7600 West Mcnab Road and Todd Ruderman

South Florida investor Todd Ruderman bought a recently built self-storage facility in North Lauderdale for $12 million. Over the past few years, self-storage has been one of the hottest property types in South Florida.

A trust tied to Ruderman — a prolific self-storage operator who owns Value Store It Management — bought the facility at 7600 West Mcnab Road. The seller was SS Mcnab LLC, which is managed by Thomas Richerson of Miami Beach.

The storage center opened this year and sits on about 200,000 square feet, according to property records.

SS Mcnab LLC bought the land to build the facility for $1.4 million in 2015, according to property records.

Value Store It Management manages close to 1.5 million square feet of self-storage properties in Florida and Massachusetts, according to the Ruderman Family Foundation’s website. In September 2018, Ruderman paid $5.5 million for an unfinished self-storage facility in Pembroke Park. The property was previously seized by the federal government after the former owner, self-storage developer Daniel Joseph Touizer, was indicted for fraud.

Over the past few years, self storage has been one of the hottest property types in South Florida.

In June, Public Storage bought four large storage facilities in Miami-Dade County for $63 million. Nationally, self-storage facilities have been outperforming all other major commercial property types in terms of earnings growth and company stock performance, according to a Green Street Advisors analysis.

The post Prolific self-storage operator is a buyer in North Lauderdale appeared first on The Real Deal Miami.

Aerial view of Aspen, Colorado

When the yachts go south and it becomes less of a feat to get a reservation at the East Hampton Grill or other local haunts, the residential brokers in the Hamptons have to come up with creative ways to network and keep their pipeline of business flowing.

Some globetrot to chase down clients. Others meet with potential clients in Manhattan. And many keep contractors on track.

“The fall is kind of a breather, but it’s also really a time to set yourself up for the winter and spring,” said Brown Harris Stevens agent Christopher Burnside.

And different brokers, of course, take different approaches to doing that.

Douglas Elliman’s Enzo Morabito said he attends events like Art Basel in Miami Beach — which takes place every December (he’s going this year) — and the Super Bowl in February, “which is when buyers start to come out again.”

“In this business, business and social are the same things,” said Morabito.

Last year at Art Basel, he ran into a fellow Elliman agent with a Florida client hunting for a newly built waterfront house in the Hamptons. Morabito suggested his listing at 611 Dune Road in Westhampton and the deal closed for $6.7 million in February, he said.

Meanwhile, top East End agent Susan Breitenbach, of the Corcoran Group, is also a regular at Art Basel — and an advertiser there. “You definitely see a lot of Hamptons people there,” said Breitenbach, who also relocates her 67-foot powerboat from Sag Harbor to Miami Beach in the winter.

Breitenbach often gets referrals from Jill Hertzberg and Jill Eber, better known as the “the Jills.” The duo — who recently teamed up with Judy Zeder — are at Coldwell Banker Residential Brokerage, which shares a corporate parent (Realogy) with Corcoran. Corcoran, which opened a new Miami Beach office in September, also sends her leads.

At press time, Breitenbach was nearing a closing with one of those buyers on a Sagaponack property. She said she also spends a week every February on a boat in St. Bart’s chartered by clients. “I’m on the phone the whole time, but so are they, so it’s okay,” she said.

BHS’ Burnside — who in the summer zips clients around in his 42-foot motorboat, which he uses to check out estates from the water — also usually goes to Florida in the winter. He bounces between borrowed condos in Palm Beach and Miami and spends weekends with “customers who are also friends.”

But now, with the Hamptons’ market seeing a slow off-season, those trips have taken on added importance. Burnside’s 10-year-old daughter, Amelia, a competitive equestrian, will train this winter in the wealthy village of Wellington, which is thick with potential East End buyers.

For the month of December, while Amelia works on her jumping, Burnside will, for the first time, work out of BHS’ Palm Beach office. By then, he hopes to have a Florida real estate license so that he can also list Palm Bach houses owned by Hamptons homeowners. “It seems like there is a lot of money in the horse world,” said Burnside, who was tapped by developer David Walentas to market 12 new-construction spec homes on the site of his Two Trees Farm, another equestrian spot, in Bridgehampton. (Those homes sold, but he’s still marketing the original farm, which is on the market for about $18 million.)

Corcoran’s Gary DePersia, meanwhile, turns his attention to Aspen in the winter, making frequent trips there and buying ads in Aspen and Aspen Peak magazines and on a popular weather app. And the advertising seems to pay off: While having dinner at the restaurant Betula Aspen last year, “a woman recognized me and said, ‘Do you know about my property in Sag Harbor? I might want to discuss listing it with you,’” he said.

DePersia got the listing, which he said is currently on the market. He declined to disclose the address, but in November he had five Sag Harbor properties listed on his web page.

Among them was the $12.9 million 14 Seaponack Drive, which he appears to have picked up this year. According to online records, the new-construction home in the North Haven section came on the market in 2017 for about $17 million with Saunders & Associates, which is currently sharing the listing with Corcoran.

But DePersia, a long-time skier, bristles at suggestions that he chases clients to the Rocky Mountains. “It just turns out that a lot of my clientele happens to be there,” he said. “Connections happen organically.”

Local yokels

When DePersia first came to Hamptons to windsurf in the 1980s, many owners boarded up their houses at the end of the summer season. That’s obviously not the case anymore for most second-home owners on the East End.

And annual events like the Hamptons International Film Festival and Winterfest — a weeks-long festival of music, food, arts, wine and entertainment throughout the North and South Forks — are a big draw.

But outside of those events, the hubbub and deal volume fall off.

In 2018, the fourth quarter was, not surprisingly, the slowest of the year on the South Fork, with 360 deals, according to market data from Elliman. By comparison, the second quarter was the most active, with 601 deals.

But brokers say there’s been a bit more activity this fall than usual as cautious buyers finally commit to purchasing houses they’ve been circling for months.

“There are definitely usually fewer showings at this time of the year,” said Saunders’ Terry Cohen. “But we’re doing more deals this off-season than during the season.”

That may be because average listing prices are down about 20 percent from the spring — to $1.38 million from $1.73 million, according to Elliman’s third-quarter market report. Average sales prices were also down for the year through September — a fact agents attributed to both fears of a pending recession and the recent federal tax overhaul that capped state and local tax (SALT) deductions at $10,000 a year, which made buyers hesitant to take on big-ticket second-home properties.

Not helping matters is that some of the Hamptons’ venues — like Starr Boggs in Westhampton Beach, the Inlet Seafood Restaurant in Montauk and the Beacon and Le Bilboquet in Sag Harbor, places brokers flock to in order to hobnob and generate deals in the summer — close up shop in the off-season.

But increasingly, some establishments — Pierre’s in Bridgehampton, the Palm in East Hampton and East Hampton Grill, to name a few — stay open throughout the winter.

Elliman’s Morabito and his team meet at Sag Harbor’s American Hotel once a week for breakfast. “I always get leads there,” said Morabito.

For some, Hamptons venue hours are not as crucial in the winter.

BHS’ Burnside said he also heads into Manhattan in the off-season for meetings at the firm’s main Midtown office, where he meets with firm principals once a month.

