maktoum family, the royal ruling family of Dubai. In 2018, Emaar’s shares dropped 39 percent, amounting to the company’s lowest price-to-earnings ratio in about a decade. [Arabian Business] – Katherine Kallergis

Pawn shops in China will often lend up to 40 percent of the value of an apartment pledged as collateral (Stock photo, credit: Getty)

Over the past few years, China has increasingly relied on real estate-backed loans from pawn stores.

Pawn shops in the country provided $43 billion worth of loans in 2017 while the number of these stores has doubled since 2010 to more than 8,500, Bloomberg reported. Crucially, more than half the loans in 2017 were backed by real estate.

Borrowers for these loans are not required to disclose how the money will be used, according to Bloomberg, and pawn shops in China will often lend up to 40 percent of the value of an apartment pledged as collateral. More than a third of China’s pawn shops had losses as of February 2018.

Now Chinese regulators are seeking to increase oversight of this segment of the market amid a widening crackdown on the country’s expansive shadow banking industry. Specifically, the government is looking to increase the capital requirements for pawn shops.

The move also comes as China’s real estate market is reportedly weakening, especially in rural parts of the country. [Bloomberg] — Keith Larsen

Rendering of planned AC Hotel by Marriott at 3029 Alhambra Street in Fort Lauderdale

Miami-based Key International broke ground for construction of an AC Hotel by Marriott near the beach in Fort Lauderdale.

Key International is building the 10-story, 171-room hotel on a site at 3029 Alhambra Street on Fort Lauderdale’s barrier island.

The Miami-based firm acquired the development site as a three-parcel assemblage for $9.56 million in July 2016.

Amenities at the AC Hotel by Marriott will include a cocktail lounge and a resort-style swimming pool with cabanas and dining service.

Key International acquired the half-acre development site about eight months after Fort Lauderdale city commissioners approved a site plan for the hotel development in November 2015.

South Carolina-based OTO Development had a contract to purchase the Alhambra Street site but decided against closing the deal.

Key International’s portfolio of hotels and resorts includes the Eden Roc Resort in Miami Beach, a newly opened  Embassy Suites by Hilton in St. Augustine and the dual-brand Residence Inn and Springhill Suites in Clearwater. [Hospitality.net]Mike Seemuth

250 Bird Road in Coral Gables (Credit: Avison Young | South Florida Business Journal)

Baptist Health South Florida and Belmont Village Senior Living formed a joint venture to develop senior living centers in Coral Gables and elsewhere in South Florida.

Baptist and Houston-based Belmont plan to develop their first South Florida senior living project at 250 Bird Road in Coral Gables.

Construction is expected to start in mid-2020 and conclude within two years of the groundbreaking.

Belmont will manage the development and operation of Belmont Village Coral Gables, which will have a mix of residential units for independent living, assisted living and memory care.

Belmont is now building Belmont Village Fort Lauderdale at 1031 Seminole Drive, which is expected to open in fall.

Baptist acquired the 2.8-acre development site on Bird Road in January for $37 million. Developers Ugo Colombo and Masoud Shojaee had planned to build condos and retail space on the site before their partnership ended nearly three years ago.

Baptist is a non-profit health care organization with 10 hospitals in South Florida, more than 40 physician practices, and 50 outpatient and urgent care facilities. – Mike Seemuth

Bioscleave House in East Hampton, NY (Credit: Realtor.com, iStock)

Real estate is often a hot commodity in the Hamptons area of Long Island, New York. But an oddly designed house in East Hampton remains unsold even though it has been on the market since 2011.

The 2,700-square-foot house is painted in 40 different colors and has windows located at floor level, power outlets tilted at 45-degree angles and a cement floor covered with little hills.

The property, called Bioscleave House, is a testament to belief in “reversible destiny,” or the notion that humans can take action to avoid death.

Two deceased artists, Shusaku Arakawa and his wife Madeline Gins, completed the house in 2008.

They met at the Brooklyn Museum Art School, married in 1965, and together tried to achieve eternal life by making the world a better place – initially through painting and writing, then through architecture.

They designed the Bioscleave House to ensure active engagement in the performance of routine tasks, which the couple believed would strengthen their immunity to illness and extend their lives.

For example, the hilly concrete floor required them to use caution when walking across it to avoid falling. They also believed that the floor-level windows, the angled electrical outlets and the 40 different paint colors put the focus of their attention on their immediate surroundings and made their senses sharper.

But the residential real estate market in The Hamptons isn’t buying it.

The asking price for Bioscleave House just dropped $200,000 to $1.29 million. The asking price had fallen from $4 million in 2011 to $2.49 million last July and $1.49 million in February.

The property is an annoyance to locals. Marc Boroditsky, a neighbor who resides next to Bioscleave House, derides the unsold property as “a disturbing deviation from the norm.”

The belief in reversible destiny has no scientific basis, according to Dr. Ted Strange, a pediatrician affiliated with Staten Island University Hospital.

In 2010, Arakawa died of ALS at age 73, and in 2014, Gins died of cancer at age 72.  [New York Post]Mike Seemuth

 

Damien Hirst (Credit: Getty)

The Palms Casino Resort in Las Vegas recently introduced a two-story, 9,000-square-foot suite available for $200,000 for a minimum two-night stay.

Damien Hirst, a British contemporary artist, designed the suite that features some of his works, including two bull sharks suspended inside a formaldehyde-filled tank and a medicine cabinet packed with 12,500 cubic zirconia “pills” that resemble diamonds.

Also displayed in the Palms Casino Resort suite are works by artists Andy Warhol, Felipe Pantone, Eric Haze and Jean-Michel Basquiat.

Other features of the suite include a cantilevered pool and hot tub overlooking the Las Vegas Strip, a curved bar with seating for 13 guests, a pair of lounges that double as media rooms, a salt room for therapeutic treatments, two private massage areas and an exercise room.

The suite, which has two bedrooms and two-and-a-half bathrooms, comes with a $10,000 resort credit, 24-hour butler service, chauffeured car service, and access to the hotel’s nightclubs and Pearl Theater.

The highest of high rollers – gamblers who spend at least $1 million – may get invitations to stay in the suite free of charge. Though used March 1 for a private event, the suite hasn’t had an overnight guest yet. [Los Angeles Times] – Mike Seemuth

Frankfurt (Credit: Getty)

The owners are trying to sell an office complex in Frankfurt amid speculation that Brexit will boost the value of commercial property in the German financial capital.

Norway’s sovereign wealth fund and Axa Investment Managers SA want about 550 million euros ($622 million) for the Die Welle office complex in Frankfurt’s business district, Bloomberg reported.

Prices for nearby office properties have increased to record levels on speculation that Brexit, or the pending exit of the UK from the European Union, will lead professional talent and financial capital to relocate to Frankfurt.

Both the Norwegian fund and Axa declined to comment. They formed a joint venture to buy the Die Welle office complex in 2012. It was the sovereign fund’s first investment in German real estate.

The fund’s $1 trillion in assets now include a $25 million portfolio of real estate around the world, and the fund announced in February that it would pare its property investments. [Bloomberg] Mike Seemuth

 

It’s not all angular glass and steel rising above the old rail yards on the Far West Side.

While the office buildings and vertical mall have garnered the most attention, the condominium building at 35 Hudson Yards is the “beautiful señorita flamenco dancer in the center” of the development, twisting and turning as it rises, said David Childs, the chairman emeritus from Skidmore Owings and Merrill.

The architect, who worked with Related chairman Steve Ross on the design concept, relied on stone between the panes of glass to give the condo tower a residential feel.

“The way you get to a building is part of the experience of architecture,” he said. “Architecture is not just a picture of something like you see in a museum… I will always look at this building and think of it much like a piece of music, to which architecture has often been compared.”

The building, with 143 apartments, opened on Friday with the rest of the eastern portion of Hudson Yards. The developer and its partner Oxford Properties Group is aiming for a $1.53 billion sellout. Units start at $5 million.

Check out our video tour of 35 Hudson Yards and interview with David Childs.

Tim Leissner and and Roger Ng (Credit: Getty Images)

Abu Dhabi’s state investment company has hit pause on new business with Goldman Sachs, which has been embroiled in the multibillion-dollar fraud scandal tied to Malaysian state investment fund 1MDB.

The moves increases pressure on the bank and threatens to affect its broader relationships in the region, the Financial Times reported. Goldman had become a top investment bank in Abu Dhabi and worked on the merger of two major state-owned real estate companies.

“We have suspended any activities with Goldman Sachs pending [the] outcome of the litigation,” Brian Lott, a spokesperson for Mubadala Investment Company, said in a statement. “The only exceptions are engagements signed prior to the litigation, which will continue as per contractual terms.”

Goldman declined to comment to the FT.

The International Petroleum Investment Company, a Mubadala unit and former partner of 1MDB, sued Goldman in November, accusing the U.S. financial institution of bribing its officials during a “massive global conspiracy,” the report said. And Malaysia has filed criminal charges against Goldman subsidiaries and two former bankers — Tim Leissner and Roger Ng — accusing them of helping misappropriate $2.7 billion from 1MDB bonds.

Malaysia’s charges came after the U.S. Department of Justice indicted Leissner and Ng. Leissner has pleaded guilty to two counts of conspiracy to commit money laundering and bribe foreign officials. In 2015, IPIC guaranteed billions of dollars of bonds arranged by Goldman and issued by 1MDB. DOJ alleged that $4.5 billion had gone missing, the report said. After the Malaysian fund defaulted, the government in Kuala Lumpur at the time agreed to repay IPIC in a settlement, which has the new government has since challenged.

For its part, Goldman has disputed all the allegations and said it would defend itself against them, the report said. The bank also said the previous Malaysian lied to the bank about how the bond proceeds would be used.

Meanwhile, Jho Low, the alleged mastermind behind the scandal, is wanted by the Malaysian government and believed to be hiding in China. He allegedly used the funds to finance his lavish lifestyle, and invested in Steve Witkoff’s formerly-owned Park Lane Hotel, where Mubadala owns a stake.

Professional services firm Deloitte has also become embroiled in the scandal. The UK-based firm was fined $535,000 by the Malaysian government after it allegedly failed to report irregularities found in audits of companies linked to the 1MDB fund. [FT] — Meenal Vamburkar

After Hudson Yards’ official opening ceremony on Friday — which featured guest speakers including none other than Big Bird — The Real Deal got a hold of the development team behind the $25 billion project.

Ken Himmel, the president and CEO of Related Urban, spoke about opening the seven-story Shops at Hudson Yards amid a troublesome time for retail.

And in light of the controversy surrounding Amazon’s incentive package to come to New York, Related Companies CEO Blau responded to questions regarding public funds pumped into the Hudson Yards neighborhood.

“Subways and parks, aren’t subsidies,” Blau said. “That’s the role of government to encourage economic development.”

Check out the video above to hear more from the developers behind the country’s largest private real estate project.

Interviews by Kathryn Brenzel.

Brenda Nestor (Credit: Google Maps)

Brenda Nestor’s Islamorada property is hitting the market in a bankruptcy sale.

The 8.4-acre stretch of oceanfront land on Windley Key is zoned for residential development.

Avison Young’s John K. Crotty, Michael T. Fay, Jay Ziv, David Duckworth and Brian C. de la Fé are handling the sale of the vacant Islamorada property on behalf of the U.S. Bankruptcy Court. Qualifying bids of at least $1.835 million are due on March 25, according to a press release. The property is located at Old Highway at Mile Marker 84.5.

Nestor filed for personal bankruptcy in 2017. Nestor is the former girlfriend-turned-business-associate of the late businessman and corporate raider, Victor Posner. She was named primary beneficiary of his $321 million estate in 2002, and has been entangled in a slew of litigation in recent years.

In 2015, a Miami-Dade judge removed Nestor from that role after she allegedly disobeyed previous court orders. The judge said Nestor failed to provide a full accounting of her actions as the Posner estate’s personal representative, according to court documents. The judge replaced Nestor with Philip von Kahle, a lawyer and a broker with Fort Lauderdale estate planner Moecker & Associates. He hired Akerman to provide legal advice.

Last year, Nestor filed suit against Akerman for breach of fiduciary duty, malpractice and civil conspiracy. Nestor alleged that she suffered damages as a result of “negligent and reckless” legal advice Akerman provided after she was removed from handling Posner’s estate. The suit was dismissed in November.

The probate estate allegedly owed more than $46 million to Pension Benefit Guarantee Corp. and more than $8 million to the IRS, all of which built up while Nestor was handling the estate, the Daily Business Review reported in November.

Property records show Nestor paid $300,000 for the Islamorada property property in 1992.

Clockwise from top left: Real estate developers among 50 charged in college admissions fraud scheme, HUD will give preference to affordable housing in Opportunity Zones, Ben Carson says, New York congresswoman presents bill that would expose LLCs’ beneficial owners, and CoStar Group sues two NY firms claiming copyright infringement.

Real estate developers among 50 charged in college admissions fraud scheme
Fifty people have been charged in a college admissions fraud scheme that allegedly involved parents handing out bribes to secure acceptance letters for their children, including three real estate developers and investors. Miami developer Robert Zangrillo and Los Angeles developers Bruce Isackson of WP Investments  and Robert Flaxman of Crown Realty were among the 50 individuals ultimately charged in the scandal.  William E. McGlashan Jr., a partner at private equity firm TPG, has also been charged. The scandal marks the Justice department’s largest-ever college admissions investigation. [TRD]

HUD wants to boost affordable housing in Opportunity Zones
Developers and investors looking to take advantage of the federal Opportunity Zone program may want to consider building affordable housing. In an interview with The Real Deal, Housing and Urban Development Secretary Ben Carson said preference for certain grants will be given to proposed affordable developments, though he noted the agency can’t require developers to build affordable housing. Carson also said he would consider staying with HUD for a second four-year term. “My preference would be to go back to the private sector, that would be my preference now,” he said. “But there are some very important things that need to be done.” [TRD]

New York Rep. presents bill that would expose LLCs’ true owners
New York Congresswoman Carolyn Maloney has reintroduced a bill that would force anonymous LLCs to disclose their beneficial owners to the Financial Crimes Enforcement Network, which would in turn disclose the info to law enforcement and financial institutions. The bill, known as the Corporate Transparency Act of 2019, aims to solve a “very simple” problem, Maloney said. “Criminals and terrorists have always used anonymous shell companies to finance their operations, because they never have to disclose who actually owns these shell companies,” she said, adding that law enforcement investigations often “hit a dead end at an anonymous shell company.” [TRD]

CoStar Group sues two NY firms claiming copyright infringement
CoStar Group has hit two different firms with copyright infringement lawsuits. The suit filed against New York-based Baron Realty Group claims the firm didn’t pay to use its service, “stole tens of millions of data points” and subsequently compiled its own database for employees. Another suit filed against New York-based Realty Insight claims that firm did buy CoStar subscriptions, but “secretly” resold them to other commercial real estate firms. CoStar said it hopes the lawsuits “send the message to would-be thieves that [it] will pursue legal action.” The firms didn’t immediately respond to requests for comment. [TRD]

MAJOR MARKET HIGHLIGHTS

The Chrysler Building’s new owner is considering a hotel conversion
Aby Rosen’s RFR Holding and Austrian real estate firm Signa Holding GmbH may have big plans for their latest purchase. In an email, Rosen told Bloomberg he would consider a hotel conversion for the Chrysler Building, which he and his partner are buying from Tishman Speyer and an Abu Dhabi government fund for $151 millionNewmark Knight Frank’s Lawrence Wolf noted that a conversion of the 1930 Art Deco building could be difficult for the new owners. “It’s a magnificent building… but changing use is not without issues,” he told the outlet. [TRD]

Chicago City Council approves $6B riverfront development plan
Sterling Bay’s $6 billion plan for a development along the North Branch of the Chicago River has secured the Chicago City Council’s approval. The council approved the developer’s plan to build 14.5 million square feet of office, retail and residential space on the Lincoln Yards site along the river by a vote of 33-15, following months of debate. While one Alderman had hoped to delay approval, describing the project in its current iteration as “the rich getting richer,” another Alderman said the Windy City needs the project to compete with cities like New York. Sterling Bay still needs the council to approve a new $1.3 billion tax increment financing district. [TRD]

Miami WeWork building to sell in cryptocurrency auction
The owners of a Miami office building that’s currently leased to WeWork are expected to sell it for $65.5 million as part of a cryptocurrency real estate auction, marking largest such deal of its kind. Turnbridge Equities founder and managing principal Andrew Joblon and his partners plan to sell the 93,000-square-foot building to New York-based financial and advisory services firm Inveniam Capital Partners, which reportedly made a deposit on the building using Bitcoin back in January. WeWork still has 12 years on its lease at the building. [TRD]

Co-living company plans $100M expansion in LA amid “huge demand”
Los Angeles will be getting seven new co-living buildings over the next few years. Co-living company Common is teaming up with Proper Development on a $100 million project that will include 600 beds, the Los Angeles Times reported. Common’s existing co-living buildings in Echo Park and Hollywood offer housekeeping services and fully-furnished units. Rents are around $1,550 per person at the Hollywood location, and competition for the spaces is fierce: Common founder Brad Hargreaves told the outlet the company got 9,000 applications for the 24 units, and noted that he’s seen “huge demand in Los Angeles.” [TRD]

West Coast housing prices drop after years of “out of reach” prices
Home prices on the West Coast are falling thanks to an increase in inventory, spelling good news for prospective homebuyers, according to Bloomberg. The shift comes after years marked by “out of reach” price tags and heated competition between buyers. In places like Seattle, San Francisco and Denver, “bidding wars are vanishing, time-on-market is climbing and prices are flattening, or even falling,” according to the outlet. “This is what it looks like when the pendulum starts to go the other way,” Trulia housing economist Felipe Chacon told the outlet. [TRD]

Austin-based developer to construct 3-D printed affordable housing
An Austin-based developer is planning to use a 3-D printer to construct affordable homes. Construction-tech startup Icon is selling the printer, known as the Vulcan II, to Cielo Property Group, which plans to start using it this year, according to the Wall Street Journal. The 3,800-pound printer will be able to create a 2,000-square-foot family home within several days by pumping out concrete. Perfecting the technology hasn’t been setback-free, Icon CEO Jason Ballard noted. “We exploded so many pumps,” he said. “I’m talking about liquid concrete on every surface and every human in the room.” [TRD]

From left: Bruce Flatt, CEO of Brookfield Asset Management and Howard Marks, co-chairman of Oaktree

Brookfield Asset Management is already one of the largest alternative asset managers in the world. And its latest diversification play could help it during a downturn.

This week, the Toronto-based giant paid $4.7 billion for a 62 percent stake in Oaktree Capital Management, which specializes in distressed debt. Oaktree has countercyclical success to Brookfield, and was one of the biggest buyers of distressed debt during the last financial crisis, the Financial Times reported.

“Oaktree is the premier credit alternative manager in the world,” Brookfield’s CEO Bruce Flatt told the publication.

Oaktree, founded by Howard Marks, reportedly discussed deals with other players, according to FT. But the firm found Brookfield, whose shares have soared throughout the economic recovery, to be the “ideal” buyer as the asset manager’s investments perform better in stronger economic times, FT reported, citing a person with knowledge of the transaction.

“We do not produce steady growths in assets or profits and the last 10 years have been a tough period for that orientation,” Marks told the outlet.

Together, the companies will take in roughly $2.5 billion in annual fees on their assets under management, making the firm one of the largest of its kind, according to the outlet.

The move comes as investors and the real estate community prepare for a potential economic slowdown, along with any opportunities it might bring.

For example, Churchill Real Estate Holdings is in the midst of fundraising for a $200 million distressed debt fund that would target Manhattan real estate assets. And late last year, Maverick Real Estate Partners closed on what appears to be its largest distressed debt fund, with $200 million on hand to go after defaulted commercial mortgages around the city. — [Financial Times] Mary Diduch

Beth Butler and Dilip Barot with a rendering of Amrit Ocean Resort & Residences

With just a fraction of its condos pre-sold, Amrit Ocean Resort & Residences hired Compass to handle sales and marketing of the relaunched project under construction on Singer Island.

