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
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Miami-Dade plans to set aside $76M for a Virgin Trains station in Aventura. What does that mean for Tri-Rail? Tri-Rail was intended to be extended along the Florida East Coast rail tracks, and Virgin Trains was going to make express stops to Orlando and farther north, the Miami Herald reported. But now, Virgin is seeking a tax-funded station in Aventura. Javier Betancourt, who heads the Citizens Independent Transportation Trust, is now asking whether Virgin Trains still plans to allow Tri-Rail to use its tracks. [Miami Herald]
Manhattan had the top three spots for priciest Zip codes to rent in the U.S. It also had seven of the top 10, according to a new report in RentCafe. New York, L.A. and the Bay Area dominated RentCafe’s list. Boston is the only city outside of New York and California to make the top 50, and it doesn’t turn up until No. 32. [TRD]
Forever 21’s bankruptcy was bad news for mall stocks. Macerich, Simon Property Group, Brookfield Property Partners, Taubman Centers and Vornado Realty Trust all saw their stocks take a hit after the news that the fast-fashion retailer said it would close 178 stores this year.[TRD]
Meridian Senior Living paid $60.9 million for a community near Boca Raton. A company tied to Capital Health Group sold the 154-unit senior living facility at 21865 Ponderosa Drive. The buyer financed the deal with a $45 million loan from Capital One. [TRD]
The stock market sell-off is a boon for homebuyers. Fixed rates on 30-year fixed mortgages are down to 3.62 percent, a 1.25 percent year-over-year change. That means a savings of $225 a month for a $300,000 mortgage.[CNBC]
WeWork’s Artie Minson, Miguel McKelvey, and Sebastian Gunningham (Credit: Getty Images)
In WeWork’s first all-hands meeting since Adam Neumann was ousted as CEO, company executives sought to reassure employees about the strength of the firm’s business model, but made clear that layoffs were coming.
Miguel McKelvey, who co-founded WeWork with Neumann in 2010 and now holds the title of chief culture officer, kicked things off by telling employees the company’s recent stumbles shocked him, according to sources who attended. He reminded workers of the company’s core values — the ones detailed throughout its S-1 filing — before turning the floor over to WeWork’s newly minted co-CEOs.
The company’s latest funding round in January, led by SoftBank, valued it at $47 billion and made it one of the country’s most valuable startups. Its rapid growth has made it the largest private tenant in prime markets such as Manhattan and Central London. However, on the road to its IPO, that valuation was heavily scrutinized, as was Neumann’s controversial behavior and his potential financial conflicts of interest. The company has seen its reported valuation plunge at least two-thirds since then. Neumann stepped down as CEO late last month and on Monday We pulled its application to go public.
Co-CEOs Sebastian Gunningham and Artie Minson, who until last week were vice president and CFO, respectively, reassured employees that the company’s business model was sound. Yet they made clear that job cuts were coming, noting that all departments were being “evaluated.”
Executives apologized for not informing employees of changes at the company in advance — many heard about the executive shakeups and other overhauls through the media — and said that now that the We Company had withdrawn its application for a public offering, communication would be streamlined.
Bloomberg first reported some details of the meeting Thursday evening.
WeWork has already cut ties with 20 of Neumann’s inner circle, including his wife Rebekah Neumann, who joined the company years after its founding but was billed as a co-founder and took on an increasingly prominent role until recently. WeWork also let go of its “Made by We” staff. On Thursday, hours after the company meeting, Business Insider reported WeWork might lay off between 10 percent and 25 percent of its roughly 12,500-person staff. Others have predicted that the layoffs could be far broader.
The all-hands meeting was held Thursday afternoon at WeWork’s Chelsea headquarters on West 18th Street and broadcast to the entire company. WeWork declined to comment.
WeWork has taken some unusual cost-cutting measures. At one location the company has for months been watering down mouthwash stocked in its bathrooms, according to an employee who works there. And to trim a roughly $4,000 per month budget on cold-brew coffee, the tap is now only open six hours a day.
Here are a few real estate events coming to South Florida next week:
Host: BREIA & MDREIA Date: October 9 Time: 9 a.m. to 4 p.m.
BREIA and MDREIA are coming together to host their Project Rehab event at the Broward Real Estate Investors Association Office in Plantation, at 1660 Northwest 65th Avenue, from 9 a.m. to 4 p.m. The interactive experience will provide guests with an understanding of what it takes to fix and resell a property.
Host: CCIM Florida Chapter Date: October 10 Time: 11:30 a.m. to 2 p.m.
CCIM’s Florida is holding its District Outlook Conference at the Signature Grand in Davie, at 6900 Florida State Road, from 11:30 a.m. to 2 p.m. The event will include an overview of the Fort Lauderdale and Broward district in 2019, and the outlook for the area in 2020. Spencer Levy of CBRE will be the keynote speaker at the event.
To search for future industry events or browse past ones, click here. And to submit more industry events, please reach out to events@therealdeal.com.
From left: Adam Rubin, Farin Milligan, Nicholas Chatman, Tim Elmes, Addison Ruff, Mike Herstik and Niki Michopoulos
Longtime Coldwell Banker agent Tim Elmes jumped over to Compass.
The Elmes Group, a six-agent team managed by Elmes’ daughter, Addison Ruff, joined the Compass office on Las Olas Boulevard in Fort Lauderdale, according to a release.
Elmes has closed over $1.5 billion in sales over the past 25 years. He recently represented the seller of a $7 million spec home in Fort Lauderdale and the seller of a $9.5 million estate in the Lauderdale Harbours neighborhood. The latter set a record for the highest price per foot – $1,847 per square foot – when it closed in July.
So far this year, Elmes’ team has closed nearly $104 million in sales volume, he said.
He was with Coldwell Banker for at least 16 years, joining the brokerage when it acquired Wimbish-Riteway Realtors in 2003 and leaving for a few months to join Douglas Elliman.
Elmes said the decision to leave Coldwell Banker was very difficult, but that Compass’ in-house marketing assistance and technology — which includes an in-house platform that operates as a “vastly improved MLS” — led him to it.
Nancy Klock Corey, regional vice president of Coldwell Banker, said in a statement that it is “unfortunate when agents choose to leave, especially those we hold in such high esteem,” adding that “we wish Tim and his team the best and look forward to continuing our business relationship.”
The Elmes Group is one of the top real estate teams in Fort Lauderdale. Elmes’ daughter, Ruff, joined his team in 2015 and is responsible for managing its operations and sales, and providing support to the other agents in the team.
Compass has been growing in South Florida. It recently brought on the Liz Caldwell Team, including Michelle Dery, Karin Gillette and Nicole McKenney, at its Fort Lauderdale office. Cinthia Ane’ McGreevy and The Cinthia Ane’ team also joined Compass in Palm Beach County.
At Marlins Park on Super Bowl weekend in February, thousands of aspiring entrepreneurs watch as a black Rolls-Royce SUV with tinted windows roars onto the stage amid a cloud of smoke. Over the loudspeakers, the song “Nuthin’ but a “G” Thang” plays as Snoop Dogg steps out of the driver’s seat.