He said he recently met with Will Zeckendorf, an owner of Terra Holdings, the firm’s parent company. Zeckendorf, Burnside said, is closely following the firm’s conversion of Southampton’s former post office into a BHS office. (Burnside oversaw the recent expansion of BHS’ Bridgehampton office and is involved in this project as well.)

Hal Zwick, a commercial agent with Town & Country Real Estate, said he, too, takes more Manhattan meetings in the off-season.

Negotiations with his clients — particularly owners of bars and restaurants, many of which are offshoots of New York City restaurants — require multi-day trips to Manhattan about every six weeks. “I stayed at the W Union Square right after they opened,” back in the early 2000s, “and have not stayed at another hotel since,” said Zwick.

Venue owners — who often have to wait months for the state to approve a liquor license — generally need to lock down a space by the late fall to start the approval process, Zwick said. And there are a number of deadlines to meet in order to be up and running by Memorial Day, he said.

But outside of bars and restaurants, retail leasing is weak on the East End. A decade ago, retailers were looking for 10-year leases. Today they want one-year pop-ups, which landlords won’t agree to until March, when their other options run out, Zwick said: “It’s been difficult to do business out here. That’s a fact.”

Keeping busy

In the old days — aka the 1990s — resales were the properties du jour in the Hamptons. But those resales often needed renovations. That dynamic led to a rush to buy in the fall, leaving enough time for off-season construction so homes could be ready by summer, said Aspasia Comnas, the BHS executive director who manages the firm’s nine North and South Fork offices.

Art Basel is a popular event for Hamptons brokers.

But with the rise of new-construction homes, that autumn deal bump has dissipated, Comnas said.

On the plus side, new-construction home closings can happen much closer to the start of the season. “You no longer have the same pressure to close that you used to,” she said. “Deals are more evenly distributed throughout the year.”

Construction of spec homes has, however, produced a new kind of off-season work for brokers: unofficially project-managing to ensure that properties are ready to market during the critical spring window.

BHS’ Burnside is currently keeping tabs on the under-construction 33 Bellows Court in Southampton Village, which is listed for about $4 million. Marketing materials for the property are not yet ready, but he’s pushing to make sure it’s photo-ready by February.

Another property he’ll be prepping for the market is 1127 Noyac Path in Water Mill, a spec house listed for $5.2 million — or $350,000 for the summer. The house was completed in August, an unfavorable month to enter the rental market, so Burnside decided to move into it himself in November. A cocktail-fueled open house may be held there in the spring, to lure buyers or renters, but is not likely before then.

Event-style showings are an effective in-season tool, he said. An August gathering that included an art show drew about 100 people to 54 Old Sag Harbor Road, a six-bedroom listed for about $4.7 million. But, he said, in the off-season potential buyers (and renters) usually just come to the East End to check out houses for the day.

For years, renters booked summer homes in the previous fall. After the 2008 crash, they began hunting more aggressively for deals, which meant waiting till the last minute.

Now, however, brokers say they’re seeing more long-term planning. Some of that demand is being driven by those looking to rent while they’re constructing Hamptons homes, according to Saunders’ Cohen.

In early November, Corcoran’s DePersia was on the verge of closing three summer leases, including one for a full season for a house in Bridgehampton to be rented by “a guy in his 40s from Manhattan with an extended family,” he said.

Still, the pace of deals is undoubtedly slower than usual. “[But] if you’re just going to be working all the time it kind of defeats the whole point of enjoying the beauty of the Hamptons anyway,” Burnside said.

The post Jet-setting to follow the money appeared first on The Real Deal Miami.

Bill Rudin and Dock 72

Bill Rudin spent time this summer at the Brooklyn Navy Yard — not exactly one of his haunting grounds. In its 94 years, his family real estate firm had never done a project in Brooklyn, let alone in an out-of-the-way industrial campus — and with an anchor tenant about to plunge into crisis.

The CEO of Rudin Management was overseeing the finishing touches at Dock 72, a 675,000-square-foot building overlooking the East River. Complete with a basketball court and a rooftop conference center, it was billed as the city’s first “agile” office building with varying lease terms and a 21st-century workplace.

To help attract tenants, WeWork would anchor the site and manage its amenities. But by the time the building opened in October, the hip office-space company had imploded. 

After WeWork pulled its plans to go public, hundreds of its landlords — holding lease commitments totaling as much as $47 billion — were facing the reality that WeWork could be bankrupt within weeks.

For Rudin, who co-developed Dock 72 with Boston Properties, the uncertainty was acute. Three years ago, he took another leap with WeWork, filling his firm’s 110 Wall Street entirely with the young, fast-growing company.

Since late October, when WeWork received a $9.5 billion lifeline from its largest investor, SoftBank, the co-working company has continued to make lease payments. But it lost $1.25 billion in the third quarter and is now facing investigations by the New York State attorney general and the U.S. Securities and Exchange Commission, clouding its prospects.

Even with the benefit of hindsight, though, Rudin said he has no regrets about doubling down on the office-space company.

“I don’t think we would have done anything different,” he said in an interview.

Heavy exposure

Rudin is hardly the only major New York landlord who opened his doors to WeWork. Others include a partnership led by Kushner Companies that signed a 90,000-square-foot lease with the company to take over 81 Prospect Street in Dumbo. SL Green made a deal with WeWork for all of its office space at 609 Fifth Avenue. And Walter & Samuels inked a 100,000-square-foot lease with the company at 214 West 29th Street.

But while dozens of New York landlords were lured by WeWork’s talk of culture and community, as well as its rapid growth and open checkbook, few have made such a concentrated bet on the company.

Some fellow developers raised an eyebrow at Rudin’s exposure to WeWork, which, including Dock 72, totals about half a million square feet. But they stopped short of saying the office-space company’s possible demise threatens the fourth-generation Rudin family business, which encompasses 36 properties across 15 million square feet.

“Knowing the Rudins, can it hurt a little bit financially? Yeah,” said Jerry Wolkoff, founder of the family development firm G&M Realty. “But they’re not going to go into bankruptcy.”

John Catsimatidis, CEO of the Red Apple Group, said he walked away from a deal with WeWork at 5 Columbus Circle but was not worried about the company inflicting lasting damage on the Rudins, even if it ends up filing for bankruptcy.

“The Rudins will be fine no matter what happens to WeWork,” said the billionaire grocer and developer.

As the WeWork saga has played out with a drumbeat of losses, lawsuits and layoffs, Rudin has frequently faced questions about why he put so many eggs in a thinly woven basket. When asked on CNBC’s “Squawk Box” how he would respond if the company filed for bankruptcy or defaulted on a lease payment, Rudin dismissed the idea, but then said he would consider taking over the office space and hiring another co-working company to manage it.

He has also said that WeWork’s impact on the New York City commercial real estate market is minimal — its footprint amounts to about 1 percent — and that if the company did go bust, the city could absorb the vacant spaces.

During a panel at the annual NYU Schack Institute Capital Markets in Real Estate conference last month, moderator Richard Blumenthal asked Rudin what he would do in the event of a potential decline of his major tenant.

Rudin responded, “I’m not worried.” But, he said, “WeWork is going to have to work through their issues.”

