Amazon CEO Jeff Bezos (Credit: Getty Images, iStock)

Last week, just after Amazon CEO Jeff Bezos committed his company to a host of major environmental measures, hundreds of Amazon employees took to the streets to protest.

The company’s pledge, which came on the heels of this week’s Climate Week and the United Nations’ Climate Action Summit in New York, included converting to 100 percent renewable energy by 2030. The move was “a big win, but not enough,” activists said.

The e-commerce behemoth’s announcement followed a standoff between Bezos and Amazon Employees for Climate Justice, which has put pressure on other high-emission industries — including real estate — to address their environmental records and strategies.

It also turned the spotlight again on real estate industry, and whether it has finally gotten serious about climate change.

Over the last 15 years, the industry has seen a gradual shift in its willingness to adopt greener technology and construction, industry pros said. But progress remains slow.

While major developers have made efforts to address environmental concerns, smaller building owners with lower profiles have lagged far behind, according to one industry insider.

A reason to go green
“Unless there’s a compelling reason [to go green], they are not going to want to spend money,” said the insider, who didn’t want to be identified because it could jeopardize his current position.

On the commercial side — particularly office buildings — environmentally conscious features have come to be expected. “If you want to rent to a Fortune 500 company, you’re going to have to have a building that has green credentials,” he said, adding that many companies have environmental targets and commitments of their own.

But, “there’s still a big gap between where we are now and where we need to be.”

In New York, buildings are responsible for 67 percent of emissions, according to a government report from 2017. Earlier this year, the city adopted new greenhouse-gas emissions standards for properties bigger than 25,000 square feet, threatening penalties to those landlords that didn’t comply.

The legislation, which laid out a preliminary deadline of 2024, was met with resistance from some developers who complained that the deadline was too tight.

But the impacts of climate change have already prompted institutional investors to alter their approach. They have begun consulting imaging maps and big data to help make decisions about whether to buy real estate in Miami, New York and other major coastal cities worldwide, according to real estate experts at a recent sea level rise conference in Miami.

Touting their “green cred”
Despite industry pushback to some initiatives, including New York’s own “Green New Deal,” new developments on the market are touting their so-called green credentials, suggesting both an acknowledgement of wider environmental issues and an understanding of changing consumer priorities, industry pros said.

In Manhattan, the 115-unit Renzo Piano condominium at 565 Broome Street bills itself as “the first luxury residential zero waste building in New York City.” Developed by Bizzi & Partners Development, Aronov Development and Halpern Real Estate Ventures, the complex offers recycling rooms on each floor, water bottle–filling stations throughout the building and natural air filtration. The 42 parking spots come equipped with electric charging stations, according to marketing materials. Tennis superstar Novak Djokovic and Uber co-founder Travis Kalanick both bought units at the ultra-luxury residence.

Boston Properties, which last year sought to raise $1 billion to fund its green projects across the country, has also invested in the space. The real estate investment trust said it planned to use the proceeds for recently completed and future green projects. It has also pledged to cut water and energy consumption throughout its extensive portfolio.

Some developers have also considered major changes, including finding environmentally friendly alternatives to steel and mortar, according to The New York Times. Architecture and development firm Flank is constructing two wood-filled commercial buildings at 320 and 360 Wythe Avenue in the Williamsburg section of Brooklyn. Mick Walsdorf, co-founder of Flank, said the projects “will expand the limits of traditional construction and usher in a new era of sustainability-minded building practices.”

Still, climate issues have remained low on the real estate industry’s agenda. In 2017, following President Trump’s decision to pull the U.S. out of the Paris climate accord, The Real Deal surveyed 165 real estate firms about the decision. Only 19 firms agreed to participate.

The real estate industry’s reluctance to fully invest in green technology isn’t unique, experts said. According to a new report from the U.S. Green Building Council, 39 percent of Americans say they have “never considered or don’t know the impact buildings have on the environment and their health.” That’s despite almost half of them reporting direct, personal experience with dirty drinking water, asbestos and “sick buildings,” according to the report.

Grand Lake Apartments and Yamal Yidios

Miami-based Ytech sold a shuttered apartment complex in Belle Glade that was previously condemned due to rodent infestations, mold and open sewer pipes.

Ytech sold the Grand Lake Apartments at 2000 South Main Street for $7.4 million, or $19,140 per unit. The buyer is Palm Glade LLC, which is managed by Irvin Pena of Southwest Ranches, records show.

The 384-unit complex sits on 21 acres. It was closed in 2018 after the owner claimed that its insurance company did not pay for repairs after Hurricane Irma, according to the Palm Beach Post.

However, the project had issues prior to the hurricane, which largely missed Palm Beach County, the Palm Beach Post reported.

In August 2015, 200 residents at the complex were displaced because of health and safety problems that included broken or missing staircases, rodent infestations, mold, garbage, open sewer pipes and discarded mattresses and tarps in abandoned swimming pools, according to the Post.

The Palm Beach County Housing Authority lost more than $1 million in taxpayer money on a failed plan to rebuild the complex, the publication reported.

Ytech purchased the property in 2013 for $7.6 million, meaning it sold the property at a slight loss.

Belle Glade is a small agricultural community in the western part of Palm Beach County and sits on the southeastern part of Lake Okeechobee. It is known for its sugar cane production.

Ytech has developed and redeveloped more than 7,000 residential units in 25 cities in the southeastern United States, according to its website. It is led by Yamal Yidios. In 2017, the company bought the BankUnited building at 1428 Brickell Avenue in Miami’s Brickell neighborhood in a deal valued at $50 million.

Alexandria Ocasio-Cortez (Credit: Getty Images)

If AOC had her way, landlords would feel the pain. The big ones, anyway.

On the heels of Sen. Bernie Sanders’ $2.5 trillion housing plan, the firebrand New York congresswoman just released her own $16.5 billion plan on Tuesday, and it’s not pretty for institutional landlords.

Though any landlord with five or more properties would be subject to her overall housing proposal, Alexandria Ocasio-Cortez is really taking aim at “market-controlling landlords,” whom she defines as owners with more than 100 properties in a single metropolitan area, 1,000 rental units nationwide or rental units in three states.

“It’s time that we stop commodifying the housing market because it is not a speculative investment, it is a basic right for all Americans,” she said at a rally earlier this month.

Under her housing plan — which she said is premised on transparency, fairness and justice — large institutional landlords would have to provide quarterly data to the Secretary of Housing and Urban Development. The “market-controlling landlords” would have to disclose the median rent in their units, any vacate orders, copies of current leases, the identity of the landlord, and list the company’s three largest shareholders, she said.

It would be up to tenants to enforce these measures by filing civil actions, or state attorney generals to file in U.S. district courts for damages.

AOC’s plan would include the lowest cap yet on annual rent increases for landlords with at least five properties. The “Place to Prosper Act” would limit increases to 3 percent of the average rent or the consumer price index, whichever is greater. The proposed rent cap is smaller than both the rent control measure passed by California last week — which would cap rent increases at 5 percent plus the consumer price index — and Oregon’s statewide cap of 7 percent plus inflation passed earlier this year.

AOC’s plan would also include a “good cause” eviction provision, versions of which have passed in California and Oregon, but notably failed in New York. In Ocasio-Cortez’ federal version, evictions would be restricted to cases where a tenant has not paid their rent for two months or landlord occupancy of a unit.

