(iStock)

Homeowners looking to refinance their mortgage are going to be in for a pricier ride. And mortgage and housing professionals, who’ve benefited from record low rates to do brisk business, are miffed.

Freddie Mac and Fannie Mae said Wednesday that they will charge an additional 0.50 percent, or 50 basis points, fee to lenders on refinance loans. That means the average consumer looking to refinance a home will soon be paying $1,400 more than they would previously, according to the Mortgage Bankers Association.

Fannie and Freddie cited Covid-related losses from the coronavirus and economic uncertainty to justify the fee hike, which kicks in in September. The government-sponsored entities, which are under the oversight of the Federal Finance Housing Agency (FHFA), do not originate mortgages, but instead buy loans and repackage them through securities.

The move was a shock to the mortgage and housing industry who were seeing a huge uptick in refinancings due to historically low mortgage rates. The 30-year fixed-rate mortgage averaged 2.96 percent for the week ending Aug. 13, according to Freddie Mac.

“Tonight’s announcement by the GSEs flies in the face of the Administration’s recent executive actions urging federal agencies to take all measures within their authorities to support struggling homeowners,” Bob Broeksmit, CEO of the Mortgage Bankers Association, said in a statement on Wednesday.

Industry insiders say the FHFA may have another motivation to raise these fees.

“It’s a money grab here,” said Greg McBride, chief financial analyst at Bankrate. “The government sponsored enterprises are trying to get their hands in the consumers’ pockets.”

Some say the FHFA could be looking to the success of mortgage companies like Rocket Companies, the parent of Quicken Loans, and looking to benefit from the flurry of refinancings. Rocket Companies recently had an Initial Public Offering where it priced its shares at $18 a piece for 100 million shares, allowing the company to raise up to $1.8 billion.

The fee increase will impact both homeowners who are seeking to get a refinance and those that have already requested to refinance, but have yet to lock in their rate. The FHFA did not immediately return a request to comment.

Some lenders, however, don’t seem too concerned about the move, considering that mortgage rates are still at record lows. Banks have relied on refinancing during a time when other lines of business such as commercial real estate lending are being hurt by Covid.

“There will still be demand, just not at a spike like in the last 60 days,” said David Druey, who heads the Florida region for Centennial Bank. “We don’t anticipate any steep drops in the number of requests until mortgage rates climb by at least half a point.”

The timing of the fee hike has puzzled some industry insiders, given that the Federal Reserve is buying $40 billion of mortgage backed securities every month. The Fed’s asset purchases are designed to boost liquidity into the marketplace and encourage lenders to keep making loans.

“Housing has been a big part of the Fed’s toolkit. They are desperately hoping that they can then help the broader economy,” said Chris Whalen, an investment banker who runs Whalen Global Advisors. “This is totally contrary to what they need to be doing.”

The fee increases also come at a time when the FHFA is seeking to return Fannie and Freddie back to privatization after scoring a $190 billion bailout during the housing crisis. The agency could be seeking to increase Fannie and Freddie’s capital levels to bolster its financial position.

In its most recent quarter, Fannie and Freddie combined booked $4.3 billion in profits, earnings statements show.

Whalen adds that by making this move, FHFA head Mark Calabria, who was formerly a director at the Cato Institute, is going to face some heat.

“He has picked a fight with the entire housing industry,” Whalen said. “And everyone is going to come after him.”

The post Mortgage refis will get a lot more expensive. The industry isn’t happy appeared first on The Real Deal Miami.

Joe Biden (Getty)

Presidential candidate Joe Biden’s proposal to axe like-kind exchanges for real estate — part of his plan to offer more federal aid to children, senior citizens and people with disabilities — makes veteran investment sales broker Bob Knakal think of New Years Eve in 2012.

Knakal was racing against the clock to close 23 deals with buyers who all wanted to defer taxes by rolling their capital gains on recent sales into new properties using the federal tax code’s 1301 provision.

The flurry of activity was due to Obamacare’s 3.8 percent Medicare tax on capital gains that went into effect the following day, and the threat that Congress might soon pike 1031 exchanges as well. Knakal said the fear fueled so many eleventh-hour deals that his brokerage at the time, New York-based Massey Knakal (which was acquired by Cushman & Wakefield two years later), made 60 percent of its revenue during 2012’s fourth quarter.

“I think the same thing could happen this year,” said Knakal, who now co-chairs New York investment sales at JLL.

Biden’s proposal, which he announced during a campaign speech in New Castle, Delaware, could have big impacts for property owners large and small. Like-kind exchanges are estimated to account for as much as 20 percent of all commercial real estate deals around the country, a market that was valued at $560 billion in a 2019 analysis by Real Capital Analytics of property sales of $2.5 million or higher.

Biden says eliminating 1031 exchanges for well-heeled real estate investors, as well as stepping up tax enforcement for the wealthy, will amount to $775 billion over a decade. Congress’ Joint Committee on Taxation projected that between 2019 and 2023 real estate investors will defer $51 billion in capital gains using like-kind exchanges, as cited by Bloomberg.

Like-kind exchanges have been on the chopping block plenty of times before, so some are dismissing Biden’s proposal as an empty threat. But the Democratic candidate may be able to count on a fresh surge of partisan support considering President Donald Trump’s penchant for using 1031 exchanges in his real estate business.

Knakal is of the latter mindset. Though he wouldn’t provide further details, the broker claimed to have four properties on the market now where the sellers have told him they want to offload their properties by year-end due to Biden’s proposal. “People are definitely giving it credibility and it’s impacted the decision-making for some,” he said.