But his passenger is the real star of the day. Donning dark sunglasses along with a black sweatshirt with the words “10X” in gold lettering, the 60-year-old, gray-haired Grant Cardone walks alongside the rapper, singing to the lyrics into a microphone.
A speaker, author, business consultant and real estate investor, Cardone has amassed more than 2.4 million Instagram followers who look to him for advice on how to grow their businesses. In Miami, he held a three-day conference as part of his 10X Growth Tour — named for his goal to grow your business 10 times.
“The whole world knows about Miami, Marlins stadium and Grant Cardone putting 35,000 people for three days at that place during Super Bowl weekend,” Cardone said in an interview with The Real Deal.
Cardone’s social media posts portray him as a person of great wealth and success. In one Instagram post he boards a private plane with the caption, “You can’t get rich by acting poor.” In others, he’s traveling the world and meeting with celebrities such as boxer Floyd Mayweather. On his website, you can buy wristbands that say “Don’t Be a Little Bitch,” which to Cardone means: stop complaining about your problems.
The Louisiana native’s real estate company, however, is much less bombastic than his events or his lifestyle. Based in Aventura, Cardone Capital only buys apartments across the Southeast where rents average less than $1,500 per month, he said. The company paid about $90 million for the 346-unit Atlantic Delray Apartments in Delray Beach in October 2018. In July, the company bought a 501-unit apartment complex at 2903 Northwest 130th Avenue near Sawgrass Mills in Sunrise for an undisclosed price. In the first seven months of this year the firm completed almost $350 million in deals.
Cardone’s thesis is simple: The American dream of homeownership is dead, and everyone is going to move to apartments.
“You got 75 million millennials that don’t want to own anything. They wouldn’t own their tennis shoes if they could just lease them,” Cardone said.
He is now opening up his real estate investments to his social media followers who can invest in his fund with a minimum of $5,000. Cardone, who is speaking at The Real Deal’s 6th Annual Showcase & Forum on Oct. 17, talked to TRD about his investment strategy and how he got into real estate.
How did you get into real estate investing?
I will never forget it, it was 30 years ago. It was $78,000. I put $3,000 down and I bought a house, and I thought I was going to be a real estate mogul. I rented it to Janet and her sister, Jill. I think I was making $180 bucks a month. I said, ‘Oh man, I am going to get rich doing this.’ Then they moved out about five or six months after living there. Then I realized I was responsible for the payment of the house. Then I was like ‘Oh my gosh, I can’t do this.’ I was 28-years old, it was a single-family house in Houston, Texas.
I sold that house because I realized it was something that I didn’t know. I got my money back, sold the house to a guy who did know what he was doing. I spent the next three years studying apartments, which is the only thing that we focus on now, which is buying apartments. I did my first real apartment deal in San Diego, California. It was $1.9 million and it was 38 units. Then we were off to the races.
Why did you switch from single-family homes to apartments?
Real estate wasn’t my first business. I had two other companies and I was doing consulting for companies. But I always had a love affair for real estate. When I did the single-family home, frankly, I bought based off what money I had. I didn’t do a lot of research. I just did the easy thing. I got the loan with almost no money down. And I could buy the house and rent it to someone else.
So when they moved out, I realized there was something I don’t understand. There was a risk, there was a risk of having to pay a note. So I went and studied other super real estate investors like Sam Zell, Donald Bren and Fred Trump. What did these guys create? These guys, by the way, are not super genius people. I could relate to them, these are all kind of blue-collar people.
They all have one thing in common. They had scale. They have apartments, they all did affordable. So my next deal, it would be in three years. For those three years, every weekend I would shop real estate. I was in Houston at the time and I moved to San Diego. I would read deals and shop deals and bought my first deal in San Diego three years later.
What are the markets you would avoid?
California and New York. You couldn’t convince me to do a deal in California. It’s about who actually owns the real estate. They are so tenant-friendly that I can’t move a non-paying tenant out. And if I can’t move a bad tenant out, then I can’t take care of my property and all of my good tenants. You got other problems in both those places, you have water and trash problems. We are not ready to scale to those markets. Even if I wanted to, we are not ready to scale to those markets.
I like tax-free states. I like job migration. Neither one of those states, California and New York, have positive job migration. We are looking for a very affordable band of real estate. Our average rental is probably $1,100 to $1,300 [per month].
Where is tenant demand coming from for your properties in South Florida? Are people just getting priced out of single-family homes?
I think that people don’t even want single-family homes any more. I think the preferred way of living is going to be an apartment complex. The [D.R.] Hortons, the big homebuilders are building more apartments because they don’t want to say this publicly, but the American consumer is not inclined to buy a home today.
You got 75 million millennials that don’t want to own anything. They wouldn’t own their tennis shoes if they could just lease them. Then you have 80 million baby boomers who have already owned a home, [who] know it is not the American Dream.
You got half of the population who is interested in mobility rather than in home ownership. This will play out over the next decade or two. We bought the debt deal in Delray [Beach]. That swimming pool had to cost $2 million to build. Well, where could I get a $2 million swimming pool? The house would have to be $30 million to build a $2 million swimming pool.
Is there an oversaturation of upper Class A apartments in Miami?
I think there will end up being an oversupply. The real issue is that we don’t have income growth in America. I get concerned about all these places that are going up that support someone not at $2,200 [per month in rent] but at $4,000. I don’t know why we need all these $4,000-$4,500 per month apartments.
Are you buying in Miami right now?
We are buying, but we are very, very selective. You got to be careful right now.
Why are you careful?
You got to be really careful in location. That’s not just in Miami. In Houston, you have to be very careful on location. People should be preparing for a recession. I want to be recession-proof. I don’t want to be beat up. At the same time, I don’t want to wait for a recession to buy property.
Are you noticing any signs in the real estate market that a recession is imminent?
I wouldn’t look for a recession just in the real estate market. I would look for it in the everyday person. I am looking at what people can spend money on. If you look at the auto industry, the cars that sell best, there is a direct correlation between the subsidy offered by the manufacturer and how well that car sells.
The high-volume activity in the automobile sector is driven by subsidiaries, no money down, very low and no interest rates. You could say the same thing about the furniture industry, meaning people don’t have the down payment to make discretionary purchases.
What attracts you to invest in South Florida?
I left California, I moved here seven years ago. A lot of people are following me over since then. Now you got New York coming down here… I like our politics. I like that we don’t have a state income tax. I like the warmth. Older population prefers warm weather during the year. I just finished traveling, we did 19 countries in two months for the 10X tour. I’ve been to Singapore, Dubai, London, Malaysia, and Thailand. I’ve been to some beautiful places. Every time I fly back into Miami, I say, ‘Damn this place is beautiful.’ When other people come here, they see that… I am always looking at deals here as long as it is a cash-flow positive deal even in the face of a contraction.
How are you financing your real estate deals?
We raised about $250 million in the last 20 months using social media. I raised a quarter of a billion without using a family fund or an institution and without running ads and bringing anyone to dinner. This is a story by itself. $250 million, 20 months and our advertising spend is negligible. No fees, no brokers to raise the money. Its Instagram, Facebook and LinkedIn.
