1009 Hillsboro Mile with Troy Link (Credit: Robin Marchant/Getty Images and Douglas Elliman))
The president and CEO of Link’s Snacks, maker of Jack Link’s beef jerky, sold his Hillsboro Beach mansion for $12.5 million.
Property records show Ocean Properties of Hillsboro LLC, tied to Troy Link, sold the beachfront estate at 1009 Hillsboro Mile to Benjamin and Rachel Bayless. The couple owns AFS Foundation & Waterproofing Specialists based in Alabama.
Nick Malinosky
The five-bedroom, 9,207-square-foot home includes a 14-seat movie theater, pub-style lounge and bar, master wing with a balcony, an infinity edge pool, and a 100-foot dock with boat and jet ski lifts, according to the listing. Nick Malinosky of Douglas Elliman represented the seller and Robin Winistorfer of Lang Realty brought the buyer, according to the MLS.
The property hit the market in October for $15.5 million. Elliman declined to comment.
The ocean-to-Intracoastal estate was developed in 2007 on a 32,442-square-foot lot. It last sold in 2010 for $6.4 million.
Link’s father, Jack Link, founded the company in the 1980s. Troy Link became president in 2003 and president and CEO in 2013, according to LinkedIn. Its brands include Jack Link’s, Matador, Squatch, Peperami, and Lorissa’s Kitchen.
In July, Link hosted a campaign fundraiser for President Trump in Hillsboro, according to Bloomberg. Two years ago, Link represented Wisconsin at a “Made in America” showcase hosted by the White House.
Luxury home sales along South Florida’s coastline have been booming in recent months. In July, the estate of the late real estate investor Stephen Lazovitz sold his home at 1085 Hillsboro Mile for $18 million.
Write to Katherine Kallergis at kk@therealdeal.com
Condo sales and dollar volume both rose in Miami-Dade County last week.
A total of 167 condos sold for $83.7 million last week in Miami-Dade. That’s compared to 125 units that sold for $54.5 million the previous week. Condos last week sold for an average price of about $502,000 or $326 per square foot.
The most expensive sale was for unit 1008 at Grove at Grand Bay in Coconut Grove, which traded for $8 million, or more than $1,300 per square foot. Gabriela Dajer represented the seller, while Allison Blumenthal brought the buyer. The unit was listed for one day.
The second most expensive sale of the week was at Grovenor House, also in Coconut Grove. Penthouse 3202 sold for $7 million, or just under $1,000 per square foot, after 442 days on the market. Jorge Uribe was both the seller’s and buyer’s agent.
Here’s a breakdown of the top 10 sales from Aug. 30 to Sep. 5. Click on the map for more information:
Most expensive
The Grove #1901S | 1 day on market | $8M | $1,365 psf | Listing agent: Gabriela Dajer | Buyer’s agent: Allison Blumenthal
Least expensive
The Ritz-Carlton #208 | 158 days on market | $1.4M | $729 psf | Listing agent: Cyril Bijaoui | Buyer’s agent: Mark Balsom
Most days on market
Acqualina Ocean Residence #1905 | 642 days on market | $1.7M | $768 psf | Listing agent: Victoria Romanenko | Buyer’s agent: Jack Esquenazi
Fewest days on market
The Grove #1901S | 1 day on market | $8M | $1,365 psf | Listing agent: Gabriela Dajer | Buyer’s agent: Allison Blumenthal
Mortgage refinancings jumped 200% the second quarter, a record high, as lenders provided over $1 trillion in home loans. (iStock)
Mortgage refinancings have hit a record high, as the U.S. housing market continues to rebound from the initial shock of the coronavirus.
With interest rates at all-time lows, refinancings jumped more than 200 percent in the second quarter compared to a year ago, according to the Wall Street Journal. Lenders provided more than $1 trillion in home loans — including both originations and refinancings — between April and June, the Journal reported, citing mortgage data firm Black Knight. That marked the biggest quarter on record since Black Knight began collecting the data in 2000.
Purchase mortgages, however, dropped 8 percent from a year earlier, according to the Journal.
After a short drop at the onset of the pandemic, home sales have risen steadily as people are pivoting to working from home and are seeking to purchase larger spaces. In July, home sales rose almost 25 percent, the highest monthly increase on record.
Mortgage rates fell below 3 percent in July, prompting a burst of refinancings and new home loan purchases.
Millennials have been responsible for much of the boost to the mortgage and housing market. Millennials made up 61 percent of home loans in July, up five percentage points from June, according to a recent report from mortgage software company Ellie Mae.
New York Attorney General Letitia James and President Donald Trump (Getty)
Two dozen states are trying to stop the Trump administration from allowing certain infrastructure projects to bypass the environmental review process.
Attorneys general from the 24 states, including New York’s Letitia James, filed a lawsuit that challenges the Trump administration’s changes to the National Environmental Policy Act, the Brooklyn Eagle reported.