Camille Renshaw, co-founder and CEO of New York-based commercial brokerage B+E, which specializes in 1031 exchanges involving net-lease properties, said the phones in her office have been blowing up since Biden’s announcement. She argued that the property owners who would be left most exposed if the tax provision were eliminated are far less wealthy than Trump and his well-heeled peers.

“Most of these people aren’t Trump,” she said. “It’s usually working class people who made a big pop of money through real estate in their life.

In the grand scheme?

For many, however, Biden’s proposal to kill the tax provision — once and for all — is the least of their problems.

“I struggle to think that a real change in 1031 is in the cards,” said Rick Jones, partner and co-chair of Dechert’s global finance and real estate. “It’s like about worrying about a zit on the end of your nose when you’re about to get hit by a tsunami.”

Exhibit A: a global pandemic and economic fallout with no end in sight. That’s followed closely by the potential meltdown of commercial debt markets, among many other factors.

Though Biden’s proposal seems like a no-brainer for Democrats, trade organizations and some economists agree that the 1031 provision stimulates transactions, which in turn generate tax revenue for local government, and jobs for intermediaries on each deal. And there’s evidence that eliminating 1031 slows market activity.

Like-kind exchanges were banned for assets including artwork under the Trump administration’s 2017 Jobs Act, and art dealers say the tax change led to a subsequent slump in discretionary sales of high-priced works.

But fears that a similar thing could occur in commercial real estate is tempered because, as many, including Jones and Knakal, point out, this is far from the first time 1031 has been on the chopping block, and it’s always escaped unscathed.

In 2017, as President Trump began cutting away pieces of the tax code, like-kind exchanges appeared to be headed for the history books. But real estate investors were spared and the exchange disappeared for all assets except property, leading to speculation that the reprieve was due to Trump’s own use of 1031 in his investments.

The Trump Organization used a like-kind exchange in 2005 to defer capital gains tax on $1 billion in profits earned through the sale of a development site on Manhattan’s Upper West Side. The funds were redirected into the purchase of two office buildings, at 1290 Sixth Avenue in Manhattan and 555 California Street in San Francisco, under the 1031 provision.

Bloomberg reported in June that the Trump Organization is considering selling its stake in both assets — which would mean the company may either be teeing up another exchange or preparing to face a significant tax bill.

James Nelson, head of Tri-State investment sales at Avison Young, said half of the firm’s deals had one party using the transaction as part of a like-kind exchange.

Many in the industry, however, push back on the idea that 1031 exchanges are a mechanism for wealthy real estate investors and institutions to skip out on taxes. Some like Starwood Property Trust’s Barry Sternlicht don’t like property taxes, but eschew like-kind exchanges. During his firm’s second quarter earnings call, a few weeks after Biden’s proposal came out, Sternlicht said he has never used the 1031 provision, which he referred to as lifetime exchanges, and that the tax code “should go away.”

“It isn’t required and it isn’t helpful to real estate,” the Starwood chairman and CEO said.

Renshaw — who maintains that mom-and-pop real estate owners would take the biggest hit — called a like-kind exchange of more than $10 million unusual. Most 1031 transactions her brokerage handles range between $3 million and $4 million, she said. Deals that use the tax code provision to gain capital gains account for half of B+E’s business.

Less established real estate owners are “trying to protect wealth for the next generation,” Renshaw said.

Death and taxes…

In the case of the ultra-rich, however, that’s exactly what lawmakers are trying to avoid.

When a 1031 investor dies, all deferred capital gains taxes owed are wiped out, with beneficiaries responsible for just an estate tax. Biden’s proposal would address that concern among smaller investors by allowing like-kind exchanges to continue for those making under $400,000 a year.

Economist Sam Chandan, dean of NYU’s Schack Institute of Real Estate, argued that regardless of the merits of Biden’s proposal — which the presidential candidate says will go toward universal childcare and in-home care for seniors — 2020 is not the time.

Removing like-kind exchanges would have a downward effect on pricing that he argued could compromise banks and lenders.

“Roughly 50 percent of banks’ exposure in the United States is real estate or construction loans,” said Chandan. “To further downward pressure on asset values at this point in time could have potentially significant spillovers into the health and stability of some banks, which would be highly undesirable. We need credit to flow.”

Jeffrey DeBoer, head of the Real Estate Roundtable in Washington, D.C, said the national trade group would support a Congressional review, but stressed the importance of like-kind exchanges “during economic downturns when access to capital is less certain.”

James Whelan, president of the Real Estate Board of New York, echoed that. “It falls in the category of … if it ain’t broke, don’t fix it,” he said.

Dechert’s Jones attributed his blasé outlook on Biden’s proposal to the fact that many Democrats use like-kind exchanges for their own personal wealth, noting that “lots of big dollar D’s do 1031s.”

“Mr. Obama didn’t get rid of it and he controlled both houses at one point,” Jones said. “As Michael Jordan said when asked why he was not more political: ‘Republicans buy sneakers too.’”

The post Ending 1031 exchanges: Would Biden’s plan hurt smaller owners more than Trump and peers? appeared first on The Real Deal Miami.

Three Hundred Collins

Three Hundred Collins in Miami Beach’s South-of-Fifth neighborhood is besieged with poor quality interiors, debts to contractors and an unresponsive developer, among other problems, according to a recently filed lawsuit.

The 300 Collins Condominium Association is suing JHPSB Collins Development, marking the latest salvo from buyers who allege they were duped into purchasing units in a condominium that is not as luxurious as advertised in marketing materials. The building at 300 Collins Avenue has 19 units that ranged in price from $1.7 million to $9 million.