I buy the deals with my money. Once they are stable and cash flow positive, we then offer it on Instagram or Facebook or LinkedIn and say, ‘Hey you can invest in this with me.’ Rather than invest in family funds or go to traditional institutional lenders for equity, we use crowdfunding via social media.
The equity comes from me first. I write a check for the deal, I get traditional lending from Fannie [Mae] and Freddie [Mac] or a life insurance company, then I backfill the equity from my social media following which is shy of 20 million people worldwide.
What’s the minimum investment?
$5,000 for a non-accredited fund.
What are your expected returns?
We target transactions that we believe can deliver 15 percent annualized to the investors after expenses.
How did you get into motivational speaking?
I take offense to being called a motivational speaker. I am an educator. When I was 31 years old, I was helping companies increase their revenues. It started with small companies. Then a small company introduced me to a bigger company. Then I was introduced to Nissan Motor Company. I have been working with companies for 30 years on how to raise their revenue. It just so happens if people aren’t motivated about raising their revenues they probably won’t raise their money.
When did you start going overseas on these tours such as the 10X?
We started doing that about a year and a half ago when some people called. We put 35,000 people at the Miami event. Once we did that last February, the phone rang off the hook. More people were in the Marlins stadium that weekend than have ever been there for months at a time, by the way. The whole world knows about Miami, Marlins stadium and Grant Cardone putting 35,000 people for three days at that place during Super Bowl weekend. So, how ballsy is that?
We raised almost $15 million at that event in 90 minutes for our real estate.
What is the question that you get most commonly asked?
How do I grow a business? Guys in startups, a guy that is making a million dollars a year. I attract people that want to grow things. So, in real estate you are buying 30 units — how do I grow my portfolio?
You live in Sunny Isles Beach? Do you plan to stay there?
I got two kids, an eight-year-old and a 10-year-old, we own the office here, 25,000 square feet in Aventura. I would buy all the apartments in Aventura. It’s just impossible to move around here… People are going to choose renting over owning in the future. It’s going to become obvious to everyone.
Any other plans you have in the future?
In the next three years, I am going to raise $3 billion in cash to build a $10 billion real estate portfolio using social media. It’s never been done before. I am going to do it without paying agents and fees. No brokerages. About 25 percent of the money is coming from retirement accounts, self-directed 401Ks. Without any brokers involved, without any licensed agents.
From left: Stephen Ross, Jonathan Gray, Sheldon Solow, John Catsimatidis, Charles Cohen and Donald Trump (Credit: Getty Images, iStock)
The market may be down, but these real estate executives are doing just fine.
Almost 50 industry titans, including Stephen Ross, Charles Cohen and Jeff Greene, made this year’s Forbes 400 list, which ranks America’s wealthiest people.
Warren Buffett was tops among those with real estate chops and was number three overall, with a net worth of $80.8 billion. Other big wigs from the sector were Blackstone’s Jonathan Gray (number 225), Irvine Company’s Donald Bren (32) and Red Apple Group’s John Catsimatidis (319).
Developers were also well represented, with Sheldon Solow (148), Jeff Sutton (179), Jerry Speyer (187) and Ben Ashkenazy (207) all making the list.
The youngest real estate billionaire in the top 400 was Nathan Blecharczyk, the 36-year-old co-founder of Airbnb, who is worth $4.2 billion. The company’s other co-founders, Brian Chesky and Joe Gebbia, both 38, also cracked the ranking with net worths of $4.2 billion, putting them in equal position at number 168.
President Trump, with a net worth of $3.1 billion, slipped 16 spots to 275th.
In addition to real estate professionals, the list also included some buyers and sellers of high-profile New York properties, including Amazon CEO Jeff Bezos (1) and hedge funder Ken Griffin (38). Earlier this year, Bezos dropped $80 million for three units inside the luxury condo 212 Fifth Avenue, while Griffin set a national record with his $238 million purchase of a penthouse at 220 Central Park South. [Forbes] — Sylvia Varnham O’Regan
From left: Michael and Suzanne Ainslie with 202 Plantation Road and Ron Terwilliger (Credit: Getty Images and Redfin)
The retired CEO of Trammell Crow Residential paid $7.2 million for a home in Palm Beach.
The seller also has ties to the real estate industry. Property records show Michael and Suzanne Ainslie sold the four-bedroom, 5,356-square-foot house at 202 Plantation Road. Michael Ainslie was president and CEO of Sotheby’s between 1984 and 1994, and a director at Lehman Brothers from 1996 until its 2008 bankruptcy. At Lehman Brothers, he oversaw the sale and disposition of the company’s assets.
The buyer is Our Palm Beach Home LLC, a Delaware company that lists the Key Largo address of J. Ronald Terwilliger. Terwilliger is chairman emeritus of Trammell Crow and a former CEO of the multifamily development company, which has built more than 250,000 units in major markets.
Terwilliger is also the founder and chairman of his J. Ronald Terwilliger Foundation for Housing America’s Families.
The Palm Beach house hit the market earlier this year for nearly $8 million. Suzanne Ainslie represented herself and her husband as the listing agent. She’s with Sotheby’s International Realty.
The non-waterfront home last sold for $1.55 million in 2011. It features a full house generator, gas fireplace, wine room, master suite and a loggia overlooking a garden designed by landscape architect Mario Nievera, according to the listing.
The ultra-high-end residential market in Palm Beach boomed over the summer, during what is typically the off-season. Fourteen single-family homes totaling more than $343 million in sales volume closed in July, according to MLS and Palm Beach County data compiled by Premier Estate Properties.
The 17,000-square-foot estate at 9268 Robin Drive (Credit: Redfin)
A glut of luxury listings in Los Angeles — particularly spec homes and particularly in the Bird Streets — has lingered on the market, forcing numerous sellers to deeply discount their original and often “aspirational” asking prices.
But Farzin Aghaipour, a tech executive and developer of a spec home on Bird Streets, believes.
Aghaipour — through an LLC — listed his newly-built 17,000-square-foot estate at 9268 Robin Drive for $42.5 million, according to Redfin. The vice president of cobrowsing company Samesurf — bought the property for $5.6 million in 2013, records show. He demolished the existing home then built a two-story contemporary structure designed by Swiss and L.A.-based XTEN Architecture. It was completed this year.
Branden Williams of Hilton and Hyland and Kurt Rappaport of Westside Estate Agency have the listing. The home has six bedrooms, eight bathrooms and includes “stones that were curated across the globe,” according to the listing. It includes a chef’s kitchen, home gym, infinity pool, private spa, screening room and wine cellar.
Just last month, tech guru Lynda Weinman, sold her 12,530-square-foot Bird Street mansion at a deep discount.
The sale price of $16.5 million, was far below what the $27 million she paid for it two years ago.
Alexandria Ocasio-Cortez, Bernie Sanders and Elizabeth Warren
Just a few months after New York passed historic reforms that infuriated landlords and thrilled tenants — with California following suit — several Congress members and presidential candidates are throwing their weight behind even more aggressive proposals.