Developed by WRS Development, LLC, an affiliate of Dilip Barot’s Creative Choice Group, Amrit Ocean Resort & Residences will consist of an 18-story tower and a 19-story tower named Peace and Happiness. There will be 182 condo units in total. The oceanfront project at 3100 Ocean Drive in Riviera Beach has topped off and is set to be completed in the first quarter of 2020, according to a spokesperson. Compass’ development division was brought in.

Amrit relaunched sales in 2017, a decade after Barot had pulled the plug on the previously planned development. An in-house team has been handling sales, which currently stand at 20 percent, the spokesperson said. Prices for the units, including 11 penthouses with rooftop terraces, range from the $900,000s to more than $4 million.

During the last recession, Barot returned 86 deposits to buyers of his previously planned Amrit Ocean Resort & Residences. But he held onto the vacant site and began construction in 2017.

The condo development is aimed at “mindful living,” focusing around nutrition, fitness, mindfulness, sleep and relaxation. The project plans to feature resort amenities such as an Aayush Spa, fitness center, salon, oceanfront fitness zone and beachfront spa and pool.

In recent years, developers have been targeting Singer Island for new oceanfront condominiums. VistaBlue Singer Island, a 19-story tower with 58 units, was recently completed by Third Palm Capital; and 5000 North Ocean, is currently under development by Kolter Group. The 19-story, 48-unit condo project is expected to be completed later this year.

211 individuals in New York City own between three and 10 units in a single building (Credit: Pixabay)

Conventional wisdom advises real estate investors to spread their risk across a diverse portfolio. But not so for “bulk buyers” who prefer to invest in multiple luxury units in single developments, often against the wishes of their financial advisors.

“Bulk buyers” may use their multiple units to house guests or extended family, to generate rental income, or to cobble together a dream home, the Wall Street Journal reported. But the strategy requires total faith in the specific development, and its management team.

A PropertyShark report shows that 211 individuals in New York City own between three and 10 units in a single building. In Chicago, 342 owners do and in Los Angeles, 181 owners do, the Journal found. The report also shows that many bulk buyers use LLCs to make purchases. (PropertyShark’s report doesn’t track owners with more than 10 units in a building, or whether there was overlap between buying in their own name and also using LLCs.)

As with bulk buying of food or home goods, bulk real estate investment can save buyers money. Neil Johnson, managing director of Ohana Real Estate Investors, a developer of luxury resorts in California, Mexico and Park City, Utah, told the Journal he sometimes offers bulk buyers a 15 percent to 20 percent discount off the listing price. [WSJ] – Decca Muldowney

 

Brian P. Burns and 217 Via Tortuga (Credit: Wikipedia and Realtor)

President Trump’s planned ambassador to Ireland and his wife sold their home in Palm Beach for $8.8 million.

Brian and Eileen Burns sold their 6404-square-foot house at 217 Via Tortuga for $1,374 per square foot. The buyer is tied to Robin Tebbe, an executive with the Chicago-based real estate company Magellan Development.

The Mediterranean-style home has five bedrooms and seven bathrooms. The house was built in 1997. The couple had bought the home for $3.3 million in 1999, records show.

The New York Times reported that President Trump had chosen Brian Burns to be the U.S. ambassador to Ireland in 2016, but a year later Burn’s backed off from the position, citing health reasons. Burns was also formerly a partner at a number of large law firms in San Francisco and sat on the boards of the Kellogg Company and the Coca-Cola Bottling Co. Burns reportedly holds a massive collection of Irish art that is seen in photos of the Palm Beach estate.

Increasingly, wealthy out-of-state buyers are purchasing properties in Palm Beach.
In December, Tom Elghanayan and his wife Madeline Hult Elghanayan paid $8.1 million for a house in Palm Beach. In 2017, Capital International Research executive Kathryn M. Peters bought the estate of developer Florenz Robert Ourisman, at 209 Via Tortuga, for $6.2 million.

Related Companies’ Stephen Ross and The Shops at Hudson Yards; right, a view of the Vessel from Queensyard restaurant (Credit: Getty, Erin Hudson)

On its opening night, the glittering new mall at Hudson Yards resembled more of a circus than the Far West Side’s newest retail destination.

A marching band, tap dancers, a capella singers and other performance artists served as entertainment for opening night of the megadevelopment, which was nearly 15 years in the making. Liza Minnelli serenaded the crowd gathered in Neiman Marcus with a rendition of Frank Sinatra’s “New York, New York.”

Related Companies CEO Jeff Blau was seen early in the night making the rounds, receiving congratulations for hitting the milestone at the $25 billion project his company developed with Oxford Properties Group.

Industry power players including GFP Real Estate’s Jeff Gural and Jane Gural-Senders, Two Trees Management’s Jed Walentas, developer Harry Macklowe, L&L Holding’s Rob Lapidus were among the thousands of guests — making the night the largest gathering of real estate figures outside the Real Estate Board of New York’s annual gala.

HFZ Capital’s Ziel Feldman said the opening of Related’s project is part of the “rejuvenation, the creation” of Manhattan’s West Side.

“Hats off to them for being able to actually open, and in a challenging retail environment,” he said. “Everything looks beautiful.”

Cushman & Wakefield’s Doug Harmon and Adam Spies, Newmark Knight Frank’s David Falk, SCG Retail’s David Firestein and Dolly Lenz were among some of the top brokers who made appearances.

Well-stocked and brightly lit shops opened around 6 p.m. as invite-only guests started pouring into the seven-story complex, which is anchored by the first Neiman Marcus in Manhattan. Outside, spotlights danced across the building’s façade and cars pulled into the driveway to drop off and pick up passengers – bringing to life the public plaza that until just a few days ago was a working construction site.

“This is like Sim City on steroids, but real,” said Sharif El Gamal of Soho Properties. He added the developers would need enough interactive experiences to generate foot traffic for the retail stores.

At least on opening night, immersive retail appeared to be the theme. Athleta on the third floor had live mannequins in the windows: women in sportswear moving in and out of yoga poses in tandem.

Michael Pennock, a broker with Corcoran, got a facial on the second floor of Neiman Marcus. He stumbled upon skincare and beauty retailer C.O. Bigelow’s area, thinking that guests were receiving a shave.

“It was lovely,” he said afterward.

He and Douglas Albert, also of Corcoran, said they appreciated the glamour and exclusivity of the mall.

Not everything went off without a hitch, though. Several escalators appeared to have broken down at different points in the night. And not every shop was ready for its debut.

According to Related, 90 percent of the shopping center’s space is leased, and 85 percent was up and running by Thursday. As for the larger complex, roughly 82 percent of the office space is either leased or sold.

“It’s nice to see a mall with this much energy,” said Ilan Bracha of Keller Williams NYC. The test, he said, would be in sustaining interest. “Who knows, will it become like Brookfield?” he added, referring to the moribund atmosphere at Brookfield Place downtown.

Related and Oxford planned a more formal grand opening for Friday, with elected officials expected to be in attendance as real estate executives mark the occasion. Part of the 28-acre’s public areas will open on Friday, including its centerpiece: the 150-foot tall, honeycomb-shaped Vessel — which new development and marketing adviser Anna Zarro described as “real estate’s answer to J.Lo’s ring.”

Next, the developers are planning another 6.2 million square feet of mixed-use buildings at the second phase of Hudson Yards, which is expected to be completed in 2024.

Additional reporting by Hiten Samtani and Kathryn Brenzel.

Here are a couple of real estate events to check out next week!

On March 20th, Bisnow is holding an event on the State of the Market in Fort Lauderdale at the W Hotel Fort Lauderdale, 401 North Fort Lauderdale Boulevard from 8 a.m. to 11 a.m. Attend for networking opportunities and discussions on the new developments coming to Fort Lauderdale. Speakers include the Mayor of Fort Lauderdale, Dean Trantalis, and ZOM Living CEO Greg West.

On March 21st, CREW Miami is hosting its monthly luncheon at the Four Seasons Brickell, 1435 Brickell Avenue from 11:30 a.m. to 1:30 p.m. At the luncheon, there will be discussion focused on the importance of striking a balance between driving profits and benefiting communities.

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

Ken Griffin and Long Island City (Credit: iStock)

Ken Griffin, the billionaire CEO of Citadel, considered uprooting the Chicago-based hedge fund and moving to New York — until the backlash against Amazon’s plans for a new campus in Long Island City.

The political backlash against Amazon in New York “has dramatically reduced our interest in moving our headquarters here,” Griffin told Bloomberg. He called the e-commerce empire’s decision to pull out of the city “heartbreaking.”

Griffin began to mull a new home for his $29 billion company in January, after he spent a record $238 million to buy a penthouse at 220 Central Park South in Manhattan. Griffin visits the city about once a week, he said.

He already had grabbed the record for the priciest home in Chicago in 2017, when he paid $59 million for a four-story penthouse at the top of JDL Development’s No. 9 Walton.

Citadel’s offices anchor the 1.5 million-square-foot Citadel Center at 131 South Dearborn Street in Chicago’s Loop.

In New York, Citadel signed a lease in 2016 to take 211,400 square feet in the 47-story tower being built by L&L Holding Company at 425 Park Avenue. In January, the company announced it would expand the lease by another 124,000 square feet. [Bloomberg]Alex Nitkin 

Andrew Casino and 2300 Sunset Islands Drive

A Miami Beach hedge funder sold a spec home on the Sunset Islands for $5.9 million.

Andrew Casino and his wife Caroline sold the 5,900-square-foot house at 2300 Sunset Drive in Miami Beach for about $1,000 per square foot, records show. The buyer is Stephanie Clarke of Miami.

Andrew Casino is a partner at Appaloosa Management, a Miami Beach hedge fund led by David Tepper, the billionaire owner of the NFL’s Carolina Panthers.

The Sunset Islands home was built in 2016. It has six bedrooms, seven-and-a-half bathrooms with marble and oak floors and sits on 0.3 acres. Outdoors, it has a heated pool and a koi pond. It was developed by South Florida spec home developer Todd Michael Glaser.

Casino purchased it in 2017 for $5.78 million, records show.

The home was listed by Julian Johnston of Calibre International Realty. Catherine Rodstein of One Sotheby’s International Realty represented the buyer.

The Sunset Islands are home to many celebrities, including MLB Hall of Famer Mike Piazza, who listed his 9,000-square-foot waterfront house for $18.5 million in December of last year. The creator of the South Beach Diet, Dr. Arthur Agatston, also listed a property at 1633 North View Drive in the Sunset Islands for $23 million in May 2017.

From left: Jorge Mas and David Beckham, with a rendering of Miami Freedom Park (Credit: Getty Images)

On the field, David Beckham always operated within the confines of a 90-minute game, and now as a developer of a new soccer stadium, he’s still on the clock.

The same day Beckham and his partners announced a potential deal for their professional soccer franchise to play its first two seasons in Fort Lauderdale, Miami city commissioners ramped up the pressure on negotiations for their coveted site at the city-owned Melreese golf course.

The city commission voted 4-1 on Thursday to set a Sept. 16 deadline for City Manager Emilio Gonzalez to present a negotiated 99-year lease allowing Beckham’s group, led by partner and Miami businessman Jorge Mas, to build Miami Freedom Park. The massive commercial complex is planned to have a hotel, retail center and office park anchored by a 25,000 seat stadium for the group’s Major League Soccer team Inter Miami CF. Beckham and Mas want to build the project on 72 acres of city-owned land that is currently used as the golf course.

City commissioners are also requiring Gonzalez to seek their approval for any real estate consultants he wants to hire to assist with the negotiations.

During the meeting, Commissioner Joe Carollo said seven months is enough time for city staff and the Beckham group to draw up an agreement, while noting the partnership heavily lobbied the commission last year to place the stadium proposal on the November 2018 general election ballot in order to meet a deadline set by Major League Soccer. Voters approved the stadium referendum.

“There is no reason in the world this negotiation is going to take longer than the time we are talking about,” Carollo said. “I remember we pushed this through quickly because they had a gun at their head at the time from MLS. If we draw the line with a date, that is smart negotiating from the start.”

Carollo also threatened to throw a monkey wrench into the stadium proposal if no deal is in place by the commission’s deadline. “I will put forth a motion that we put it out to bid for the best and highest idea,” he said. “You will have no less than 20 development firms lining up.”

Commissioner Manolo Reyes, who co-sponsored the resolution, said he wanted to set a deadline to vote on a negotiated lease before the city’s municipal election on Nov. 5. Reyes claimed unnamed individuals planned to run a candidate against him because of his vociferous opposition to Miami Freedom Park. He also noted Willy Gort, the project’s other critic on the commission, is termed out.

“You know I have an election in November and I am totally opposed to this project [because] of the way it was done without any transparency and [because] parks shouldn’t be developed,” Reyes said. “Because of what has happened, there is an effort to get me out of here…. I want to make sure I am here when it’s time to vote.”

The commission’s vote on a deadline was a blow to Mayor Francis Suarez, who spoke against setting a deadline during the discussion. “I do have an issue with the deadline because I think it is an artificial deadline,” Suarez said. “To me this is not political.”

In a statement after the vote, Mas said the Beckham partnership is on board with the deadline. “All along we have wanted to finalize an agreement as soon as possible,” Mas said. “We will be ready to present the lease to the city as soon as its consultants are selected.”

Mas and Beckham did not attend the city commission meeting as they were in Fort Lauderdale touting their proposal to have Inter Miami CF play its first two seasons at a newly constructed $60 million Lockhart Stadium soccer complex, which was once the home of MLS’s first South Florida team, the Miami Fusion. That franchise closed down in 2001.

Inter Miami CF had initially submitted a non-solicited proposal to privately fund the design, development, construction, maintenance, and operation of a state-of-the-art soccer-training complex that includes an 18,000-seat stadium, as well as several community facilities, including a public park. The Fort Lauderdale city council will vote on Inter Miami’s proposal on Tuesday.

Sidewalk Labs CEO Dan Doctoroff with a rendering of Alphabet’s project in Toronto (top) and Hudson Yards (bottom). (Credit: Sidewalk Labs and Twitter)

Alphabet, Google’s parent company, may look to Hudson Yards as a model for how to finance an 800-acre urban hub along a downtrodden part of Toronto’s waterfront.

Sidewalk Labs, a Google sister company, is exploring options that could include selling bonds back by tax revenue and development charges from the commercial site, Bloomberg reported. The model could be similar to part of the $25 billion plan for Hudson Yards: Investors funded about $3 billion worth of special-purpose Hudson Yards Infrastructure Corp. bonds that went to the development of the 7 subway line and other infrastructure.

“We devised this approach, which said, we’ll go to bondholders and get them to put up the money on the hope that there would be development in the area,” CEO Dan Doctoroff told Bloomberg. “We will devote all of those incremental tax revenues and some other related revenue streams to the payment of debt service on the bond.”

Doctoroff, who spearheaded Hudson Yards’ development as a deputy mayor, says the area has the same need for a light-rail link to the Toronto development. The bonds would be issued by a special purpose corporation, he said.

The company is controversially also weighing a proposal to take a cut of property taxes, development charges and increased land values in the project to help cover infrastructure costs that could total $4.5 billion over the next 30 years.

Sidewalk Labs plans to submit an official proposal in the next three months or so, the report said. It includes first revitalizing a 12-acre neighborhood, called Quayside, which would include a new Google campus.

The firm has held some “very preliminary” conversations on financing with several pension funds across Canada and is working with a number of investment banks. [Bloomberg] — Meenal Vamburkar

1765 North Miami Avenue, Camilo Lopez, Jorge Escobar and Gerard Yetming

TSG Group closed on a development site in an Opportunity Zone in Miami’s Arts & Entertainment District, where it plans to build a multifamily project, The Real Deal has learned.

TSG Group, led by managing partners Camilo Lopez and Jorge Escobar, paid $5.9 million for the 30,000-square-foot site at 1765 North Miami Avenue. The deal marks the first for the Miami-based firm in a designated Opportunity Zone, Lopez said.

The program, passed as part of President Trump’s 2017 tax overhaul, gives investors and developers the ability to forgo and defer paying some capital gains taxes if they invest in any of the designated zones. Investors have already set up massive funds across the country, but many are waiting to invest until more regulations are released.

Escobar said the market for properties in Opportunity Zones in Miami is very competitive. “There is plenty of capital chasing these types of deals. The other deals we are analyzing are extremely expensive and there are already buyers lined up,” he said.

The property has been being marketed for its Opportunity Zone status in recent months. Colliers International South Florida brokers Gerard Yetming, Mitash Kripalani and Julian Zuniga represented the seller, BDB Miami 2 LLC, a partnership between Atlanta-based BDB Realty and Redwood Capital. Yetming said that once the Opportunity Zone frenzy kicked in, he received four offers within a few weeks from investors with the same intent as TSG Group. He said the company was “very aggressive and got the deal at the right time.”

The Miami City Commission recently approved an ordinance requiring that new projects in the A&E District seeking density and floor lot ratio bonuses must include workforce or affordable housing. The property is zoned T6-24-O, which allows for up to 24 stories, 210,000 square feet of building space and 344 units, with bonuses.

Escobar will work with Diego Bonet of Linéaire Group, a minority partner in the deal, to spearhead the regulation process. TSG Group is seeking an Opportunity Zone fund as a partner on the project. The company will hire an architect to design plans for a multifamily project with retail space on the site, and could break ground as early as next year, according to Lopez.

Newly completed development in the neighborhood includes Filling Station Lofts and Canvas, and the property is blocks away from Wynwood and a new park planned as part of the I-395 expansion, Lopez said.

While the project marks the first for TSG Group in an Opportunity Zone, the developer already owned the property at 17 Northeast 41st Street, which was also designated as one of the zones. TSG is planning a commercial development there with nearly 9,000 square feet of retail space.

Approved mortgage papers (Credit: iStock)

If you’re one of the millions of Americans who are self-employed or earn money on the side through freelance, contract or “gig” work, you may know the drill firsthand: Applying for a mortgage can be an intrusive ordeal.

Compared with people who have W-2 forms or pay stubs to verify their income, you encounter a much more time-consuming process. Lenders want to see your full tax returns for a couple of years — the whole box of stuff, not just an electronic transcript from the IRS. They need hard documentation of any income you’re claiming to qualify for the loan. And even if you can document your sideline pay, it might not be steady enough or ongoing long enough to be eligible under mortgage-industry rules.

You’re likely to get hit with a lot of questions: How come you reported less on your tax returns than what you’re claiming as your income on your loan application? You may also get charged more in fees, take longer to get approved, and end up with a slightly higher interest rate on your loan.

Lenders do this because self-employed earnings for mortgage eligibility purposes can be squishy, and there’s a lot riding on accuracy. If they approve a loan that turns out to be based on inflated or ineligible self-employment income, they can be hit with severe penalties. If they sold your mortgage to an investor, which is commonplace, they could be forced to buy it back.

But major improvements are underway: As of last week, the two largest sources of mortgage money in the U.S. — investors Freddie Mac and Fannie Mae — have deployed remarkable new technology that automates underwriting for applicants who are self-employed or have significant side income. Applications that previously would have taken days to analyze and verify may now take just minutes, thanks to the use of “optical character recognition” (OCR) technology that reads tax returns, identifies what qualifies as eligible income, and integrates it into both companies’ electronic underwriting systems. Dallas-based tech company LoanBeam supplies the OCR solution in both cases. Freddie Mac notified its thousands of lenders of the change March 6; Fannie Mae introduced its program in December.

Instead of an underwriter having to plow through wads of tax documents, lenders can now upload the paperwork directly to LoanBeam, where it will be scanned and analyzed within minutes, saving time and money for borrowers and lenders alike. Andy Higginbotham, a Freddie Mac senior vice president, told me the new system “takes three to five days out of the process,” can cut hundreds of dollars in costs, and slashes risk for the lender. If Freddie’s automated underwriting system approves the application with the LoanBeam-verified income, Freddie will not hold the lender responsible for inaccuracies that pop up later. Fannie Mae’s system does the same.