To cut costs and focus on its core business of office space, WeWork’s new leaders have said they will unload ancillary ventures and product offerings, including an elementary school, digital marketing platform, wave-pool builder and various software entities.

However, a WeWork representative said it is committed to its residential offering, WeLive, whose two locations include the majority of Rudin’s 110 Wall Street. The embattled subsidiary recently abandoned plans for a location in Seattle.

As for Dock 72, just getting there is a challenge. Located at the former ship-repair yard, it is — by New York standards — light years from the nearest subway station. Instead, tenants reach the site by car, bicycle, ferry or shuttle buses that travel to and from Dumbo and Atlantic Terminal every 10 or 15 minutes.

John Kim, an analyst at BMO Capital who covers Boston Properties, said Dock 72 has posed a challenge for its owners to attract tenants, particularly because of its isolated location.

“It’s been sort of a glaring development project that hasn’t leased,” Kim said, contrasting its high vacancy rate with the lower rates at other Boston Properties assets.

Dock 72’s owners say its occupancy figure isn’t unusual for a building at this early stage, and both WeWork and Rudin said the plan remains unchanged. The development is 30 percent occupied by WeWork, which has agreed to a 20-year lease at the building.

“WeWork remains committed to providing our members with an incredible experience at Dock 72,” the WeWork representative said.

A plan comes together

Following the financial crisis of 2008, the titans of Wall Street receded and Downtown Manhattan struggled to find its groove. It had never truly recovered from 9/11 to begin with.

But the area had been revitalized before. In the early 1990s it would shut down when the markets closed each day. “At 5 o’clock, you could roll a bowling ball down the street and not hit anyone,” Rudin recalled.

As the owner of four downtown towers and a board member of the Downtown Alliance, Rudin had played a key role in shaping the area. It was during an encounter with then-WeWork CEO Adam Neumann at a cocktail party in 2012 that he saw an opportunity to bring life back to the neighborhood.

Rudin already knew that catering to tech firms and startups had its advantages. In the 1990s, his firm refurbished 55 Broad Street for the digital age, fully wiring the building to enable satellite access, high-speed internet and video conferencing.

But when Hurricane Sandy hit, 110 Wall Street was rendered inoperable when the storm surge destroyed its mechanical room. Rudin was left with stark options: Convert the office building to residential or keep 25 percent of the structure and build a taller tower on the site.

Rudin invited Neumann to tour the darkened building. “Adam called me up and said, ‘I’ve got an idea,’” Rudin recalled. They would create a work-and-live utopia where people could occupy shared residential units and head downstairs to work on floors devoted to WeWork’s traditional office space.

To close the deal, WeWork committed to partially funding the $100 million conversion of part of the building to residential use.

“At that moment in time, it was very dark out,” said Rudin, who later made a modest personal investment in WeWork. “That deal was a strong ray of light and excitement and energy.”

The buildout ultimately included a cocktail bar in the basement, adding play to the work-live mix. The property opened to tenants in 2016 and was immediately seen as a popular, hip place among residents. Time magazine dubbed it “vaguely reminiscent of a college dorm” but with networking and brainstorming instead of beer pong. Neumann later said WeLive came from a desire to reduce suicide rates by ensuring that “no one ever feels alone.”

The building also played into WeWork’s vision of becoming a “physical social network.”

By then, talks between WeWork and Rudin were well underway for another project, at the Brooklyn Navy Yard, which had undergone a transformation to become a bustling business park with views of Manhattan. The campus’ leadership approached WeWork to develop a building and help the area attain a younger and more energized vibe.

Without the means to develop its own building, WeWork reached out to Rudin.

“We thought that it was unique because for WeWork, it would be their first ground-up development,” Rudin said. “This was a clean palette.”

Rudin turned to Mort Zuckerman, the chairman of Boston Properties and an early believer in WeWork. They agreed to co-develop the $410 million project and in 2017 secured a $250 million construction loan. Asking rents in the building would be between $55 and $70 per square foot.

Once completed, the building would signal a step into the 21st century for Rudin. But by the time it opened, WeWork’s many problems had poured into the public sphere, as even its co-CEO Sebastian Gunningham acknowledged at the official opening ceremony in October.

“You may have heard we’ve been in the news lately,” he said, “not all of it that flattering.”

Departure from conservatism

For more than a century, the mantra of the Rudin family had been “never sell.” But after the death of Jack Rudin, Bill’s uncle, in 2016, the family was forced to settle estate taxes and put two Downtown buildings on the market: One Whitehall and 110 Wall Street.

One Whitehall sold quickly, for $182 million. But the second property, wholly occupied by WeWork, drew less interest. WeWork had committed to paying $210 million in rent, and its business model had yet to be tested in a downturn. After Eastdil Secured circulated materials spelling out the potential impact of a WeWork default, Rudin pulled the building off the market.

Despite the about-face — and uncertainty for residents — Rudin said he intends to keep WeWork and its residential offering.

“The building is no different from where they were three months ago,” Rudin said. “The WeLive is doing well.”

At Dock 72, WeWork is still the only tenant Rudin and Boston Properties have announced. Boston Properties CEO Owen Thomas predicted it would be easier for them to find additional tenants now that the building has officially opened and prospective occupants can more easily come see it. Thomas described it as a “show me” property.

“We’ve got to get it open and have all the amenities open and all the transportation running to be more effective in the leasing,” he said. In the meantime, WeWork has been “successfully filling” its space at the property, Thomas said.

For Rudin, the relationship with WeWork has amounted to a turbulent experiment with a 21st-century tenant. His firm, founded by his grandfather Samuel Rudin in 1925, has since turned to other office-space providers, including Knotel.

“We’re entrepreneurs ourselves,” Rudin said. “Sometimes we take risks.”

The post No regrets on WeWork bets: Rudin confident on weathering WeWork storm appeared first on The Real Deal Miami.

Lake that Lake Sana Developments wants to partially fill

A property owner on a quest to partially fill an 85-acre lake in unincorporated northwest Miami-Dade for future development suffered another setback recently.

Last month, a panel of three Miami-Dade Circuit Court judges denied Lake Sana Developments’ petition to overturn a vote by the county’s Community Council 8. The council’s vote denied the Hollywood-based company’s permit to fill 29.5 submerged acres near Northwest 103rd Street and Northwest 13th Avenue.

According to a five-page order, the judge’s panel didn’t buy Lake Sana’s arguments that the community council’s decision was not “supported by competent substantial evidence.” “We find that it did, and deny the petition for writ of certiorari,” the order states. “Lake Sana makes no independent argument that the [community council] failed to observe the essential requirements of the law or that it denied the petitioner due process.”

Representatives for Lake Sana, led by Evan Kagan, did not return phone calls, but a source familiar with the owner’s plan told The Real Deal the company is going to petition the Third District Court of Appeals. The source said many large developers have provided Lake Sana with letters of intent to partner and develop the northwest Miami-Dade property into a multifamily project. According to Miami-Dade property records, Lake Sana paid $750,000 for the land in June of last year.

In its petition, Lake Sana said that whatever future plans it has for the site should not have factored into the community council’s decision to deny the fill permit. “The council heeded the outcry of those who did not want the lake even partially filled, based on speculative fears as to a potential future development that could possibly affect their personal comfort and convenience,” the petition states.