Ocasio-Cortez’ bill would not prevent states from enacting stricter limits on rent increases or placing additional obligations on landlords. The bill would also provide $6.5 billion for the next decade to fund tenants’ right to counsel for eviction proceedings, echoing a measure already in place in New York City.

The congresswoman proposed $10 billion over the next decade for lead abatement. In her own district, the New York City Housing Authority is embroiled in a lead-based paint crisis that led to the poisoning of hundreds of children between 2012 and 2016. A federal monitor was appointed earlier this year.

The bill also seeks to amend the Fair Housing Act and crack down on discrimination of tenants on federal rent subsidy programs. Under the proposed legislation, the definition of source of income as a protected class would be expanded to include Section 8 housing vouchers and social security benefits.

The bill would also make significant changes to mortgage-backed securities for landlords who repeatedly engage in tenant harassment or foreclose on 40 percent of their occupied properties. The proposal would prohibit federal agencies from issuing or purchasing securities backed by those landlords.

Check back in the coming days for more analysis on her plan.

Adam Neumann (Credit: Getty Images, iStock)

In the beginning there was Adam Neumann.

Now, WeWork is facing a future without its energetic leader — who raised billions and opened hundreds of office-space locations, but ultimately led the company astray.

“I had so much respect for him when I got there,” said one former executive. “And I had zero when I left.”

The bitter sentiment is shared by many. In recent years, Neumann’s behavior — which included smoking marijuana on an international flight and expressing a desire to become the world’s first trillionaire — became a constant blight on a business many WeWork employees believed in.

In interviews with The Real Deal, eight current and former WeWork executives described a circle of top staff around Neumann who enabled his actions and feared running afoul of the charismatic CEO. Those criticisms extend to a board accused of being complicit in allowing Neumann to take total control of the company and appeased Neumann’s worst management instincts rather than impose strict corporate standards.

“We were making workspace accessible to people and helping people create business,” said a former executive, who, like others, spoke on the condition of anonymity because they have signed non-disclosure agreements. “But there were a lot of distractions.”

Among the most concerning disclosures involved Neumann’s purchase of buildings financed with loans from WeWork, which he later leased back to the company. Others included taking out almost $1 billion in loans and cashing out stock options, and a $5.9 million payment to Neumann for providing WeWork with the right to use the word “we.”

One executive said Neumann was “no financial guru” yet “surrounded himself with yes people.” Until this week, he had majority voting power.

“They created the monster,” the executive said.

A spokesperson for Neumann and his wife, Rebekah Neumann, said the couple “want nothing more for the company than to succeed. They are going to let management do its job, they are not going to be in the way.” WeWork declined to comment.

Neumann’s removal as CEO Tuesday was a stunning blow for one of the world’s most-hyped startups, which has seen its reported value plunge by at least two-thirds from its once lofty $47 billion. Alongside co-founder Miguel McKelvey, the 40-year-old Israeli opened the firm’s first workspace in Soho in 2010 and has since raised $12 billion to scale the company. It has locations in 111 cities and is the largest tenant in New York, central London, Washington, D.C., and other markets.

The company has postponed its IPO indefinitely as its new leadership seeks to reassure investors that can survive forthcoming huge losses and eventually be profitable.

“Neumann’s energy and style was critical,” said one executive. “It’s what allowed the company — even its good parts — to be what it was.”

But his removal came to be seen as necessary for the public offering to succeed. In announcing Neumann’s demotion to non-executive chairman, the firm said CFO Artie Minson and Sebastian Gunningham, a vice chairman, would become co-CEOs. However, those who worked alongside them said the pair were among the people who tolerated Neumann’s poor corporate practices.

“Artie was supposed to be the adult,” one executive said of Minson, who joined WeWork after leaving his post as deputy CFO at Time Warner. Another said he was Neumann’s “biggest enabler.”

Given Minson’s track record of corporate success, his lack of intervention surprised some executives. They ascribed it to his desire to keep his job and not fall out of line with Neumann.

“It’s a company of survival,” said one person.

One person defended Minson, saying the chief financial officer had in fact crossed Neumann on multiple occasions and “paid a price for it.” One such episode led to Minson’s shift from COO to CFO, according to the person, who added, “Adam runs very hot and cold on people, and then finds a new shiny object.”

But Minson and other executives who remain at the company benefited greatly from relationships with Neumann. Minson received multimillion-dollar loans, not to mention a $600,000 loan that was forgiven (other loans have been repaid). Board member Lew Frankfort and COO Jen Berrent also received millions of dollars in loans, company documents show.

Former executives also cast blame on WeWork’s largest investor, SoftBank, whose CEO Masayoshi Son formed a tight bond with Neumann but ultimately pushed for his ouster.

“Providing Adam with a lot of money and then blaming him for not spending it in the way they thought he should is not fair,” said one former executive. “What did they think was going to happen?”

It was Neumann’s image as a loose cannon and visionary leader that attracted exorbitant investments in the first place, in particular from Son, who once told Neumann he was not being “crazy enough.”

In fact, Neumann’s ambition knew few limits. He often said WeWork’s office space was merely the beginning, akin to Amazon’s book sales and Google’s search bar, said the executives. But his attempts to expand WeWork into other offerings — wave pools, co-living and food companies — failed or proved to be distractions. Few have generated much revenue.

Neumann’s wife Rebekah, who stepped away Tuesday from her position as chief brand officer, contributed to the tension in management decisions, the executives said. In addition to launching an elementary school, WeGrow, Rebekah was later given the title co-founder, and reportedly pushed out the former chief brand officer, SoulCycle co-founder Julie Rice earlier this year.

More recently, it was upon Rebekah’s insistence that the company’s IPO prospectus declared “we dedicate this to the energy of we — greater than any one of us but inside each of us.” The bizarre inclusion to a traditional regulatory filing unsettled some of the executives.

Tuesday’s announcement marked the beginning of WeWork’s attempt to reshape a narrative that had become decidedly negative. In statements, its new co-CEOs spoke of a “new journey.” Board member Frankfort said he was “thrilled” about the “new phase” of the company.

Other changes at the company could include an end to WeWork’s notorious party culture, which has included multi-day outdoor festivals to daily happy hours. (One executive recalled an office party where a glass wall in Neumann’s office was smashed.)

Another issue is a human resources department in disarray. One executive recalled waiting weeks before getting administrative staff; others said they worked without a title for extended periods.

What WeWork’s next chapter will look like remains to be seen. Early reports point to mass layoffs, possibly in the thousands, and the shuttering of secondary business lines.

With Neumann as non-executive chairman of a board overseeing two internal CEOs, and without plans to search for a single chief from outside the company, hope is faint that much will change at WeWork, the former executives said.

One source said that the company in the next few days expects to lay off executives who were seen to be Neumann’s “enablers,” including those who were aware of his more erratic behavior. The source would not provide more details.

Some former executives remain bitter about what they see as a self-absorbed leader and compliant followers costing WeWork a chance to finish reshaping the commercial office industry.

“I don’t know why anyone was paying him for the word ‘we,’” said one. “The only word he knew was ‘I.’”

(Illustration by Andrew Colin Beck)

Miami’s condo doomsday prognosticator, Peter Zalewski, has been waiting for this moment for almost a decade.

The fast-talking former business journalist turned consultant with a penchant for electronic cigarettes and condo sales numbers has predicted the crash of Miami’s high-end condo market for years.