The move to automation could have wide impacts. In 2016, the Bureau of Labor Statistics reported that there were approximately 15 million self-employed individuals in 2015, one of every 10 people in the workforce. A tax-preparation industry estimate indicated that more than one-third of workers earned income from “gig-economy” sources in 2015 — such as driving for Lyft or renting out a house via Airbnb — and that the total will exceed 40 percent by 2020.

Lenders say Freddie’s and Fannie’s improvements could have benefits for home buyers, sellers and realty agents that may not be immediately obvious. Josh Moffitt, president of Silverton Mortgage, headquartered in Atlanta, says that having absolute certainty about income eligibility up front should give buyers greater confidence as they shop for a home. And it could help dramatically in meeting contingency-clause financing deadlines in contracts, eliminating situations where underwriters are still struggling with verifying income days or hours before a contingency expires.

John Meussner, executive loan officer for Mason-McDuffie Mortgage in San Ramon, California, says streamlined underwriting should also eliminate a lot of confusion — and conflict — between applicants and lenders. Currently there is often “a huge disconnect [between] what self-employed borrowers THINK they make versus what they actually make” under mortgage-industry rules, he said in an email. “Many people still fail to realize they can’t write off income in tax returns and then use that written-off income as qualifying income for a mortgage.”

Bottom line: If you’re self-employed or have gig income, be aware of the changes. Since the programs are new, not all lenders may offer streamlined income verification yet, but if they’re on the ball, they soon will.

Renderings of Fifield Companies’ project

Another developer is joining the action at Miami Worldcenter.

Chicago-based Fifield Companies filed plans for a 533-unit rental tower at the mixed-use project in downtown Miami.

Fifield is proposing a 47-story, 738,000-square-foot building with about 15,000 square feet of retail space on the northeast corner of 10th Street and First Avenue. The developer will go before the city’s Urban Development Review Board next Wednesday.

The building, designed by ODP Architects, would feature an amenity deck on the seventh floor with lap pools, a dog park, table tennis and picnic areas. The rooftop will have a sunset lap pool and sun deck.

CIM Group and Falcone Group already completed Caoba, the first building at the $4 billion, 10-block complex. Rents at the 444-unit rental tower, at 698 Northeast First Avenue, start at about $1,800 for a 349-square-foot studio.

The Forbes Company and Taubman Centers recently hired the Comras Company to partner on leasing the 300,000 square feet of retail, restaurant and entertainment space at the 27-acre project.

Next to be delivered is Paramount Miami Worldcenter, a 60-story condo tower with more than 500 residential units, which is 85 percent sold. It’s expected to open in May.

Miami Worldcenter will also have a 348-room CitizenM hotel, a 434-unit rental tower from Zom, a 1,100-space parking garage, a 1,700-room convention center hotel from MDM Development Group and an office tower being built by Hines with up to 500,000 square feet of office space.

In Chicago, Fifield is moving forward with plans to build the mixed-use Logan’s Crossing development with Terraco Real Estate in Logan Square.

The Panda IDX team, with Miguel and Marco Peralta and Gary Silber

Miami real estate agents Miguel and Marco Peralta are being sued by their partner in the real estate website company Panda IDX, who alleges the twin brothers stole money from the firm.

Gary Silber, a partner at Panda IDX, filed suit against the Peralta brothers for allegedly stealing money from corporate accounts, self-dealing, engaging in conflicts of interest, and otherwise neglecting their responsibilities to Panda. The suit was filed last month in Miami-Dade Circuit Court.

The brothers are also agents with Dezer Platinum Realty. Marco Peralta declined to comment, and Silber could not be reached for comment through his attorney.

Panda IDX creates websites for real estate agents that are integrated with the Multiple Listing Service and update every two hours, in addition to other features. It charges about $70 a month for an agent plan or $90 a month for an office. Panda stands for “Property Access N’ Detailed Analysis,” according to its website. The company incorporated in Nevada but its principals are based in South Florida.

The website also runs a blog, where posts include “Best Websites For Professional Realtors,” “Realtors And Homes For Sale,” and “How To Work Like A Luxury Realtor.”

The brothers’ real estate website, Miamirealestatetwins.com, built by Panda IDX, includes their listings, an MLS search bar and a blog. Their tag line is, “Before you make a move… Think twice.”

According to Panda IDX’s website, Marco Peralta is the company’s “art director, designer and creative thinker.” Miguel and Marco are both listed as creators, while Silber says he is “the heart.” Silber deals “with the back of the house that requires numbers,” according to the website.

Silber is seeking compensatory damages, attorneys’ fees, court costs and other relief. In the lawsuit, he’s alleging that Marco and Miguel Peralta violated their fiduciary duty of loyalty and care, and allegedly failed to carry out their duties in the best interests of the company. The suit also seeks “judicial dissolution” of Panda IDX and for the court to appoint a receiver.



Related Companies is celebrating the grand opening of Hudson Yards on March 15, 2019. But the megadevelopment’s observation deck, resting 1,100 feet above Manhattan’s West Side, doesn’t open to the public until 2020.

The Real Deal got a sneak peek at the future tourist attraction, dubbed “the edge.”

The deck spans 7,500 square feet and stretches 65 feet out from the 101st floor of the Kohn Pedersen Fox-designed 30 Hudson Yards. Its height makes it the tallest outdoor deck in the Western Hemisphere and the fifth tallest in the world. And it boasts expansive views of New York City and New Jersey.

Related will be competing with observatory decks at One Vanderbilt, One World Trade, the Empire State building and Rockefeller Center. Prices haven’t been set for the deck at 30 Hudson Yards.

Check out the video above to see the insane views from “the edge.”

3898 Shipping Avenue (Credit: Google Maps)

UPDATED, March 15, 5 p.m.: Members of the Matheson family sold an industrial property near Coral Gables for $13 million.

Brooks and Joan Matheson, whose family was once one of the largest property owners in Key Biscayne, sold the 43,785-square-foot property with a small building at 3898 Shipping Avenue for $296 per square foot for the land. The buyer, 3898 Shipping Ave LLC, is tied to Maira and Hector Castellon.

The lot totals about 1 acre and sits in an industrial area close to some auto shops and new apartment developments adjacent to Coral Gables and north of Coconut Grove. The 13,431-square-foot building was built in 1953.

One member of the Matheson family, Bruce Matheson, has become known as an activist opposing development on publicly owned land. Matheson helped move the Miami Open tennis tournament out of Key Biscayne to the Hard Rock Stadium in Miami Gardens. He was also a vocal opponent against Beckham’s MLS soccer team’s previous proposal to place the stadium in Overtown.

Shipping Avenue is seeing more apartment development proposals. Mast Capital is proposing to build a 20-story multifamily project at 3811 Shipping Avenue near the Douglas Road Metrorail Station in Miami. Plans are for project to include 254 apartments, an eight-story parking garage covered in murals and about 10,000 square feet of amenities.

From left: Steven Mnuchin and Steve Wynn (Credit: Wikipedia)

Steve Wynn is a fan of Opportunity Zones, too, evidently.

The disgraced casino mogul met with Treasury Department officials last June to discuss the federal tax incentive program for developers, just as the agency was writing new rules for the program, according to the Wall Street Journal.

The news comes amid rising criticism that the Opportunity Zones program will only benefit big investors and developers, rather than the low-income communities and residents it was designed to aid.

Wynn, who was forced to sell his stake in Wynn Resorts last year because of widespread sexual misconduct allegations, had a $2.1 billion tax bill from the sale. The Opportunity Zones program could have helped him defer and reduce those taxes, according to the Journal.

Wynn attended a meeting in the Treasury Department building in Washington with Daniel Kowalski, a counselor to Treasury Secretary Steven Mnuchin, who was helping write Opportunity Zones regulations, the Journal reported. Mnuchin greeted Wynn at the meeting.

A former Treasury official said Wynn was trying to get an interpretation of the law that he did not get, according the Journal.

Wynn had needed to invest in an Opportunity Zone fund by September 2018, if he wanted to take advantage of the tax benefit, the Journal reported. [WSJ]Keith Larsen

Carolyn Maloney and Emanuel Cleaver (Credit: Wikipedia)

A bill that would require anonymous LLCs to disclose their beneficial owners is back on the table.

Congresswoman Carolyn Maloney, of New York’s 12th congressional district, presented a draft of the Corporate Transparency Act of 2019 during a congressional hearing on Wednesday. Under the bill, corporations and LLCs would be required to disclose their beneficial owners to the Financial Crimes Enforcement Network, or FinCEN, which would then share that information with law enforcement and financial institutions.

“The problem that we’re trying to solve here is very simple,” said Maloney, who noted that she had been working on this bill for 10 years. “Criminals and terrorists have always used anonymous shell companies to finance their operations, because they never have to disclose who actually owns these shell companies.”

“Law enforcement tells me that whenever they’re following the money in an investigation, they always hit a dead end at an anonymous shell company,” she added.

The bill is a reintroduction of the Corporate Transparency Act of 2017, which garnered bipartisan support during the prior congressional year, but not enough to pass.

“There is a lot of contention on the need to collect this info to combat money laundering,” said Mark Hays, head of the anti-money laundering division at anti-corruption watchdog Global Witness, who attended the hearing. “I think that the amount of support we had last year persists.”

Another bone of contention was whether FinCEN was the proper agency to collect this information. Congressman French Hill of Arkansas, who also attended the hearing, has proposed a bill that would designate the Internal Revenue Service be the point of collection instead. While Hill argues that this would be a more efficient way of collecting that information, Maloney countered that IRS information would be difficult for law enforcement to access.

“As an FBI agent, I wouldn’t have access to that information,” said financial crimes expert Dennis Lormel, a witness at the hearing. “I would have to have a court order to get that information, especially tax information.”

Most obviously non-shell companies would be exempt from these additional disclosure requirements. Exempt corporations include banks, publicly traded companies, insurance companies and non-profits, as well as any company that employs more than 20 full-time employees in the U.S., has a physical office in the U.S., and generates more than $5 million in gross receipts annually.

Congresswoman Maloney noted that this legislation is of particular importance to New York City, both as a prime target of terrorist attacks on the one hand, and a favored place to stash dirty money on the other.

“You can just ride through my district at night, the East Side of Manhattan, and you’ll pass complete buildings where there are no lights on,” Maloney said. “They’re bank accounts, and they [law enforcement] simply want to know who owns that bank account for national security.”

Two other bills were considered during the hearing. One would authorize the Secretary of the Treasury to pay monetary rewards to people who assisted in investigations of foreign government corruption, and the other included a laundry list of proposals to modernize and close loopholes in existing anti-money laundering legislation.’

There have been other efforts to combat the use of LLCs. In November, the Treasury Department sharpened its disclosure rules, requiring that title companies provide the identity of LLC buyers who spend $300,000 or more on a real estate purchase in 12 major metro areas including New York City, Miami, Los Angeles, Chicago, San Francisco and Boston. It was a dramatic expansion of the previous Geographic Targeting Order, which had lower thresholds for cash deals in New York City, Los Angeles, San Francisco, San Diego, Miami-Dade, Broward and Palm Beach Counties, among other cities

Elie Khoury and 5191 Pine Tree Drive

New Orleans developer Elie Khoury closed on a waterfront home on Pine Tree Drive in Miami Beach, property records show.

Khoury paid $6.3 million for the six-bedroom, six-bathroom house at 5191 Pine Tree Drive. 5191 Pinetree LLC, led by Enrique Colmenares and Enrique Fernandez, sold the three-story, 5,829-square-foot home.

Colmenares and Fernandez sold the Eurostars Vintro Hotel at 2216 Park Avenue in Miami Beach for $20 million last year.

The Pine Tree Drive home, built in 2016, features an open floor plan, 70 feet of water frontage with a private dock, pool and cabana, and a 5,000-square-foot rooftop sun deck, according to the listing. Cristina Gort of Astor Realty is the listing agent. The property was on the market for about $7.5 million.

Records show the seller paid $2.7 million for the 12,223-square-foot property in 2013.

Khoury leads the KFK Group, a real estate owner and developer, and Southeast Restaurant Group, which owns independent and franchised restaurants.

In New Orleans, Khoury was the first developer to break ground and complete a major project following Hurricane Katrina, according to his bio. In addition to developing condo and retail projects, he’s operates hotels in New Orleans and Dallas.

A number of high-end home sales have closed in recent months in Miami Beach. Jamie LeFrak, vice chairman and managing director of LeFrak, is under contract to buy the spec mansion at 4567 Pine Tree Drive for a price close to the nearly $21 million asking price. North of Alton Road, Miami Beach developer Barry Brodsky sold 6401 Pine Tree Drive Circle for $7.3 million.

Flooding in the coastal town of Guerneville, California in the 1980s

That’s a lot of people and a lot of property.

A study by the U.S. Geological Survey found that around half a million Californians and $150 billion in coastal real estate are at risk of flooding by the end of the century, the Los Angeles Times reported.

Scientists modeled sea level rise together with storms and other natural threats in state’s coastal regions together for the first time.

Previous studies looked at single risks, like storms and beach erosion. The USGS study showed that three times as many people are at risk when sea level rise and other threats are modeled together than when only sea level rise was considered.

The agency’s finding were not necessarily surprising. November’s deadly Woolsey Fire caused an estimated $5 billion alone in property damage during its three-week burn through Los Angeles and Ventura counties.

Storms and other natural disasters are expected to become more common in the coming decades, said Patrick Bernard, research director of the USGS Climate Impacts and Coastal Processes Team.

“These are significant events that are going to recur and be 10 times the scale of the worst wildfires and earthquakes that we’ve experience in modern California history,” he told the Times.

Meanwhile, the storms and floods make it increasingly difficult for homeowners. The recent string of wildfires across the state has insurers pulling back coverage in high-risk areas to reduce their exposure.

But companies are not immune. Pacific Gas & Electric, facing billions of dollars in liabilities related to wildfires, filed for bankruptcy in January as it became increasingly likely the company played a role in Northern California’s Camp Fire. [LAT] Dennis Lynch 

Calum Weaver

A portfolio of more than 100 apartment units in South Beach is hitting the market and is expected to sell for $27 million according to Cushman & Wakefield, The Real Deal has learned.

Boardwalk Properties owns the six renovated properties at 1501 Michigan Avenue, 1100 10th Street, 942 Lenox Avenue, 1606 West Avenue, 1135 Eighth Street and 1521 Michigan Avenue, property records show.

Cushman & Wakefield’s Calum Weaver, Perry Synanidis, Robert Given, Zachary Sackley and Troy Ballard are marketing the Lux South Beach portfolio, according to a release.

Boardwalk Properties made headlines in 2016 when it paid $59 million for a 15-property, 240-unit portfolio of apartments, also in Miami Beach. Boardwalk is only looking to sell one of the buildings it acquired in 2016, a 12-unit, 7,200-square-foot building with apartments averaging 600 square feet.

The other properties that are now being listed for sale include:

  • 1501 Michigan Avenue: 36 units, 17,527 square feet
  • 1100 10th Street: 20 units, 10,605 square feet
  • 942 Lenox Avenue: 18 units, 12,670 square feet
  • 1606 West Avenue: 12 units, 7,800 square feet
  • 1521 Michigan Avenue: 6 units, 3,812 square feet

Boardwalk invested $7 million in capital improvements for the Lux South Beach portfolio, including installing impact windows and doors, new electrical, plumbing and HVAC systems, new kitchens, updated bathrooms and new washers and dryers. The properties, built between 1945 and 1969, are 98.1 percent occupied.

Weaver said in the release that the units could be converted into condos by a new owner.

Boardwalk Properties, a Miami Beach-based company owned by the Gober family trust and Adam Walker, owns multifamily buildings in South Beach, North Beach, Bay Harbor Islands, Fort Lauderdale and Davie. In December, it paid $119 million for a nearly 400-unit apartment complex in Davie.

The South Bronx Waterfront overlayed by teens (Credit: Curbed NY, SVG Silh, and Pixabay)

Who’s building up the South Bronx waterfront? Sure, $160-billion real estate developer Brookfield Properties is at the helm. But there are also a group of 50 high school and undergraduate students from the Bronx making some calls.

The students are partnered up with executives from Brookfield, teaching them about site design, deal analysis, construction financing and how to market projects, according to the Wall Street Journal.

“The bonding happens because they are competing together,” said private equity banker Cedric Bobo, who co-founded the nonprofit program Project Destined.

The group of 50 students are divided into five teams with real estate executives from Brookfield to plan a development, meeting once a week.

Their work is overseen by a panel of judges, which includes Bronx borough president Ruben Diaz Jr. and former Yankees star Alex Rodriguez, who invests in real estate.

The winning team won for their design on a site at the Three Bridges, where Brookfield is actually planning a development. Their prize? $10,000.

Project Destined also gives students a closer look at the people developing in the city.

“It breaks down the illusion people have in their head of the big, bad developer,” Brookfield’s Charlie Howe told the Journal. “They get to see that this business is fun, and we enjoy what we do, and we’re normal people.” [WSJ] — David Jeans

Foreclosures down, but signs show they could be on the rise again

New foreclosure lawsuits are starting to pop up in Miami, Chicago and Los Angeles, marking an ominous sign for a housing market that is showing indications of a slowdown.

Thirteen states posted year-over-year increases in foreclosure starts, or new foreclosure lawsuits, filed in February, according to a newly released report by Attom Data Solutions. While total existing foreclosures are down, lenders are beginning to start the foreclosure process in states like Louisiana, Illinois, Texas and Florida. New York was not on the list.

Foreclosure starts jumped 74 percent in Miami, 15 percent in Chicago and 7 percent in Los Angeles, according to Attom.

The news comes amid a number of indicators that show the post-recession housing boom is coming to an end and home prices are starting to come down. Foreclosures are also generally viewed by economists as a predictor of an economic downturn.

One promising sign is that banks have yet to start taking control of homes because borrowers cannot make payments. Banks repossessed 11,392 U.S. properties in February, down 7 percent from the previous month and down 12 percent year-over-year, Attom reported.

Some experts are projecting that 2019 will be the worst year for the housing market since the financial crisis. Homeowners are struggling to sell homes amid higher mortgage rates, and home affordability is at its lowest level in a decade.

Rendering of the stadium and David Beckham (Credit: Getty Images)

The Miami-Dade Commission on Ethics and Public Trust dismissed an ethics complaint tied to Miami Freedom Park and Miami Beckham United’s plan to build a multimillion-dollar mixed-use complex with a Major League Soccer stadium.

Attorney David Winker filed the complaint days before Miami residents were set to vote on a referendum that would allow the David Beckham-led group to begin negotiating a lease for a portion of the Melreese Country Club site. In the complaint, he alleged that the developers failed to register as lobbyists before asking commissioners to place their proposal on the ballot.

Voters approved the referendum in November, waiving competitive bidding for the property. The city and Miami Freedom Park LLC, an entity that includes the soccer star, Sprint CEO Marcelo Claure, and brothers Jorge and Jose Mas, is now in negotiations over a 99-year lease for part of the Melreese property, just east of Miami International Airport.

Both sides declared victory on Thursday.

“My complaint … forced the Beckham lobbyists to disclose who they worked for and who the owners of Miami Beckham United LLC and Miami Freedom Park LLC were, information that the public is entitled to,” Winker said in a statement. “It also brought out in the open the problems in the current lobbying registration system and how hardly anyone is complying with these laws.”

Jorge Mas, managing owner of Inter Miami CF, called on the ethics commission to sanction Winker “for filing this baseless complaint that was fueled by a political agenda” and for wasting “government time and resources in a failed attempt to derail the will of residents,” he said in a statement.

A Miami-Dade County ethics inquiry found that lobbyists in the majority of the county’s municipalities were not following county law by failing to disclose the identities of people or entities who own 5 percent or more of the corporations they are representing “due to the poorly formatted forms,” according to the Miami Herald.