The complaint was filed in Miami-Dade Circuit Court, three days after Miami-Dade Judge William Thomas granted summary judgment in favor of JHPSB in a separate lawsuit that made similar allegations, filed by individual unit owners as the plaintiffs.

According to Thomas’ order dismissing the first lawsuit, the judge ruled that under Florida law the condo association, and not the individual buyers, had the right to sue.

“We feel this [new lawsuit] is baseless,” said JHPSB’s attorney Marko Cerenko. “We feel strongly this one has no merit either and we dispute the allegations.”

Donald Hayden, the association’s lawyer, declined comment.

The five-story boutique condominium started off as a joint venture project between New York developer Jason Halpern and his silent partner, Dhruv Piplani. The partnership fractured and a legal battle ensued. Two years ago the same judge ordered Halpern’s JMH Development to turn over its remaining interest in Three Hundred Collins to PSB Collins, an entity managed by Piplani.

In March, the Third District of Appeals denied JMH’s petition to overturn Thomas’ partial summary judgment for PSB Collins, according to court documents.

In the most recent lawsuit, the condo association alleges JHPSB refuses to turn over the building and has gone AWOL in addressing a litany of unfinished construction work and fixes.
Unit owners found that many of the most basic elements — such as electric garage doors, the pool deck and an ornamental fountain — “were installed cheaply or improperly, have been prone to malfunction or were never completed at all,” the condo association claims.

“Punch lists promised to be addressed by the developer within 60 to 90 days of closing have been ignored,” the lawsuit states. “In recent months, some of the malfunctions and neglect in the maintenance of this luxury building have led to life safety issues.”

Those defects include loss of air conditioning for multiple days in the heat of summer, malfunctioning elevators and a malfunctioning garage gate. JHPSB knowingly substituted substandard products and finishes to the detriment of the individual unit owners and the building as a whole, the condo association alleges.

In addition, the complaint said contractors and vendors who allegedly haven’t been paid have refused to come back and fix critical issues. Court records reveal five other pending lawsuits against JHPSB filed by construction firms and subcontractors that worked on the project.

“Since Piplani, through his corporate entity, PBS Collins, has taken over the control and management of the developer, no material movement has been made toward completion of the building,” the lawsuit states. “The unit owners have been left in the dark.”

The complaint alleges the condominium should have been turned over in late 2018 when the developer had closed on 94 percent of the units.

High-profile buyers at Three Hundred Collins include cosmetics executives Richard Ferretti and his husband, James Gager, who paid $5.8 million for a penthouse; New York-based ATM clothing designer and founder Anthony Thomas Melillo, who paid about $2 million for a unit; and celebrity restaurateur Myles Chefetz, who owns the nearby Prime 112 and Prime Italian.

The post Three Hundred Collins allegedly marred by cheap materials, unpaid contractors and duped investors: lawsuit appeared first on The Real Deal Miami.

Vizcaya Museum and Gardens and Joel Hoffman (Credit: Robin Hill)

After months without visitors, the historic Vizcaya Museum and Gardens launched a $1 million coronavirus relief fundraising campaign to compensate for lost revenue and stay open.

In a letter sent to Vizcaya supporters, Joel Hoffman, CEO and executive director, said this is “Vizcaya’s hour of need” and that support is “critical to keep Vizcaya open, protected and preserved.”

The waterfront Coconut Grove museum, at 3251 South Miami Avenue, is the former villa and estate of the late businessman James Deering. Vizcaya estimates it will have lost about $3 million by its fiscal year end, at the end of September, Hoffman said.

Prior to the pandemic, nearly 370,000 visited Vizcaya each year. In addition, it was a venue for weddings, other events and photoshoots. The 10-plus-acre bayfront property closed for two months and reopened May 10, but still can’t host events or hold photoshoots. Hoffman said about 25 percent of visitors have returned.

The property is south of the Rickenbacker Causeway connecting Miami to Key Biscayne, and northeast of downtown Coconut Grove, where a number of new residential projects are underway.

The funds would be used to continue to preserve and protect Vizcaya, providing bridge funds during the pandemic.

“Cultural organizations are encouraged to have cash reserves. During this crisis, like many other cultural organizations, we have begun to spend through those,” he said. “It’s very worrying to deplete cash reserves, especially when you’re a massive historic property in a hurricane-prone environment.”

Miami-Dade County owns the property, buildings, assets and collections, and the non-profit has operated the museum and gardens since 2017. The county provides Vizcaye with $2.5 million a year.

Vizcaya also received a $1.1 million Paycheck Protection Program loan and a $190,000 CARES Act grant.

Write to Katherine Kallergis at kk@therealdeal.com

The post Vizcaya needs money to operate, launches $1M fundraising campaign appeared first on The Real Deal Miami.

Kamala Harris and donors (clockwise from lower left) Francis Greenburger, Ron Moelis, Douglas Durst, Charles O’Byrne and Jonathan Gray (Getty)

Kamala Harris has a reputation as a tough negotiator, extracting the second-largest settlement in U.S. history from big banks, which paid $25 billion for their role in the foreclosure crisis.

But there’s more to that story.

Joe Biden’s just-announced running mate has touted for years that she forced the banks to cough up another $5 billion. “President Obama stood with me and 48 other attorneys general in taking on the banks and winning $25 billion for struggling homeowners,” Harris said in her 2012 Democratic National Convention speech.

But other attorneys general, notably Eric Schneiderman in New York, took that stand before Harris, who as California’s top lawyer hesitated until Schneiderman’s office marshaled housing activists and pressured her then-rival Gavin Newsome to oppose a more lenient agreement. Only after Newsome wrote a letter opposing a lesser settlement did Harris walk away from the talks, prompting the banks to offer more money.