Mostly promoted by Democrats on the far left, those policies include the mid-September doozy from U.S. Sen. Bernie Sanders calling for nationwide rent control under his $2.5 trillion housing plan. Despite more than two dozen states prohibiting limits on what landlords can charge, Sanders wants to cap annual rent increases around the country at 3 percent, or 1.5 times the consumer price index, whichever is higher.
Sen. Elizabeth Warren, who’s also gunning for the White House, has a slightly less contentious proposal: adding more supply to help lower prices in the rental housing market. But Warren hopes to build millions of new apartments with tax hikes on the wealthy, and her call to relax zoning rules for more construction could rankle rich and poor alike.
Rep. Alexandria Ocasio-Cortez, the first-term congresswoman who represents parts of the Bronx and Queens, is another high-profile politico with lofty goals.
Ocasio-Cortez recently took aim at “market-controlling landlords” with her $16.5 billion housing plan and wants to greatly expand tax relief for middle-class home loan borrowers at the expense of tax deductions for the wealthy. Additionally, the sweeping Green New Deal bill, which she and Sen. Ed Markey of Massachusetts co-sponsored this year, could force landlords to make big energy-efficiency upgrades to their buildings. And with a projected cost of between $50 and $90 trillion, the federal plan would be mostly covered by tax revenue.
The millennial congresswoman, widely known as AOC, has quickly become a national force with close to 5.5 million Twitter followers. In her rapid rise, she’s also earned the wrath of Republican critics, while other political upstarts have followed in her footsteps.
Here’s a breakdown of some of the hotly contested real estate agendas coming out of Washington in 2019.
$1T
Florida
An estimate of the total damage to coastal properties and public infrastructure if global temperatures rise 2°C above pre-industrial levels, according to the Green New Deal. The bill calls for no more fossil fuels and the switch to 100 percent clean energy by 2029, while new and existing buildings would need to adopt “maximal energy efficiency.” A similar proposal in New York City became law in May.
7.4M
The amount of affordable housing units that would be built or fixed up under Sanders’ proposal, at an estimated cost of $1.48 trillion. The Vermont senator has also vowed to create 2 million new mixed-income apartments and make Section 8 vouchers an entitlement for all Americans, while national public housing would get $70 billion in improvements, including high-speed internet access.
$4B
“Emergency funds” to be set aside for middle-class rental housing, outlined in Warren’s American Housing and Economic Mobility Act. For borrowers who owe more on their mortgages than their homes are worth — a casualty of the last recession — the Massachusetts senator wants to allocate $2 billion. She is also promoting a $500 million investment in rural housing and $2.5 billion in grants for apartments for Native Americans and Native Hawaiians.
14,000
The number of families expected to pay higher inheritance taxes under Warren’s proposed housing plan. Lowering the trigger for inheritance taxes to $7 million — where it stood during George W. Bush’s presidency — from $22 million could generate as much as $500 billion over a decade, Warren says. The new revenue would lead to “millions” of new homes and reduce housing costs by 10 percent, she argues.
1968
Republican Sen. Mike Lee
The year Congress passed the Fair Housing Act — which bans discrimination in home sales and rentals. But Republican Sen. Mike Lee of Utah wants to cut off the funding to enforce the law. His Local Zoning Decisions Protection Act of 2017, co-sponsored by Sen. Marco Rubio of Florida, would prohibit the use of federal money to investigate compliance, which Lee and Rubio call ineffective and wasteful.
100%
Presidential candidate and former HUD secretary Julián Castro has vowed to award generous tax credits to renters who earn up to 100 percent of their area median income. The promise is part of his sweeping housing plan, which could cost close to a trillion dollars over a decade. Like several of his peers, Castro wants to cap the max amount renters spend each month on housing costs at 30 percent of their income.
8M sq. ft.
The size of Amazon’s proposed Long Island City campus — before the e-commerce giant killed its offer in the face of local opposition. AOC and State Sen. Michael Gianaris came out against the plan to award Amazon $3 billion in subsidies for the creation of up to 25,000 new jobs. But Gov. Andrew Cuomo and other proponents of the deal argued that those incentives were necessary since Amazon was considering other locations. The company now plans to anchor its “HQ2” in Arlington, Virginia.
A nearly completed Aston Martin, Bentley and Rolls Royce dealership in Fort Lauderdale is at the center of a property dispute between the facility’s developer, Holman Automotive, and its Alabama-based landlord.
In a recently filed lawsuit, Peggie McNatt alleges Holman executives went behind her back to obtain approvals from Fort Lauderdale and Broward County permitting agencies to tear down a previous dealership and replace it with a new 29,657-square-foot showroom, plus a two-level parking garage and service department.
“The dealership didn’t have her permission to build on her land,” said McNatt’s attorney Michael Feinstein. “They have now two choices: They can buy her out for fair market value or they can proceed with their eviction.” He said McNatt is seeking $3.3 million.
John Shiekman, a lawyer for Holman Automotive, which is headquartered in Maple Shade, New Jersey, declined comment.
According to the lawsuit filed in Broward County Circuit Court, McNatt and her late husband initially leased the property at 900 East Sunrise Boulevard to King Motor Company of Fort Lauderdale in 1967 for 99 years. In Nov. 2007, King Motor assigned the lease to Holman, then submitted a plat amendment application to redevelop the land that McNatt signed off on, according to the lawsuit. But Holman did not follow through on the application.
In 2018, Holman submitted a second plat amendment application to redevelop the site into an Aston Martin, Bentley and Rolls Royce dealership, but did not inform or involve McNatt, the lawsuit claims. McNatt alleges Holman executives made false representations to Broward County and Fort Lauderdale officials, including that the dealership had a fee simple interest in the property.
According to Feinstein, McNatt, an 83-year-old woman with no ties to South Florida, had to hire him to find out what Holman was up to. He sent Holman a letter on Feb. 8 warning Shiekman that the dealership was in breach of the 99-year lease agreement. “Before we filed the lawsuit, they admitted to making a mistake,” Feinstein said. “And afterward, they tried to back their way into authority by suggesting the 2007 amendment to the lease agreement gave them authority to do what they are doing more than 10 years later.”
In a Feb. 12 letter attached to the lawsuit, Shiekman told Feinstein that not seeking McNatt’s approval in the second plat amendment application was an “inadvertent omission,” but that she and her late husband had executed several documents as recently as 2015 granting permission to build the luxury dealership.
4539 Pine Tree Drive and Shaya Boymelgreen (Credit: Realtor, Getty Images and iStock)
Sarah Boymelgreen sold her Miami Beach estate for $9.3 million, property records show.
Boymelgreen is married to Shaya, an Israeli-born New York developer who was temporarily banned from selling condos in New York alongside his partner, Lev Leviev’s Africa Israel Investments, in 2014.
Sarah Boymelgreen, via 4539 Pinetree LLC, sold the five-bedroom, 6,311-square-foot house at 4539 Pine Tree Drive to Miami Hills LLC, a Delaware company that lists a Brooklyn address. The property was built in 1951 on a waterfront 0.7-acre lot in Miami Beach.
The house includes an outdoor terrace with a summer kitchen, salt-water pool and a dock with 100 feet of waterfront, according to a previous listing. It last sold in 2015 for $9 million.