Winker, meanwhile, filed two lawsuits that are still pending against the city of Miami over the stadium plan. One is centered around the lobbying issue, alleging that that Beckham and his partners only registered as lobbyists after he filed his complaint, and the other focuses on the ballot language that was used in the November referendum.

The Miami City Commission is set to consider a resolution forcing a vote on the lease before November’s municipal election. That would require approval from four of the five city commissioners, and two have opposed the deal.

From left: HomeAway President John Kim and SmarterAgent CEO and founder Brad Blumberg

SmarterAgent, the platform that connects hundreds of multiple listings services, filed a federal lawsuit against short-term rental company HomeAway, accusing it of patent infringement with the creation of a digital travel guide application.

SmarterAgent — which Keller Williams acquired in September — claims that HomeAway’s “Hospitality by Glad to Have You” steals its proprietory technology for the app that improves how location-based search queries are conducted.

The lawsuit — filed in U.S. District Court in Texas last month — suggests SmarterAgent’s claim rests on the real-time connection of market data with GPS information. HomeAway, owned by travel site Expedia, is headquartered in Austin, Texas.

Neither SmarterAgent nor HomeAway responded to calls for comment.

The “Hospitality by Glad to Have You” app works as a kind of personalized travel guide for users who rent vacation homes on HomeAway, according to a description in Google Play’s app store. It provides users with information like restaurants and attractions in the area they are visiting, as well as “interactive maps that use your phone’s built-in GPS system.”

It’s not SmarterAgent’s first time in court over a patent infringement. The New Jersey-based company aggressively defended its technology in court before its acquisition by Keller Williams. It sued numerous real estate companies over technology that links listings and market data with GPS positioning.

Some of the real estate listing platforms SmarterAgent has sued over the years for similar patent infringements include Zillow, Trulia, StreetEasy, and Hotpads, according to entrepreneur news site The American Genius.

SmarterAgent closely protects its technogloy because its primary business is packaging it as a platform, and selling it to agents and other companies to build their own branded apps. Its tech is able to link data from around 650 multiple listing services around the country.

Over the years, SmartAgent built a client base of around 300 brokerages including industry giants like Sotheby’s International Real Estate and Berkshire Hathaway. The Keller Williams purchase allows that business to continue.

The recent lawsuit offers a window into the highly competitive field for real estate technology, or proptech. The sector has gotten hotter over the last few years, with investors pouring billions into startups they think have the technology to change the real estate game.

Keller Williams’ acquisition is part of a push to compete with online consumer platforms like Redfin and Zillow.

Sergey Danilochkin (Credit: Interpol)

A Russian real estate investor who spent roughly $1.4 million on South Florida properties is seeking political asylum as he attempts to stay in the U.S.

Sergey Danilochkin moved to South Florida in 2010 after he was accused of participating in a $170 million tax fraud scheme in Russia. Danilochkin, who has claimed innocence, believes he could be killed if he’s forced to return to Russia, the Miami Herald reported. The fraud scheme was orchestrated by the same organized-crime group behind the Magnitsky affair. In a self-produced documentary, he says the crime group tried to lure his audit company into the scheme.

Between 2010 and 2012, Danilochkin bought at least 50 homes and condos that had been foreclosed on during the recession, in areas like Homestead, Overtown and Lauderhill, spending an additional $700,000 on renovations to the rundown properties.

The Sunny Isles Beach resident is now in litigation with the sellers of those properties, most of which he has already sold, claiming that he was cheated out of renovations and management that the sellers were hired to handle. In the lawsuit, Danilochkin is alleging that Vadim Nestscheret, a Russian-born businessman, inflated prices, embezzled rent money, stole the title of some properties, and kept money intended for renovations. Nestscheret denied the allegations.

Danilochkin has moved on from real estate investment. As a YouTube reporter, he was recently found attending a private black-tie “Safari Night” fundraiser at Mar-a-Lago, hosted by President Trump’s sister. Danilochkin now stars in Russian America TV, a Russian-language YouTube news channel he founded, according to the Herald. [Miami Herald]Katherine Kallergis

Sterling Bay’s “People” webpage from last month versus the webpage now

About 10 minutes into a three-hour City Council zoning committee hearing on Sterling Bay’s plan for Lincoln Yards, senior counsel Shelly Burke took to the microphone. What followed was not an overview of the $6 billion project, but an update on the firm’s efforts to boost diversity in its ranks.

Burke, the company’s newly-appointed director of community engagement and diversity compliance, described the developer’s new training and hiring programs she said would “create workforce opportunities for all of Chicago.” The only African-American executive out of 28 listed company leaders, Burke spoke as Sterling Bay principals Andy Gloor and Dean Marks, who are both white, sat at the front of the council chamber listening.

Afterward, Alderman David Moore (17th) questioned Gloor about the timing of Sterling Bay’s decision to add Burke and five other women to the company’s web page listing executives. He noted it happened only after three members of the Community Development Commission publicly mentioned that 19 of the 21 photos posted on the site’s “Senior Leadership” page were of white men.

Moore held up two poster boards showing the difference, prompting Gloor to defend the change.

“The reformatting doesn’t change that these people have all been part of Sterling Bay for a number of years,” Gloor said. “They are the most senior individuals with their particular expertise, and that has not changed.”

The tense exchange highlighted a persistent challenge the Sterling Bay has faced during the project’s punishing eight-month public approval process that began last summer: Demonstrating that a private real estate company, whose leaders mirror an overwhelmingly white and male-dominated industry, deserves to benefit from a $1.3 billion tax increment financing district bolstered by taxpayers in a diverse city.

The TIF district has not yet been approved by the City Council. But a zoning change for the project advanced through the committee last week, lining up Sterling Bay’s 54-acre master plan for final passage by the council Wednesday. The development is slated to build up to 6,000 apartments and 6 million square feet of commercial and hotel space.

Though one of the city’s largest developers, Sterling Bay is hardly the only real estate firm led predominantly by white men. The leadership pages for major developers in Chicago like Hines, CIM Group and McCaffery Interests are all filled mostly with white, male faces.

And in an industry composed mostly of privately-owned companies whose hiring practices lean hard on personal relationships, few companies are motivated to upset the status quo, said Megan Abraham, executive director of the Goldie Initiative, a nonprofit aimed at elevating women in commercial real estate.

“Until companies are publicly owned, the issue of diversity generally doesn’t emerge, because there’s just no mandate to change,” Abraham said. “The people making decisions are those in leadership, and when that’s a homogenous group of older white men, which is often the case, you’ll find no sense of urgency.”

Gloor told Moore during last week’s zoning committee meeting that hiring women- and minority-led contracting firms is “something we’ve consistently done in all our projects in Chicago.” It is also mandated under city code for any new development seeking financial backing from the city.

Sterling Bay has faced relentless public scrutiny over Lincoln Yards since last summer, including over how it hires contractors the development. Executives met with critical city officials like Moore, who ultimately voted to approve the zoning change last week.

Days before a Feb. 15 Community Development Commission hearing to approve the new tax increment financing request, Sterling Bay published a three-page “diversity and inclusion program statement.” The company has spent the past six months building and sharpening the company-wide plan, a spokesperson said.

The statement describes sponsorships in training and mentoring programs and lists members of an “advisory council for diversity and inclusion” who will consult the company on Lincoln Yards. Burke said the advisory council will help Sterling Bay “reach out to all parts of Chicago” to find contractors to work in Lincoln Yards, and will promote from within the firm to help it stand out in an industry “that has been dominated by white males.”

The firm also promoted Burke to the position of “director of community engagement and diversity compliance” after she personally asked Dean Marks to consider her for the position, she told the Community Development Commission last month. She was one of five women who had the word “director” added to their titles on the website since last month.

But in the fall, Sterling Bay lost a woman director in Erin Lavin Cabonargi, who stepped down as head of development to start hew own development and consulting firms. Her position was filled by a man.

At the zoning committee meeting, Moore ended his questioning by telling Gloor and other Sterling Bay principals to expect the same scrutiny from the city in the future over its hiring practices. That will be especially true, he said, after the April 2 runoff election, when either Toni Preckwinkle or Lori Lightfoot will become the next mayor, marking a milestone for Chicago.

“I think we must continue to make sure we have racial diversity at all levels, not just in the project but at the company level as well,” Moore said. “Because let’s not forget, there’s going to be a new sheriff in town here soon, and that sheriff is going to be an African-American woman.”

In-Rel Properties’ Kirk Cypel and 600 South Andrews (Credit: LoopNet)

Updated, March 14 2:52 p.m. A company tied to In-Rel Properties sold a six-story office building in downtown Fort Lauderdale for $9 million.

Lake Worth-based In-Rel sold the nearly 40,000-square-foot building at 600 South Andrews Avenue for $225 per square foot, records show. Asuman 57th Street LLC, led by private investor Asuman G. Polat, bought the building. It was built in 1987.

Sara Gayer of Douglas Elliman represented the buyer and seller in the deal.

The building houses a number of law offices and the bank branch of Bank OZK, one of South Florida’s most active condo construction lenders. The office property was last purchased in 1991 for $2.7 million, records show.

In-Rel Properties, a privately held real estate investment firm, owns a number of commercial properties across the Southeast, including the 200 Lake Avenue office building in Lake Worth. It also owns the 4100 Okeechobee Building in West Palm Beach.

In September, Asuman bought three commercial buildings in Coral Springs, including the Waterway Shoppes, for $42.95 million. The same month, Asuman sold a development site at 41 West 57th Street in New York City for $80 million to Turkish developer Sedesco.

Downtown Fort Lauderdale has seen a big uptick in new investment over the past few years.

According to a report by Colliers International South Florida, office rents skyrocketed from an average of $10 per square foot in 2013 to $34 per square foot in 2018. The average rent per month for a one-bedroom apartment increased by $200 to $1,954 during the same time period.

Paul Manafort (Credit: Getty Images)

Former Trump campaign chairman Paul Manafort was indicted in Manhattan on Wednesday on mortgage fraud charges, the same day a federal judge increased his overall jail sentence to 7.5 years.

District Attorney Cyrus Vance Jr. charged Manafort with a scheme to defraud banks for million of dollars in loans, including falsifying business records, after a two-year investigation.

Manafort was previously sentenced to a total of 48 months in prison on charges from Special Counsel Robert Mueller in Washington, D.C. and Alexandria, Virginia. Those charges also included counts of mortgage and bank fraud. But Judge Amy Berman Jackson on Wednesday ordered the former campaign chairman to serve an additional 43 months on federal conspiracy charges, noting he broke a prior plea agreement by lying to investigators and a grand jury over contact with a Russian associate during the 2016 campaign.

29 Howard Street

Vance’s 16 count indictment covers a range of alleged illegal activity that also appeared in those federal cases, including alleged deceptions to banks in order to obtain a loan on Manafort’s Soho condominium at 29 Howard Street in Manhattan. However, Vance’s filings are more cryptic and lack detail when compared to federal filings.

Vance’s indictment, which largely covers the same alleged activity in the federal cases, serves a very strategic purpose: President Trump, who has repeatedly sought to undermine the Mueller investigation, cannot legally pardon Manafort from charges issued by a New York State court.

The New York Times reported that Manafort’s attorneys are likely to appeal Vance’s charges on double jeopardy grounds.

Manafort has also owned property in Palm Beach County. In October, he signed a deed transferring his house in Palm Beach Gardens to his wife, Kathleen, for $10.

6401 Pinetree Drive (Credit: Realtor)

Miami Beach developer Barry Brodsky sold a restored waterfront Miami Beach home for $7.3 million.

Brodsky, a spec home developer and owner of Brodson Construction, and Steven Habib sold the 6,052-square-foot Mediterranean-style home at 6401 Pine Tree Drive Circle for $1,211 per square foot, records show. The buyers are Thomas Dixon and Anne Dixon of New York City.

The six-bedroom, five-bathroom home was originally built in 1936 and designed by famed Miami Beach architect Russell Pancoast. Brodsky purchased the house for $2.7 million in 2004 and then restored it, records show.

The home was listed by Jill Hertzberg of the Jills team at Coldwell Banker, according to realtor.com. It was previously listed for $7.9 million in March 2018.

Other features include oak wood floors, a wine cellar, a one-bedroom guest house with a kitchen, a gate house with a full gym, an infinity pool, private boat dock & lift, and outdoor cabanas.

Developer Jamie LeFrak is under contract to buy 4567 Pine Tree Drive, a spec home developed by Brodsky. It was listed for $21 million.

In early 2017, Brodsky sold a 13,500-square-foot, six-bedroom spec mansion at 4555 Pine Tree Drive for $22.6 million that had a waterslide and a half-court basketball court.

In 2017, a company tied to J. Christopher Burch, head of Burch Creative Capital and ex-husband of designer Tory Burch, paid $12 million for a home at 5111 Pine Tree Drive.

Stuart Miller and 23 Star Island Drive (Credit: Realtor)

After hitting the market two years ago for $49 million, the home of late Lennar Corp. founder Leonard Miller and his wife Susan Miller, a prominent Miami philanthropist, sold for just over half that amount.

Property records show the Susan Miller Revocable Trust sold the seven-bedroom, 10,211-square-foot mansion at 23 Star Island Drive for $25 million to Florida Property HoldCo, a Delaware company managed by Berntson Porter & Company, an accounting and wealth management firm based in Bellevue, Washington. No mortgage was recorded.

Lennar Chairman Stuart Miller, Leslie Miller Saiontz and Jeffrey Miller, acting as trustees, sold the 1.85-acre waterfront property. It was listed with Jill Hertzberg of Coldwell Banker’s The Jills, hitting the market in 2017 for $49 million and reduced to $29 million earlier this year. Jill Eber, also of the Jills, represented the buyer, according to Realtor.com.

Leonard Miller, who died in 2002, and Susan Miller, who died in 2016, built the waterfront estate at 23 Star Island Drive in 1973. The property has 327 feet of water frontage, a pool, lighted tennis court, dock and boat lift. The estate includes a separate guest house with two bedrooms, two baths, a kitchen and a living room.

Records show the Millers paid $210,000 for the waterfront lot in 1973.

Exclusive Star Island is also home to Gloria and Emilio Estefan, Phillip and Patricia Frost, and others. Stuart Miller is planning a number of luxury homes on the island, where he owns 4, 5, 6, 10, 11, 12 and 22 Star Island Drive. In June, the former Lennar CEO paid $33 million for the former estate of ex-South Beach developer Thomas Kramer at 4 and 5 Star Island Drive.

Adam Neumann morphing into Jonathan Gray (Credit: Getty Images)

A growing number of co-working companies have figured out a new way to diversify revenue and boost profits: emulating the private equity model in real estate. But it’s not without risks.

Using a private equity playbook, the co-working companies set up real estate funds, using very little of their own money, if at all, to purchase property. They then collect management fees generated from the investments or acquire a stake in the building.

Bond Collective, a New York-based firm led by Shlomo Silber with eight locations, has stakes in properties in New York, Chicago, Miami and Nashville. Silber told the Wall Street Journal he decided to take the private-equity investment approach after one of his landlords flipped a property for a 40 percent profit.

WeWork, which recently rebranded as the We Company, manages what appears to be the biggest of these funds — having raised $745 million from investors as of March 8. That fund, through an investment vehicle WeWork Property Advisors, closed on the Lord & Taylor building at 424 Fifth Avenue in February. But they struggled to find another equity partner alongside Rhone Capital and instead picked up $950 million in debt to acquire the building. As part of the operating agreement, the seller Hudson’s Bay Company retained a $125 million stake and WeWork had to chip in its own money, too.

According to the Journal, WeWork agreed to lease the entire property at a much higher clip than it normally pays landlords — $105 a square foot for 20 years, with a guarantee of 15 years of rent payments.

The model has also created complex ownership arrangements for the co-working companies who effectively sit on both sides of the table, as the tenant and the property owner.

“This could, in a period of economic stress on that company, create difficult conflicts to deal with,” Minta Kay, who oversees the real estate arm at Goodwin Procter LLP law firm, told the Journal.
[WSJ] — David Jeans 

John Farina, president and CEO of US Construction, and a rendering of Ocean Delray (Credit: Buzz Buzz Home; Rendering credit: ArX Solutions)

The Delray Beach City Commission granted final site-plan approval Tuesday for Ocean Delray, the first development on the city’s oceanfront in more than 30 years.

National Realty Investment Advisors (NRIA) and US Construction Inc. expect to clear the development site at 1901 South Ocean Boulevard by demolishing the 66-year-old Wright by the Sea Hotel in late April.

Construction of 19-unit Ocean Delray will start immediately after the demolition project and is expected to conclude in the fourth quarter of 2020.

The developers have priced the units at Ocean Delray from the upper $4 million to $9 million. The three-story building is being designed by South Florida architect Randall Stofft, who also designed the Seagate Hotel and Residences in Delray Beach.

Ocean Delray units will range from 3,373 square feet to more than 4,400 square feet. Terraces will add as much as 2,300 square feet of additional living area. Floor plans have three to five bedrooms and four-and-a-half to six-and-a-half bathrooms.

Each unit will have a private, air-conditioned garage with an electric car charging unit and a private elevator. The units will be named after such famous artists as DaVinci and Van Gogh. IMI Worldwide Properties is handling sales of Ocean Delray units.

Amenities will include beachfront lounges and cabanas, a swimming-pool lounge suite with personal full-height lockers and changing rooms, and a fitness room equipped with Peloton exercise machines.

New Jersey-based NRIA acquired the Wright by the Sea Hotel in 2018 for $25 million. The 1.8-acre property has more than 200 feet of frontage on the ocean.

CoStar CEO Andrew Florance (Credit: iStock)

CoStar Group filed two copyright infringement lawsuits against firms it claims repurposed its data and illegally shared subscriptions.

The $17 billion real estate data giant, which has enjoyed a surge in market cap and share price in recent weeks following strong 2018 financial results, is known to go down the legal route to protect its data, and has filed dozens of lawsuits against firms it has accused of copyright infringement.

In one federal complaint filed Monday against New York-based Baron Realty Group in the Eastern District of New York, CoStar alleged that the commercial real estate firm did not pay for the service and then stole “tens of millions of data points” before making its own database for Baron employees.

A separate complaint also filed Monday against Realty Insight, alleged the New York-based commercial firm purchased CoStar subscriptions and then “secretly” resold them to five other commercial real estate firms.

Both firms could not be reached immediately for comment.

CoStar said in a statement that the lawsuits “continue the company’s long-running efforts” to protect its intellectual property, and end the defendants’ “cycle of theft and send the message to would-be thieves that CoStar will pursue legal action.”

In October, CoStar filed seven federal copyright-infringement lawsuits against firms it accused of stealing its data and illegally obtaining a subscription.

The Bristol

South Florida boutique hotel developer Clifford Lane paid $14.7 million for a penthouse in the Bristol condominium in West Palm Beach.

Lane and his family’s trust purchased condo 2501 at 1100 South Flagler Drive from the development group, Flagler Investors, led by Al Adelson and Gene Golub, records show. The Bristol is still under construction and the unit’s square footage is not yet recorded in property records. Some buyers are purchasing raw units and are able to close on their condos and finish them themselves before the rest of the project is completed, Adelson said previously.

Units at the luxury condo building range from 3,600 square feet to 14,000 square feet, and are priced from about $5 million to more than $40 million.

Construction crews topped off the 69-unit Bristol in January. It broke ground in 2016 and secured a $206 million construction loan from the Blackstone Group in 2017.

Lane founded the Lane Organization in 2011, which owns the 139-room Waterstone Resort Marina in Boca Raton, according to the company’s website. He formerly headed Data Device Corp., a supplier of data interfaces for the aerospace, defense, space, and industrial sectors.

The Bristol is one of the few new luxury condo developments in West Palm Beach. Last year, former Wall Street honcho Donald C. Carter bought a condo at the Bristol for $6.75 million. Also last year, the former general counsel at Fidelity paid $6.85 million for a unit at the building.