Amy Schur, campaign director for Alliance of Californians for Community Empowerment, which pushed Harris to oppose the initial settlement, said Harris is “not very different from the majority of elected officials.”

“It was when we pushed her to meet with and hear directly from people losing their homes unfairly, and she heard from community groups and unions across the state — organized groups with some power — that we saw her moving to action,” Schur said.

Things actually could have been worse for mortgage lenders. More radical plans were on the table to hold them accountable for bad practices — including fraudulently foreclosing on properties and back-dating mortgages — that cost many Americans their homes.

Sheila Bair, as chair of the Federal Deposit Insurance Corporation, drafted a $24.4 billion proposal which the banking industry panned. It called for reducing mortgage payments to 31 percent of borrowers’ income, with the government covering half the losses if those borrowers defaulted. That plan was scrapped in favor of a settlement.

While the 2012 settlement carried a lofty price tag, it spared lenders from further liability. That helps explain the real estate and finance sectors’ comfort with Harris and why her earlier presidential campaign enjoyed steady support from banks, private equity firms, real estate developers and brokerages.

“People in the real estate business appreciate tough negotiators when they feel they’re on their side,” said Time Equities CEO Francis Greenburger, who has donated to Harris’ campaign. “And while as the vice president, presumably, she could be on the other side of an issue, she is seen more as a moderate than an extremist, and is closer to Biden than Bernie [Sanders] or Elizabeth Warren.”

Harris’ short-lived presidential campaign drew support not only from major banks but from some big names in real estate.

Blackstone chief operating officer Jonathan Gray and his wife Mindy each donated $2,800. Douglas Durst, who leads the Durst Organization, donated $1,000. Affordable housing developer Ron Moelis, head of L+M Development, also chipped in $1,000, a month before Harris suspended her campaign.

Beatrice Hsu, senior vice president of development at Brookfield Property Partners, donated $2,800. Related Companies’ top lobbyist, Charles O’Byrne, supported Harris’s Senate campaign, and staffers from the development firm have backed her over the years.

“If Joe [Biden] had asked me, which he didn’t, that’s who I would have recommended,” Durst said in a statement about Harris. “She is a great choice and I am a big supporter.”

Besides her reputation as a moderate, rather than a champion of populist ideologies that have unnerved real estate executives, Harris has a compelling narrative that sets the industry at ease, sources say.

One political operative called Harris “pragmatic and charismatic.” The coalition that is interested in removing President Donald Trump from power, which has grown to include many in the financial sector, does not find Harris “as frightening,” the person said.

“She is someone who is thoughtful, but incremental,” the politico said. “She’s always looking for the sweet spot to do what’s right and what’s achievable.”

The post Did Kamala Harris really stare down housing lenders? appeared first on The Real Deal Miami.

Photo illustration of Masayoshi Son (Getty, iStock)

SoftBank is pouring $1.1 billion more into WeWork as the flexible-office giant sees membership fall.

In a memo to employees, chief financial officer Kimberly Ross called the infusion “another sign of SoftBank’s continued support for our business,” according to Bloomberg. The funding will come in the form of senior secured notes, and will bring the company’s cash on hand to $4.1 billion.

WeWork’s membership fell 12 percent from the first quarter to 612,000, and the company recorded $882 million in second-quarter revenue — down from $1.1 billion during the first three months of the year. It also burned through $671 million in cash, including $116 million in non-recurring expenses such as severance pay due to layoffs.

“Covid-19 has had an impact on our business,” Ross wrote in her memo. Last month, WeWork tapped JLL and CBRE to help lease millions of square feet of vacant office space in New York City and Los Angeles. In New York, its availability rate is more than 20 percent, nearly double Manhattan’s overall rate. It also recently shuttered its first location ever, at 154 Grand Street.

Following WeWork’s botched IPO last fall, controversy has swirled over SoftBank’s continued commitment to the company, now totalling $10 billion in total support.

Cost-cutting measures have helped reduce cash burn that peaked at $1.3 in the last quarter of 2019. [Bloomberg] — Orion Jones 

The post SoftBank shovels another $1.1B into WeWork appeared first on The Real Deal Miami.

Paseo de la Riviera and Brent Reynolds

The developer of Paseo de la Riviera in Coral Gables opened the hotel component last week, completing the mixed-use project that has been in the works for about five years.

Nolan Reynolds International, led by CEO and managing partner Brent Reynolds, decided to open ahead of the University of Miami’s fall semester that begins next week. The developer originally planned to open the hotel in the spring.

The project, at 1350 South Dixie Highway, includes Residences at Thesis, a luxury 204-unit apartment tower, the 245-room Thesis Hotel, and two restaurants by chef Niven Patel. Mamey, one of the restaurants, recently opened with outdoor dining and takeout only. (Indoor dining in restaurants is not currently allowed by Miami-Dade County.) Orno, Patel’s other restaurant at the project, will open early next year.

Reynolds said the project’s total cost is more than $225 million, a figure that includes the acquisition of the land.

The hotel is more than 50 percent occupied through the weekend, Reynolds said, thanks in part to the university’s reopening. The average daily rate is about $220. The hotel plans to stay open, with a limited number of rooms, as many hotels in South Florida remain closed due to the pandemic’s effect on tourism.

“The consumer wants the confidence that the hotel is open,” he said. “We’re seeing same-day reservations. You really can’t garner that business unless you’re open.”