Zalewski projects that, driven by an oversupply of expensive condo buildings in Miami Beach and downtown Miami, along with a new influx of luxury apartments, vulture funds will swoop in to buy the units for pennies on the dollar. Luxury apartments won’t get leased due to the large number of condos that are being rented out, adding to the overall rental inventory.

“You are going to get a lot of spin on how everything is great, trying to build up the perception of demand, but anecdotally, if you look around, there is a rental building just west of downtown that is offering three months of rent free,” said Zalewski.

His company, Condo Vultures, analyzes sales numbers to back these predictions up. According to Zalewski, there is a five-year oversupply of luxury condos in downtown Miami alone. Reports by other brokerages, however, contend that while there is a lot of supply, much of it is being absorbed. ISG’s Miami Report, published in May, calculated that there are 20,000 units in the pipeline this cycle, from Coconut Grove to Fort Lauderdale and east of I-95, with a total of 89 percent that have been pre-sold.

In the last cycle, parts of South Florida’s real estate market imploded. Buyers of high-end condo projects fled; for example, at the 103-unit “Caribbean” condominium complex in Miami Beach, only 14 buyers sought to close. Developers were forced into heavy losses or bankruptcy.

It’ll be a different kind of ride through a downturn today versus 2008, according to industry professionals, who argue that more precautions have been taken to mitigate losses. 

But there will still be winners and losers. Poised to take the winning side are vulture funds such as Miami-based Safe Harbor Equity and Bain Capital, which will capitalize on defaulted loans and buyers looking to get rid of their condo units. On the losing side, there will be some overleveraged developers, of course, as well as debt and equity lenders who don’t get paid back.

Cracks in the market

In South Florida, there have been a unique set of recession warning signs. Residential foreclosure lawsuits were up 7 percent in the first half of 2019, compared to the first half of 2018, to 10,258, according to Attom Data Solutions. During this same time, new foreclosure filings increased 32 percent, to 5,663. 

Ralph Serrano of Safe Harbor Equity, whose fund is currently seeking to raise $200 million to buy distressed debt in South Florida and throughout the country, said he is seeing growing signs of distress in the tri-county area.

“I am seeing an increase in defaults on the bank level in terms of borrowers not making the payments in a timely fashion,” he said.

Serrano added that he’s also seeing issues with some buyers in countries such as Venezuela that are having difficulty getting money out of the country.

Daniel Ades of Kawa Capital, a Miami-based firm with $1.2 billion in assets under management, said he has already completed two bulk condo deals in Miami in the past four months. The company bought units in two separate high-end condo projects for about a 30 to 50 percent discount from the previous sale price. He declined to give the names of the projects but added that more of these type of bulk condo deals could be coming soon.

In Sunny Isles Beach, the developers of the Regalia luxury condo tower were recently forced to turn over 100 percent interest in the two remaining — and most expensive — unsold units by a Miami-Dade County Judge after the development group failed to pay a $3 million judgment.

And just north of Miami in Hollywood, Madison Realty Capital is currently seeking foreclose on $40.06 million of delinquent debt of Costa Hollywood Beach Resort at 777 North Ocean Drive, which opened only a year ago.

Nonbank lending’s increasing popularity

The emergence of nonbank lenders and alternative financing is one factor that makes this potential recession look different from the last. Since the last downturn, banks have backed away from commercial real estate lending due to increased regulatory scrutiny under the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Nonbanks have stepped in to fill the void and, as a result, mezzanine lending, which was popular prior to the recession, is making a comeback.

Generally used to fill in the gaps on construction loans for large-scale projects, mezzanine loans are a hybrid of equity and debt. Mezzanine lenders most often get paid back after the senior loan, and the rate is between 12 and 20 percent per year, which is much higher than traditional financing.

“I am seeing more mezzanine right now due to interest rates and banks backing away,” said Jay Sakalo, a partner at Bilzin Sumberg in Miami, whose team negotiated financing for PTM Partners and Estate Investments Group’s mixed-use project Soleste Grand Central in Miami’s Overtown neighborhood. The capital stack included $18 million in mezzanine financing from Nationwide Real Estate Investments and a $55 million construction loan from Bank OZK.

The inherent risk lies in the fact that mezzanine lenders are generally paid back after the construction loan is paid off. If a developer runs into trouble, there is a chance that the mezzanine lender won’t get paid back right away or at all.

“I think there are some mezzanine lenders that got uber aggressive and they may very well own the project,” said Brett Forman of Boynton Beach-based Trez Forman Capital, a nonbank lender.

That’s what happened in New York City, where an 88-story luxury apartment building, 125 Greenwich, could be taken over by Jupiter, Florida-based United States Immigration Fund, which provided a $194 million mezzanine loan to the project’s sponsors in 2017. USIF, which raises its money through the EB-5 visa program, is now seeking to foreclose upon the project. 

Another potential risk is the growing use of non-recourse lending by nonbanks.

“Alternative lenders are growing because banks are predominantly [providing loans at] full recourse,” according to Charles Penan of Aztec Group, a real estate investment and merchant banking firm.

There is also more risk in nonbank financing because there is less publicly available information known about nonbank lenders. They aren’t required to hold the same amount of capital as banks since they are not subject to the same level of regulation.

“In South Florida, there is a lot of non-professional money flowing here,” said Kawa Capital’s Ades. “There are a lot of poor quality lenders who will lend too much.”

Every day, The Real Deal rounds up South Florida’s biggest real estate news, from breaking news and scoops to announcements and deals. We update this page throughout the day. Please send any tips or deals to tips@therealdeal.com

This page was last updated at 9 a.m.

Adam Neumann (Credit: Getty Images, iStock)

WeWork insiders slam Neumann and his enablers: “They created the monster” In interviews with The Real Deal, eight current and former WeWork executives described a circle of top staff around Neumann who enabled his actions and feared running afoul of the charismatic CEO. [TRD]

The Venezuelan government could soon be seeking to confiscate the homes of millions of Venezuelans living abroad. Venezuelan leader Nicolás Maduro ordered a census on how many homes are empty, adding to fears that the homes may be confiscated by the government, according to the Miami Herald. [Miami Herald]

Keys Hospital wiped out by Irma expected to open in 2021. Fishermen’s Community Hospital in Marathon is about to be rebuilt after being destroyed by Hurricane Irma, according to the Miami Herald. The $43 million building is planned to open in summer of 2021. [Miami Herald]

Compiled by Keith Larsen

(Credit: iStock)

Millionaires aren’t what they used to be.

The global population of individuals worth at least $30 million saw their net worth shrink in 2018 for the first time in three years — even as their ranks grew, according to a new report by research firm Wealth-X. Following the downward trend of billionaires’ fortunes, their collective wealth has dropped 1.7 percent to $32.3 trillion last year, amid stock market volatility and concern over the U.S. and China’s trade war.

As a result, the demographics of where the world’s wealthy live have changed. Notably, New York City is once more the world’s capital of millionaires, bumping out the former top city, Hong Kong. The Chinese city saw a 10.6 percent dip in high-net worth individuals, and of those folks, their wealth shrunk by 9 percent. That’s largely a reflection of the trade war, according to one of the report’s authors, Maeen Shaban, director of research and analytics.

On a global level, 31 percent — or about 81,000 high-net worth individuals — were living in the U.S. last year, between either New York, Los Angeles, Chicago, San Francisco, Washington, D.C. or Dallas. The Big Apple had nearly 9,000 ultra-high net worth residents, a 1.3 percent increase from the previous year.

It’s unclear what that means for New York City’s real estate market, which is struggling with a flood of condo inventory and deals only closing after hefty price cuts.