Nearby at 4260 Pine Tree Drive, developer Russell Galbut wants to build a mansion three feet higher than is currently allowed by the city.
Earlier this year, Jamie LeFrak, vice chairman and managing director of LeFrak, closed on 4567 Pine Tree Drive for $19.6 million.
Shaya Boymelgreen and Leviev had a failed partnership to build a number of condo projects in New York, and they also built the Marquis Miami building in downtown Miami. They were sued in 2016 over alleged construction defects at Marquis Miami.
Last year, Menachem Boymelgreen secured a $23.5 million construction loan for a planned townhome project in Surfside.
President Trump’s signature accomplishment, his 2017 tax bill, contained a special sweetener for his peers in the real estate development community: the Opportunity Zone program. Investors and developers financing real estate deals could get major tax breaks on their capital gains for up to a decade if they funneled those earnings to projects and businesses in roughly 8,700 low income communities throughout the country in designated “opportunity zones.” According to the Trump administration, the incentives would deliver $100 billion in investment to neglected, struggling neighborhoods across America, including South Florida, where there are 123 Opportunity Zones across Miami-Dade, Broward and Palm Beach counties. The key piece of the program is that, in addition to deferring taxes on their 2018 and 2019 capital gains, investors won’t have to pay any taxes on their profits if they wait 10 years to sell their interests in an Opportunity Zone project.
Proponents hailed the program as a way to entice investors to fund developments in severely depressed communities that otherwise would not attract equity financing. But the zones were determined by U.S. Census data from nearly a decade ago. And two years after the tax bill passed, qualifying projects that plan to reap the program’s benefits are located in areas where gentrification has already been taking place and developers were moving forward with construction long before the program was conceived. For instance, Miami-Dade Opportunity Zones include parts of Miami’s Arts and Entertainment District, Edgewater and the Design District, three neighborhoods that have experienced significant redevelopment since the 2008 crash.
“These are all gentrified areas that are very popular and are being developed,” noted Ronald Fieldstone, a Miami attorney with Saul Ewing Arnstein & Lehr, who is representing about half-a-dozen projects in Opportunity Zones. “But there is nothing wrong with what developers are doing. A lot of these projects would not have happened as quickly. Being an Opportunity Zone is accelerating the process.”
The Real Deal identified five major projects in Miami-Dade, Palm Beach and Broward Opportunity Zones that will reap significant benefits from the program:
SoLe Mia
1. SoLe Mia, North Miami
In March 2015, four months before Trump jumped into the 2016 presidential race, New York real estate titan Richard LeFrak announced that he was teaming up with Turnberry Associates, the Aventura development firm founded by the Soffer family, to build a $4 billion mixed-use project on 184 acres along the waterfront in North Miami. Located on the site of a former toxic landfill, SoLe Mia will consist of 12 residential buildings with a total of 4,390 units, more than 1 million square feet of commercial space, including a Jaguar dealership, and a swimmable lagoon. In 2018, after Congress passed Trump’s tax bill, construction was well underway. That’s when SoLe Mia representatives lobbied North Miami city officials to push for the development site to be designated an Opportunity Zone by then-Gov. Rick Scott, according to Bloomberg.
In January, the developers finished and began leasing at twin 17-story towers called The Shoreline. Costco also relocated a store to the site, and the University of Miami Health System is opening a facility at SoLe Mia.
A spokesperson for the LeFrak Organization, which is the lead developer, said that other components of the project will not seek investors that want to capitalize on Opportunity Zone tax breaks. “We do not finance our business activities with investors and are not raising any money for SoLe Mia,” the spokesperson said.
However, LeFrak and the Soffers can use their own capital gains from recently sold assets as equity in SoLe Mia and reap tax benefits for themselves. According to Bloomberg, by taking advantage of the Opportunity Zone incentives, SoLe Mia’s developers may boost the project’s returns by more than $100 million. The spokesperson declined to comment on how much in tax breaks LeFrak and the Soffers would receive at the end of 10 years.
2. Magic City Innovation District, Little Haiti
In November 2016, when Barack Obama was still president, Metro 1 commercial realty and development firm founder Tony Cho and Silicon Valley entrepreneur Robert Zangrillo unveiled preliminary plans for a $1 billion, 18-acre mixed-use project in Little Haiti, a predominantly poor immigrant neighborhood in Miami where residents have opposed major developments that they believe will gentrify the area. Magic City Innovation District would be a techie and artistic enclave that entails 2,670 apartments in buildings up to 25 stories tall, plus more than 45,000 square feet of commercial space for startups, co-working tenants and retail spaces.
The project was already moving forward before Congress passed Trump’s tax bill, but delays caused by the zoning process made it possible for Magic City to qualify as an Opportunity Zone project thanks to Scott, the ex-governor who is now in the U.S. Senate.
In April 2018, Scott designated 427 census tracts in the state as Opportunity Zones, including a large area in Little Haiti bound by the FEC railroad tracks on the east to Interstate 95 on the west, between Northeast and Northwest 46th to 82nd streets. Magic City runs from Northeast 60th to 64th streets and Northeast Second Avenue to the railroad tracks, which means Cho, Zangrillo and their partners, Cirque du Soleil co-founder Guy Laliberte and Miami development firm Plaza Equity Partners, may be able to earn considerable tax breaks for their equity investment.
Neil Fairman, chairman and founder of Plaza, which is now leading Magic City’s construction, did not respond to phone and email messages seeking comment about the estimated tax breaks Magic City developers and investors can achieve through the Opportunity Zone program.
AltaWest
3. AltaWest, Delray Beach
In January, Aventura-based BH3, led by Dan Lebensohn and Greg Freedman, beat out five other firms to win a public-private partnership deal with the Delray Beach Community Redevelopment Agency to redevelop 6.17 acres on West Atlantic Avenue between Southwest Ninth and Southwest Sixth avenues in the city’s lone Opportunity Zone.
The agency is providing the city-owned land for free in exchange for BH3 building a mixed-use site that the developer values at $100 million. The project would entail 43,000 square feet of ground floor retail, 21,600 square feet of professional office space, a 33,000-square-foot grocery store, 165 residential units totaling 272,242 square feet, 744 parking spaces, about 45,000 square feet of public space called “Frog Alley” and up to 30 workforce housing units, including 18 affordable housing units being built on an adjacent site. A portion of the office component will have smaller spaces at more affordable rents for local businesses, BH3’s Lebensohn said.
He added that BH3 is discussing financing for AltaWest with potential investors, including a real estate-oriented private equity fund with $100 million to invest in Opportunity Zones. Lebensohn declined to name the fund and declined to answer questions about how much potential investors would save in tax breaks and how much more profit the project would generate by being in an Opportunity Zone.