An illustration of trucks hauling dirt (Credit: iStock)

Fred Rosen still remembers the chaos that enveloped Bel Air when the mansion-expansion trend went into overdrive.

About five years ago, dozens of trucks began snaking through the neighborhood’s narrow roads ferrying dirt and cement, as residents and spec developers carved out hillsides for massive new homes, many exceeding 35,000 square feet.

Developer Nile Niami

“You would wake up in the morning and see a convoy of maybe 50 hauling trucks down Stone Canyon Road,” said Rosen, the former chief executive of Ticketmaster and a resident of the area. Many of those trucks, he said, were coming from Airole Way, where spec developer Nile Niami was building a 100,000 square-foot property dubbed The One.

Unbeknownst to neighbors at the time, the construction effort involved digging over 47,000 cubic yards of dirt out of the hillside, city records show, requiring at least 4,500 trips in 10-ton trucks. Niami plans to list the home for $500 million.

Rosen rallied his neighbors in a mini-revolt against City Hall. The result was 2017’s Bel Air mansion ordinance, a more rigid version of the ordinance imposed on the rest of Los Angeles. While many of the hauling trucks are now gone, the wealthy enclave is still grappling with the legacy of its McMansion years. Between 2014 and early 2017, the city issued 28 permits for mansions in Bel Air of 17,500 square feet or larger, most of which are still under construction, according to an analysis by The Real Deal. The projects are exacerbating a spec-home building spree that rattled longtime Bel Air residents and is dramatically altering the landscape of the area, not to mention its real-estate market.

As of Wednesday there were 12 homes in Bel Air of 15,000 square feet or larger currently sitting empty and unsold in, according to MLS data cited by Steve Lewis, President of CORE Real Estate Group in Beverly Hills.

“These are white elephants,” Rosen said. “Half these houses are going to wind up in foreclosure.”

Sizing up the market

After more than two years of back-and-forth, the city passed an ordinance for Bel Air restricting the amount of dirt that could be removed from a property to 6,000 cubic yards. That addressed the problem of massive dirt movement, the residents’ biggest gripe.

Paul Koretz, the city councilmember whose district includes Bel Air, also pushed through a rule requiring any home over 17,500 square feet to have a public hearing. “That virtually capped all homes” at that figure, Koretz said, “because homeowners didn’t want to deal with uncertainty.”

In the run-up to the ordinance, though, owners rushed to file permits for dozens of projects that would avoid the de-facto cap and the dirt-movement restrictions, grandfathering in plans for yet more large, boxy properties.

“There were people that were pushing permits through so they had entitlements, which would circumvent the new law coming in,” said Stephen Shapiro, the co-founder of Westside Estate Agency, a residential brokerage focused on luxury homes in Beverly Hills, Malibu & Bel Air.

For some properties, pre-ordinance status has become a major selling point.

Take the Park Bel Air on Tortuoso Way, which hit the market in January asking $150 million. The 10.6-acre site directly across from Hotel Bel Air and features three contiguous lots with permits to build homes of about 60,000 square feet each.

The Hollywood producer Steve Bing acquired all nine homes on the street, then tore them down and built a small home for himself, before selling the site to a hedge fund, said Shapiro, who formerly had the listing. The current owners, the London firm DOMVS, and Junius Real Estate Partners, a division of JPMorgan, spent some five years creating three finished lots, and secured permits for massive home designs.

“You could literally start construction the day after you close,” said Douglas Elliman’s Connie Blankenship, the current listing agent. “You can’t do what we can do here any longer, with the current building codes and restrictions.”

Meanwhile, on Chalon Road, Thomas Barrack Jr., the Colony Capital CEO and pal of President Donald Trump, is nearly done building out an eight-acre compound with a 77,000-square-foot mansion being designed by Peter Marino. Barrack is building it on behalf of the royal family of Qatar. Other competing giant offerings, including the Mountain, a 157-acre plot in Beverly Hills Post Office now listed for $650 million, and a 120-acre site owned by an entity linked to the late Paul Allen asking $150 million, don’t have plans or permits in place for mega-mansions, Blankenship said.

Massive spec mansions on the market right now include Bruce Makowsky’s 38,000-square-foot estate at 924 Bel Air Road, asking a much-reduced $150 million, and the Mohamed Hadid-developed mansion at 901 Strada Vecchia, which is the subject of an FBI probe and a lawsuit from neighbors who want to see it torn down.

Tom and Jerry

When Rosen decided to act, he learned that unlike in Santa Monica and Beverly Hills, there were no limits in Bel Air on the amount of dirt that could be excavated. That led builders to opt for massive, amenity-filled subterranean spaces.

LA City Councilmember Paul Koretz

“If you had 10 of those homes going in at once it was like a war zone,” Koretz said.

Residents also chafed at city rules that allow workers to do construction from 7 a.m. to 9 p.m. on weekdays, and from 8 a.m. to 6 p.m. on Saturdays

In the race to build, drivers of giant earth-moving vehicles were going twice the posted speed limit, Koretz said. He said someone on his staff once followed dozens of dirt-hauling vehicles that were backed up on Stone Canyon Road all the way to Niami’s The One, with its 20 bedrooms, bowling alley, four pools, and a 40-seat theater.

“We required that owners only send one vehicle into Bel Air at a time,” Koretz said. “And that they have identification numbers for each of the major projects, so we could trace who they were working for.”

The “cat and mouse game” between homeowners and the city continues. With new limits on dirt hauling, some homeowners have turned to proposing 30,000-square-foot patios to expand de-facto square footage, and continue to build elaborate underground caverns, he said.

Bel Air isn’t alone

While Koretz points to Bel Air as the most extreme example of mansion expansion gone rogue, other parts of L.A. have also weathered convoys of dirt-hauling trucks.

In 2014, an off-duty cop was killed in Trousdale Estates when a cement truck ran over a pickup truck and overturned. That led Beverly Hills to impose a 30-day suspension on heavy-haul deliveries from construction sites around the area.

Other areas of L.A., notably the Bird Streets in Hollywood Hills, are only now getting dirt-movement restrictions in place. The exclusive neighborhood’s narrow streets were choked last summer with construction trucks and dumpsters working on spec homes and major renovations. An ordinance passed last year cut back construction hours.

While L.A. was working to limit out-of-control mansion-building, the gated city of Hidden Hills in the San Fernando Valley — a favorite among celebs like Kanye West and the Kardashians — actually loosened rules in the past three years to allow for even larger homes.

Two years ago, spec developer Kasey Walker sold a 13,000-square-foot home to Canadian singer The Weeknd for $18.2 million. Walker now plans to build an 18,000 square-foot mansion just up the street, on a five-acre parcel on Long Valley Road she purchased from Miley Cyrus last year.

The new estate, which she plans to list for at least $28 million, will feature a basement with a bowling alley, parking for up to 10 cars and a lounge-type theater.

“If you build something special, nothing is an issue,” Walker said of the restrictions.

Back in Bel Air, an expansion like the one contemplated by actress Salma Hayek and her billionaire French husband François-Henri Pinault hardly moves the needle these days.

In December, the couple filed plans to tear down their nearly 8,000 square-foot home and build a new home over twice that size.

“In Bel Air, that wouldn’t be shocking,” Koretz said. “To get into the shocking range would be if they went from 7,500 to 50,000 square feet. That is where you get the controversy.”

HUD Secretary Ben Carson and a map of Opportunity Zones (Credit: Getty Images)

Housing and Urban Development Secretary Ben Carson said the agency will give preference to developers and investors who build affordable housing in federal Opportunity Zones when it comes to certain grants.

In an interview with The Real Deal on Tuesday, Carson said HUD will give added weight to proposed affordable developments in the Opportunity Zones, looking to make that construction a more competitive option for builders. But he acknowledged the agency could not mandate the construction of affordable housing in the 8,700 designated Opportunity Zones nationwide.

“If you are doing a project within an Opportunity Zone and you are applying for one of our grants, you get some preference,” Carson said during the interview. “So that, along with the tax advantages, will drive people to look at those (areas). We are also offering very specific technical assistance to help them coordinate their efforts.”

The preference point system marks one of the first Opportunity Zones initiatives by HUD, and could have a significant impact toward pushing developers to build affordable housing in Opportunity Zones.

The Opportunity Zones program, passed as part of President Trump’s 2017 tax overhaul, gives investors and developers the ability to forgo and defer paying some capital gains taxes if they invest in any of the designated zones. Investors have set up massive funds but most are waiting to deploy capital until more regulations are released from the U.S. Treasury Department and the IRS. The latest round of guidance has been expected in the following weeks, and Carson confirmed that.

The Opportunity Zones program, which has been popular with developers and investors, does not require affordable housing construction. That reality has created skepticism that the program will just benefit the wealthy developers for projects that would have been built anyway.

Until recently, HUD had largely been quiet on how the agency would fold Opportunity Zones into its mission.

Last month, Carson announced the Federal Housing Administration’s low-income housing tax credit financing pilot program was expanded to incorporate Opportunity Zones projects.

Carson told TRD that his agency is also working with other federal agencies and programs to coordinate efforts, so that developers can combine the Opportunity Zone tax benefits with other tax credits, such as the New Market Tax Credit.

“All of these things can really be utilized in conjunction with those” Opportunity Zones investments, Carson said.

Carson also reaffirmed HUD’s controversial initiative, announced in August, to encourage cities to change their zoning regulations in order to build affordable housing.

“We are making it known to people that we are going to look more favorably upon their applications if they are willing to work on removing the barriers. We are talking zoning restrictions,” Carson said.

The former Republican presidential candidate, who last month was quoted saying he would likely return to the private sector after completing his four-year term as secretary, now said he is open to staying on for a second four-year term after the 2020 presidential election.

“My preference would be to go back to the private sector, that would be my preference now,” he said. “But there are some very important things that need to be done.”

Rendering of Forte in West Palm Beach 

Two Roads Development and Alpha Blue Ventures scored approval for a luxury condo project in West Palm Beach.

The West Palm Beach City Commission OK’d Forté, a 42-unit waterfront condo building planned for 1309 South Flagler Drive, on Monday night, according to a release. Construction is expected to begin later this year and be completed within two years of groundbreaking.

The 24-story tower, designed by Bernardo Fort-Brescia of Arquitectonica, will feature a sculpture garden and art walk, library, wine storage, grand lobby and great room, pool, spas, two dedicated house cars for residents’ use, a theater and a fitness center.

Rendering of Forte in West Palm Beach

Units will average 4,200 square feet and there will be two units on each floor. The building will also have a two-story penthouse with a rooftop infinity pool. Sales are expected to launch in July, with prices ranging from $3.8 million to $7.5 million.

In Miami, Two Roads Development built Biscayne Beach and is developing Elysee Miami, both luxury condo towers in the city’s Edgewater neighborhood. The West Palm Beach-based firm closed on a $138 million construction loan from JPMorgan Chase for Elysee in August.

Alpha Blue Ventures, a joint venture between founder Marius Fortelni and managing partner Scott Maslin, specializes in “unique high-quality real estate projects” in New York and southeast Florida.

Few new condo towers have been built recently in West Palm Beach. Developer Al Adelson is nearly done with construction of the 25-story condo building at 1112 South Flagler Drive.

Houses in Seattle (Credit: iStock)

Buyers looking for homes in cities like Seattle, San Jose and Oakland this spring will have more negotiating power than they did during previous years, thanks to surging inventory tugging prices down across the western United States.

Home sales hit 11-year lows in Southern California and in the San Francisco Bay area in January, and prices in the Denver and Portland areas fell this year for the first time since 2012, according to Bloomberg.

And in King’s County around Seattle, home prices fell by about 3 percent per square foot, the first year-over-year decline since 2012, Redfin data show. And between January 2018 and 2019, Seattle-area sellers cut the prices on about one-sixth of homes, twice the rate of the prior 12-month period, according to Trulia.

Seattle-area home inventory in February more than doubled year over year, forcing sellers to accommodate a buyer pool suddenly replete with options, per Redfin data. During the same period, inventory spiked 82 percent in San Jose, 41 percent in Oakland and 37 percent in Portland and Denver.

Across the country last year, home inventory jumped by 6.4 percent and sales dropped by 11 percent as the national market continues to cool, according to a Re/Max report last month.

[Bloomberg]Alex Nitkin

Javier Lluch and 7940 West Drive in North Bay Village (Credit: Zillow)

Miami developer Javier Lluch, known chiefly for his planned Glasshaus boutique condominium development in Coconut Grove, is continuing to fight a five-year battle against investment partners he recruited for a new project that stalled in North Bay Village.

Lluch filed his second lawsuit in Miami-Dade Circuit Court last month over the planned luxury condo project, known only as 7940 West Drive for its address in North Bay Village.

Lluch, president of Element Development, alleges that his partners Ernesto Weisson, Roberto Cortes and Fernando Haberer defrauded him, lied about their companies’ financial condition and went behind his back to purchase the North Bay Village property without compensating him for development services.

Attempts to reach the defendants or their attorneys were not successful.

The same defendants are facing a bigger, ongoing lawsuit in Miami-Dade Circuit Court alleging they were responsible for a $40 million Ponzi scheme that defrauded several family members of the late Alejandro Romay — known in Argentina as the czar of television. The bigger suit has only just reached a point where several defendants have filed initial motions to dismiss it.

Haberer worked as a financial adviser on the Romay family’s investments before getting involved in the North Bay Village project, according to court documents.

Cortes and Weisson were previously hit with a cease and desist order in 2016 by the U.S. Securities and Exchange Commission in connection with their companies. According to federal court records, Cortes and Weisson settled with the SEC on charges they violated U.S. law by failing to make adequate disclosures to investors regarding the financial condition of one of their companies, Biscayne Capital International LLC. BCI was hit by financial fallout during the Great Recession and Weisson and Cortes have pleaded in court cases that they were victims of the recession. But the Romay family has accused them of mounting a Ponzi scheme to cover up their financial woes.

In the Romay lawsuit, the defendants have argued that they were only officers or investors in BCI and were not liable for the actions or financial condition of the company. According to a report from Tribune 242 news in the Bahamas, BCI has since been liquidated on order of the Securities Commission of the Bahamas.

The North Bay Village property is still undeveloped, according to property records. 7940 West Drive LLC, led by Gustavo Trujillo, paid $4 million for the property in 2015, records show. Lluch was the operating manager of the entity when it was formed in 2014.

Other litigation is pending against the project. Ecuadorian citizen Juan Javier Cordovez has also sued Weisson and Cortes, alleging he has the right to foreclose on the property due to a loan he made on the project of $567,000. In that case, Cortes recently filed a notice that he is defending himself pro se — without an attorney.

In 2015, a judge ordered the companies associated with the defendants to pay Lluch $3.2 million in damages for similar issues.

From left: Dragon Global CEO Robert Zangrillo, Crown Realty CEO Robert Flaxman, and WP Investments president Bruce Isackson (Credit: Dreagon Global, Getty Images, WP Investments, and iStock)

Three real estate developers and investors were among the 33 parents indicted in the Justice Department’s largest-ever college admissions investigation, which federal prosecutors revealed Tuesday.

Miami developer Robert Zangrillo and Los Angeles developers Bruce Isackson of WP Investments and Robert Flaxman of Crown Realty were charged in the scandal, which involved parents allegedly paying bribes to secure their children acceptance into elite schools including Stanford, Georgetown and Yale.

Actresses Felicity Huffman and Lori Loughlin and William E. McGlashan Jr., a partner at the private equity firm TPG, were also among the wealthy parents who were charged by the Department of Justice.

An FBI investigation found that the parents conspired to bribe SAT and ACT exam administrators to allow students to cheat on their college entrance exams, as well as paid off varsity coaches and administrators who could facilitate their kids getting accepted to those universities. A number of parents used charitable organizations to conceal the payments, according to the Justice Department.

The owner of a college admissions company, William Rick Singer, was charged with money laundering, obstruction of justice, racketeering and conspiracy to defraud the U.S. The parents paid Singer about $25 million between 2011 and February of this year, according to the indictment. He’s expected to plead guilty.

The case is the Department of Justice’s largest-ever prosecution of its kind, involving 200 agents, according to the New York Times. Fifty people in six states were charged.

Zangrillo, a main investor in the Magic City Innovation District project in Miami’s Little Haiti neighborhood, was charged with conspiracy to commit mail fraud and honest services mail fraud. According to the complaint, filed in the Southern District of Florida, Zangrillo paid off athletic department officials at the University of Southern California to designate his daughter as an athletic recruit, having someone take classes on her behalf. Zangrillo did not immediately respond to a request for comment.

He is said to have made two donations: $200,000 to the Key Worldwide Foundation and $50,000 to Women’s Athletics at USC. Though USC rejected his daughter’s application in 2017, the complaint states she was accepted after her second application, touting her rowing experience that was absent from the first application, was placed on a VIP list of transfers.

Zangrillo is founder and CEO of Dragon Global, a venture capital and real estate investment firm. In Miami, he’s co-developing the controversial $1 billion Magic City project along with Tony Cho and Plaza Equity Partners. The 17-acre development calls for a 30,000-square-foot Magic City Studios and a 15,000-square-foot innovation center with startups, co-working space and other collaborations; an office tower; retail space; workforce housing and possibly a hotel. It’s planned for land between Northeast 60th and 64th streets.

In the Los Angeles area, Isackson and his wife, Davina, were both indicted in the scheme for securing their daughter’s admission, also to USC, as a recruited athlete.

In an email in July 2016, Bruce Isackson wrote: “Thanks for the follow up call regarding the attached Key Worldwide Foundation invoice. Per our discussion can you please send me an email confirming that if [our daughter] is not admitted to UCLA as a freshman for the Fall 2016 class that The Key Worldwide Foundation will refund our $250,000.00 gift. Again, both Davina and I are greatly appreciative of all your efforts on [our daughter]’s behalf!”

Isackson is president of WP Investments, an industrial and office firm in Woodside, California. He could not immediately be reached for comment.

Beverly Hills developer Flaxman, president and CEO of Crown Realty, paid to get his son into the University of San Diego, according to the complaint. Flaxman’s company wired two payments of $125,000 each to the Key Worldwide Foundation in May and June of 2016.

The version of his son’s application that was ultimately accepted by USD in March 2016 said his son volunteered work managing an elite youth athletic team, according to the suit. Previous versions did not refer to the sport, according to the complaint. Flaxman is also said to have paid to get his daughter a higher ACT score.

Alex Samoylovich (red) and Jacob Rynar (blue) with a Flats Chicago gym (Credit: Facebook and LinkedIn)

In developing 8,000 apartment units over 15-plus years, Alex Samoylovich learned quite a bit about the demands of renters and the inefficiencies in multifamily property management.

Now the founder of Cedar Street Companies and Flats Chicago is using that knowledge to launch Livly, a property management system that streamlines the apps and technology that renters and landlords use.

Launching Tuesday, Livly is an operating system and smart-phone app that seeks to be a central platform for paying rent, logging maintenance requests, booking amenities and fielding tenant inquiries, among other services.

The product will help landlords reduce property management expenses while unlocking “ancillary” revenue through the more efficient use of building space, Samoylovich said. It also seeks to create a more seamless tenant experience, he said.

The increasing demand for rental units and the corresponding rash of new deliveries have made the multifamily market hyper competitive. A system tying together a building’s amenities and services can be a huge leg up for landlords, Samoylovich said.

“In apartments, people are trying to keep their tenants,” he said. “In the future, it won’t be about the amenity races. It will be about the experiences and services that will help keep and retain tenants. By retaining and increasing your retention slightly, that increases the value of your property significantly.”

Livly already has some big backers and early adopters. The company is backed by $10 million in seed funding from Pritzker Group Venture Capital, Navitas Capital and JLL Spark, the $100 million fund launched last year by JLL to back real estate tech ventures. It is being rolled out at properties controlled by industry giants the Related Companies, Golub & Company and CA Ventures, according to the company.