But decline in net worth and recession fears could lead to cutbacks on lavish spending on assets such as “yachts, private aviation, [and] luxury property” among other major purchases, according to Shaban.

Just over a fifth of this ultra wealthy population, which totals around 265,000 worldwide, are interested in pouring their money in real estate for personal or investment reasons, according to the report. Alternative assets, including real estate, accounted for 6 percent of this tier’s holdings last year.

More broadly, international buyers are retreating from U.S. residential markets in droves. Between April 2018 and March 2019, foreign buyers spent $77.9 billion, down from $121 billion a year earlier.

And though brokers say wealthy domestic buyers, who either inherited their fortunes or made them through working in technology, have largely stepped in to the New York market, they’re buying slowly, if at all.

“There are billions of dollars on the sidelines,” said Compass’ Kyle Blackmon, speaking at an event in August.

WealthX’s findings support that assertion. The report notes that many high net worth individuals focused on wealth preservation last year and approached 2019 with “some trepidation.”

“Developments over the first half of the year largely justified this sense of caution,” authors wrote, concluding that “the near-term prospects are therefore not especially favorable.”

But appraiser Jonathan Miller noted that a downturn in the market can also represent “a period of opportunity” for flush buyers. And there’s been historic trades in recent months by billionaire buyers such as Ken Griffin and Jeff Bezos. In June, the market had its best month on the books — but that was largely thanks to buyers trying to beat a looming transfer tax.

“The question is will they continue to invest?” Miller continued.

Write to Erin Hudson at ekh@therealdeal.com

David Martin and the site at 2655 South Bayshore Drive (Credit: Realtor)

Terra secured $185 million in construction financing for its next development in Coconut Grove.

Mack Real Estate Credit Strategies is providing the loan to Terra for the Bayshore Grove project at 2655 South Bayshore Drive in Coconut Grove, according to property records.

It’s one of the largest construction loans to close in South Florida this year, after the $300 million loan for Vlad Doronin and Cain International’s 830 Brickell office tower and the $225 million loan for The Residences at Mandarin Oriental in Boca Raton, both of which closed in July.

MSD Partners, the private investment firm of Dell Technologies billionaire Michael Dell, is the lender for the $300 million loan, according to a spokesperson for Doronin’s OKO Group. The South Florida Business Journal first reported the loan.

In April, Terra affiliate CG Summer Investments LLP filed a notice of commencement to demolish the former Summerhill Apartments building on the site.

Terra said Meyer Davis and Arquitectonica are designing a luxury residential project to be built on the 1.5-acre lot, which is one parcel away from Terra’s Grove at Grand Bay, a pair of Bjarke Ingels-designed luxury condo towers.

Previous plans for the project called for two 20-story towers with about 300 residential units, 32,000 square feet of office space, a pool deck and parking, according to the South Florida Business Journal, which first reported the loan.

The property is across the street from Regatta Harbour, a 9.5-acre, mixed-use bayfront development with more than 100,000 square feet of retail and restaurants, a new marina, dry boat storage and more. Treo Group is developing that project.

Based in an office condo between Grove at Grand Bay and the Bayshore Grove site, Terra has a number of projects in the neighborhood, including Park Grove with the Related Group, Mary Street and Grove Central.

Terra is also partnering with Grass River Property on Grove Station, a mixed-use, transit-oriented project planned next to the Coconut Grove Metrorail station. The development will have 130,000 square feet of retail space and 350 apartments, some of which will be managed by Common.

Michael Gross and Zvika Shachar (Credit: NOAH Conerence via YouTube and LinkedIn)

WeWork is clearing house.

Three more executives were told Wednesday night that their tenure with the company is up, multiple sources told The Real Deal.

The executives, who were seen to be aligned with former CEO Adam Neumann, include vice chairman Michael Gross, VP of Operations and special projects Zvika Shachar, and director of development Roni Bahar.

They are the latest in a string of high-profile departures at WeWork in recent months, as company operations have descended into chaos.

The three were first reported to be under scrutiny by Bloomberg.

This is a breaking story, please check back for updates.

Venezuelan leader Nicolás Maduro and the city of Caracas (Credit: Wikipedia, iStock)

The Venezuelan government is looking to seize the homes of Venezuelans living abroad as it seeks to capitalize on the four million people who have left the impoverished country.

Venezuelan leader Nicolás Maduro ordered a census this month to look at how many homes in Venezuela are empty, according to the Miami Herald.

In the last two decades, the Venezuelan government has seized billions of dollars in land and other assets of private companies, the Herald reported. Dozens of buildings have already been taken over by groups that support the regime.

There are concerns among Venezuelans that there is a government program called “Locate Your House,” where groups backed by the government are identifying vacant properties.

Earlier this decade, many Venezuelans bought properties in South Florida, especially in Doral and Coral Gables’ Cocoplum neighborhood. Between 2012 and 2015, condo buyers from Venezuela represented roughly 25 percent of Latin American real estate sales in Miami, according to Craig Studnicky, principal and owner of ISG. In February, he said that figure was essentially down to 1 percent.

Some of the country’s top officials have purchased condos and high-end real estate in South Florida, including units at the Porsche Design Tower in Sunny Isles Beach, and multi-million dollar houses in Cocoplum. Some of those assets have been seized by the U.S. government as part of a money laundering investigation.

[Miami Herald] — Keith Larsen

From left: Santiago Vanegas, Harvey Hernandez, David Arditi, and Russell Galbut

It’s no secret that the Miami area is facing an oversupply of shiny new condos, spacious units with sprawling terraces in skyscrapers stretching from Brickell to the northernmost tip of Sunny Isles Beach.

But a new product type has emerged that developers claim they can’t build quickly enough: more affordable units that buyers can rent out however and whenever they want, no strings attached. The projects are mostly clustered in downtown Miami and Brickell, with price points in the $300,000 range and up – a sharp contrast to the glut of $1 million-and-up condos on the market in Miami.

Miami’s biggest condo developer is even getting in on the action. The Related Group is partnering with ROVR Development to build a roughly 400-foot tower with about 350 units in downtown Miami that will have a short-term rental or hotel component. The project is still in the design stages.

A rendering of Smart Brickell

Smart Brickell

Santiago Vanegas, founder of the Habitat Group, is one of the first developers to pivot with his planned project, Smart Brickell. In mid-2017, he launched sales of the first tower, with 50 hotel rooms and 50 condos. A year later, Habitat Group had sold out the first building and was beginning sales of the second tower, with the same number of hotel rooms and condos. A third tower will have 97 rental apartments.

Yet to be built, the project at 239 Southwest Ninth Street is now almost completely sold out.

“What the customer wants today is a combination between returns, flexibility, and price,” Vanegas said. Buyers at Smart Brickell will be able to rent their units out as often as 50 times a year on platforms such as Airbnb. They can also participate in a two-year, fixed annual leaseback program.

Construction on the first building will begin in October and will be completed in the fourth quarter of 2021, including the hotel. The second tower will be delivered and start operating as a hotel in the second quarter of 2022. Habitat Group is working with Ocean Bank and City National Bank to finance construction of the project, where units will range from about 600 square feet to 1,100 square feet. Cervera Real Estate is handling sales of the condos, priced from $300,000 to $600,000.

Investors, especially from Latin America, are attracted to Smart Brickell and similar projects because they provide income while the owners are away, as well as a place to stay when they are in town. And they don’t have to worry about short-term rental restrictions that may be found in older buildings – think pre-Airbnb – or in new luxury developments where end-users wouldn’t want to live among daily or weekly renters.