The petition asserted that objections from seven nearby residents did not constitute valid evidence to deny the permit because the potential development of the property was not part of the application. Lake Sana also argued that county staff, which had recommended denying the permit, did not present any witnesses with expertise or fact-based evidence supporting a denial.

However, the three-judge panel found that testimony from the residents who said that filling the lake would impact their quality of life was sufficient in denying the permit. The order pointed out that one of the objectors stated he moved into the neighborhood to be near the lake and that he enjoys watching the birds, while another neighbor offered similar reasons for buying a house there.

“This fact-based lay testimony regarding aesthetics and neighborhood compatibility…constitute substantial competent evidence supporting the community zoning appeals board’s decision to deny the petitioner’s permit,” the order states.

The post Northwest Dade property owner seeking to fill lake gets denied — again appeared first on The Real Deal Miami.

As deals for expensive artworks closed, so did those for luxury condos.

A total of 116 condos sold for $49 million last week during Miami Art Week, compared to 74 units that sold for a combined $30 million the previous week. Condos last week sold for an average price of about $422,000 or $294 per square foot.

The top sale was the $5.1 million trade of Ocean Tower II unit 208 in Key Biscayne. The six-bedroom, 6,701-square-foot condo was on the market for 338 days before it sold. Brigitte Nachtigall is the listing agent, while Geraldine Lanusse represented the buyer. It sold for under $800 per square foot.

Unit 612 in the south tower of the Surf Club Four Seasons in Surfside sold for $4.45 million, or $1,551 per square foot. It was on the market for 160 days before selling. The listing agent was Charlotte Maietto and the buyer’s agent was Karim Daneri.

Here’s a breakdown of the top 10 sales from Dec. 1 to Dec. 7. Click on the map for more information:

Most expensive
Ocean Tower II Condo #208 | 338 days on market | $5.1M | $761 psf | Listing agent: Brigitte Nachtigall | Buyer’s agent: Geraldine Lanusse

Least expensive
Towers of Key Biscayne #C507 | 592 days on market | $975K | $547 psf | Listing agent: Maureen Jauregui | Buyer’s agent: Fernando Echeverri

Most days on market
Acqualina #1901 | 861 days on market | $2.15M | $786 psf | Listing agent: Michael Goldstein | Buyer’s agent: Adriana Vargas Hernandez

Fewest days on market
Akoya #901 | 13 days on market | $1.15M | $653 psf | Listing agent: Mickael Lancri | Buyer’s agent: Mickael Lancri

The post Miami condo sales experience bump during Art Basel appeared first on The Real Deal Miami.

Madison Realty Capital’s Josh Zegen and Fort Partners’ Nadim Ashi

Fort Partners scored a $210 million construction loan for its Four Seasons Hotel and Private Residences in Fort Lauderdale, in one of the largest residential financings in the city’s history.

The Miami-based group secured the loan for its 22-story oceanfront luxury condo and hotel development at 525 North Fort Lauderdale Beach Boulevard from Madison Realty Capital, a New York-based construction lender. Madison Realty Capital provided the entire loan for the project.

The project is already under construction with about 60 percent of the units sold, according to a press release. The hotel and condominium development will include 148 guest rooms and 83 condos ranging in size from one- to four-bedrooms. Prices start at about $4 million.

Amenities include two pools with luxury cabanas, a beach butler service, a spa and yachting services. Pets at the luxury development will also have a pet concierge and the development will include an on-call veterinarian, according to the release.

The loan signals growing demand for luxury condo and hotels in Fort Lauderdale. The city is attracting an influx of new buyers from the Northeast due to changes in Trump’s tax plan. Nearby, the Related Group is co-developing a two-tower luxury condo development, Auberge Beach Residences & Spa.

Josh Zegen, a co-founder of Madison Realty Capital, said one reason Fort Partners was interested in working with his firm is because it could provide the entire $210 million loan, so the developer would not have to rely on other components such as mezzanine debt.

Madison Realty Capital is becoming more active in South Florida’s real estate market, especially in Broward and Palm Beach counties.

In July, the lender provided a $225 million construction loan to Penn-Florida for The Residences at Mandarin Oriental in Boca Raton. In June, the company also provided Menin Development a $72 million loan to finance construction of The Ray, a 141-room hotel planned in downtown Delray Beach.

In total, the lender has completed about $12 billion in equity and debt transactions since 2004, according to its website.

The post Four Seasons in Fort Lauderdale scores $210M loan appeared first on The Real Deal Miami.

From left: Brian Shapiro, Jo-Ann Forster, Lauren Goodkind Allan and Sande Forster Keil

Jo-Ann Forster, a top agent at One Sotheby’s International Realty, left to join Compass, The Real Deal has learned.

Forster left One Sotheby’s on Thursday and was with Compass as of Friday, according to records filed with the state of Florida. The Coral Gables agent had been with One Sotheby’s since February 2014. Before that, she worked for EWM Realty International between August 2009 and early 2014.

Forster said she was successful at One Sotheby’s, but knew she could do better at another firm.

“I think that top producers are kind of in a conundrum of what to do when they’re doing well but want to do better,” she said. “I looked around, I talked to people from coast to coast. The answer ultimately became Compass.”

Forster is now based out of Compass’ Coconut Grove office at 2550 South Bayshore Drive in Miami. She and her 14-person team, including her partners who are her son and daughter, Brian Shapiro and Lauren Goodkind Allan, joined Compass. Her sister, Sande Forster Keil, an agent on her team, also jumped over to Compass.

Forster declined to provide details of her agreement with Compass, but said that “Compass makes really strong investments in top producers” and that “they honored me with a top investment on their side, and I’m very grateful.”

Her team focuses on luxury home and condo sales from Miami Beach all the way to the Florida Keys, but Forster said she spends more time in Coconut Grove, Coral Gables, Pinecrest and Key Biscayne. Forster had been a top producer at One Sotheby’s in recent years. In 2018, she was the No. 1 agent with $65.3 million in sales volume, according to the MLS. From January to Oct. 31 of this year, her sales volume is $44 million.

“Jo-Ann has been a valued part of the ONE Sotheby’s team and we thank her for our partnership over the years. We wish her only success in the future,” One Sotheby’s president Daniel de la Vega said in a statement.

Beth Butler, director of new development for Compass in the Southeast, has been a magnet for Forster. “When I went to EWM, Beth was leaving a week later, When I went to [One] Sotheby’s, she had just left. I came over here, she walked in and said ‘I’m just telling you I’m not going anywhere,’” Forster said.

Compass has been recruiting top agents from other firms around the country and in South Florida. Fort Lauderdale agent Andy Ziffer recently joined Compass, as did Tim Elmes of Coldwell Banker.

The post Jo-Ann Forster joins Compass from One Sotheby’s appeared first on The Real Deal Miami.

Paul Volcker (Credit: Getty Images)

Paul Volcker, the former head of the Federal Reserve, who fought a war against inflation and was the driving force behind a rule to stop risky bank lending after the real estate collapse in 2009, has died at age 92.

Volcker was the Federal Reserve chairman in the 1980s at a time when inflation skyrocketed, forcing him to take drastic measures by raising interest rates to 22 percent. It infuriated housing developers.