4. 45 Northeast 41st Street, Design District
Since 2010, Craig Robbins’ Dacra and L Real Estate have radically transformed Miami’s Design District from a quiet architecture and interior design-oriented neighborhood into the coolest, high fashion retail center in South Florida. Gucci, Fendi, Prada, Bulgari, Hermès, Dior and Cartier are among more than a dozen luxury brands that have planted flags inside opulent storefronts between North Miami Avenue and Northeast Second Avenue from Northeast 36th Street to 41st Street. Since 2014, deep pocket investment firms, predominantly from New York, have paid top dollar for commercial properties in the Design District. So it’s safe to say the Design District is a neighborhood that doesn’t need any help attracting investment.
Yet, Design District census tracts were among those designated as Opportunity Zones, and some real estate investors are fully taking advantage of the program. Miami-based Forte Capital Management and New York-based GSI Equities paid nearly $10 million for a nearly complete commercial building developed by Alex Karakhanian. The 8,400-square-foot building, located at 45 Northeast 41st Street, is sandwiched between the Institute of Contemporary Art and the De La Cruz Collection, two arts institutions that were completed in recent years.
Chaim Cahane, Forte’s president, said the building qualifies as an Opportunity Zone project because the certificate of occupancy has not been issued. “It’s considered new construction and qualifies for the tax benefits,” Cahane said. “That is what made it an attractive deal. We didn’t have to acquire the land or go through the approval and development process.”
Cahane said the $10 million was derived from capital gains from previously sold assets. “This is our own capital,” he said. “We get to defer the whole cost.”
Still, Cahane noted, he doesn’t know how much in taxes he and his partners will save from any profits they may earn if they sell the property after 10 years. “The Design District has a lot of room for growth,” he said. “In 10 years, values will be significantly more than what we paid for it.”
Wynwood Haus
5. Wynwood Haus, Arts and Entertainment District
In March, Linéaire Group and TSG Group paid $5.9 million for a 30,000-square-foot property at 1765 North Miami Avenue, which is located in an Opportunity Zone. The developers are planning an apartment building between 18 and 24 stories tall with ground floor retail that will cost an estimated $50 million to build. Linéaire Group managing partner Diego Bonet said he and his partners are seeking to finance roughly 40 percent of the project through an Opportunity Zone investment fund. “We are actively in discussions with a few funds about being the equity for the project,” Bonet said. “If they invest $1 million and that generates an extra $1 million of capital gains, they won’t have to pay taxes on that extra $1 million.”
Although he can’t predict how much the project will be worth 10 years from now, Linéaire and TSG have financial models that show investors their profits could be twice as much as their initial investment after 10 years.
Yet, the Arts and Entertainment District was already in the midst of a mini development boom without the boost provided by the Opportunity Zone program. For instance, NR Investments and Melo Group have separately completed one condo tower, Canvas, and three apartment complexes, Filling Station Lofts, Melody Tower and Square Station, within four blocks of one another in the Arts and Entertainment District. In addition, the two firms are constructing four other apartment projects that do not qualify for Opportunity Zone financing.
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.
Stay Alfred townhouses with Mike Wilson
Stay Alfred is expanding in Miami. The short-term rental operator opened in late August at 761 and 765 Northwest First Street in Little Havana, and signed on last week to take an additional two townhouses at 769 and 771 Northwest First Street. Developer Andrew Frey developed the buildings. Stay Alfred began operating in Miami when it opened Stay Alfred Brickell in February, and the company is looking to expand throughout South Florida, said Mike Wilson, senior vice president of real estate. It’s among a growing number of short-term rental operators with eyes on Miami.
941 North Venetian Drive
A Venetian Islands spec home hit the market for $18.5 million. Developers Eduardo Otaola, Rodrigo Diaz and Eduardo Lucca completed the five-bedroom, eight-bathroom mansion at 941 North Venetian Drive in Miami. The waterfront property, designed by architect James Wall, features a glass elevator, 19-foot front door, and a master suite with a plunge pool on the balcony. It’s on the market with Dina Goldentayer of Douglas Elliman.
The Trump Organization will not host a fundraiser for an anti-Muslim extremist group at Mar-a-Lago. After news broke that ACT for America, a group with over 1 million members, planned to have its annual fundraiser at President Trump’s Palm Beach club on Nov. 7, a spokesperson for the Trump Organization said, “This group absolutely will not be hosting their event at Mar-a-Lago,” according to the Palm Beach Post. [Palm Beach Post]
The Altman Companies has almost completely knocked down a Little Havana church that neighbors sought to protect. A group collected more than 2,000 signatures online to preserve the structure, and Miami Mayor Francis Suarez even stepped in to ask the city’s historic preservation office to look into whether the former Shenandoah Presbyterian Church site on Southwest 22nd Avenue should be preserved, but he ended up withdrawing that request. Altman, a Boca Raton developer, is planning to build 224 apartments on the site. [Miami Herald]
Left to right: Debbie Orshefsky, Seth Bour, Vivian Dimond, Peter Flint, Tim Wheat and Chip Abele
Hollywood has more than $1.4 billion of commercial and residential real estate development planned or under construction – but precious few office projects.
“There is an under-supply of quality office space in downtown Hollywood,” said Michael Feinstein, founder and CEO of co-working office space operator Büro, which recently opened its sixth location in Hollywood.
Feinstein, a panelist at an Urban Land Institute and the Greater Hollywood Chamber of Commerce event Thursday, and other speakers agreed that Broward County’s second-largest city is an underdeveloped office market.
“Certainly, for the size of city we have, for the tax base, I don’t believe we have sufficient high-quality office space,” said Wazir Ishmael, Hollywood’s city manager, citing the scarcity as an obstacle to luring new companies to Hollywood.
Left to right: Ken Krasnow, Jorge Camejo, Michael Feinstein and Wazir Ishmael
“We’ve missed out on some opportunities, in fact, where we see people coming through the Broward Alliance [economic development agency] looking for space. And we didn’t have it, and we had to pass,” Ishmael said.
The market’s response to Büro’s new 15,000-square-foot location on Harrison Street in downtown Hollywood “has been great,” Feinstein said. “We’ve had about 30 companies move in, mostly local, some relocating from Aventura and Fort Lauderdale.”
Panelist Seth Bour, president of Firm Realty, said his company plans to break ground in six months on a 50,000-square-foot office building at a downtown site on the corner of Tyler Street and 19th Street. Bour said he expects to draw office tenants new to Hollywood from such densely developed areas as downtown Fort Lauderdale, largely because of “the premiums you have to pay to be in those urban cores.”
CBRE Senior Vice President Larry W. Genet, another panelist, said the office vacancy rate in Hollywood is 6 percent, and financing terms restrain the delivery of new office space. “These days, it’s not impossible to get an office building financed for development,” he said. “But you have to have some tenants ready to take the space.”
According to a report on real estate trends in Hollywood that the city government distributed at the ULI event, more than $1.4 billion of real estate developments are planned or under construction in Hollywood.
Rendering of the hotel (Credit: Seminole Hard Rock Hotel & Casino)
Among those under construction are Related Group’s 342-unit Hyde Beach House condominium on South Ocean Drive; Block House, a downtown mixed-use project that is combining 166 apartments and 103 hotel rooms; and an eye-catching, guitar-shaped hotel at the expanding Seminole Hard Rock Hotel & Casino along State Road 7, in the northwest corner of the city.