At Smart Brickell, the majority of buyers at Smart Brickell are from Latin America. “Those buyers are mainly investors and they plan to get a return,” Vanegas said. The two-year leaseback will offer rents of $3.50 per square foot, which Vanegas said is about 10 percent higher than the standard rental market.

YotelPad Miami

YotelPad

As early as 2015, developer David Arditi was working on plans for a mixed-use Yotel-branded hotel and residential tower in downtown Miami. Arditi’s Aria Development Group partnered with AQARAT, a Kuwaiti real estate company and an investor in Yotel, to develop the site.

The project, with 231 condos and 222 Yotel “cabins,” sold out this month, a year and a half after launching sales. The 31-story tower at 227 Northeast Second Street will have condos ranging from 417-square-foot studios to 708-square-foot two-bedrooms, with kitchen, dining and living areas.

OneWorld Properties is handling sales and marketing of YotelPad. More than half of its buyers hail from Mexico, China and Colombia. The building is expected to be completed in 2021.

“We had always explored some form of flexible rental policy or creative rental policy … We wanted to address a segment of the market that we think was not being addressed locally,” Arditi said. “South Florida continues to be reliant on non-local buyers – out of state, European, South American. A lot of these people use this as their second home, third home, an investment. It’s very logical.”

In other parts of the country, residents have already been willing to accept smaller units in exchange for building amenities, location and a more affordable price point.

“We took what we had seen in the markets in our projects in New York City and Washington, D.C. And in both of those markets there’s clearly a trend of prime locations with great amenities and a quality residential experience combined with smaller units,” Arditi said.

Whether it’s for-sale or rental units, Arditi said his focus has always been on the total purchase price or monthly rent while keeping functionality and livability in mind. With rising land and construction costs, the developers designed the building so that the unit prices are attainable for young buyers and are configured so that they fit more furnishings than people might expect.

“If you ask people if they can guess the square footage, they always think it’s [up to] 20 percent bigger,” Arditi said, adding that “the consumer doesn’t think in dollars per square foot.”

He plans to develop another site in downtown Miami into a similar project, and is considering building more YotelPads in South Florida, New York City, Los Angeles and Washington, D.C.

A rendering of Natiivo Miami

Natiivo Miami

While YotelPad and Smart Brickell have been in the works for years, a new competitor emerged this summer when developers Harvey Hernandez, Russell Galbut and Bruce Menin revealed plans for their first Airbnb hotel-condo project in South Florida.

Natiivo Miami, planned for 190 Northeast Sixth Street in downtown Miami, launched sales in June with a huge push to the broker community. Agents from a number of firms blasted their mailing lists with marketing materials for the development.

Natiivo is a new brand from Hernandez’s company, NGD Homesharing. Hernandez said the brand was “born out of necessity.” Three years ago, his company also created the Niido brand, a similar concept focused on the rental market.

“As we expanded the brand, we realized there was a space and need for a second brand that was more about hospitality,” Hernandez said. “Realtors felt there was a tremendous need for a licensed home-sharing [product].”

Natiivo is the first project in Miami that will be “powered by Airbnb,” which means that unit owners will be able to put individual rooms or entire units on the Airbnb platform. If the unit owners join Airbnb’s Friendly Buildings Program, hosts and NGD Homesharing would share the revenue generated from renting the units out on Airbnb.

Studios start at $330,000 and three-bedrooms go up to $1.2 million, according to one e-flier. The units, or rooms, will be able to be rented daily, with a management company handling everything from changing linens to washing the dishes, similar to a hotel.

Cervera Real Estate is handles sales of Natiivo. It’s expected to open in late 2022.

So far, Hernandez has two Niido projects in Miami-Dade. As for Natitvo, the downtown Miami project is the only one so far in Miami-Dade, but he said he is looking at a number of opportunities for the condo product in “every major city.”

“I think at the end of the day, ownership is changing,” Hernandez said. “If you don’t provide a very progressive way of ownership, you’re not going to be able to sell your product.”

The private plane used by Adam Neumann is on sale (Credit: Getty Images, iStock, Wikipedia)

That was fast.

WeWork is selling the private plane used by Adam Neumann days after the co-founder stepped down from his post as CEO.

The company bought the two-bedroom Gulfstream G650 last year for $60 million for Neumann’s use, but the purchase immediately raised concern among investors and frustrated employees, according to Business Insider. The sale comes on the heels of mounting criticism of the co-founder that led to his removal as CEO on Tuesday.

Internal strife began as staff customized the luxury aircraft for Neumann while multiple employees say they were denied bonuses or salary raises due to a lack of resources.

“The company was spending $60 million on an airplane, and I can’t get a decent raise? It felt like it was ‘We over me,’ unless me was Adam. And We was Adam,” one mid-level employee told Business Insider.

The personal touches added to the plane for Neumann included the build-out of two bedrooms and installation of a central computer system with multiple televisions.

Staff members told BI that they spent “three days straight” downloading thousands of movies and TV shows onto the plane’s media system. Neumann also often hosted meetings with employees as he travelled.

“I know of instances where people got on the plane, flew across the country, and flew commercial home,” according to the report, citing an anonymous executive.

Neumann’s behavior came under scrutiny after the company filed paperwork for an IPO in August, which disclosed the personal loans, credit and other income that We issued to its co-founder.

Former and current WeWork executives told The Real Deal they hold the company’s board, investors and two new CEOs responsible for the company’s troubles of late. They charge that group enabled Neumann but should have implemented corporate governance standards.

“They created the monster,” said one of the executives. [BI] — Erin Hudson

Jay L. Schottenstein and the Ritz-Carlton Residences, Miami Beach

The CEO of American Eagle Outfitters bought a penthouse at the Ritz-Carlton Residences, Miami Beach for $6.5 million, in one of the first closings at the luxury condo development.

JLS North Meridian LLC, managed by Jay L. Schottenstein, who also leads Schottenstein Stores, purchased the lower penthouse 12 at 4701 North Meridian Avenue in Miami Beach. Property records do not indicate the square footage of the property.

The Columbus, Ohio-based company, Schottenstein Stores, owns stakes in the retailer DSW, American Signature Furniture and American Eagle Outfitters. Schottenstein was named CEO of American Eagle Outfitters in 2015.

Last week, Petra Levin, the former Miss Germany, bought a condo at the Ritz-Carlton Residences, Miami Beach for $4.8 million.

Ritz-Carlton Residences, Miami Beach was developed by Miami-based Lionheart Capital, led by Ophir Sternberg and Ricardo Dunin, and New York-based Elliott Management Corp. It is the first full-scale architectural project in the U.S. by Piero Lissoni, an acclaimed Italian architect who is known for his minimalist design.

In August, the developers secured a temporary certificate of occupancy for the Mid-Beach project. The development group had launched sales in 2014 and initially said closings would begin by the end of 2017.

The Ritz-Carlton Residences has 111 condos and will also have 15 standalone villas, with overall prices ranging from $2 million to $40 million.

In addition to condos and villas, Ritz-Carlton Residences, Miami Beach features gardens, pools and 36 private boat slips. Shared amenities include an art studio, a rooftop pool deck with private cabanas and a restaurant, a waterfront bar and social room, pet grooming facilities, indoor and outdoor yoga studios, a meditation garden and car wash facilities.