“By restricting the types of projects that undergo environmental review prior to their construction, it puts both our communities and our environment in harm’s way,” said James, who took office promising to challenge President Donald Trump at every turn.
The lawsuit said the Trump administration’s July rule — which advocates say gutted the 50-year-old federal law — will reduce the government’s ability to look at environmental impacts of projects and could eliminate the public participation process.
NEPA, created in 1969, requires federal agencies to look at the environmental impacts of any federal actions and consider alternatives. The Trump rule would exempt highway, power plant and pipeline projects, among others. Business interests say it would enhance the nation’s competitiveness.
Critics of the change said upon its announcement that it would be challenged in court.
The move comes amid a broader push to reduce environmental regulations by the Trump administration, which argues that it hampers economic growth. [Brooklyn Eagle] — Keith Larsen
A group of unit owners at the Mondrian South Beach sued the condo association and companies tied to developer Russell Galbut, alleging securities fraud.
Fifty-one unit owners are each seeking $600,000, for a total of $30.6 million. They allege that a group of entities raised assessments and special assessments for improvements to the common areas of the condo-hotel. And the market value of their condos allegedly has been driven down to $250,000 or less, at which point companies tied to Galbut could exercise their right to purchase the units.
The unit owners filed suit in Miami-Dade Circuit Court last month, against 1100 West Condominium Association, 1100 West Investments LLC, 1100 West Investment Holdings LLC, 1100 West Properties LLC, 1100 West Realty LLC and Mirador Master Association. The Mondrian declined to comment on the litigation.
The 335-key condo-hotel at 1100 West Avenue in Miami Beach was built in 2008.
The plaintiffs, acting as securities holders, said they invested into the condo-hotel with the expectation that profits would come from the defendant, developer and its third-party management company, by renting out units. By doing so, they gave up a significant amount of control to the developer and its proxies, the lawsuit alleges. Plus, the developer has allegedly refused to hand over control of the condo association, “despite the fact that more than seven years have elapsed since the dedication of the Condominium,” according to the lawsuit. The unit owners are also seeking access to the condo-hotel’s financial records, which they allege they have been denied.
The owners allege the companies are committing illegal acts by allegedly refusing to turn over control of the condo association to the unit owners, by enacting special assessments so that companies tied to Galbut benefit when they sell the units, by retroactively charging assessments, and by using special assessments to improve common areas of the mixed-use condo hotel before selling the units.
The retroactive assessments were charged even after unit owners had been given an estoppel certificate from the association showing that nothing else was due, the suit alleges.
The unit owners claim that the defendants withheld payments on rentals that occurred prior to the pandemic, and denied access to units, allegedly creating a scheme that ultimately benefits the developer, Galbut.
The unit owners footed the bill for the renovation, and the developer and its proxies “benefit by not only receiving the special assessments, but by the increase in value” when they sell the units, the lawsuit alleges.
In December, Galbut’s Crescent Heights sold 50 percent of the units owned at the Mondrian to investor Michael S. Liebowitz.
The lawsuit alleges that the defendants are trying to sell 100 units to a hotel operator for $850,000 or more per unit. The unit owners are seeking $600,000, each, to make up for the difference between their alleged current value and $850,000.
The hotel’s website advertises that it is “undergoing a property-wide multi-million dollar renovation” and plans to reopen Oct. 1.
The lawsuit is similar to litigation at the Shelborne South Beach, a condo hotel previously owned by Galbut and W.P. Carey. Forty unit owners had sued the association and Shelborne entities, as well as four association board members, alleging they violated Florida law when $30 million in assessments were approved to repair and renovate the hotel.
In July, the Third District Court of Appeals denied a petition by two investors to overturn a judge’s 2017 ruling granting summary judgment in favor of Shelborne Ocean Beach Hotel Condominium Association and Shelborne Property Associates and Shelborne Operating Associates, two entities that own a majority of the hotel’s rooms.
Wall Street isn’t buying the rosy rent and occupancy predictions that many apartment landlords have been offering up. (iStock)
Many apartment landlords across the U.S. maintain that tenants are paying rent, that occupancy remains high and all is going well.
Understandably, investors are skeptical, according to the Wall Street Journal. The FTSE Nareit Equity Apartments index, which follows publicly traded apartment owners, has fallen by more than 21 percent this year.
Some multifamily owners have been claiming that up to 90 percent of their tenants are paying rent, the Journal reported. But asking rents in cities like New York have fallen about 15 percent since August 2019, the Journal reported, citing data from Green Street Advisors on publicly traded apartment landlords. And investors are preparing for a possibility of more vacancies once landlords are allowed to evict tenants.
Apartments have been hit the hardest by the coronavirus crisis in pricey coastal cities like New York and San Francisco, according to the report. Asking rents in Bay Area cities dropped 9 percent in July, and fell 6 percent in the Bay Area suburbs.