Related Chief Operating Officer Matt Allen called Livly a “game changer,” and said it will be rolled out at Related’s Miami properties to start.

“Not only does Livly offer additional revenue streams to property managers, such as affiliate revenue from renter’s insurance and credit card transactions, the company also helps properties gain new revenue from rethinking and transforming shared and dead space in their buildings into monetized spaces,” Allen said in a statement.

In the multifamily market, developers have increasingly turned to amenities and services to attract tenants. Often those services include digital components like smart phone apps. As a result, some renters are juggling multiple apps and accounts for things like package delivery, building access and maintenance requests, Samoylovich said.

Samoylovich sought to streamline the digital experience for renters, and in early 2018 he hired Jacob Rynar to help him out. Rynar previously worked for Microsoft’s big data and cloud solutions efforts, and later worked for WeWork, which has its own tenant-facing app.

“Renters were typically working with a slew of third parties and they were having a really disjointed experience,” Rynar said. “That experience was not great. We really want residents to be able to utilize this app in a seamless way … to enjoy their time in the building.”

The technology also aims to help pad landlords’ bottom lines. Data collected by the app will tell landlords which spaces are being used, and it will help in the “activation of dead spaces,” or repurposing underutilized space to make it more valuable, Samoylovich said. The data collected will be owned by the landlords, he said.

“You’ll have live information to understand what are the things that are working within a building based on utilization and engagement,” he said.

Proptech is a growing field within the technology and real estate industry, with millions being poured into new products. Still, Samoylovich and Rynar said their product is unique. Given the demand for rental units, and the incorporation of high-tech amenities and services, the business partners believe they have a unicorn on their hands.

“It’s not just the growth of the popularity of multifamily, but more of what you’re seeing is the merging of the physical and digital world,” Samoylovich said. “It’s kind of the perfect storm of opportunity.”

From left: New York Attorney General Letitia James, President Donald Trump, and Deutsche Bank CEO Christian Sewing (Credit: Getty Images)

The fallout from Michael Cohen’s congressional hearing continues.

Two weeks after President Trump’s former “fixer” told lawmakers that his boss inflated the value of his assets to secure loans, the New York attorney general’s office issued subpoenas on Monday to two lenders, Deutsche Bank and Investors Bank, the New York Times reported.

Last week, the New York State Department of Financial Services issued a subpoena to insurance broker Aon, also on the basis of Cohen’s testimony.

The subpoena to Deutsche Bank seeks loan applications, mortgages, lines of credit and other transactions connected to Trump properties in Miami, Chicago, and Washington, D.C., as well his failed attempt to buy the Buffalo Bills in 2014, according to the Times.

The subpoena to New Jersey-based Investors Bank is for documents related to a project it had backed, Trump Park Avenue.

This new inquiry, a civil investigation whose scope and focus is as yet unclear, opens up a additional scrutiny of Deutsche Bank, one of the few large lenders willing to do business with Trump in recent years. The bank is already the subject of two congressional investigations, and previously claimed it could not legally hand over documents related to its loans.

Soon after she was elected in November, attorney general Letitia James promised to investigate Trump’s real estate dealings, as well government subsidies, Russian collusion and possible violations of the emoluments clause. “We will use every area of the law to investigate President Trump and his business transactions and that of his family as well,” James told NBC in December. [NYT] — Kevin Sun

Homes under construction (Credit: iStock)

A company affiliated with the CEO of Sedano’s Supermarkets sold an 86-acre property slated for a home community in Florida City for $33.8 million.

Sedano’s CEO Agustin Herran

A company tied to Agustin Herran, the CEO of Sedano’s and a former board of director of Miami-based U.S. Century Bank, sold the site to Brickless Developer Group, which is managed by Nelson Delgado. The property at 1100 West Palm Drive in south Miami-Dade County sold for $392,000 per acre, records show.

Herran’s GREC HOMES IX LLC was planning to build a home community at the site called Keys Edge Development. The development was planned to have 389 single-family homes, 174 townhomes and 624 apartments, according to its website.

The buyer got $32.6 million in financing from the seller.

GREC HOMES IX bought the property for $17.1 million in 2005, records show.

Sedano’s is one of the largest Hispanic-owned grocery store chains in the U.S. It was founded by Rene Sedano in Hialeah in 1961 and now has more than 30 stores.

Homebuilders are increasingly moving farther south toward Homestead and Florida City as land becomes more scarce in South Florida. A lack of affordable priced homes have also pushed residents to the far suburbs.

In 2017, Lennar paid $10.75 million for about 77 acres in Homestead, just west of the Turnpike along Mowry Drive and Southwest 152nd Avenue. In June, the homebuilder also paid $9.5 million for about 32 acres at 11406 Southwest 248th Street.

Icon’s Chicon House in Austin, Texas (Credit: Icon Build)

3-D printing is going mainstream.

Construction-tech startup Icon says that its new 3-D printer, the Vulcan II, will be able to print a 2,000-square-foot family home in a matter of days, and reduce costs by about 30 percent.

“People will look back on this as something that was a game changer,” HUD secretary Ben Carson said on Thursday during a tour of Icon’s Austin factory.

Austin-based developer Cielo Property Group is purchasing the Vulcan II and plans to start production of affordable housing in the city this year, the Wall Street Journal reported. Icon is also partnering with startup New Story to build at least 50 homes in Latin America this year.

The 3,800-pound printer, operated by a tablet and needing just a few people to run and supervise it, works by pumping out concrete layer by layer, creating buildings with a distinctive, folded appearance. The nonconcrete elements of the homes will continue to be installed by traditional methods.

The technology faces a number of challenges to widespread adoption. Scaling and shipment of the heavy machinery will be difficult, and the printers will have to function outdoors in rain and wind, hot and cold.

The interior of the Chicon House in Austin, Texas (Credit: Icon Build)

Icon has had to overcome many technical challenges to get to this point. “We exploded so many pumps,” Icon CEO Jason Ballard said. “I’m talking about liquid concrete on every surface and every human in the room.”

Ballard founded the company two years ago and has raised $9 million in seed funding. This will be the company’s first effort to generate significant revenue, he said.

The construction industry faces serious problems due to worker shortages and rising material prices. Dozens of startups have invested hundreds of millions of dollars in technology to make construction more efficient – such a brick-laying robots – but so far none have made a real impact in what remains a conservative, inefficient industry. [WSJ] — Kevin Sun

Eva Longoria and Jose Baston with Baston’s Il Villaggio condo (Credit: Getty Images)

UPDATED, March 12, 2:52 p.m.: Jose Bastón, husband to “Desperate Housewives” actress Eva Longoria, is selling his Miami Beach condo to a Quebec developer for $8.75 million, The Real Deal has learned.

Bastón, former president and board member of Mexico City-based Televisa, the largest media company in Latin America, is under contract to sell his combined unit at Il Villaggio, at 1455 Ocean Drive, to Zave and Celia Aberman, according to a spokesperson for One Sotheby’s International Realty.

Barbera Estela of One Sotheby’s represented both sides of the deal. The condo hit the market last year for $9.9 million.

Unit 1104 and 1105 includes four bedrooms, four bathrooms, four oceanfront terraces and 4,425 square feet of interior space. It also features a private elevator, a marble master bath, smart home system and Miele kitchen appliances.

Longoria, who is also a producer, restaurateur and activist, married the Mexican businessman in 2016. He recently stepped down from Televisa’s board of directors, citing personal reasons.

Property records show Bastón’s Oceanview 1105 LLC and Emfer Inc. paid a combined $7.85 million for the two units in 2012.

Brazilian billionaire developer Jose Isaac Peres of Multiplan Real Estate Asset Management completed Il Villaggio in 1998. He’s now working on two condo developments in Miami Beach.

Correction: An earlier version of this story incorrectly stated that the deal closed, according to a spokesperson. It’s under contract. 

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

It takes aim at some of the central tenets of the U.S. real estate business: Multiple Listing Services and buyer’s broker’s commissions.

A new class action lawsuit alleges that the National Association of Realtors, along with the “Big Four” — Realogy, HomeServices of America, RE/MAX and Keller Williams — violated federal antitrust law by conspiring to require home sellers to pay buyer’s broker’s commissions at inflated rates. The suit was first reported by Inman.

The complaint, filed March 6, takes aims at NAR rules that require all brokers to offer buyer broker compensation when listing a property on a MLS, saying this has driven up costs to the seller and stifled competition.

“Because most buyer brokers will not show homes to their clients where the seller is offering a lower buyer broker commission, or will show homes with higher commission offers first, sellers are incentivized when making the required blanket, non-negotiable offer to procure the buyer brokers’ cooperation by offering a high commission,” the complaint reads, “Absent this rule, buyer brokers would be paid by their clients and would compete to be retained by offering a lower commission.”

Filed on behalf of Christopher Moehrl, a homeseller from Minnesota, the lawsuit also says it will represent any home sellers who sold property and paid a broker commission in the last four years in specific geographic areas covered by different regional MLSs.

This includes areas in Texas, Maryland, North Carolina, Ohio, Colorado, Michigan, Florida, Nevada, Wisconsin, Minnesota, Pennsylvania, Arizona, Virginia, Utah and the District of Columbia.

If other homesellers joined the class action, the defendants could find themselves potentially liable for millions of dollars.

NAR responded by calling the lawsuit “baseless.”

“The U.S. Courts have routinely found that Multiple Listing Services are pro-competitive and benefit consumers by creating great efficiencies in the homebuying and selling process,” Mantill Williams, a spokesperson for NAR, told Inman. “NAR looks forward to obtaining a similar precedent regarding this filing.”

On its website, NAR argues that MLSs and their accompanying rules encourage both competition and cooperation among brokers to the benefit of the consumer.

“The real estate market is competitive, and the business is unique in that competitors must also cooperate with each other to ensure a successful transaction. MLS systems facilitate that cooperation,” NAR’s website states. “MLSs are a powerful force for competition. They level the playing field so that the smallest brokerage in town can compete with the biggest multi-state firm.”

[Inman] – Decca Muldowney

Palm House Hotel

A bankruptcy judge finally approved the sale of the troubled Palm House Hotel to a U.S. affiliate of London + Regional Properties for $39.6 million.

London + Regional Properties, a U.K.-based luxury hotel and resort company, beat Related Cos. to buy the former failed EB-5 project in Palm Beach, according to the Palm Beach Daily News.

The judge declined to accept a last minute bid by Wellington developer Glenn Straub whose lawyer said the developer was prepared to pay $40.6 million for the property, according to the Daily News. But the judge ruled it down, saying it came too late in the process. The bankruptcy judge also previously ruled down a “credit bid” by Straub, which would allow him to make an offer without putting down any cash for the condo-hotel project at 160 Royal Palm Way, according to the Daily News.

London + Regional Properties is a private real estate investment firm with almost $12 billion in assets. The company owns the 453-room London Hilton hotel on Park Lane in London’s Mayfair neighborhood.

Some of the proceeds of the sale would go toward paying EB-5 investors who invested $500,000 in the project in order to get a green card. The investors have not yet been paid back.

Federal officials have charged the former developer of the Palm House, Robert Matthews, with multiple counts of wire and bank fraud and money laundering over the development.

[Palm Beach Daily News] — Keith Larsen

804 Northwest 21st Terrace

A Miami investment group is beginning leasing of a micro office development in Allapattah as the area heats up with new projects.

Central Commercial Real Estate launched leasing at the Allapattah Building, a renovated 14,520-square-foot building at 804 Northwest 21st Terrace in Miami, just west of Wynwood. Monthly rents, which are double net, start from $621 and go up to $1,190, according to a property flier. Units range from 274 square feet to 525 square feet.

Ari Dispenza, Diamela Burguera and Eric Gonzalez of Central Commercial Real Estate are handling leasing.

The Turris Group, which owns more than 4.6 acres of land and over 100,000 square feet of building space in Allapattah, owns the building. Property records show TTH23 804 AP LLC, managed by Luis Percovich, Ivan X. Gallegos and Alejandro Torres, paid $2 million for the building in October 2017. It was built in 1925 on a 14,543-square-foot lot.

The just-completed Allapattah Building includes a conference room, common area lounges and courtyards. The 30 offices each include a kitchenette and full bathroom.

Allapattah has attracted investment from Robert Wennett, Jorge Pérez, Lissette Calderon, the Rubell family, Michael Simkins, Lyle Stern, Moishe Mana and others. Wennett, who developed 1111 Lincoln Road, hired architect Bjarke Ingels to design plans for a residential, office, retail and hotel project between Northwest 21st and 22nd streets, and between Northwest 13th and 12th avenues.

In November, Pérez paid $2.7 million for the warehouse at 2270 Northwest 23rd Street where he’s planning a mixed-use complex focused around art.

Thomas Bartelmo, President and CEO of Kislak Organization

Triarch Capital Group paid the Kislak Organization $11.3 million for Plantation Professional Park, marking a sharp increase from the property’s last sale price three years ago.

Miami Lakes-based Kislak sold the 63,319-square-foot-property at 6710–6834 West Sunrise Boulevard for $178 per square foot, records show.

Kislak bought the six-building office park in 2016 for $5.1 million, according to records. The office park was built between 1987 and 1989 on a 7.8-acre site, according to a release. The Plantation Professional Park is currently about 96 percent occupied, with tenants including Dickens Sanomi Academy and American Access Care.

Cushman & Wakefield’s Greg Miller, Scott O’Donnell, Dominic Montazemi and Miguel Alcivar represented the Kislak Organization in the deal.

Aventura-based Triarch Capital Group was founded in 1996 by Daniel Halberstein, Mario Grosfeld, and Jorge Linkewer. It owns a number of properties in Aventura, including Artefacto Plaza, One Turnberry Place, and the Biscayne Harbour Shopping Center.

The Kislak Organization has acquired and managed more than 7,000 multifamily units, and brokered more than 1,550 commercial real estate transactions. Its founder Jay Kislak died in October at age 96. Kislak was a well known businessman and philanthropist in Miami, who started Kislak National Bank before eventually selling it to Banco Popular in 2005.

Ilya Karpov and 320 S. Hibiscus Drive (Credit: LinkedIn)

Ilya Karpov, a former director and stakeholder in a defunct Russian agricultural firm, is the buyer who paid $11.6 million last year for the largest lot on Miami Beach’s Hibiscus Island.

Karpov wants to subdivide the 31,500-square-foot property at 320 South Hibiscus Drive and build a pair of two-story spec houses on the site. He has asked the Miami Beach Planning Board for a variance to build the homes, which are slightly taller and denser than what the zoning code allows. His hearing is set for March 26.

Mount Sinai Medical Center sold the property in September to an entity controlled by broker Daniel Tzinker. But an affidavit filed with the project’s planning application names Karpov as the owner. When reached by phone, Karpov said that Tzinker is representing a partner, whom Karpov declined to name.

“It’s two partners, doing two houses, and we’ll sell them both,” Karpov said. He is handling development while he and his partner have split the equity. The two do not have a construction loan.

Karpov was general director at the OGO Group, a now-dissolved conglomerate that was once one of Russia’s largest grain-producers, according to a World Bank report from 2006. Karpov, 47, said that he started working there as a broker at the age of 21 and climbed the ranks, eventually acquiring shares in the company. He sold his stake in the firm 10 years ago and moved to Miami Beach five years later.

He expects to deliver the houses in two years and said that $2,500 per foot is a good rate for the area. At a combined 12,700 square feet, that would put a price tag of nearly $32 million on the two houses — a large return, even discounting the fees for luxury architect Ralph Choeff, who is designing the project.

“The price for this lot was good,” he said. “We started negotiating with Mount Sinai probably 12 months ago. The first time I was there was February [2018], even before they came to the market. Natalia [Gryczynska] and Ale [Diaz-Bazan] — they found it,” he said, referring to his Douglas Elliman brokers.

“Hibiscus has perfect views, south exposures,” Karpov said. “I think that’s what people want.”

Karpov has been involved in real estate in South Florida since at least 2007, when he bought a house at 19 Palm Avenue on Palm Island in Miami Beach for $4.5 million at the top of the market. He sold it seven years later for $6.5 million.

He said he enjoys the work and the area. “I was married here,” he added.

Charles Cohen and the Design Center of the Americas

Cohen Brothers Realty Corp. faces a second delinquency on loans backing the Design Center of Americas, a financially troubled interior design showroom in Dania Beach.

A $86.5 million loan was marked delinquent in February, just three months after the borrower said it could not meet the payments on a separate $86.5 million loan secured by the property, according to Trepp, a financial data provider.

The newly delinquent loan is now more than 30 days past due, Trepp reported. It ranked it as one of the five largest CMBS loans to turn newly delinquent in 2019.

The Design Center of Americas, known as DCOTA, is a 782,986-square-foot property at 1855 Griffin Road, owned by New York-based Cohen Brothers Realty Corp.

The property was built in 1985 as an interior design showroom, but has struggled to retain tenants amid changing retail habits. It has converted much of the design center space to office property, leasing 100,000 square feet for the headquarters of online pet retailer Chewy.com.

Still, the property is currently only 64 percent occupied, according to Trepp.

The property has had trouble with its debt since 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.

Cohen Brothers Realty Corp. is headed by Charles Cohen. It holds over 12 million square feet of commercial property nationwide, with notable New York office properties including 3 Park Avenue, Grand Central Plaza and International Plaza.

Casey Wold

A joint venture between Vanderbilt Office Properties and Barron Collier Companies paid $20.8 million for an office building at Sawgrass International Corporate Park.

The U.S. real estate arm of UBS Asset Management sold the 91,221-square-foot Corporate Center II in Sunrise, according to a release. Cushman & Wakefield’s Mike Davis, Dominic Montazemi, Scott O’Donnell and Rick Brugge represented UBS.

Corporate Center II, at 1571 Sawgrass Corporate Parkway, was built in 1998 and features a two-story lobby, on-site cafe, and a parking ratio of 4.4 per 1,000 square feet. It’s 98 percent leased to tenants that include Cigna Insurance, Heritage Insurance and Synechron.

The building last sold for nearly $14 million in 1998, records show.

Sawgrass International Corporate Park is one of the largest suburban office parks in South Florida, spanning more than 600 acres and over 3 million square feet of office and industrial space in west Broward County. In September, a partnership led by Starwood Capital Group sold Sawgrass Pointe II, within the corporate park, to a Vanderbilt and Barron Collier joint venture for $27.25 million. Months earlier, Starwood, Trinity Capital Advisors and Vanderbilt Office Properties sold Sawgrass Pointe I for $51.1 million.

Vanderbilt is a Chicago-based investment management firm, and Barron Collier Companies is a family run company with commercial real estate, residential, oil exploration, agri-business and golf courses. The firm’s ties in Florida go back to the 1920s, when Barron Collier amassed a large portfolio of land in a county that was later named after him in southwest Florida.

Realogy CEO Ryan Schneider and CFO Charlotte Simonelli (Credit: LinkedIn)

As it looks to whittle expenses and reduce debt, Realogy has tapped Charlotte Simonelli — a 47-year-old former executive at Johnson & Johnson — as its new chief financial officer and treasurer.

Simonelli, who will report to CEO Ryan Schneider, is set to start March 25, Realogy announced Monday. She replaces longtime CFO Tony Hull, who stepped down abruptly in November. Interim CFO Timothy Gustavson will stay at Realogy as chief accounting officer and controller.

Since 2016, Simonelli has served as CFO of various divisions within Johnson & Johnson, including medical devices and enterprise supply chain. She’s also worked at Reckitt Benckiser, Kraft Foods, PepsiCo and Unilever.

Last month, Realogy disclosed plans to cut $70 million in expenses in 2019. It will also spend the first half of the year focusing on reducing its corporate debt load.

In regulatory filings, Realogy said Simonelli will earn a base salary of $650,000 (though she’ll be eligible for a bonus of $650,000 and an equity award of $1.1 million). In addition to her salary, Simonelli will receive an initial grant of restricted stock valued at $1 million; the stock will vest on the first three anniversaries of her start date.