Most recently, Volcker became known for the “Volcker Rule.” Passed as part of the Dodd-Frank Wall Street Reform Act of 2010, the “Volcker Rule” was designed to keep banks from betting on speculative investments such as mortgage backed securities that contributed to the financial crisis. Banks complain that this has directly impacted their ability to grow and make more real estate loans.

At six-foot seven-inches tall, Volcker was a larger than life type figure in Washington, D.C. with an affinity for cheap cigars and fly fishing. He was appointed to be the Fed Chairman in 1979 under President Jimmy Carter after serving as the president of the New York Federal Reserve. He served two contentious terms during President Reagan’s administration until 1987.

His fight against inflation resulted in immense pushback from the real estate industry since rising interest rates can cause mortgages and home buying to become more expensive. The move caused Americans to stop buying homes and homebuilders mailed pieces of two-by-fours to the Federal Reserve’s headquarters, according to The New York Times. Volcker ultimately was able to win his fight against inflation, keeping the inflation rate below 3 percent.

After serving at the Fed, he worked on various boards and committees, including working to return money to the families of Holocaust victims from Swiss banks. He wrote a memoir last year at age 91. He is survived by his wife Anke Dening and two children from his first wife.

The post Paul Volcker, Fed Chair who infuriated real estate, dies appeared first on The Real Deal Miami.

Zillow’s Jeremy Wacksman. The listings giant just launched an instant-homebuying business in L.A.

When Zillow Group pivoted from an advertising-based business model to algorithm-based home-flipping in 2018, its executives knew this day would come.

Zillow and other tech-driven companies were able to refine their technology enough to make tiny profits on cookie-cutter houses in deserts and small metropolitan areas.

But to make $20 billion a year in revenue from Zillow Offers within five years as executives boldly projected, Zillow would need to crack major coastal markets, where homes are at least twice as expensive, and prices can change dramatically from one block to the next. To not do iBuying would represent an “existential threat” to the $8.5 billion company, CEO Rich Barton said in October.

On Monday, Zillow announced that it would make its biggest play yet, launching an iBuying business in Los Angeles with field staff and two veteran brokers.

In L.A., Zillow plans to hire a significantly larger staff to accommodate the growth — more than double the size of any of the other 21 markets where it already operates, including San Diego, Sacramento, Houston, San Antonio, and Atlanta. Traditionally, it has hired a dozen staffers in local markets, but in L.A. it will hire about 24, though much depends on consumer demand, Zillow president Jeremy Wacksman told The Real Deal.

The company also will establish two offices to cover the city, including one in highly urbanized Irvine in Orange County to the south, according to Wacksman.

“L.A. is easily the biggest and most complex market that we are going into,” said Wacksman. “It is not a market, but a whole bunch of markets. Of the ones that we’ve opened in, it’s the biggest geographically, population and the average home price.”

The iBuying model offers sellers a chance to quickly offload their property, giving them fast access to cash to buy other homes. It’s a business with extremely thin margins, and requires Zillow to set aside large pools of money to make the purchases, perform simple updates to the property, and sell it again, with the ultimate goal of financing the buyer’s purchase through its new mortgage arm.

Zillow lost an average of $4,826 on each home sale in the third quarter, after interest expenses — up from $2,916 in the second quarter, the company revealed last month. Still, Zillow does make money on the transaction fee, which runs between 6 and 9 percent. And that’s the focus.

“We’re looking to move it as quickly as possible and earn our money off the transaction fee,” Barton said last month. “And ultimately because this transaction sits at the nexus of all of these adjacent markets that we know so well, that are big businesses in and of itself, they’re dying to be integrated into one thing.”

For Zillow, the L.A. launch will be a defining test on how far its Zestimate technology has come, and whether it can gain an edge in higher-stakes markets.

The median home price in L.A. for October was $640,000, where homes sat on the market for an average 47 days, two days longer than a year ago, according to the nonprofit listing service, California Real Estate Technology Services. That’s more than double what Zillow averaged in terms of gross revenue of $317,610 per home sold. That metric is expected to grow now that it has entered Southern California in a big way, Wacksman said.

The region is so gargantuan, according to Wacksman, that Zillow plans to open one office in Glendale and the other in Irvine, to handle newly hired field staff who will fan out across the region to snap photos of homes, and generally kick the tires to see what’s under the hood before Zillow makes an offer.

JohnHart Real Estate’s John Maseredjian and Active Realty’s Suzanne Seini

Zillow Offers also has brought on two broker partners to help: John Maseredjian, vice president of JohnHart Real Estate, who will run Zillow Offers in Los Angeles; and Suzanne Seini, partner and chief operating officer with Active Realty, who is leading the Orange County expansion.

The plans to scale are daunting.

“To be honest, it’s an unknown, given that this is a considerably larger market than all others, Maseredjian said. “All we have are these submarkets and neighborhoods with different nuances. It’ll be interesting. We are prepared for everything.”

Zillow is initially targeting certain zip codes and neighborhoods in San Gabriel Valley, Pasadena, Monrovia, Glendale, Burbank, parts of Hollywood, Long Beach, Culver City and West Hollywood, according to Wacksman.

Wacksman declined to state how much capital Zillow has set aside for its L.A. operations. However, Zillow secured an additional $500 million undrawn credit line in October, bringing its total credit capacity to $1.5 billion to support its Zillow Offers business, he said. Its total liquidity with cash and other investments is double that amount.

“We are comfortable that we have the equity and debt to handle all of this,” said Wacksman, of its L.A. gambit.

Still, its iBuying business has struggled to become profitable, as it juggles big changes to its business model, using advertising sales from its online marketing business Premier Agent — which has been in L.A. for a decade — to fund its push into buying and selling homes. Last month, the company said it sold 1,211 of the 2,291 homes bought in the third quarter, generating $385 million, up from just $11 million in the same period last year.

The rapid growth of Zillow Offers has come with mounting losses. The company reported a net loss of $65 million, with the results weighed down by the new business, which has bought and sold more than $800 million in total home sales since its inception.

Wacksman declined to say when Zillow Offers might hit break-even.

Zillow is still casting an eye over its shoulder on its iBuying rivals. That includes the likes of virtual brokerage eXp Realty, Redfin, Realogy and Keller Williams and Softbank-backed Opendoor, which just last month opened its first L.A. office in Silver Lake. The Wall Street Journal reported that OpenDoor would spend up to $800,000 for a home in L.A., and Redfin would pay up to $900,000.

Zillow Offers also plans to open in Cincinnati; Jacksonville, Florida; Oklahoma City and Tucson, Arizona, by mid-2020.

The post Zillow launches its high-stakes home-flipping business in LA appeared first on The Real Deal Miami.

West Palm Beach Marriott (Credit: iStock)

The Marriott family sold a West Palm Beach hotel for $50 million.

Property records show PBM Properties LLC, managed by Kevin Kimball, sold the 352-room West Palm Beach Marriott at 1001 Okeechobee Boulevard to LR West Palm Beach. The buyer is tied to Jackson Hole Trust Company, which manages real estate, businesses and other investments on behalf of families in the U.S. and internationally.

It sold for about $142,000 per key.