Lionheart Capital paid Mount Sinai Medical Center $20 million for the property in February 2012.

From left: Edward Romo, Ryan T. Shaw and Scott C. Sandelin and the property

An investor is assembling land south of Las Olas Boulevard in downtown Fort Lauderdale for $12 million, with long-term plans to develop the 1.1-acre site.

For the first parcel, property records show that Fort Lauderdale Land LLC, led by Ray F. Ferraro Jr., sold the lot at 216 Southeast Sixth Street to 625 SE 3rd Avenue LLC for $3.75 million. Ferraro is a former president of Nova Southeastern University and the Florida Bar.

Separately, an affiliate of MVP Realty Advisors in Las Vegas sold the 32,750-square-foot assemblage of lots at 625 Southeast Third Avenue for $6.1 million to the same buyer. The Delaware LLC also has 601 Southeast Third Avenue under contract for about $2.2 million. It is expected to close within 30 days, according to Ryan T. Shaw of Marcus & Millichap.

Edward Romo, Shaw and Scott C. Sandelin of Marcus & Millichap represented two of the sellers, and they also represented the buyer. The brokerage declined to comment on the buyer’s identity.

In all, the buyer will pay about $12 million for the properties, which are next to the 110 Tower, a 30-story office building on Sixth Street. The assemblage is also across the street from the Broward County Courthouse.

Shaw said the buyer plans to develop the site in the long term, after the market for the area south of the river matures. The property is zoned RAC-CC, which Shaw said is the highest zoning in Fort Lauderdale. A developer could build a mixed-use project, with between 300 and 400 multifamily units, office and more.

Romo said in a release that the buyer is banking on development shifting south, where other projects are planned.

In April, developer Dev Motwani won city approval for a 34-story, 246-unit apartment building at 629 Southeast Fifth Avenue, called 629 Residences.

From left: Jon Paul Perez, Alex Karakhanian, Tony Arellano and Devlin Marinoff over the site (Credit: Google Maps)

UPDATED, Sept 26, 5:35 p.m.: The Related Group, developer Alex Karakhanian and their partners purchased a large property in Wynwood for $32 million, with plans to redevelop the site, The Real Deal has learned.

A joint venture between Related, Karakhanian and Tricera Capital’s Scott Sherman and Ben Mandell closed Thursday on the 2.1-are site at 2801 Northwest Third Avenue. Tony Arellano and Devlin Marinoff of Dwntwn Realty Advisors brokered the deal.

Rockwood Capital sold the property, which runs along a planned woonerf, a Dutch-inspired pedestrian-friendly street. The site hit the market about two years ago for $45 million.

Rendering of the Third Avenue woonerf

The Related joint venture hasn’t decided what they’ll build on the site, but the land can be developed into 650,000 square feet of buildable space, up to 12 stories in height and 310 units of multifamily units, Arellano and Marinoff said. The property currently houses several warehouses.

Property records show Thor Weck Owner LLC paid $26.9 million for the site in 2015. The company received site plan approval in 2016 for the Wynwood Plant, a 12-story, mixed-use residential building with roughly 300 units, retail space and parking.

The brokers said the property is the largest contiguous site to trade in the period following the neighborhood’s rezoning in 2015. The first major projects are now being completed, following the creation of the Neighborhood Revitalization District roughly three years ago. The new district replaced most industrial uses with denser mixed-use, residential projects.

Development is booming in Wynwood, where major players include the Related Group, Sterling Bay, East End Capital, RedSky Capital, and others. Related and East End recently completed the Wynwood 25 apartment building and the Wynwood Annex office building on Northwest 25th Street, near the landmark Panther Coffee.

Kushner Companies, Block Capital Group, Property Markets Group, David Edelstein’s TriStar Capital and others also have projects in the pipeline.

Block Capital Group, owned by the Miculitzki family, is looking to sell a retail building near Related and Karakhanian’s project site, at 2729 Northwest Third Avenue, for $18 million.

Karakhanian, owner of Lndmrk Development, is also working on plans for a hotel on Northwest 29th Street in Wynwood, with a partner. The Miami developer has built projects in the Miami Design District, South Miami and Miami’s MiMo District.

Real estate stocks tick up — even as the House begins impeachment inquiry (Credit: Getty Images, iStock)

Real estate stocks have ticked up this week, weathering a downward trending S&P 500 and the extraordinary news that the House Speaker had opened a formal impeachment inquiry into President Trump.

The Real Deal analyzed a cross section of 28 real estate stocks — a mix of real estate investment trusts, research firms and brokerages — and found that the prices rose just over 1 percent on average since Monday’s market open. That’s about on par with the Real Estate Select Sector SDPR Fund, an index heavily weighted toward the industry.

Among TRD’s sample, the strongest performer this week was brokerage RE/MAX Holdings, whose stock price so far this week has risen almost 8.2 percent to close at $30.82 on Thursday. The weakest performer was Marriott International. The hotel chain’s stock closed at $121.67 on Thursday, a nearly 3.6 percent fall from its Monday opening price.

Meanwhile, the S&P dipped about 0.2 percent, continuing its downward track from last week.

But a Thursday morning tweet that Trump sent, warning that “the markets would crash” should an impeachment inquiry take place, did not happen. That followed Tuesday’s decision by House Speaker Nancy Pelosi to open a formal impeachment inquiry into the revelation of a whistleblower complaint that was filed in August. It accused Trump of pressuring Ukraine’s president to investigate Democratic presidential candidate Joe Biden and his son, Hunter.

Now back to real estate: As for REITs, they so far have been outperforming the market overall. For the week through Wednesday, U.S. equity REITs bumped up less than half a percent.

And so far this year, U.S. equity REITs have seen returns up 20.64 percent this year — thanks to the strongest-performing sector, manufactured homes — compared to just 4.48 percent for the S&P. That’s according to data from S&P Global Market Intelligence.

The industry’s uptick this week marks a slight reversal for real estate stocks, which last week took a dip after the Federal Reserve formalized its anticipated second interest rate cut of the year.

Hard Rock Stadium in Miami Gardens

UPDATED September 20, 1:04 p.m. Though the football season has only just begun, diehard fans know where they’re going to be come Feb. 2, 2020: watching the Super Bowl at Hard Rock Stadium in Miami Gardens. Those wanting to travel in style should have some deep pockets: A Super Bowl LIV package for a one-bedroom overlooking the beach at 1 Hotel South Beach will run them $13,963 a night, according to Five Star Luxury Travel, a Miami Beach-based brokerage specializing in listing and managing rental units at high-end condo-hotels. At the same property, a four-bedroom penthouse with ocean views throughout the unit is priced at $62,577 a night during the days around the big game.

Yet Five Star Luxury Travel owner Jennifer Restrepo insists Super Bowl spectators who might rent those accommodations are getting a bargain. “Our prices are 10 percent to 30 percent lower than if you book directly with the hotel,” Restrepo said. “And most of the five-star resorts on the beach are completely booked for Super Bowl.”

Indeed, according to travel booking site Expedia, a penthouse at 1 Hotel South Beach is going for $119,642 a night between Jan. 30 and Feb. 3, 2020 — the four-day weekend that includes Super Bowl Sunday. Elsewhere on the property, a unit identical to the one Five Star is listing for $14,272 was listed for $71,750 on Expedia. And one- and two-bedroom suites are completely sold out.