But relatively little office space is in the local development pipeline. The city government’s 43-page report on development activity listed three boutique office projects.
That pipeline could fill up, however, with an office-heavy redevelopment of Oakwood Plaza, a commercial hub and shopping center in Hollywood just south of Fort Lauderdale-Hollywood International Airport.
Kimco Realty, the owner of Oakwood Plaza, may redevelop the 140-acre property with a mix of apartments, offices and a hotel. “We’re looking at a master plan redevelopment of Oakwood Plaza … We want to redevelop it into a mixed-use center,” said Peter Flint, senior director of business development, Southeast, for Kimco.
Speaking as a panelist, Flint said Kimco’s redevelopment of Oakwood Plaza could include the construction of as much as 1 million square feet of office space over a decade. He said Kimco will submit a proposed site plan to the city in six months. The New York-based, publicly held company is the master developer of the nearby Dania Pointe mixed-use center, a 103-acre project in Dania Beach, just north of Hollywood.
1771 North View Drive, Julian Johnston, Enrique Iglesias, and Caterine Gomez (Credit: Getty Images)
Marc Puleo, the founder and former CEO of 1-800 PetMeds, sold his waterfront Miami Beach estate – a property that once belonged to Enrique Iglesias.
Puleo sold the seven-bedroom, 7,622-square-foot home at 1771 North View Drive for $13 million to a European buyer, said Julian Johnston of the Corcoran Group. He represented the seller, while Caterine Gomez of Corcoran brought the buyer.
The half-acre property first hit the market with another broker for $25 million in 2015, which means it sold at a 48 percent discount off the original ask. It was most recently listed for nearly $16 million, according to Realtor.com.
The house is on Sunset Island I, and includes a pool, gazebo, summer kitchen, a dock boatlift and 150 feet of water frontage. The property also has an interior courtyard and fountain, a guest house with a rooftop Jacuzzi and an onyx wet bar, according to the listing.
Iglesias, known as the King of Latin Pop, sold the house to Puleo in 2004 for $7.85 million, records show. He’s owned a number of homes in Miami.
Last month, a former Honeywell executive sold his home on Sunset Island II for $14.6 million, a 36 percent drop from its initial listing price.
New York developer Steve Witkoff was recently revealed as the buyer of 2805 Lake Avenue, on Sunset Island I.
A contentious lawsuit alleging mismanagement, project delays and $22.4 million in unpaid work during the construction of the Virgin MiamiCentral train station has ended with steel maker ADF International walking away with a $10.5 million settlement.
In the complaint, the Great Falls, Montana-based company claimed critical mistakes and plan revisions by project general contractor Suffolk Construction and structural engineering firm Skidmore, Owings and Merrill resulted in ADF International increasing its workload without compensation. In turn, Suffolk and Skidmore filed counterclaims against All Aboard Florida, which is now known as Virgin Trains USA Florida.
The suit was filed in Miami-Dade Circuit Court.
According to a Sept. 30 dismissal order, the four firms, along with three project insurers, agreed to drop the litigation after reaching the settlement on the 10th day of trial. Stuart Sobel, ADF’s lawyer, said witness testimony from steel erection experts and ADF’s engineering director Vincent Paschini demonstrated that his client had credible claims.
“It took [the defendants] some time to come around, but everyone recognized that we were entitled to a bunch of money,” Sobel said. “We were pleased to engage them in these negotiations and reach what is a very fair settlement. It is a lot more than they wanted to pay.”
Sobel said Virgin Trains USA, Skidmore, and Suffolk will each contribute toward the $10.5 million. Suffolk in-house lawyer Monique Cardenas and a Virgin Trains USA spokesperson said neither company comments on litigation matters. Skidmore attorney Curtis Brown did not respond to an email requesting comment.
According to ADF’s lawsuit, the steel firm’s scope of work and time to complete it increased as a result of errors, omissions, conflicts and changes to the plans and specifications by Suffolk and Skidmore. ADF claims that Suffolk and Skidmore often ignored its requests to provide revised plans and instructions. Other times, ADF would allegedly receive untimely, incomplete or inaccurate responses.
In its lawsuit, ADF alleges that Suffolk repeatedly failed to properly manage subcontractors by having other trades get in the way of ADF’s work. Suffolk also allegedly failed to complete jobs that preceded ADF’s installation of steel components and also allegedly failed to control the movement of Metromover and Metrorail trains during the times ADF was required to erect steel for new tracks, the lawsuit states.
In November of last year, Brightline — formerly All Aboard Florida — and Richard Branson’s Virgin Group announced a strategic partnership. The deal includes a minority investment in the high-speed passenger rail company that currently has three stops in Miami, Fort Lauderdale and West Palm Beach. All three stations are anchored by mixed-use developments. Virgin Trains USA, which plans to add stops in Orlando and Tampa, recently nixed an IPO that the company said would have raised $619 million.
A former CEO of U.S. Steel shelled out nearly $6.5 million for a modern mansion in Pinecrest.
Property records show that Mario Longhi, the retired steel executive, and Maria Helena Longhi closed on the 10-bedroom, nearly 15,000-square-foot spec house at 9121 Southwest 62nd Court.
Longhi led the Pittsburgh company, once the largest steel producer and largest corporation in the world, between 2013 and 2017. The Brazilian-American businessman was previously CEO of Gerdau Ameristeel Corporation, the largest producer of long steel in the Latin America.
The spec house was developed by Luis Garcia, chairman and CEO of Sweetwater-based Adonel Concrete.
Ana Teresa Rodriguez with Coldwell Banker represented the seller, 9121 SW 62 Court LLC, led by Garcia. Elena Bluntzer of One Sotheby’s International Realty represented the buyer, according to Realtor.com.
The non-waterfront house features a life-sized checkers deck next to the pool, a guest house, club room and gym, a cabana, wine cellar and gated motor court. It was completed in 2018.
Records show the 1-acre property last sold in 2012 for $729,000.
A number of professional athletes have owned homes in Pinecrest. Last year, Miami Heat player Tyler Johnson sold his house at 9700 West Suburban Drive for $4.35 million, taking a slight loss on the property.
Earlier in 2018, Johnson’s teammate James Johnson paid $5.2 million for the seven-bedroom, 7,700-square-foot home at 8955 Southwest 63rd Court.
A former partner and managing director of Goldman Sachs paid $6.5 million for a unit at the Bristol in West Palm Beach.
The development group sold unit 501 in the luxury condo tower at 1100 South Flagler Drive to a trust in the name of Thomas J. Healey. Healey is now founder and managing partner of Healey Development, as well as the founder of Prisma Capital Partners hedge fund, FIA Timber Partners funds, private equity firm Anthos Capital and other ventures, according to his bio.
At Goldman Sachs, Healey created the Real Estate Capital Markets and Pension Services groups.
The Bristol, which overlooks the town of Palm Beach, is the first new luxury condo building in West Palm Beach over the past decade. Flagler Investors, led by Al Adelson and Gene Golub, developed the 25-story, 69-unit building, where units range from 3,600 square feet to 14,000 square feet.