Kimball is senior managing director of J.W. Marriott, Jr. Family Enterprises, which includes investments in 19 hotels, stock and bond portfolios, and debt financing, according to his LinkedIn.

The family has owned the hotel since 2002, when it paid $20.2 million for the 8-acre property. It was built in 1981.

The 10-story Marriott has 341 rooms and 11 suites, and 12 meeting rooms with over 20,000 square feet of meeting space.

The hotel is just west of Rosemary Square in West Palm Beach, and a short drive from the island of Palm Beach. Related Companies has redeveloped portions of Rosemary Square, formerly called CityPlace. The company is also planning to spend more than half a billion dollars on projects in downtown West Palm, including a new mixed-use luxury residential tower, a second hotel next to the Hilton West Palm Beach, and 360 Rosemary, a new 300,000-square-foot office tower.

Nearby, Related is hoping to build a 25-story office tower at 134 Lakeview Avenue, in the recently created Okeechobee Business District.

Marriott International, the largest hotel company in the world, has entered the home-sharing market amid increased competition from short-term rental platforms such as Airbnb and operators like Sonder and Domio.

The post Marriott family sells West Palm hotel for $50M appeared first on The Real Deal Miami.

Brenton Saunders and his Venetian Island home

This purchase may have closed without a wrinkle.

Brenton Saunders, CEO of Botox maker Allergan, paid $10.75 million for a waterfront house on the Venetian Islands, The Real Deal has learned.

The modern home at 1142 North Venetian Drive in Miami was listed for $12.9 million. Built in 2014, the 6,685-square-foot house has six bedrooms and six bathrooms. The seller is Mark’s Home LLC, tied to John de Olazarra of Miami.

Nelson Gonzalez of Berkshire Hathaway HomeServices EWM Realty had the listing. He confirmed the price and said it is the seventh home with a price topping $10 million that he has sold so far this year.

Reid Heidenry of One Sotheby’s International Realty brought the buyer, according to a source. Neither Gonzalez nor Heidenry would disclose the buyer, citing non-disclosure agreements. But a source with knowledge of the deal confirmed it was Saunders.

Saunders is no stranger to South Florida. In September, he and his wife Amy sold a waterfront six-bedroom, 7,522-square-foot house in Palm Beach Gardens for nearly $6.5 million. They paid $6.6 million for the home less than a year earlier.

Saunders is currently president, chairman and CEO of Allergan, and reportedly earned $32.8 million in 2017, according to Bloomberg. Along with Botox, Allergan manufacturers drugs like Restasis, CoolSculpting and Juvederm.

In June, biopharmaceutical group AbbVie agreed to acquire Allergan in a cash and stock deal that would value the company at about $63 billion, according to Allergan’s second quarter earnings report. Saunders will join the board when the deal closes in early 2020 and AbbVie’s current chairman and CEO will stay in that position.

The Venetian Islands home has wall-to-wall sliding glass doors that lead outdoors, a pool, rooftop deck with spa, summer kitchen and fire pits.

The post No wrinkles here? Allergan CEO buys Venetian Islands house appeared first on The Real Deal Miami.

Softbank CEO Masayoshi Son and Goldman Sachs CEO David Solomon (Credit: Getty Images)

WeWork’s got a new bank and a new line of credit.

Goldman Sachs arranged a $1.75 billion line of credit for SoftBank Group with WeWork listed as a co-borrower, according to Bloomberg. The credit line is part of a larger bailout package SoftBank has committed to securing.

WeWork was listed as a co-borrower in a bid to attract other lenders willing to front lines of credit to the beleaguered co-working company, which is desperate for cash after its failed initial public offering, Bloomberg reported.

The new credit line replaces the company’s previous $1.1 billion facility and will reportedly free up additional cash previously being used as collateral. To complete SoftBank’s plan for $5 billion in debt financing for WeWork, a further $3.3 billion is needed. According to Bloomberg, Goldman is canvassing other banks in a bid to secure the rest of the plan by the end of the year.

Following WeWork’s botched IPO in September, co-founder Adam Neumann was ousted from his role as CEO and SoftBank assumed a controlling stake in the company.

To prevent the co-working firm’s bankruptcy, SoftBank ironed out a $9.5 billion rescue package with a $5 billion debt facility, a $1.5 billion commitment and a $3 billion stock tender offer.

SoftBank had delayed paying out the $3 billion offer, prompting WeWork’s junk bond price to sink and its risk premium to skyrocket.

Prior to Goldman Sachs leading its search for financing, WeWork largely relied on advice from JPMorgan Chase, which has had to defend its role in the failed IPO and the suspect corporate governance. JPMorgan’s CEO Jamie Dimon last month said he and the bank have “learned lessons” following the WeWork implosion. [Bloomberg] — Erin Hudson

The post Goldman Sachs will lead Phase II of SoftBank’s WeWork rescue plan appeared first on The Real Deal Miami.

Elysee building at 788 Northeast 23rd Street

The tallest building in Miami’s Edgewater neighborhood topped off construction at 57 stories high and 649 feet tall.

Two Roads Development’s waterfront Elysee condominium at 788 Northeast 23rd Street is scheduled for completion in 2020.

Designed by architect Bernardo Fort-Brescia of Arquitectonica, Elysee’s multi-tiered facade allows the building to get wider as it gets taller. The building overlooks Biscayne Bay and sits just north of downtown Miami.

Units are priced from about $1.8 million to north of $10 million. The 100 half-floor and full-floor condos range from three- to six-bedrooms between 2,200 and 6,000 square feet in size, according to a press release.

The lobby level will include a lounge and a waterfront pool, while the seventh-floor amenity level will be stocked with a resort-size “sunset” lap pool, a fitness center and yoga studio, a spa with private sauna, steam and massage rooms, a blow-dry bar and a children’s playroom.

In July, an 11,600-square-foot, three-story penthouse sold for $12.8 million – marking the highest price paid for a condo in Edgewater. In January, Douglas Elliman took over sales of the luxury condo tower from Cervera Real Estate at 50 percent sold.

In August 2018, Two Roads Development secured a $138 million construction loan from JPMorgan Chase.

The post Edgewater’s tallest building tops off at 57 stories appeared first on The Real Deal Miami.

The Obamas and 79 Turkeyland Cove Road (Credit: Getty Images, Zillow)

Former President Barack Obama and First Lady Michelle Obama recently closed on an $11.75 million, 6,900-square-foot estate in Martha’s Vineyard, making it the priciest post-presidential pad in history.

But the Obamas are only the latest former first couple to retire to comfy confines after moving out of 1600 Pennsylvania Avenue. In 2008, George W. and Laura Bush snapped up a Dallas property just after the Dow Jones tanked.

Bill and Hillary Clinton paid $1.7 million for a home in toney Chappaqua, N.Y., in 1999. That positioned Hillary Clinton for her successful Senate campaign. More real estate purchases were to come for the Clintons.

George H.W. Bush and Barbara Bush retired to their sprawling estate in Kennebunkport, Maine; while Ronald and Nancy Reagan moseyed on back to their “Ranch in the Sky” in California.

Jimmy and Rosalyn Carter returned to their longtime, modest ranch-style house in Georgia, after he lost his re-election bid in 1980.