As Miami prepares to host the NFL’s premier event for the 11th time — the most for any host city — the local hotel and short-term rental sectors are banking on game-day-related bookings producing astronomical revenue. Realtors like Restrepo said luxury stays will significantly surpass average prices visitors pay during high-season, week-long events such as Art Basel and the South Beach Food and Wine Festival.  “For those, you are looking at an average daily rate in the $3,000s,” she said. “Where it has jumped to for Super Bowl is pretty extraordinary.”

Super Bowl prices are more than double the nightly rates between Dec. 2 and 6, the week of Art Basel, when the “ultra penthouse” at 1 Hotel South Beach goes for $52,624 a night and a three-bedroom suite with an ocean view goes for $15,536 a night, according to Expedia.

The big bump

Just how much cash might the game rake in for hospitality? The Greater Miami Convention and Visitors Bureau is projecting that hotels alone will see an $11.4 million increase during the four-day Super Bowl weekend compared to the same period in 2019. Luxury hotels and resorts such as Faena Hotel Miami Beach, the Setai, St. Regis Bal Harbour, Four Seasons at the Surf Club, Fontainebleau Miami Beach, Mandarin Oriental, JW Marriott Marquis and Kimpton Epic Hotel are completely booked. Meanwhile, rooms at three- and four-star lodges, hotels and hostels in downtown Miami and Miami Beach range from $354 to more than $1,000 a night.

The hotel industry is still in a boom cycle, said Rich Lillis, Boca Raton-based national director of Colliers International’s hotels group (see our analysis of the hotel market on page 56). “When we have an event like this, the demand goes off the charts,” he said. “It’s one of the reasons why investors show great interest in South Florida’s hotel sector … It fits into their macro thinking.”

Super Bowl visitors typically stay for a week, and in some cases two weeks, so hotels will be more selective in making rooms available, Lillis added. “They won’t take a single-night person if they can get someone else for two weeks into a room,” he said.

In the short-term luxury rental market, pricing will be even higher than for the 2010 Super Bowl, the last time it was held in Miami, as the number of homes available for rent in Miami Beach and surrounding coastal communities has shrunk in the past nine years, said Bill Hernandez, half of the Bill and Bryan Team at Douglas Elliman. He said homeowners in Miami Beach neighborhoods that don’t allow short-term rentals have stopped listing their homes with brokers and online platforms such as Airbnb. As a result, property owners in areas where the city allows short-term rentals, such as along Collins Avenue where the Setai,  W Miami Beach and 1 Hotel South Beach are located, can charge a premium daily rate — about 50 to 75 percent more than what they would normally charge. Prices are even higher in single-family neighborhoods such as a small unincorporated section of the Venetian Islands, Hernandez added.

“Those that can do it are charging crazy numbers like $100,000 to $120,000 per week for mansions,” Hernandez said. “The folks who would spend this type of money are big-money CEOs and sports franchise owners and executives.”

Bryan Sereny, Hernandez’s partner at Douglas Elliman, said Super Bowl attendees seeking a posh house with at least 7,000 square feet can expect to pay $50,000 to $60,000 a night.

“That’s what people are paying for an 8,000-square-foot house in the Hamptons at the top of the market during the summer,” Sereny said. “As we get a little closer to the game, you could get more of a premium. Super Bowl is definitely the next level.”

The lowest rate Restrepo is offering for Super Bowl LIV is $10,252 for a one-bedroom unit with an ocean view. Two- and three-bedroom condos start at $18,793 and $34,873 a night, respectively (as of Sept. 15). The packages require a minimum four-night stay and include transportation to and from Hard Rock Stadium in Miami Gardens via a limo or SUV, concierge services, daily massages and in-suite dining. For some perspective, the maintenance cost for a one-bedroom unit at 1 Hotel South Beach is $19,200 a year, Restrepo said.

1 Hotel South Beach

While Five Star Luxury Travel has received a couple of dozen inquiries, the firm has not yet booked any of the 1 Hotel South Beach units it advertises, Restrepo said. “It is pretty far in advance for these reservations,” she said. “We don’t anticipate to book them for another few weeks.”

Restrepo, Hernandez and Sereny said that while most luxury hotels in Miami and Miami Beach are officially filled up, the bookings are made by travel companies that resell the rooms to Super Bowl consumers who may have not yet finalized their plans. Super-high-end clients tend to make their travel plans two to three months in advance, they added.

Still, Restrepo said her clients — some of whom are football celebrities who own 1 Hotel units — are confident they will rent their condos at such exorbitant prices. “These are high-net-worth individuals whose 1 Hotel units are their third or fourth homes,” she said. “They only come to town a handful of times a year. It is amazing to have an investment home that can make this much income in one week.”

The other guys

Brokers Restrepo, Hernandez and Sereny are competing with sports tourism companies that buy large blocks of hotel rooms with packages similar to what Five Star Luxury Travel offers, but that also include access to VIP parties with former and current NFL stars and seats at the actual game. For instance, White Plains, New York-based On Location Experiences has base packages starting at $24,390 per person, which includes tickets to lower-level and club seats at Hard Rock Stadium and a minimum three-night stay at the Fontainebleau Miami Beach. A hotel spokesperson declined to comment regarding Super Bowl room rates and prices were not available on travel websites, since the hotel is fully booked for the four-day weekend.

Kyle Kinnett, owner of Indianapolis-based Bullseye Event Group, said his firm has packages starting at $6,000 for upper-level seats, VIP access to an NFL players’ tailgate party and stays at either the SLS Brickell, Fontainebleau Miami Beach, Viceroy or Mandarin Oriental. “We started contacting hotels two years ago,” said Kinnett. “It is harder to find hotel rooms than Super Bowl tickets.”

He said he’s seeing more interest in Super Bowl LIV because it’s in Miami. “You have a beach and you have an ocean,” Kinnett said. “Miami is a destination. My most popular package in Miami is a four-night stay. For Super Bowl LIII in Atlanta, it was a three-night package.”

Hotel operators prefer to work with companies like Bullseye because of the convenience of dealing with a single client, Kinnett said. “I tell them, would you rather sell me 50 rooms at an escalated rate and deal with one person writing you a check, or do you want to deal with dozens of individuals complaining about rates being too high, etc.?”

Kinnett declined to discuss the hotel room rates he secured.

As short-term rental brokers duke it out with the sports travel firms, business travel hotel operators and owners are seeking out deals with the NFL to house league executives, employees, vendors and contractors. Related Group Chief Operating Officer Matthew Allen, who is Miami-Dade co-chair of the Super Bowl LIV Host Committee, said roughly 17,000 rooms with minimum three-night stays between Miami-Dade and Broward have been blocked off for the NFL and related entities.

The league designated the InterContinental in downtown Miami as its headquarters hotel during the big game. The hotel, which has 653 guest rooms and more than 101,000 square feet of exhibition space, connects to the baywalk along Bayfront Park that will host the week-long NFL Experience. In Broward, the committee designated the Diplomat Beach Resort Hollywood as a host property because of its 1,000 guest rooms and 209,000 square feet of meeting space, Allen said.

Ryan Shear, a managing partner with Property Markets Group, said his firm is in preliminary discussions with the Miami Dolphins and the NFL to house personnel in its X Miami Apartments project at 230 Northeast Fourth Street in downtown Miami.

“We don’t have anything specific yet, but we do know there is a massive need for housing for the NFL,” Shear said. “For us, it’s beneficial in every sense of the word to promote our building during Super Bowl.”