Reynolds said the apartment component is also leasing throughout the pandemic. Monthly rents start at $1,889 for studios, $2,277 for one-bedrooms, $3,226 for two-bedrooms, and $4,317 for three-bedrooms. The building is 63 percent leased, and renters have moved into 92 apartments so far, he said.

Paseo de la Riviera was first proposed in 2015 on the site of a former Holiday Inn hotel. The developer, then known as NP International, paid $44 million for the site in the spring of 2016.

Nolan Reynolds brought on Dr. Franklyn Prendergast to its advisory board to help create health and safety procedures at all of its properties, including incorporating ionization air filtration systems in the elevators and seals for the hotel rooms and apartments.

Paseo de la Riviera, designed by Jorge Hernandez Architects and Gensler, is one of a handful of large mixed-use projects along U.S. 1 in Coral Gables and Coconut Grove in the pipeline. Nolan Reynolds is also building Gables Station, which will have a Life Time Fitness and Life Time-branded apartments. The first phase is expected to be completed by the end of the year.

Write to Katherine Kallergis at kk@therealdeal.com

The post Developer completes $225M Paseo de la Riviera mixed-use project appeared first on The Real Deal Miami.

Donald Trump with 40 Wall Street, 725 Fifth Avenue and 1290 Sixth Avenue (Getty, Wikipedia, Trump Organization, Vornado)

Donald Trump’s businesses are on the wrong side of the Covid-19 divide.

While the stock market has roared back and some tech companies have flourished during the pandemic, the travel and leisure industry on which the president’s properties depend has sustained unprecedented losses.

Yet even before the crisis, their value had started to slide, according to Bloomberg, and Trump’s heavy investment in golf is at odds with changing generational tastes.

The office sector is not so hot either. Vornado Realty Trust is considering selling a pair of office buildings it owns alongside Trump’s firm.

The real estate investment trust is looking at options to recapitalize 1290 Sixth Avenue in Manhattan and 555 California Street in San Francisco. Vornado owns a 70 percent controlling stake in the properties.

Operating income at three Trump buildings with public financials — 725 Fifth Avenue, 40 Wall Street and 1290 Sixth Avenue — declined by $16.3 million in 2019, according to Bloomberg.

Since the publication began tracking Trump’s wealth in 2015, the past year has been the worst for Trump as his net worth declined by $300 million, or about 10 percent of his fortune. Forbes in April estimated that it fell by a full $1 billion, to $2.1 billion. [Bloomberg] — Orion Jones

The post Trump’s fortune erodes with commercial property decline appeared first on The Real Deal Miami.

Jared Kushner and Cadre CEO Ryan Williams (Getty, iStock)

Jared Kushner will have to hold onto his stake in Cadre, after the pandemic hit the startup’s bottom line.

The real estate investment startup, co-founded by CEO Ryan Williams and Jared and Joshua Kushner, was prepared to take over Jared Kushner’s stake in the firm back in February. But in the face of the coronavirus pandemic, the company was forced to cut costs, including the purchase of the White House adviser’s shares, according to Bloomberg.

For years, critics have said Kushner’s investment in Cadre created a potential conflict of interest while working as an adviser to his father-in-law, President Donald Trump. Last year, Kushner asked the White House to determine whether his shares created a potential conflict of interest. Once the sale was deemed necessary, the Office of Government Ethics agreed to let Kushner defer taxes on any gains related to the sale.

Cadre had welcomed the plan to sell Kushner’s stake following a failed investment from SoftBank’s Vision Fund in 2018, two sources told Bloomberg. In the eyes of lenders and partners, the Cadre’s association with Kushner risked the firm’s reputation.

Cadre, headquartered in the Kushner-owned Puck Building, is not yet profitable and completed its last capital raise in 2017.

The company’s CEO wrote in May that “while our current portfolio is holding up well thus far, we are navigating an environment in which real estate transactions have abruptly halted, and we can’t be certain how long this will last.”

Cadre cut a quarter of its staff the same month. Kushner withdrew his government request for a tax break on the sale in June. [Bloomberg] — Orion Jones

The post Jared Kushner’s plan to unload Cadre stake shelved by pandemic appeared first on The Real Deal Miami.

Jon Gray, 16100 Northwest 49 Avenue and 16200 Northwest 49 Avenue, Miami Gardens (Credit: Google Maps)

Blackstone bought eight industrial properties in Miami-Dade County from Elion Partners as part of a $93.5 million portfolio deal in South Florida.

Blackstone’s purchases include properties at 16200 Northwest 49th Avenue and 16100 Northwest 49th Avenue in Hialeah for $11.7 million. The investment firm also bought a warehouse at 7425 Northwest 79th Street in Medley for $8.7 million, and a warehouse at 2875 Northwest 77th Avenue in Miami for $10 million. It also purchased three additional properties in Hialeah and one in Doral.

In total, Blackstone paid $47.6 million for the properties in Miami-Dade County and $46 million for five warehouses in Broward County, in Weston, Coral Springs and Pompano Beach, according to records.

Regions Bank provided Blackstone with a $47.18 million mortgage to acquire the properties, records show.

Miami-based Elion Partners is a real estate investment firm focusing on industrial properties. It manages over $1.5 billion in assets, according to its website.

Despite the global pandemic, South Florida’s industrial real estate market has remained strong. Its second quarter proved to be its strongest period in three years, according to a recently released report from Newmark Knight Frank.

Large institutional buyers such as Brookfield, Blackstone, and Prologis have increasingly been buying industrial properties and last-mile distribution facilities across South Florida, as demand for e-commerce continues to grow.

The post Blackstone snags eight industrial properties in Miami-Dade appeared first on The Real Deal Miami.