And what is now the most expensive post-presidential property once belonged to one of the most infamous presidents. Richard and Pat Nixon retreated to their home in San Clemente, California, after he resigned amid what would have been certain impeachment in the House of Representatives and potential conviction in the Senate.

Barack and Michelle Obama

The Obamas’ new home on Martha’s Vineyard

The former first couple’s 29-acre spread on the moneyed Massachusetts island was actually snagged at a 20 percent discount from its asking price. The listing had been slotted at $14.9 million. The Obamas actually rented the estate before deciding to buy.

Their new residence at 79 Turkeyland Cove Road has a pool and an outdoor stone fireplace surrounded by lush hydrangeas. The seven-bedroom home also has high-vaulted ceilings with exposed beams and a massive kitchen — as well as a private beach. In 2017, an Obama family spokesperson denied a rumor that the couple had been eyeing two much larger parcels on the island owned by Caroline Kennedy and her husband.

George W. and Laura Bush: Dallas

George W. Bush’s Preston Hollow home

In 2008, just days after the Dow Jones fell 777 points, Laura and George W. Bush paid $3 million for an 8,501 square-foot pad in an upscale North Dallas neighborhood. The house is on a quiet cul-de-sac on a 1.13-acre lot, with an outside fireplace and a separate servant’s quarters.

The former first couple spend most of their days in the ultra-chic Preston Hollow neighborhood, near Dallas Mavericks owner Mark Cuban. He bought the Texas Rangers from Bush and other investors in 1988. Another neighbor was oil magnate and corporate raider T. Boone Pickens, who lived there until his death in September.

Separately, the Bushes owned a home in the Texas hill country near Crawford. It was 43’s favored retreat during his presidency. The couple rarely spends time there now, according to reports.

Bill and Hillary Clinton: Chappaqua, N.Y.

The Clintons’ Chappaqua home (Credit: Getty Images)

In 1999, the Clintons bought a 5,300-square-foot home at 15 Old House Lane, in Chappaqua, New York, for $1.7 million. The purchase was made as Bill Clinton was leaving the White House and Hillary Clinton was planning her Senate run.

In 2000, the Clintons bought another multimillion-dollar home, this one in the nation’s capital. The $2.85 million, 5,500-square-foot home on “Embassy Row” has seven bedrooms, a den, and a pool on grounds surrounded by trees.

But the couple apparently liked Chappaqua, an exclusive neighborhood near where New York Gov. Andrew Cuomo shared a home with now-ex and celebrity chef Sandra Lee. In 2016, the Clintons purchased a second house on Old House Lane in Chappaqua, for $1.16 million. The 3,631-square-foot home sits on 1.6 acres and boasts three bedrooms and four baths, with a chef’s kitchen and a fireplace in the family room.

George H. W. and Barbara Bush: Kennebunkport, Maine

The main home on the Walker’s Point compound (Credit: Wikipedia)

When George H.W. and Barbara Bush left the White House in 1992, they returned to their home in Kennebunkport, Maine. The former president purchased the estate from his father in 1977.

The compound, called “Walker’s Point,” was built by his grandfather, David Davis Walker, in the 1870s. The New England-style house sits on nine acres and has nine bedrooms, a library, kitchen and dining room, numerous patios and decks, a private beach and a tennis court. The parcel was assessed at $13.1 million in 2018, according to Kennebunkport tax records.

Ronald and Nancy Reagan: Simi Valley, California

Rancho del Cielo

The couple purchased this massive, 688-acre estate in 1974 for $527,000. They swiftly named the retreat “Rancho del Cielo,” or “Ranch in the Sky.” The Simi Valley ranch overlooks the Santa Ynez Valley and boasts views of the Pacific Ocean. The 1,600-square-foot house has two bedrooms, a large living room and kitchen. But the real draw is the land — filled with hardwood trees and ponds where the couple would canoe.

It was also the place where the former president conducted official state affairs when away from the White House — and entertained heads of state and VIPs, including Queen Elizabeth II and Prince Philip, former Soviet leader Mikhail Gorbachev and former British Prime Minister Margaret Thatcher.

Jimmy and Rosalyn Carter: Plains, Georgia

Jimmy Carter’s Georgia home (Credit: Library of Congress)

The couple’s post presidential pad has also been their only home, for almost 60 years. The Carters have owned the 1961 Ranch-style house at 209 Woodland Drive since it was built. The modest, 4,000-square-foot abode has four bedrooms and 3 bathrooms, according to Zillow. The Zestimate for it was pegged at around $200,000.

Richard and Pat Nixon: San Clemente, California

La Casa Pacífica (Credit: Wikipedia)

Richard Nixon purchased his 9,000-square-foot home for $1.4 million in 1969. It sits on 5.45 acres.

Combined with the other buildings, the estate had a total living space of 15,000 square feet, including Nixon’s ocean-view office, a swimming pool, an illuminated tennis court and a greenhouse. Nixon called the expansive estate “La Casa Pacífica.”

The property has been listed for as much as $75 million — the asking price it reached in 2015 — and was discounted to $57.5 million earlier this year.

The post Post-presidential pads: After the White House, what comes next? appeared first on The Real Deal Miami.

A rendering of CocoWalk (Credit: iStock)

Sweetgreen, a fast-casual salad concept, is expanding to the Sunshine State with its first locations in Coral Gables and Coconut Grove, The Real Deal has learned.

The chain of restaurants, with 100 locations in New York, Boston, Chicago, California and other markets, announced it is coming to Miami in an Instagram post showing a piece of kale taped to a wall – a play on the banana that sold at Art Basel Miami Beach for $120,000 last week.

Sweetgreen announced it was expanding to Miami, Denver and Austin in September when it closed on a $150 million funding round that values the Los Angeles-based company at $1.6 billion, according to a press release. Lone Pine Capital and D1 Capital Partners led the most recent round.

Sweetgreen will open at 120 Giralda Avenue in Coral Gables, according to the city’s business improvement district website. It will also open at CocoWalk, sources said. CocoWalk reshared Sweetgreen’s post on Instagram.

 

View this post on Instagram

 

Miami, we’re coming.

A post shared by sweetgreen (@sweetgreen) on Dec 9, 2019 at 2:45pm PST

In addition to its standalone locations, the salad startup has over 400 “outpost” locations with plans to expand to 600 by the end of 2019, an earlier release said. Those locations provide free delivery at offices, such as WeWork locations.

Sweetgreen will join recently announced tenants at CocoWalk including Spaces at One CocoWalk; Planta, a plant-based restaurant led by Steven Salm’s Chase Hospitality Group and co-founder and Executive Chef David Lee; Salt & Straw; pizzeria Mister 01 Extraordinary; The Spot Barbershop; Edward Beiner; The School of Rock; and Los Generales Mezcal & Grill.

Federal Realty Investment Trust, Grass River Property and the Comras Company are redeveloping the outdoor mall at 3015 Grand Avenue to include a total of 100,000 square feet of office space and 150,000 square feet of retail, dining and entertainment space. The partnership paid about $87.5 million for the property in May 2015. CocoWalk opened in 1990.

The post Sweetgreen expanding to Florida with first locations in Miami appeared first on The Real Deal Miami.