Buyers there include beauty mogul Sydell Miller, who closed on a full-floor penthouse for $42.6 million in March; Robert Nitabach, the owner of a New Jersey car dealership; and Eastview Development partner James Harpel.
Famed architect and watercolorist Steven Holl founded his company as a two-person practice in Chelsea in 1977. The firm has since grown to 40 people across two offices, one around the corner from Hudson Yards and the other in Beijing. Steven Holl Architects has completed more than 60 projects in the U.S., China, Japan and other countries. Holl and his colleagues worked on the $41 million Hunters Point library, which opened in September — nearly a decade after it was designed. Their extension of the John F. Kennedy Center in Washington, D.C., also opened last month, sporting “crinkle concrete” walls, a style of concrete design invented by the firm. The company now has seven projects under construction, eight in design and another nine awaiting approvals or financing. Much of Holl’s work in the U.S. has focused on museums, religious institutions, schools and other public spaces, though his firm has designed a few office towers in China. Holl is also a professor at Columbia University, where he has taught about the phenomenological side of architecture since 1981. The ceiling of his office is lined with boxes containing tens of thousands of his own watercolor paintings, a collection he adds to every day as he works out aspects of his designs.
DOB: December 9, 1947 Lives in: West Village Hometown: Bremerton, Washington Family: Married with one daughter
What were you like as a kid?I have a [younger] brother, and he and I built clubhouses in the backyard. At one point, we had an underground clubhouse and a two-story treehouse. I realized later on there are four kinds of architecture: Under the ground, in the ground, on the ground and over the ground. And I think that maybe started with my childhood at 7 years old.
So that’s how you got into architecture? It was an intuitive desire because I could draw, I like mathematics and I like making things. That’s my joy of architecture — being able to make the models, in a way, is enough. You don’t actually have to build every design.
Were either of your parents architects? No. My father had a service heating and sheet metal company. It was putting in furnaces, ductwork and HVAC systems. I actually worked as a sheet metal mechanic when I was 15 and 16. So I always related to the materiality, the machines that would bend and make these complicated geometries. Maybe that was a beginning also.
In college, you studied in London and Rome. What was that like?That was a transforming experience. I lived right behind the Pantheon, so I could go [there] every day and see how the light would come in. In my hometown, there wasn’t really much of any architecture. Seattle was the Space Needle. I went to the World’s Fair opening as a child. But Rome was a depository of amazing ancient spaces.
When you first came to New York from San Francisco, you slept on a board above your office, right? The studio I had was at 655 Sixth Avenue overlooking a Sephardic Jewish cemetery, which is still there. I paid $250 a month for this beautiful cubic space, but there was no hot water. I didn’t have a place to live, so I slept on a plywood shelf over the entrance, and no one knew I lived there. And I went to the YMCA at the end of the day to shower. That was like having a grant — I could teach and support a small practice of two people doing competitions and idealistic work, and the rent was so low. Those were the great days of New York: 1979, 1980, 1981. It was very economical.
You’ve described that time as helping to shape who you are, but did you view it that way at the time?I was so obsessed with the work that I was just glad to be in New York. I worry about the young people now. They can’t afford to live in New York.
Do you speak any other languages aside from Italian? No. My wife is Greek. My daughter is 3 and a half years old, and she speaks Greek better than me. Her grandmother teaches her every day, so she’s amazing. She translates for me, so if something falls down and she says “épese,” then she turns to me and says “fell down, Baba.”
Your daughter has a Greek name. Was it inspired by mythology? Io Helene Holl. Greek mythology; the moon of Jupiter is also named Io. My mother’s name was Helen, so Helene is Greek. I always said my buildings are my children, and I go back and visit them. But I fell in love, got married. Now I have an actual 3-and-a-half-year-old, which is amazing because her imagination is unparalleled. It makes me stop and rethink the creative impulse and the joy of imagination.
How did you meet your wife, architect Dimitra Tsachrelia?She was my student, and I always bring my most brilliant students into the office, and they work. I have about 10 people that were my former students; some of them have been here as long as 12 years. She was here in 2008. In 2010, I went through a painful divorce and then we got together in 2014. And we got married in 2016.
Where is most of your work located? Most of my built work is in Asia. I have an office now in Beijing. One of the most fortunate things that happened to me was I had work in China when the economy collapsed here in 2008. So other architects were laying people off, and I had so much work in China that I was hiring people.
You won a competition to design the headquarters for the healthcare AI company in Shenzhen. How is working there different? We presented to Wang Jun, the director of iCarbon X, this January, and the foundations are already in the ground. That’s another thing that happens in China that has helped me. In New York and various other places, I can be eight years from the first sketch to the opening of the building. In China, it’s much shorter than that.
Why are the timelines so different? It’s just a different culture altogether. There’s a certain openness for creative ideas — especially when people are doing an important headquarters, or they are trying to make a statement with their architecture. In China, they would raise their budget to build our design. It’s not so open in New York.
What do you think of Hudson Yards? Ah, I’m not going to say anything about it because I can’t say anything positive. I’ll only say this: When there was a competition back in 2000, 2001, whenever it was, we proposed a giant green space plus a suspension over the rail yards. But in the end, nobody won the competition. It was bypassed and went to the highest bidder. So what’s here was purchased by the developer and then controlled by the developer. I think it could’ve been something very positive.
Many of your projects are public spaces. Is that on purpose? It was a conscious decision. I really believe in the public-space contribution of architecture. I’m very proud of this Queens library, which is opening in New York after 10 years of effort. But I couldn’t just do these kinds of buildings; I’d lose money. You need projects like this [motions to model of a tower in China] in order to do projects like the library.
What was the inspiration for the shape of the Hunters Point library?The building could’ve been built on one floor. The site’s big enough for it to be one floor. But we all felt, local City Council member Jimmy Van Bramer especially, that it needed a vertical presence and that it should have views of Manhattan. And it doesn’t have a skin. It’s just textured concrete, marking the things that are going on inside.
What’s the most difficult aspect of working in NYC? I’d say getting the project in the first place. I’ve been here since 1977. [The Hunters Point Library] will be my third thing that I’ve built. It’s a tough city, but I love it. I know I can’t live in Rome; you can’t get anything done. I don’t like Paris because you can’t get a taxi. I lived in London. It smells funny. I thought, the best city is New York.
You live in the West Village, where development in severely restricted. What’s your interest in preservation? I’m not so interested in the historicist part — it’s the sunlight coming to the street. Natural light to me is a psychological gift. All of my buildings have natural light. That’s what we have to be careful of when we build too many tall towers crammed too close together.
What’s your biggest vice? Red wine. Barolo from Piedmont.
Cardone’s thesis is simple: The American dream of homeownership is dead, and everyone is going to move to apartments.
“Emergency funds” to be set aside for middle-class rental housing, outlined in Warren’s American Housing and Economic Mobility Act. For borrowers who owe more on their mortgages than their homes are worth — a casualty of the last recession — the Massachusetts senator wants to allocate $2 billion. She is also promoting a $500 million investment in rural housing and $2.5 billion in grants for apartments for Native Americans and Native Hawaiians.
You’ve described that time as helping to shape who you are, but did you view it that way at the time?