(Getty, iStock)

AMC theaters will reopen more than 100 of its movie theaters on Aug. 20, with another 300 the following two weeks, according to Newsday.

None of those theaters will be in New York, however. The state, where less than 1 percent of coronavirus tests are coming back positive, has indefinitely pushed back the reopening of movie theaters, along with gyms and malls.

“Thanks to our data-driven public health policies and New Yorkers’ hard work, we have achieved — and so far maintained — one of the lowest rates of infection in the country,” Gov. Andrew Cuomo spokesperson Jack Sterne told Newsday in a statement, “but with hot spots popping up across the country, we are continuing to monitor how and when higher-risk industries like movie theaters can safely reopen.”

The issue for theaters is that large numbers of people are indoors together for two hours at a time, creating the potential for super-spreader events. Mask-wearing, temperature screening, capacity limitations, and air filtering and recirculation could ameliorate that risk.

AMC was nearly forced into bankruptcy after the pandemic shut down the majority of its 1,000 locations worldwide. To draw movie-goers back into seats, the chain is re-launching with a one-day, 15-cent ticket sale. [Newsday] — Sasha Jones

The post AMC theaters to reopen next week, but not in New York appeared first on The Real Deal Miami.

Peter Merrigan and 1050 NW 14th Street

A shopping center in Miami’s Health District changed hands from one Boston-based private equity firm to another, with plans for a major facelift.

Taurus Investment Holdings paid a combined $30.5 million for Civica Center, a two-story, 47,000-square-foot retail center at 1050 Northwest 14th Street and an adjacent 4,200-square-foot building, according to a press release.

The shopping center alone sold for $26 million, records show. Rockpoint had paid $16 million for the property in 2013 and built the shopping center two years later, according to records. Tenants include a 7-Eleven, Dunkin’, Smoothie King and The Young U Montessori School.

A company affiliated with Russell M. Faibisch sold the adjacent two-story building at 1000 Northwest 14th Street. Records show the Faibisches bought the building in 2003 for $150,000. The structure was built in 1976.

Faibisch founded Surety Corp. of America, which provides surety underwriting services to over 650 bail bond agents across the nation. His son, who shares his name, founded Ultra Music Festival, according to published reports.

Taurus plans to expand the shopping center by 15,500 square feet, with medical offices and ground-floor retail, according to the release. It also plans to build a 460,000-square-foot medical office tower on the parking lot, which measures less than an acre.

Taurus has bought and developed more than 47 million square feet of commercial real estate, according to its website.

In March, Taurus Investment Holdings bought a 28-building, 1.9 million-square-foot Chicago-area industrial portfolio for $154 million.

The Rockpoint Group has been busy. In February, it closed on the purchase of a Los Angeles office tower for $303.4 million.

In May, Rockpoint and the Related Group scored a $69 million construction loan for a planned Boca Raton multifamily project.

In October, Rockpoint and The Altman Companies closed on a 30-acre development site in Miramar for $35 million, and at the same time sold a portion of the land to a joint venture for $6 million.

The post Taurus pays $31M for Civica Center, adjacent building in Miami’s Health District appeared first on The Real Deal Miami.

Landlords are organizing a protest around the lack of mortgage relief government policies and the inability to hit tenants with eviction notices.

Downtown Los Angeles is no stranger to protests, but an unexpected group will be hitting the streets on Saturday to raise their signs: Residential landlords.

Dozens of landlords are planning an 11 a.m. rally outside the county assessor’s office at 500 W. Temple Street.

The event is being organized by Yong Ling Lee, who calls herself a “mom-and-pop landlord.” Lee says she rents out 10 single-family houses in Hawthorne, Redondo and other corners of the county.

Lee has been spreading word of the “Bi-Coastal Housing Provider” protest on Facebook, and says their counterparts in New York City are planning a similar action.

The Apartment Association of Greater Los Angeles, the main local lobbying group for landlords, is also promoting the event. Apartment Association executive director Daniel Yukelson said the group is not organizing the protest, which he called a “completely grassroots effort.”

The protest will focus on two concerns: The statewide eviction ban, and landlords’ mounting mortgage payments, in which they say the government has provided little relief.

The California Judicial Council partly addressed the first issue. The state court’s rulemaking body on Thursday said it would end emergency rules prohibiting eviction and foreclosure proceedings, effective Sept. 1. The decision followed lawsuits by landlords who claimed the Judicial Council was illegally doing the work of the California legislature.

But the Judicial Council has made clear it is ending the ban as a way to force the legislature to draw up its own moratorium extension.

The L.A. demonstration is meant to counter recent rallies by the Los Angeles Tenants Union and Alliance of Californians for Community Empowerment. Those groups have called for rent payment strikes and some have physically confronted landlords who were suspected of defying the statewide eviction ban. Messages left with tenant groups organizers were not returned.

Unlike renters, landlords have so far not taken part in street marches, though California and New York property owners have previously demonstrated in opposition to rent control measures.

“The rental rights people that are saying, ‘housing is a human right,’ they are taking advantage of us,” Lee said. “We work hard for little profit. And the government has not helped us a dime with our mortgages.”

In fact, the federal government has provided mortgage relief, but only to landlords with mortgages guaranteed by Fannie Mae and Freddie Mac. Gov. Gavin Newsom announced a deal with some lending institutions in March for mortgage forbearance. But many landlords said they didn’t see the state’s intervention as an improvement over individual negotiations with mortgage providers.

Landlords are also concerned about rental income with the expiration of $600-a-week supplemental federal unemployment benefits. While property owners interviewed said they weathered the storm in August, landlords like Kevin Conway, who owns about 6,000 residential rental properties across the state, said he expects a drop in payments come September.