Although Schneider is spearheading a turnaround at Realogy, the company’s stock plunged 21 percent in late February to a new low of $14.14 per share.

That drop followed Realogy’s 2018 earnings report — in which the company said its profits slid 68 percent to $137 million. For the full year, Realogy reported $6.1 billion in revenues, $35 million less than 2017.

Condo sales dropped off at the end of February, with the top sale reaching only $2 million in Miami-Dade.

Only 100 units traded for about $32 million, down from the previous week’s 183 closings for $79 million. Condos last week sold for an average price of about $323,000 or $290 per square foot.

The most expensive sale was at Marquis Residences in downtown Miami. The combined unit, with four bedrooms and 2,975 square feet of interior space, was on the market for 175 days before it closed for $2 million, or $672 per foot. Darin Feldman represented the seller and Jason Samuels brought the buyer.

Next was the $1.3 million trade of Trump Tower II #4004, which sat on the market for 326 days before it sold. Lana Bell was the listing agent, and Dina Goldentayer represented the buyer. The 2,558-square-foot unit sold for just under $560 per square foot.

Here’s a breakdown of the top 10 sales from March 3 to March 9. Click on the map for more information:

Most expensive
Marquis Residences #5604 | 175 days on market | $2M | $672 psf | Listing agent: Darin Feldman | Buyer’s agent: Jason Samuels

Least expensive
Marquis Residences #4905 | 45 days on market | $645K | $385 psf | Listing agent: John Sandberg | Buyer’s agent: Neil Perez

Most days on market
Trump Tower II #4004 | 326 days on market | $1.3M | $559 psf | Listing agent: Lana Bell | Buyer’s agent: Dina Goldentayer

Fewest days on market
MEI #1805 | 14 days on market | $815K | $743 psf | Listing agent: Jim Agard | Buyer’s agent: Alex Miranda

Screenshot from Sim City 4 (Credit: Microsoft)

When the city-building game “Sim City” was released in 1989, video games were largely considered a leisure activity at best.

But the groundbreaking city-planning simulator has influenced scores of players to become city planners, transit advocates and to run for office over the years. These professionals told the Los Angeles Times they found their calling through the game franchise, which puts the player in the role of mayor and largely gives them free reign to build a city however they want.

For example: Nicole Payne, who is now a program official with the National Association of City Transportation Officials, said a librarian told her about the game at age 10 after seeing her drawing cities.

“I used to draw maps of cities for fun, I had no idea it was an actual career,” Payne told the Times. “I wouldn’t be where I am today without ‘Sim City.’”

Will Wright, the franchise’s creator originally thought the game would only be popular with urban planners and architects until it received widespread success. Sims popularized the simulation genre and spawned a franchise with four main installments and dozens of spinoff games. (The most recent was released in 2013.)

Sim City’s influence on gaming and culture has also been acknowledged outside the gaming world. The Museum of Modern Art in New York City included the second game in the franchise, Sim City 2000, among its permanent collection of video games for its groundbreaking design. [LAT] – Dennis Lynch

Claire Sheres and Boca Raton (Credit: iStock)

Two brokerages in Palm Beach County boosted their agent roster in Boca Raton.

Claire Sheres, a top agent at Coldwell Banker in Boca, left to join Douglas Elliman.

Sheres, who sold more than $50 million in sales volume over the past two years, will be an executive director of luxury real estate based out of Elliman’s Boca office at 444 East Palmetto Park Road. She focuses on country club and luxury home sales in Boca and Delray Beach, according to a release. Over the past 15 years, Sheres has closed $430 million in sales.

Last year, Elliman acquired Boca-based Pink Palm Properties, which had about $100 million in sales over the previous four years.

The Koolik Group joined Compass, marking the brokerage’s continued expansion in Palm Beach County. Elliot and Wendy Koolik of Koolik Group Realty are bringing their team of more than 15 agents to Compass. The Kooliks focus on custom estate homes, country club homes, luxury condos and waterfront properties.

Pebb Enterprises brought on Chris Stewart as senior vice president of leasing. Stewart’s responsibilities include overseeing 2 million square feet of office and retail space, according to a release. He was previously director of leasing at RMC Property Group and has worked for DDR and Regency Centers.

Boca Raton-based Pebb Enterprises owns and manages more than 2 million square feet of commercial space across the U.S. Late last year, Pebb Enterprises and Pebb Capital sold a retail center in Wellington to MetLife Investment Management for $74 million with plans to invest the proceeds of the sale into Opportunity Zones throughout the country.

Lynn Telling and 5307 and 5309 Hood Road in Palm Beach Gardens

Construction of 24 houses in a gated community is expected to start next month on a seven-acre site in Palm Beach Gardens.

The site at 5307 and 5309 Hood Road is the former location of the Bonnette Hunt Club, which was started in 1961 and served as a popular hangout for such celebrities as Jack Nicklaus, Burt Reynolds and Bing Crosby, and former Florida governors Claude Kirk and Lawton Chiles.

Parkwood Distinctive Homes, the developer, will build three- and four-bedroom houses priced from the low $500,000s to the high $600,000s. The gated community will maintain the Bonnette Hunt Club, and street names there will reference various aspects of the old club’s history.

The one- and two-story houses, including six on lakeside lots, will range in size from 1,361 square feet to 2,632 square feet. Each house will have a two-car garage.

Buyers already have reserved several of the houses, according to Lynn B. Telling of brokerage firm Illustrated Properties, the exclusive listing agent for the residential development.

In addition to prospective buyers who live in South Florida, “we also are getting inquiries from potential buyers looking to relocate to South Florida from tax-heavy states,” Telling said in a prepared statement.

“The site’s proximity to Scripps Research Institute, the United Technologies campus and other major employment hubs certainly helps drive interest in the project,” she said.

Telling represented Parkwood Distinctive Homes in its 2017 acquisition of the development site for $2.55 million, or about $364,000 per acre. – Mike Seemuth

Vinny Testaverde and his home near Tampa (Credit: Alexander Tamargo | Mansion Global, Getty Images)

Retired professional football player and former University of Miami star Vinny Testaverde will try to sell his lake-front house near Tampa at an auction.

The six-bedroom house has been on the market for two years and currently has an asking price of $6 million.

Testaverde will try to sell the house at an April 9, auction conducted by American Heritage Realty.

In 2007, his last year as a professional football player (with the Carolina Panthers), Testaverde paid $4.5 million for his house on Lake Keystone in Odessa, a northern suburb of Tampa.

In 2013, Testaverde and his wife, Mitzi, filed a lawsuit against the builder of the house, alleging structural defects and water-intrusion problems. The couple settled the litigation in 2015.

Testaverde initially listed the house for sale in April 2017 with an asking price of $5 million.

After that listing expired, Testaverde temporarily took the house off the market, renovated the ground floor at an estimated cost of $1 million, then re-listed the property with Eva Pedone, an agent of the Engel & Völkers office in Madeira Beach.

He and his wife live at the house with one daughter. Another daughter is engaged to be married, and their son is a student at the University of Albany, so the couple decided the house is too big for them.

Testaverde rose to national prominence as quarterback of the University of Miami football team and won college football’s highest honor, the Heisman Trophy, in 1986. [Tampa Bay Times] – Mike Seemuth

 

 

(Credit: Pixabay)

Private investors are acquiring a growing volume of mortgage loans, a practice long dominated by government-backed Fannie Mae and Freddie Mac.

Banks and other financial institutions are buying more mortgages that meet the standards of Fannie and Freddie, then selling them in the form of bonds without government guarantees.

Recent issues of these so-called private-label securities comprised largely, or solely, of mortgage-loan pools have come from JPMorgan Chase & Co., Flagstar Bancorp Inc., and real estate investment trusts Chimera Investment Corp. and Redwood Trust Inc.

In a similar middleman role, Fannie and Freddie buy mortgage loans from lenders and sell them to investors, and the government assumes some of the risk of bad loans.

But in the last year or so, investors have bought growing volumes of private mortgage bonds without government guarantees and accepting additional risk for a bigger potential return on investment.

The volume of loans that conformed with Fannie and Freddie standards and were packaged into private-label securities totaled $3.9 billion last year and $4 billion in 2017. Both amounts were approximately three times greater than the volume in 2016, according to broker-dealer Amherst Pierpoint Securities LLC.

Some legislators and policy makers want to downsize Fannie and Freddie because they want government to play a reduced role in the $11 trillion mortgage industry. But the market, not Congress, may reduce the role of Fannie and Freddie in real estate finance if the volume of private mortgage bonds continues to grow.

The Urban Institute reported that 45 percent of mortgages originated during the first nine months of 2018 ended up in Fannie and Freddie securities. The most recent peak in this proportion was 65 percent in 2008. [Wall Street Journal]Mike Seemuth

Deutsche Bank’s Paul Achleitner (Credit: Getty)

Top executives of Deutsche Bank agreed to informally discuss a possible merger with competitor Commerzbank.

The two biggest banks in Germany are exploring strategic alternatives following an extended decline in their financial performance and stock prices.

The Wall Street Journal also reported that German government officials have increased pressure on Deutsche Bank and Commerzbank to improve their performance and to consider merging.

The Welt am Sonntag newspaper earlier reported that the management board of Deutsche Bank agreed to enter merger discussions with Commerzbank.

Top executives of Deutsche Bank comprise the management board and determine the bank’s strategy. Paul Achleitner, the chairman of Deutsche Bank, is a driving force behind a potential merger with Commerzbank.

The banks’ so-called supervisory boards hire and fire top executives and participate in major decisions, including whether to merge with another bank. A formal directive by the supervisory boards of Deutsche Bank and Commerzbank to pursue a merger would require public disclosure. But that hasn’t happened.

A senior regulator in the German government told the Wall Street Journal he reviewed a plan to merge the banks and unofficially endorsed it. The regulator and other sources said Germany’s finance minister, Olaf Scholz, and his Social Democratic Party have pushed for the merger.

The Journal also reported last week that shareholders and analysts are worried about the risky challenges of a Deutsche-Commerzbank merger, including complex technological integration, staffing reduction and management alignment.

The two banks would need to eliminate as many as 40,000 jobs in Germany alone to make a merger economically feasible.

Officials of Deutsche Bank and Commerzbank have said privately that they need government support for a massive reduction in staffing. [Wall Street Journal]Mike Seemuth

(Credit: iStock, Pixabay)

Big reductions in asking prices for expensive mansions and penthouses have become more common in the past year.

For example, former professional basketball star Shaquille O’Neal decided the original $28 million asking price for his Central Florida mansion was a long shot, so he cut it to $22 million.

Another Florida mansion in Hillsboro Beach, a barrier island town near Boca Raton, was listed for sale about three years ago with an initial asking price of $159 million. After a $100 million price cut, the mansion sold in January.

Here are 11 properties with some of the biggest price cuts in the past year:

  1. The late Michael Jackson’s Neverland Ranch was listed for sale in 2015 with a $100 million asking price, which was lowered in 2017 to $65 million. The infamous property is now listed for $31 million.
  2. A four-level mansion in Los Angeles had been listed for $250 million before a big cut in January reduced the asking price to $150 million. The residence has five bars, a luxury car gallery, a movie theater and a bowling alley.
  3. The most expensive listing in Los Angeles is a vacant hilltop parcel in Beverly Hills known as “The Mountain.” Initially listed at $1 billion, the asking price was chopped to $650 million in February.
  4. Billionaire Warren Buffet finally sold a vacation home in Laguna Beach, California, for about $7.5 million. Buffet initially listed the property for sale two years ago and cut the asking price by 30 percent from $11 million.
  5. The owner of a penthouse in the SoHo neighborhood of New York City reduced the asking price from $65 million to $59.5 million. But if it sells for the reduced price, it still will be the most expensive apartment sale ever in downtown New York City.
  6. Another penthouse near New York City’s Central Park was listed two years ago for $82 million, then reduced to $61 million. The owner then split the penthouse into two apartments and sold them in February for $30.7 million and $30.2 million.
  7. A townhouse in New York City nicknamed “Versailles in Manhattan” has been on and off the market for 12 years. The owner, whose highest asking price was $35 million in 2007, now wants $19.75 million.
  8. The Florida mansion in Hillsboro Beach, which has a design inspired by the Palace of Versailles in France, sold at a January auction for $42.5 million – 73 percent below the original $159 million asking price.
  9. In 2018, Shaquille O’Neal listed his highly customized mansion in Windermere, Florida, for $28 million, then cut the asking price to $22 million, a 21 percent reduction.
  10. The largest log cabin in the world, known as Granot Loma, has a private marina and is located on 5,000 acres of wooded property in Michigan. The owner reduced the asking price in July to $20 million from $40 million.
  11. Billionaire Ken Griffin paid £95 million, or $123 million, for a London mansion that had been listed for £125 million, or $165 million. [Business Insider]Mike Seemuth

Stephen Ross, Chairman of The Related Companies, which is developing Hudson Yards, speaks with New York City Mayor Bill de Blasio during an event to unveil the plans for the new park at the Hudson Yards development, September 14, 2016 in New York City (Credit: Getty Images)

Over a period of more than 10 years, government tax breaks and incentives to support Related Companies and Oxford Properties Group’s development of Hudson Yards total about $6 billion.

That’s double the package of tax breaks and incentives Amazon’s Long Island City campus was trying to secure before the company scrapped its plans, the New York Times reports.

Related Hudson Yards’ president L. Jay Cross told the publication the 28-acre complex that contains 13 buildings and will eventually house 55,000 office workers couldn’t have happened without government backing. Namely, tax breaks that allowed office prices to be lowered enough to compete with the Midtown market and, most especially, the $2.4 billion subway extension, which the city footed the bill for. Any new developments in Hudson Yards may also be eligible for tax breaks of up to 40 percent for about two decades, and companies leasing space in the project may also be eligible for certain benefits.

Brooklyn Councilman Brad Lander, who criticized the incentive package New York offered to Amazon, told the publication he supports that public funds backed the creation of a new subway line and parks as part of the megaproject, but called for more oversight on the deals given to individual companies.

“We’re giving away tax breaks without paying close attention to what’s a good deal or not a good deal,” he told the Times.

New York mayor Bill de Blasio echoed the sentiment in a statement to the Times: “I believe state and local economic development programs need to be re-evaluated and updated.” Hudson Yards officially opens on March 15. [NYT] — Erin Hudson

London (Credit: iStock, Pixabay)

Wealthy investors from Russia and China may face a tougher time gaining “golden visas” in Britain amid a new crackdown on money laundering.

New rules in April will require visa applicants to show they have had control of more than 2 million pounds for at least two years rather than 90 days in order to gain the visa, according to the Financial Times.

In the past, the tier-one “investor visa” was referred to as the “golden visa” for allowing wealthy investors, notably from China and Russia, to easily settle in Britain in exchange for an investment.

Changes began last year after former Russian agent Sergei Skripal was poisoned in Salisbury, U.K. Following the attack, Britain did not renew the visa of Roman Abramovich, the owner of Chelsea Football Club. The number of Russians granted tier-one visas fell from 46 in 2017 to 29 last year, according to the Times.

Some want the new rules to go even further. Duncan Hames, director of policy with the anti-corruption charity Transparency International UK, proposed setting up a group to look into 3,000 individuals granted tier-one visas before 2015 by conducting wealth audits to thwart money laundering. His proposal is not included in the incoming rules. [FT] — Keith Larsen

SoftBank’s Masayoshi Son (Credit: Getty, Pixabay)

SoftBank is launching a $5 billion fund to invest in technology startups across Latin America.

Marcelo Claure, the former CEO of Sprint and a partner in the David Beckham-led venture to build a Major League Soccer complex in Miami, will run the fund. The new fund will focus on investments in e-commerce, health care, digital financial services and others industries throughout Latin America, according to CNBC.

Investors in SoftBank’s $100 billion Vision Fund have grown disgruntled as of late. The sovereign wealth funds of Saudi Arabia and Abu Dhabi have complained about SoftBank’s practice of buying stakes in companies and then passing them onto the Vision Fund at a premium.

SoftBank has invested billions into startups like Uber and Compass over the past few years. Investors are concerned that its CEO Masayoshi Son is buying shares of companies at valuations that are at market-peak pricing, citing SoftBank’s most recent $2 billion investment into The We Company, previously known as WeWork. [CNBC] – Katherine Kallergis

2 MiamiCentral rendering

UPDATED, March 11, 11:20 a.m.: Law firm Carlton Fields leased 50,000 square feet in an office building on top of MiamiCentral, at the Brightline train station in downtown Miami.

Carlton Fields will be the largest tenant and sole law firm at 2 MiamiCentral, which is 86 percent leased.

The law firm, which has about 150 lawyers and staff members based in downtown Miami, plans to move to 2 MiamiCentral early next year.

The law firm is moving from Miami Tower, a high-rise office building at 100 Southeast Second Street in downtown Miami.

The office building’s location at 700 Northwest First Avenue in downtown Miami is a “vibrant urban environment” that will benefit Carlton Fields by supporting “their efforts to attract and retain top talent,” Tere Blanca, founder and chief executive officer of Blanca Commercial Real Estate, said in a prepared statement.

Blanca Commercial Real Estate, the exclusive leasing agent for 2 MiamiCentral, represented the owner of the office building in the lease deal with Carlton Fields.

The law firm was represented in the transaction by a three-man team at brokerage firm JLL: Matthew Goodman, Matthew Cheezem and Jeff Gordon.

Blanca Commercial Real Estate also is the exclusive leasing agent for 3 MiamiCentral, which was completed on a site one block west of 2 MiamiCentral in the first quarter of 2018 and is now 94 percent leased.

Florida East Coast Industries, which owns the Brightline passenger-train service, is the developer 2 MiamiCentral and 3 MiamiCentral. – Mike Seemuth

Correction: An earlier version of this story incorrectly stated that 2 MiamiCentral is under construction. The building is completed.

Jeff Jones, managing broker of Engel & Völkers in Naples and Bonita Springs

January sales of houses and condos in the Naples area fell to 588, down 6 percent from last year’s level.

The Naples Area Board of Realtors also reported that the area’s inventory of houses and condos listed for sale fell rose to 8,154 in January, a 7 percent increase from the same month last year.

Houses and condos sold in January were on the market for an average of 97 days, unchanged from January 2018.

“The big news in January was inventory,” Jeff Jones, president and managing broker of the Naples and Bonita Springs offices of Engel & Völkers, said in a prepared statement. “We expect the inventory of homes for sale to increase, giving buyers more homes to buy, but not so many that they will negatively affect overall home prices.”

The median house-sale price in January increased year over year by 1 percent to $325,000 while the median condo-sale price increased 3 percent to $260,000.

The number of house sales in the Naples area rose to 314 in January from 295 in the same month last year, a 6 percent increase.

Condo sales, however, fell to 274 in January from 330 in January 2018, a 20 percent plunge. “Fee-heavy condominiums are hurting,” Adam Vellano, west coast sales manager of BEX Realty-Florida said in prepared remarks. – Mike Seemuth

(Credit: Pixabay)

The personal net worth of Americans fell in the fourth quarter of 2018 by the largest amount since the financial crisis.

The Federal Reserve reported that personal net worth had declined to $104.3 trillion by the end of December, down $3.73 trillion from the end of September.

It was the second-largest dollar decline in the personal net worth of Americans since the Fed began reporting the quarterly statistic.

The net worth of American households has increased 73 percent since 2009.

Much of the last year’s fourth-quarter decline stemmed from stocks amid widespread worry that the Federal Reserve would raise interest rates too fast.

American households watched the value of their stock investments drop by $4.6 trillion during last year’s fourth quarter, partially offset by a $300 billion increase in the value of their real estate holdings.

The 3.4 percent overall decline in American net worth coincided with 2.6 percent GDP growth during October, November and December.

Economists generally foresee slower economic growth this year. The Atlanta Fed has forecast GDP growth of 0.5 percent in 2019. [CNBC]Mike Seemuth

(Credit: iStock)

Forbes reported that New York City remains the most popular address in the world among billionaires.