Shear said he couldn’t comment on how much the firm would charge the NFL per room, and InterContinental Miami’s general manager, Robert Hill, did not respond to a phone message seeking comment about room rates for the Super Bowl.

In Miami Beach, the Hampton Inn at the Continental, a 100-key hotel at 4000 Collins Avenue set to open in the fall, snagged a contract with the NFL to block off 85 rooms for staffers from the league’s consumer products division, said Todd Benson, a partner with Boca Raton-based Pebb Capital, which co-owns the property with Duncan Hillsley Capital.

“The NFL has done deals with Hampton Inn before, so that is one advantage we had,” Benson said. “Plus, the NFL is getting a new hotel in a central location. We were a very attractive option for them.”

Anticipating they would vie for an NFL housing contract, the hotel’s management team did not place the corresponding dates for Super Bowl week into any hotel booking systems. “Those dates were excluded so we could be able to work on something like this,” Benson said. “If we had allowed reservations during Super Bowl week, we would not have stood a chance.”

This article has amended to reflect that Bill Hernandez of Douglas Elliman estimated the cost of renting Miami Beach mansions to be $100,000 to $120,000 per week rather than per day. 

Every day, The Real Deal rounds up South Florida’s biggest real estate news, from breaking news and scoops to announcements and deals. We update this page throughout the day. Please send any tips or deals to tips@therealdeal.com

This page was last updated at 9 a.m.

Two South Florida businessmen could be tied to President Trump’s impeachment inquiry. Lev Parnas and Igor Fruman were cited in a government whistleblower complaint released Thursday, according to the Miami Herald. Parnas is a former stockbroker who was threatened last year with eviction from a $5,500-per-month home in Boca Raton. Parnas is also linked to a Bal Harbour condo that sold for $4.1 million, according to the Herald. [Miami Herald]

A rally for real estate stocks amid a tumultuous week for Trump. Real estate stocks have ticked up this week, weathering a downward trending S&P 500 and the news that the House Speaker had opened a formal impeachment inquiry into President Trump. [TRD]

Miami commissioners approved a $1 billion spending plan. The spending plan includes subsidies for low-income seniors and park improvements, according to the Miami Herald. Mayor Francis Suarez is looking to create a $1 million rent assistance program for low-income seniors who live in subsidized housing, in which residents could receive up to $200 a month to cover rent increases. [Miami Herald]

NewSound Church in Wellington is considering buying the site of a former strip club. The church is looking to buy a large former strip club on Southern Boulevard, according to the Palm Beach Post. The former Double Dee’s, at 8199 Southern Boulevard in unincorporated West Palm Beach, was once owned by a man accused of mob ties and closed late last year, according to the Post. [Palm Beach Post]

WeWork co-CEOs Artie Minson and Sebastian Gunningham (Credit: Getty Images and Twitter)

Mounting speculation about WeWork co-founder Adam Neumann leaving his role as CEO ended when the company made his departure official earlier this week. But the move gave rise to new uncertainty about the two executives named to replace him and how they would reverse the office-space giant’s deteriorating fortunes.

With Neumann relegated to the role of non-executive chairman, WeWork CFO Artie Minson and Sebastian Gunningham, a vice chairman, take over as co-CEOs. WeWork declined to make Minson and Gunningham available for comment, but in a statement shortly after their appointments, the executives said it was “an incredible honor to lead WeWork during this important moment in the company’s history.”

“Important” is an understatement. The company’s planned initial public offering went horribly awry this summer, raising questions about how WeWork will meet its massive lease obligations in the months ahead and eventually turn a profit. Moreover, it has been plagued by a series of executive departures. On Wednesday night alone pink slips were drawn up for vice chairman Michael Gross, VP of operations and special projects Zvika Shachar and director of development Roni Bahar.

Other recent departures include Wendy Silverstein, the co-head of real estate; Jennifer Skyler, the chief communications officer; and Sarah Pontius, the global head of real estate partnerships.

Despite the turmoil, Minson and Gunningham have been described as steadying presences and capable. In a letter to employees reported by Bloomberg, they said they anticipate “difficult decisions ahead” at the company and want employees to focus on their day-to-day work.

Here’s what you need to know about the new executives:

Artie Minson
The 48-year-old Minson will oversee the financial, legal, human resources, real estate, communications and corporate-development functions at WeWork. He is a graduate of Columbia Business School whose previous jobs include COO at AOL and CFO at Time Warner Cable. He joined WeWork in 2015 as president and COO.

Minson was initially tasked with expanding WeWork’s global presence and managing its business development and administrative functions. He became the company’s CFO in June 2016, and sources have described him as a calm and level-headed worker with a reputation for being “the adult in the room.”

He told Business Insider this spring that WeWork was different from startups like Uber and Airbnb in that it faced few issues with government regulations and community resistance. He also expressed confidence that the firm could continue its rapid growth.

“If you look at the 82,000 desks we opened this quarter, those desks will generate $9 billion of revenue over their life and $2 billion of profit,” he said.

He expressed similar confidence about the company’s growth prospects in a CNBC interview in May, urging investors to view losses as “investments” after WeWork reported $264 million in red ink during the first quarter.

Sebastian Gunningham
Gunningham, 57, will focus on product, technology, design and marketing. He grew up in Argentina and attended Stanford University, and his background is mostly in technology companies. His prior jobs include vice president at Apple, CEO of Peace Software and senior vice president of Amazon Marketplace, where he worked before joining WeWork last year.

Gunningham was a very close adviser to Amazon CEO Jeff Bezos while at the company and became part of his elite group of top lieutenants known as the “S-team,” according to CNBC. At WeWork he was responsible for making the leasing process more technologically friendly and eventually had more than 1,000 people under him.

Employees were reportedly relieved when Gunningham joined the firm because he was seen as a competent professional with a logical approach to problems.

Like Minson, he was viewed as an “adult” at the company. One former executive told Business Insider that his appointment as co-CEO was not a surprise.

“We always kind of assumed [that] pre-IPO, Adam would step down and Sebastian would step up as CEO,” the former employee said.

7500 Northwest 35th Terrace and Brookfield Asset Management CEO Bruce Flatt

A company tied to Brookfield Asset Management picked up the Tire Group International Distribution Center near Miami International Airport for $19.5 million, adding to the firm’s South Florida holdings.

A Brookfield affiliate bought the 179,972-square-foot site at 7500 Northwest 35th Terrace in Miami for $108 per square foot, according to a press release from CBRE. TDH Realty, which is managed by James Hislop of Bloomfield, Michigan, sold the distribution center.

CBRE’s David J. Wigoda, Sean R. Kelly and Devin B. White represented the seller in the transaction.

The building was built in 1980 and was substantially renovated in 2006 and 2015, according to a press release. It features 26-foot clear span heights and a new ESFR fire sprinkler system.

The property was last purchased in 2013 for $14 million, records show.

Tire Group International supplies over 30 different brands of tires to wholesalers, retailers, dealerships and mechanics, according to its website.

Vacancy rates for industrial properties in South Florida remain low amid the growth in e-commerce. Institutional buyers such as Blackstone Group and Brookfield Asset Management are targeting the asset class.

In Miami-Dade County, vacancy rates for industrial properties held steady at 4 percent in the second quarter compared to the same period of 2018, even amid 725,000 square feet of newly completed construction, according to a Colliers International South Florida report.

In September 2018, an affiliate of Brookfield Asset Management bought a C.R. Laurence distribution center at 14290 Northwest Fourth Street in Sunrise for $8.45 million.