The post What do we want? Mortgage relief!: Landlords plan LA protest appeared first on The Real Deal Miami.

Rent The Runway CEO and co-founder Jennifer Hyman and a store location in New York City (Getty)

In an age of Zoom calls, remote working, outdoor dining and social distancing, every day is casual Friday. That has meant bad news for Rent the Runway, the subscription-based service that allows women to rent clothing.

On Friday, the startup said it will permanently close its retail stores in Chicago, Los Angeles, San Francisco and Washington, D.C., according to CNBC. The company will focus on its digital business, and will convert its New York City flagship store at 30 West 15th Street into a permanent drop-off location.

“We always knew we wanted and will continue to have a physical presence strategy,” Rent the Runway president and COO Anushka Salinas told CNBC. “What we know now is the physical presence strategy is about drop boxes.”

The company said it has partnered with WeWork, Nordstrom and West Elm to increase the number of its future drop box locations.

Rent the Runway signed an 83,000-square-foot office lease at 10 Jay Street on the Brooklyn waterfront in May 2019.

The company was able to raise funds despite the pandemic, though at a valuation below the $1 billion level it once had. In March, the company laid off all its retail employees on a Zoom call.

“The vast majority of our subscribers didn’t cancel their accounts,” Salinas said, according to CNBC. “They put them on hold or just kept items at home. … That tells me there is optimism.” [CNBC] — Orion Jones

The post Another clothing casualty: Rent the Runway to shutter its stores appeared first on The Real Deal Miami.

4420 North Bay Road with Kim Perell and Peter Fine (Coldwell Banker)

A company tied to New York developer Peter Fine sold a waterfront Miami Beach home to a San Diego-based angel investor and entrepreneur.

Kim Reed Perell and her husband, John, paid $10.8 million for the house at 4420 North Bay Road.

The nearly 8,000-square-foot home, built in 2003, has six bedrooms, eight bathrooms and one half-bath. The house has a gate, a gym, a master suite with a balcony, an infinity pool and a private dock, according to the listing.

Jill Hertzberg of the Jills Zeder Group with Coldwell Banker Realty represented the seller. Fabio Lopes with the same firm represented the buyer. The house listed in November for $13.3 million, then the price dropped to $11.9 million in February, according to the listing.

The Fine-connected company bought the house for $9 million in 2008 from a company connected to South Florida developer Eric Sheppard.

Fine is the principal and co-founder of New York-based real estate development firm Atlantic Development Group and owner of Miami-based To Better Days Development. He is also a Broadway producer.

In 2015, Fine launched To Better Days Development to build ultra-luxury, waterfront mansions in Miami Beach for spec. In February 2019, To Better Days sold a 10,665-square-foot spec estate at 6010 North Bay Road to Yext founder and CEO Howard Lerman for $17 million. Fine also developed the 13,000-square-foot spec mansion at 6440 North Bay Road, which is listed for $22.5 million.

In May, he secured a $70 million construction loan for a massive residential project in East Harlem, a sign of life for the commercial lending market.

In October, the United States Attorney for the Southern District of New York announced a federal civil rights lawsuit against Fine and Atlantic, accusing them of designing and constructing more than 6,000 apartments in 68 rental buildings throughout the Bronx, Manhattan and Westchester County that do not comply with the federal accessibility requirements. Fine has denied the accusation.

Kim Perell describes herself as an angel investor who’s invested in more than 80 companies, 16 of which have been acquired. She became a multimillionaire by age 30, according to her website and social media.

Other recent deals on North Bay Road include Softbank’s Marcelo Claure paying $11.1 million for 5212 North Bay Road with plans to build a new mansion, a lighting company executive who sold a home at 4330 North Bay Road for $9.8 million and a New York real estate honcho who bought a home at 6380 North Bay Road for $9 million.

The post Peter Fine sells waterfront North Bay Road home for $11M appeared first on The Real Deal Miami.

We get it, it’s been another busy news week in the middle of a pandemic, and an election year to boot. So we understand if you may have missed these excellent TRD videos — some old, some new — that are now trending. Catch up this weekend and don’t forget to subscribe to our YouTube channel.

In this interview, Social Construct’s Ben Huh and Michael Yarne talk to TRD’s Hiten Samtani about their startup’s aim to allow developers to build faster, cheaper, and more predictably.

Accountants Mark Bosswick, managing partner at Berdon; and Elliot Levine, managing member at Levine & Seltzer discuss the federal Paycheck Protection Program, and what other Covid relief options are available for the real estate industry.

An oldie but a goodie. We’re so glad our audience found this one. And remember: IT’S FUNNY BECAUSE IT’S TRUE.

The post The 5 trending TRD videos you may have missed this week appeared first on The Real Deal Miami.

Michael Crawford and a rendering of the project (LInkedin, Hall of Fame Village)

In Canton, Ohio, plans are rushing ahead to build a football-themed resort near the Pro Football Hall of Fame.

Former Walt Disney executive Michael Crawford and his investment group have already completed a stadium and sports complex as part of the project’s first phase, according to the Wall Street Journal. They plan to break ground on the $300 million second phase later this year, the Journal reported.

It will include hotels, a water park, apartments, a research building, and retail space. Crawford also wants to expand into sports betting, e-sports, and media production.

The group is aiming to complete the complex, dubbed Hall of Fame Village Powered By Johnsons Controls, by the end of 2022, with the hopes that the pandemic will by then be history.