New York is home to 84 billionaires with a collective net worth of $469.7 billion, which is more than the annual economic output of Austria. The Big Apple’s wealthiest resident is media magnate and former mayor Michael Bloomberg, with a net worth of $55.5 billion, Forbes reported.

Since 2015, New York has topped the annual Forbes list of the 10 cities around the world with the largest billionaire populations.

The cities on Forbes’ 2019 list are the same as those in the 2018 list but in a different order. San Francisco, for example, added eight billionaires – including Levi Strauss heiress Mimi Haas and Coinbase co-founder Brian Armstrong – and moved up to seventh place from tenth.

China has the largest number of cities in the top 10: fourth-ranked Beijing, sixth-ranked Shanghai and eighth-ranked Shenzhen.

Here are the top 10 cities and their billionaire population counts:

10. Mumbai, 37 billionaires (-8 since 2018)

9. Seoul, 38 billionaires (=3)

8. Shenzhen, 39 billionaires (-5)

7. San Francisco, 42 billionaires, (+8)

6. Shanghai, 45 billionaires (-5)

5. London, 55 billionaires (+0)

4. Beijing, 61 billionaires (-3)

3. Moscow, 71 billionaires (-6)

2. Hong Kong, 79 billionaires (+2)

1. New York City, 84 billionaires (+1)

[Forbes]Mike Seemuth

(Credit: Pixabay)

American homeowners increasingly file Insurance claims for water damage from interior leaks.

Aging valves and pipes and other culprits of interior flooding have caused a surge of property insurance claims, while claims due to fire and other hazards have become less frequent.

One in five American homeowners filed a claim for water damage from 2013 to 2017, which translates to a 2.05 percent frequency rate, up from 1.44 percent from 2005 to 2009, according to the ISO insurance analytics unit of Verisk Analytics.

Analysis by ISO shows that the average claim for water damage is about $10,000. Chubb Ltd., one of the largest insurers of luxury homes, reports that the annual number of water-damage claims in excess of $500,000 has more than doubled since 2015 while claims topping $1 million have tripled.

Water damage from interior flooding is the biggest risk that the typical homeowner faces, exceeding the likelihood of damage from such headline-grabbing catastrophes as wildfires, tornadoes and hurricanes, says Jon-Michael Kowal, an executive of USAA, a leading U.S. insurer of homes.

Texas-based USAA is conducting a pilot project to detect an imminent risk of interior water damage due to plumbing failures. USAA has 6,000 policyholders testing water-detection sensors.

One of the USAA policyholders participating in the pilot project, Mark Fredriksen, has avoided two potential claims for water damage to his 20-year-old house in Smithtown, New York. One sensor in his home detected water dripping from an old bathroom valve; another detected leakage from a hose in a dishwasher.

Insurance industry executives blame an aging stock of U.S. housing and a proliferation of water-using appliances – and potential leaks – in newer homes. A typical luxury home has 40 points of connection to plumbing that can include wet bars, extra bathrooms and water-filtration systems, according to American International Group Inc. (AIG) senior executive Stephen Poux.

AIG and some other insurers offer premium credits on homeowner’s insurance policies if homeowner has installed effective water-detection devices in their homes.

Standard homeowner’s insurance policies have excluded coverage of water damages due to storm surge and river flooding since the 1960s.

Homeowner’s insurance policies generally cover “sudden and accidental” damage. Policyholders who fail to fix a slow leak that ultimately causes major water damage can face a dispute with their insurer over coverage. [Wall Street Journal]Mike Seemuth

John Hughes and 263 North Mayflower Road (Credit: Wikipedia)

The widow of filmmaker John Hughes is shopping a Lake Forest mansion after buying another big estate in the North Shore town for $12 million.

Nancy Hughes broke the record for most expensive residential sale in Lake Forest when she bought the 12,500-square-foot Cape Cod last year, according to the Chicago Tribune.

Now, she’s asking $4.5 million for the Lake Forest home, a six-bedroom, 7,000-square-foot English country-style mansion that she bought for $5.2 million shortly after her husband’s death in 2009. It features a theater room with a poster on its wall for “The Breakfast Club,” according to the Tribune.

Northbrook native John Hughes’ films include that classic teen film, along with “Ferris Bueller’s Day Off,” “Sixteen Candles,” “Home Alone” and others that were all set and filmed around the north suburbs.

He and his wife owned a seven-bedroom, 11,000-square-foot mansion in Lake Forest that Nancy Hughes in 2014 donated to Northwestern Lake Forest Hospital for a fundraiser. The hospital sold the mansion for $4 million, according to the Tribune.

The Chicago area set a record for luxury home sales in 2018 even as the greater residential market had its struggles. [Chicago Tribune] — John O’Brien

Mel B and her Hollywood Hills home (Credit: Getty Images)

Spice Girl Melanie Brown has chopped the price of her Hollywood Hills home to $5.9 million, a $3 million discount from its 2017 asking price.

The singer listed the four-story home two years ago after divorcing from her husband, producer Stephen Belafonte. They purchased the home together in 2014 for $4.3 million and renovated it extensively in 2016, according to the Los Angeles Times.

Built in 1928, the home spans 5,200 square feet with four bedrooms and 5.5 bathrooms. The 2016 redesign opened up the interiors and used light woods and modern angles to create a contemporary space.

They also added a recording studio, home theater, and gym. Each floor has its own balcony. The backyard includes a pool, spa, and a large patio with a large outdoor grilling area with a built in beer tap and ice cream maker.

Ben Belack and H. Blair Chang of the Agency and Lusine Nargizyan of Dilbeck Real Estate have the listing.

Brown, who goes by Mel B professionally, rose to fame as Scary Spice, a member of the 1990s girl group Spice Girls. The group is planning a six-show tour of the United Kingdom this summer, according to the Times. The singer has also appeared as a judge on “America’s Got Talent: The Champions” and a number of Hollywood celebrity news shows. [LAT] — Dennis Lynch 

Gerald Forsythe and 344 Old Sutton Road (Credit: JG-TC)

The owner of a massive Barrington mansion that’s gone unsold for more than 11 years cut the asking price by another $1 million this week in hopes of finally finding a buyer.

“It’s taking a long time to find the right buyer,” listing agent George Michael of Chicago Northwest Realty told Crain’s. “We need a Ken Griffin…or a sports figure.”

Ken Griffin (Credit: Wikipedia)

The 22,000-square-foot mansion on more than 14 acres at 344 Old Sutton Road first listed in September 2007 at $17 million. More than a decade later, it’s now listed for $13.9 million.

Owner Gerald Forsythe, CEO of power plant-maker Indeck, bought the property for $1.85 million 2003. He then greatly expanded and renovated it, according to Crain’s.

Griffin, the hedge fund billionaire who runs Citadel, shattered the Chicago record for priciest home sale at No. 9 Walton in 2017. Recently, he bought a $238 million penthouse in New York, along with a London mansion and has assembled a sprawling South Florida compound — to go with his other properties. [Crain’s] — John O’Brien

Clockwise from top left: Dollar Tree to shutter or rebrand hundreds of Family Dollar stores, the richest real estate billionaires on an annual Forbes ranking hail from China and Hong Kong, dozens of Gap and Victoria’s Secret stores prepare to close amid low sales and real estate investment trusts are benefiting from the Federal Reserve’s decision to keep interest rates where they are.

China, Hong Kong real estate billionaires top Forbes richest ranking
Forbes has released its annual ranking of the world’s wealthiest people, and the real estate moguls who placed highest on its list are all from either China or Hong Kong. Evergrande Group’s Hui Ka Yan took the 22nd spot with a net worth exceeding $36 billion, while Dalian Wanda chairman Wang Jianlin placed 36th with a net worth of $22.6 billion, according to Forbes. Irvine Company chairman Donald Bren was the highest-ranked American property mogul, placing 68th on the list. Related Companies’ Stephen Ross took the 191st spot on the ranking with a net worth of $7.6 billion. Ross, the developer behind New York’s Hudson Yards, was the only major Manhattan real estate billionaire in the top 200. [TRD]

Hundreds of Gap, Family Dollar, Victoria’s Secret stores to close
Around 230 Gap stores and 53 Victoria’s Secret stores will be closing, their respective parent companies have said. Dollar Tree, which owns the Family Dollar chain, also plans to close up to 390 stores and convert another 200 Family Dollar stores into Dollar Tree shops, the Wall Street Journal reported. (Dollar Tree bought Family Dollar for around $9 billion in 2015.) As for Gap, it plans to split off its Old Navy brand into a separate company, as the chain’s “business model and customers have increasingly diverged from our specialty brands over time,” said a statement from board chairman Robert Fisher. Old Navy has been doing better than its sister companies, Gap and Banana Republic, according to USA Today. Meanwhile, Victoria’s Secret, a flagship of retail giant L Brands, has experienced a drop in sales amid an increased desire among shoppers for so-called “comfort lingerie,” according to CNBC. [TRD]

Amazon pulls plug on 87 pop-up stores, plans new grocery store chain
Fresh off ditching Long Island City for its so-called H2Q, Amazon is now preparing to shutter 87 pop-up retail stores throughout the country, according to the Wall Street Journal. The e-commerce giant, which launched the small store concept in 2014, is reportedly reevaluating its physical retail plans. The purported move comes as Amazon prepares to launch a new grocery store line, one whose first outpost will open in Los Angeles, the Wall Street Journal reported. The Los Angeles store could open before the end of the year, and two other stores are expected to open at the beginning of 2020, according to the outlet. Amazon’s new chain isn’t being billed as a competitor to Whole Foods, which the company acquired in 2017 and reportedly has plans to expand, but will instead offer a broader range of products. The new stores will be about 35,000 square feet, although its plans aren’t set in stone, as Amazon could back out of its existing contracts, the outlet reported. [TRD]

We Company sheds 300 staffers, or 3 percent of its workforce
The co-working giant formerly known as WeWork, most recently valued at $47 billion ahead of a January rebranding as the We Company, let go of 300 employees last week, according to The Real Deal‘s exclusive reporting. The layoffs, which sources said took place globally in its WeWork, WeLive and WeGrow divisions, are the largest by the company since its formation in 2010. A We Company spokesperson said the company has plans to hire 6,000 employees this year, or about 500 per month, to bolster its current head count of roughly 10,000. The SoftBank Group-backed firm, whose CEO Adam Neumann has come under scrutiny for personal investments that mirror those made by the We Company, last made major cutbacks in 2016. Sources told TRD that the latest force reductions have been positioned as being for performance-related reasons. [TRD]

Keller Williams credits tech expansion for 2018 deal surge
A week after Douglas Elliman and Realogy disclosed less-than-stellar financials for 2018, franchise brokerage rival Keller Williams has unveiled some key financial metrics that it hit last year. The Austin-based real estate company said that its agents in the U.S. and Canada closed $332.4 billion in sales volume during its most recent fiscal year, up 5.7 percent from 2017, as contract volume jumped 5.5 percent year-over-year, to $365 billion. Keller Williams declined, however, to disclose its net income or address a decline in franchisee profits. The company, whose CEO Gary Keller returned to its leadership ranks earlier this year, claimed that key investments in technology were paying off. Official agent count remained steady at 159,447, although Keller Williams is in the midst of purging potentially thousands of inactive agents. [TRD]

REITs benefit from Fed’s decision to keep interest rates steady
The Federal Reserve’s recent decision to keep interest rates where they are has been good for real estate investment trusts. Real estate stocks on the S&P 500 fell 5.6 percent in 2018, but have jumped by 12 percent since the beginning of this year as investors set their sights on REIT shares, the Wall Street Journal reported. “The surprising drop in yields and the drop in mortgage rates could potentially be another positive for housing and housing-related stocks going forward,” LPL Financial senior market strategist Ryan Detrick told the outlet. The Fed raised interest rates four times in 2018, but held off on another rate hike in January. [TRD]

MAJOR MARKET HIGHLIGHTS

New York’s Chrysler Building nears potential $100M sale
Aby Rosen, principal and co-founder of Manhattan-based real estate firm RFR Holding, is nearing a deal to acquire the iconic Chrysler Building, according to The Real Deal‘s exclusive reporting. A source with knowledge of the negotiations told TRD that the purchase price is “not much higher” than the $100 million estimate that the Commercial Observer reported the building could trade for, in part due to a ground lease on the landmarked property. The Chrysler Building’s current owners, an Abu Dhabi government fund and the developer Tishman Speyer, put the Art Deco-style office tower up for sale in January. CBRE Group is marketing the building, which saw the Abu Dhabi Investment Council cough up $800 million in 2008 for what would become a 90 percent stake in the tower. [TRD]

Silverstein Properties, Cantor Fitzgerald to raise nearly $2B OZ fund
In one of the largest funds so far to target the Trump administration’s increasingly popular Opportunity Zone program, financial services firm Cantor Fitzgerald and real estate developer Silverstein Properties announced on March 7 that they had joined forces on a fund that they hope will raise $2 billion. The duo, which are both based in Manhattan, said they will target ground-up developments in primary metropolitan markets with a focus on industrial, hospitality, office and retail projects. The partnership between Silverstein and Cantor Fitzgerald is the latest in a series of moves by real estate firms and other investors seeking to capitalize on the OZ program. Earlier this week, Greenwich, Connecticut-based Belpointe Capital announced its plans for an OZ-focused real estate investment trust that it hopes will raise $3 billion within eight years. [TRD]

Michael Cohen sues Trump Org over $2M in unpaid legal fees
President Donald Trump’s former personal lawyer, fresh off testifying on Capitol Hill and suing two Chicago-based taxi medallion moguls over a $6 million condo loan in Miami, is back in court again. Michael Cohen has sued the Trump Organization for breach of contract over its alleged nonpayment on roughly $1.9 million in legal fees. Cohen claims the president’s namesake real estate company must reimburse him for legal costs he incurred as a result of investigations into Trump’s 2016 presidential campaign. Cohen’s lawsuit, filed in Manhattan by lawyers from Binder & Schwartz and Gilbert LLP, states that at various times he has been represented by the Blakely Law Group, Davis Goldberg & Galper, McDermott Will & Emery, Monico & Spevack and Petrillo Klein & Boxer. Cohen, who was disbarred in New York State last month, claims that the Trump Organization cut him off after he began cooperating with federal prosecutors. [TRD]

Top Miami broker teams merge at Coldwell Banker, rebrand
One of Miami’s top broker teams has left its home of 16 years to merge with another top team. Judy Zeder’s team has parted ways with Coral Gables-based EWM Realty International and is teaming up with Jill Herzberg and Jill Eber’s group at Coldwell Banker. The new group will be called The Jills Zeder Group with Coldwell Banker. The families that comprise the two groups are longtime friends, Zeder said. “It’s a very unusual situation to have three families get along and like each other,” said Zeder, adding that they would be “working together for the benefit of the clients.” The two teams have closed a combined $5 billion in real estate sales since 2006. Eber and Herzberg, known as “The Jills” in South Florida’s real estate market, saw a former Miami realtor who tried to extort them receive a jail sentence in February. [TRD]

Nashville-based office REIT mulling potential IPO
Priam Properties is thinking about going public in a move that would make the Nashville-based outfit the first real estate investment trust in the U.S. to pursue an initial public offering this year, Bloomberg reported. The office landlord “has held discussions with investment banks about selling shares as soon as this year,” the outlet reported, citing sources familiar with the matter. Priam generally focuses on “high-growth markets” in states such as Florida, Ohio and Tennessee. Its representatives didn’t return requests for comment about the reported IPO. Dallas-based Fathom Realty, a cloud-based brokerage founded in 2010 that operates on a 100 percent commission model, is another real estate firm reportedly considering an IPO this year. [TRD]

Chicago gets priciest resi sale this year as condo trades for $11.3M
Despite some areas along the southern shore of Lake Michigan sinking due to climate change, Chicago had its priciest residential sale of 2019, the Chicago Tribune reported. A 31st floor unit at No. 9 Walton, a luxury condo tower along the Windy City’s Gold Coast that has attracted business magnates and celebrities, sold for $11.3 million to an as-yet-unidentified buyer. Nancy Tassone of Jameson Sotheby’s International Realty had the listing for the four-bedroom, 7,100-square-foot condo unit, while Natasha Motev of Jameson Sotheby’s is advising the buyer. Hedge fund billionaire Ken Griffin, who made headlines earlier this year for a record-setting penthouse purchase in New York, paid $59 million in late 2017 to buy the top four floors of No. 9 Walton. That deal remains the most expensive residential transaction ever in the Chicagoland area. [TRD]

Compass’ Bay Area growth continues with Alain Pinel Realtors acquisition
A week after picking up customer relationship manager Contractually, Compass is expanding again. The New York-based brokerage announced on March 4 that it bolted on Saratoga, California-based Alain Pinel Realtors, which has 1,300 agents in 33 offices across Northern California, Inman first reported. Compass’ expansion in the Bay Area continues an acquisition spree it began in 2017 when the SoftBank Group-backed firm snapped up San Francisco-based Pacific Union International, which reported $14 billion in sales in 2017. The acquisition of Alain Pinel brings Compass’ agent count in the Golden State up to around 4,500. Compass CEO Robert Reffkin said in January that the firm doesn’t plan to expand into any new markets this year. [TRD]

Eden Health CEO Matt McCambridge and Convene CEO Ryan Simonetti (Credit: iStock)

Beer on tap, fitness centers, child care…and now doctors? Amenities in co-working spaces have evolved as the concept has grown more popular, and now one firm wants to add onsite health care to the mix.

Co-working firm Convene and Eden Health — a health care company provider — are teaming up to open primary care offices in 25 Convene locations in six cities including New York, Chicago and Los Angeles, according to GlobeSt. The rollout will happen in the next year and a half.

Convene co-founder and CEO Ryan Simonetti said the onsite health care providers will be available to Convene clients, landlords and fellow building tenants. Eden Health CEO Matt McCambridge said partnering with Convene will help his firm quickly scale its model across the country.

New York-based Convene was among investors in Eden’s recent $10 million Series A funding round, according to GlobeSt.

The partnership comes at a time of transition for Convene, which offers space and amenities, and more recently co-working services to mid-sized tenants. Convene co-founder Chris Kelly recently stepped back from his role as president as the company looks for someone to lead a global expansion.

In a bid to keep up with competitors like the We Company, Convene wants to double its number of locations by the end of the year. In Chicago, it has opened or announced plans for four locations in less than a year.

Convene’s most recent funding round in July raised $152 million, pushing its valuation north of $500 million. [GlobeSt.] — John O’Brien

S2 Development’s Claudio Stivelman and Township Plaza in Coconut Creek (Credit: LoopNet)

S2 Development bought the Township Plaza in Coconut Creek for $10.1 million.

The Aventura-based real estate firm bought the 66,266-square-foot retail and office property at 4400 West Sample Road for $152 per square foot, records show. The seller was Township Shoppers LLC, which is managed by Roy Mussaffi and Simha Rabi.

Township Plaza was 89 percent occupied at the time of the sale. Tenants include Winn Dixie and Minto Home Communities. The property sits on 9.1 acres, one mile east of US 441/SR 7.

CBRE’s Miami-based Todd Weintraub represented the seller. The property last sold in 2011 for $5.8 million, records show.

S2 Development co-developed Muse Residences in Sunny Isles Beach along with Property Markets Group. The 49-story luxury tower at 17141 Collins Avenue started closings last year.

Here are two more real estate events coming up next week!

On March 13th, Great Gulf is hosting a reception at the Norton Museum of Art with renowned architect Siamak Hariri, 1450 South Dixie Highway from 6 p.m. to 8 p.m. At the event, Hariri will discuss his career as an architect and give insight on his latest project.

On March 14th, the NAIOP is hosting its Awards of Excellence event at the Fort Lauderdale Marriott Harbor Beach Resort & Spa, 3030 Holiday Drive from 6 p.m. to 10 p.m. This event aims to recognize the most successful individuals and significant accomplishments during the past year.

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