HFZ managing director John Simonlacaj and The XI development (Credit: LinkedIn and Wikipedia Commons)

The Gambino crime family bought off a top executive at HFZ Capital Group, federal prosecutors allege.

Feds say that 50-year-old HFZ managing director John Simonlacaj let the mob skim hundreds of thousands of dollars from the company’s High Line development, the XI, and other Manhattan projects. The City first reported news of the charges.

Simonlacaj, who oversaw construction of the 950,000-square-foot condo and hotel project, surrendered on Friday and pled not guilty to tax fraud and wire fraud conspiracy charges. He was released after posting $250,000 bail.

Simonlacaj’s cousin Mark “Chippy” Kocaj and alleged members of the Gambino family operated the Mount Vernon carpentry firm CWC Contracting and gave HFZ employees hundreds of thousands of dollars in kickbacks and bribes between June 2018 and this past June to get on the inside track with the firm, according to prosecutors. This included providing free labor and materials for renovations at Simonlacaj’s home in Scarsdale, court papers say.

The XI is still under construction along the High Line. The pair of towers, designed by Bjarke Ingels, will include a Six Senses Hotel. In June, New Zealand’s richest man Graeme Hart went into contract for a $34 million penthouse at the property. The project has 236 condos with a projected sellout of $1.96 billion.

Thanks to market conditions and slow sales to start, whether or not HFZ chief Ziel Feldman will turn a profit on the project remains a question. Earlier this year, Leonard Steinberg, president of Compass , told The Real Deal, “I can’t imagine Ziel losing money. It would be unusual for him.” [The City]  — Eddie Small

The post Flashy Bjarke Ingels-designed project was ATM for the mob: Feds appeared first on The Real Deal Miami.

Ben Carson (Photos by Stephen Voss)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

— Edited and condensed for clarity.

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

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

A rendering of Via Ventura and Stuart Miller (Credit: Lennar)

Lennar sold part of its property in the Via Ventura community near Aventura for $9.1 million.

The Miami-based homebuilder sold a lake in the community it is developing at 20890 San Simeon Way to the San Simeon Community District. The district is designed to provide financing for community infrastructure, facilities and services. A community development district is a special purpose government agency in Florida, used as a mechanism to allow developers to pay and finance costs for home communities.

In this case, the San Simeon Community District will finance the stormwater management system, water distribution system, wastewater collection system, park improvements and roadway improvements, according to county documents. It will also manage the community.

Via Ventura is a 181-acre residential development that will have 55 single-family homes, 393 townhomes and 254 villas. Lennar purchased the site in $40 million in October 2017, records show. Prices for single-family homes at Via Ventura start at $427,000.

Among homebuilders, Lennar is one of the most aggressive land buyers. Historically, the strategy has paid off and has led to Lennar emerging as the country’s largest homebuilder, thanks to its reasonably priced single-family homes.
Recently, a number of indicators, however, show that the housing market is slowing down.

The post Lennar sells off part of its Via Ventura community appeared first on The Real Deal Miami.

Toll Brothers CEO Doug Yearley (Credit: iStock)

Lackluster home sales took a bite out of Toll Brothers’ 2019 profits, which dropped 20 percent to $590 million, the homebuilder reported Monday.

The Pennsylvania-based firm reported $7.08 billion in 2019 revenue from home sales, down 1 percent year over year. Net signed contract value dropped 12 percent to $6.71 billion.

But the company said buyer demand rose during the fourth quarter of the year — signaling improvement ahead. At the end of the quarter, the number of contracts was up 18 percent year over year.

During an earnings call Tuesday, CEO Doug Yearley said several markets — including California and New York City — “feel better” than they did a year ago.

“Southern California was pretty flat and it’s running at about the company average for sales,” he said. “New York is not back to where it was four to five years ago, but it’s better.”

Still, Toll’s stock dropped 3.27 percent to $40.04 per share on Tuesday afternoon, after the company said its gross margins would contract in 2020. The fourth-quarter order growth was “below our estimate and we believe investor expectations,” analyst Michal Rehaut of JPMorgan wrote in a research note.

During the call, Yearley reiterated the company’s strategic expansion into new geographic regions and lower price points to meet demand for so-called “affordable luxury” homes.
“We remain committed to our luxury niche,” Yearley said. Still, there are a “growing number of millennials who are older, more affluent and discerning when they buy their first home,” he said, comparing Toll’s affordable luxury homes to BMW’s 3 Series.

During the fourth quarter, Toll reported net income of $202.3 million, down from $311 million a year prior. Toll said home sale revenues dropped 7 percent to $2.29 billion.

Net contract value rose 12 percent to $1.68 billion, but the company’s backlog at the end of the quarter was $5.26 billion, down 5 percent year over year.
For the first quarter, Toll anticipates delivering 1,650 to 1,850 units, with an average price between $800,000 and $820,000 — down from $863,000 a year ago. The drop is “strategic” and reflects Toll’s new focus on affordable luxury, said CFO Marty Connor.

In New York City, Toll has avoided “super luxury,” Yearley said. “We’re focusing on $2,000 per square foot in Manhattan and $1,000 on the Jersey side,” said Yearley. “That is relatively affordable in the New York City market.”

The post Toll’s profits plunge 20% amid housing slowdown appeared first on The Real Deal Miami.

Realogy CEO Ryan Schneider

Ryan Schneider likes to keep Realogy’s eyes on the prize: better agents, better products and better technology that will keep the firm profitable in the long run. The rest — lawsuits, short-term stock price fluctuations, rivals flaunting big signing bonuses — is all noise.

“In an industry where three of the top six-owned brokerages lose money, we like to make a substantial amount of money,” Schneider told Inman in an interview. “We like the fact that the market is looking for that flight to quality and we’re seeing that show up in the competitive environment, also.”

Schneider discussed Realogy’s approach to cost-cutting. The firm, parent company to brands such as Coldwell Banker, Sotheby’s International Realty and the Corcoran Group, has shut several offices this year, combined teams, and even sold off businesses to get costs under control. But all that, he said, has to come hand-in-hand with investment in the firm’s main business.

“I tell my team all the time, ‘you can’t cut your way to greatness,’ he said. “You’ve got to actually drive growth.” During the third quarter, Realogy generated $1.6 billion in revenue, down 2.8 percent year-over-year. The company said it lost $69 million during the quarter, compared with last year’s net income of $104 million, which it attributed to an impairment — or write-down in value — of its NRT business.

Without naming the likes of Compass, which Realogy is engaged in a major lawsuit over the SoftBank-backed brokerage’s competitive practices, Schneider said that six- and seven-figure signing bonuses were “not economic or sustainable.” Compass has said that it was approached by Schneider regarding it potentially buying Realogy, which Realogy has denied.

Schneider also discussed the big trends that Realogy was tracking in 2020, including the instant-homebuying craze known as iBuying that has been taken on by everyone from Zillow to Opendoor to Keller Williams, as well as Realogy. Its approach to iBuying, known as RealSure, gives sellers the “certainty of an offer that they can get for 45 days and we try to sell their house for the best price possible,” he said. [Inman] — TRD Staff

The post Realogy boss on cost-cutting, the competitive landscape and what to look for in 2020 appeared first on The Real Deal Miami.