“The people’s hunger and desire to consume sports and be in environments like arenas and stadiums and destinations like this will be at an all-time high,” Crawford told the Journal. “We will be building in a down market and opening up in an up market.”

Crawford spent 25 years at Disney and was involved with developing resorts in the U.S, Japan, and China. In 2018, he joined the company behind the park, called Hall of Fame Resort & Entertainment Co.

Last year, it raised $31 million when it merged with so-called “blank check” company Gordon Pointe Acquisition Corp. It hoped to raise up to $80 million with the merger, but some of the company’s shareholders dropped out during the pandemic.

Crawford said the company is now in talks with banks for a construction loan worth more than $200 million. [WSJ] — Dennis Lynch 

The post Is Canton ready for a football-themed resort? Investors say yes appeared first on The Real Deal Miami.

Nirav Tolia and his San Francisco home (Linkedin, Compass)

Nextdoor founder Nirav Tolia is looking to part ways with his San Francisco home.

Tolia listed the Pacific Heights home for $25 million, according to the Wall Street Journal. Tolia bought it in 2011 as a wedding present for his wife, Megha Tolia, three years after founding the neighborhood-centric social network. Malin Giddings with Compass has the listing.

Tolia said that ultimately his family plans to find a house outside San Francisco proper, but plans to temporarily relocate to Florence, Italy.

The coronavirus pandemic has rent falling in notoriously expensive San Francisco, although the top end of the housing market appears to be less affected. There were 31 sales above $3 million in June, 10 more than June 2019, according to Compass.

The three-story home has six bedrooms and dates from the 1910s. It was designed by architect George Applegarth in the Beaux-Arts style that was popular at the time.

The Tolias spent three years renovating the property. They rebuilt most of the interior in a subdued contemporary style but retained and restored some of its original features including the coffered ceiling.

The top floor master suite has wraparound windows with views of San Francisco Bay and the Golden Gate Bridge.

The open kitchen and living room area leads to the backyard through sliding floor-to-ceiling doors. The backyard has a hillside garden and a lawn. There’s also a two-car garage.

Tolia was CEO of Nextdoor until 2018 when he became chairman. He also runs an advisory company, Early Stage Internet Companies, that has advised companies including Zillow, Minted, and SurveyMonkey, according to LinkedIn. [WSJ] — Dennis Lynch 

The post Leaving the neighborhood: Nextdoor founder lists Beaux Arts home in San Francisco for $25M appeared first on The Real Deal Miami.

The last Blockbuster in Bend, Oregon (Airbnb)

The last remaining Blockbuster video store in the world is getting a new lease on life.

Airbnb is turning the Bend, Oregon, store into a nostalgia-themed rental, according to NBC News. It is listed for three one-night stays in September for the low cost of $4 — a penny more than the video store’s rental fee.

The store will be stocked with “all the movies your heart could desire,” according to a press release from Blockbuster.

Airbnb periodically promotes novelty rentals on its platform. Earlier this year the company helped rent out New Jersey’s Lucy the Elephant attraction for brief stays. In the past the company has rented out a Goodyear Blimp and a Barbie Dreamhouse–themed house in Malibu.

At Blockbuster’s peak in the mid-2000s, it had nearly 9,100 stores worldwide, but broadband internet and the advent of streaming video platforms such as Netflix spelled the end for the once-ubiquitous movie rental franchise. The chain filed for bankruptcy protection in 2010 and Bend’s Blockbuster became the last operating store in the country in 2018 when a handful of other remaining stores in Alaska shut their doors.

The store, which is privately owned, has since become somewhat of a tourist attraction. Earlier this year a documentary about the store, “The Last Blockbuster,” premiered in Bend.

Unfortunately for Blockbuster fans around the country, the one-night Airbnb stays are open only to residents of Bend and surrounding Deschutes County in order to minimize the risk of Covid-19.

Guests must adhere to local guidelines on coronavirus safety and store staff will clean and prepare the store per CDC guidelines, according to NBC. [NBC News] — Dennis Lynch 

The post World’s last Blockbuster for rent on Airbnb appeared first on The Real Deal Miami.

Buyer Kevin Ness

The pandemic has not put a dent in the Colorado luxury market, in fact, it may have propelled more sales. And the latest is a new record.

A biotech executive paid $57.3 million for a six-story Vail mansion — complete with two elevators — in the ski resort town.

Kevin Ness, CEO of the biotech company Inscripta, bought the 15,000-square-foot home from a limited liability company tied to Mexican businessman Alejandro Rojas, according to the Wall Street Journal.

Rojas bought the property for $14.5 million in 2014, and spent three years rebuilding it and dividing it into two apartments.

On an acre near the center of town, the home has 11 bedrooms, two pools, two hot tubs, and a theater between the two units. The units have numerous terraces to take advantage of the mountain views.

The sale shatters the old record set in 2017, when Ann Smead sold her property for $28.7 million.

Ness said he bought the property as a “generational” family home, according to the Journal, attracted to it in part because its two-unit design will give guests more privacy. He said Rojas only planned to sell one unit, but ultimately agreed to sell both. Ness and his family moved from Boulder.

The Colorado property market has been hot since the pandemic hit. In May, former New York City mayor and presidential candidate Michael Bloomberg paid $44 million for a 4,600-acre estate in Meeker, about 150 miles northwest of Vail.

Later that month, natural gas mogul Charif Souki listed his Aspen-area 813-acre estate for $220 million. If it closes at that price ,it would be the most expensive home sale ever recorded in the country. [WSJ] — Dennis Lynch 

The post As big as a mountain: 6-story Vail mansion sells for record price appeared first on The Real Deal Miami.