Apartments in the Sun Belt are faring better, however. One landlord with a high concentration of properties in that region, Mid-America Apartment Communities, said July leasing volume was on pace to exceed its amount year-over-year.
Investors expect to see apartment occupancy decline as landlords are allowed to begin evictions. Many cities and states nationwide have had eviction moratoriums since the pandemic’s early days. Many of those are beginning to roll off. Last week, the CDC issued an order to halt residential evictions through Dec. 31. [WSJ] — Keith Larsen
With so many of the year’s biggest gatherings delayed or cancelled altogether, The Real Deal has compiled a list of some of the top real estate events you can count on this month.
Sept. 9: TRD Talks Live on the Future of Queens
Manhattan sales may be falling, but Queens real estate is pretty hot — long-lost Amazon HQ bid notwithstanding. TRD Senior Managing Editor Erik Enquist will be speaking with Modern Space’s CEO and founder Eric Benaim about the biggest projects in Queens that may reshape the borough for years to come. Tickets are free but make sure you register here to watch live.
Sept. 22 – 23: The Shadow Summit’s Innovation to Save the Planet
This is an interesting event — and not just because TRD Publisher Amir Korangy is speaking along with a slew of other real estate industry pros. Now in its second year, the Shadow Summit is aiming to (virtually) touch every corner of the world — and after keynotes and panels, attendees will be able to move onto intimate networking sessions with presenters. You can find more details and register here.
Sept. 23: TRD Talks Live with Louise Sunshine & Fredrik Eklund
This one you cannot miss. Industry icons Louise Sunshine and Fredrik Eklund will dish on their best practices in unprecedented times. Tickets are free so be sure to register here.
Sept. 24: ULI SE Florida/Caribbean’s PropTech series kickoff
TRD readers know proptech is hot, but sometimes it’s worth reeducating yourself on the basics. This event from the ULI will kick off a series on all things proptech, specifically for the Florida and Caribbean regions. Click here for details and ticket prices.
Want to get added to our calendar for October and beyond? Email events@therealdeal.com with the event’s name, date and ticket info — along with why it’s a must for real estate.
980 South Ocean Boulevard & Jane Holzer (Credit: Google Maps. and Jared Siskin/Patrick McMullan via Getty Images)
Warhol protégé Jane Holzer’s family bought a Palm Beach home for $8 million.
According to records, William D. Rollnick, a former chairman of Mattel, sold the 6,817-square-foot house at 980 South Ocean Boulevard to a trust linked to the Holzer family.
Rollnick and his wife, Nancy, listed the home for nearly $10 million in February. They bought the house in 2008 for $8 million, records show.
The seven-bedroom, seven-and-a-half bath home, built in 1950, sits on almost half an acre of land and has a private guest house and a pool that overlooks the Atlantic Ocean, according to the listing.
Ashley Holzer, Jane Holzer’s daughter-in-law, owns a home just three miles north of this one.
Jane Holzer, also known as “Baby Jane,” is an actress and model who most notably was a muse of Andy Warhol, appearing in many of his films. A native of Palm Beach, her father was a prominent real estate developer in the town.
She owns a home at 977 South Ocean Boulevard, which she bought in 2018 for $6.9 million, right across the street from the home her family just bought.
Before becoming chairman of Mattel, William Rollnick was the chairman of Genstar Rental Electronics. He was also a board member of the Metropolitan Opera Association and the National Trust for the Humanities. He and his wife, Nancy, are also co-directors of the William D. Rollnick and Nancy Ellison Rollnick Foundation, a foundation for the performing arts.
The Palm Beach market continues to be extremely active during the pandemic. Another former Mattel executive, Christopher A. Sinclair, bought a home in Palm Beach last week for $10 million.
Michael Shvo and a rendering of the project (Credit: Patrick McMullan via Getty Images)
The Miami Beach Historic Preservation Board approved developer Michael Shvo’s plans to add a residential tower behind the landmark Raleigh Hotel.
But that tower won’t be 200 feet tall, as Shvo had proposed. Instead, following community outcry and a passionate plea from board chairman Jack Finglass during a meeting on Tuesday, the board shortened the residential addition to 175 feet.
Although the tower will be 25 feet shorter than what he had sought, Shvo, chairman and CEO of New York-based SHVO, proclaimed the approval a victory.
“This approval marks a new milestone in the partnership between SHVO, South Beach and the surrounding community,” Shvo said in a statement. “SHVO will continue to honor Miami’s rich history and culture. We vow to play a significant role in the city’s continued growth and transformation.”
Last year, Shvo, Bilgili Holdings, and Deutsche Finance America invested a combined $219.6 million to buy the 80-year-old Raleigh Hotel at 1775 Collins Avenue and the neighboring 79-year-old South Seas and Richmond hotels.
In September, Shvo promised to invest another $500 million redeveloping the site.
Prior to closing on the purchases of the South Seas and Richmond Hotels, Shvo pushed for the passage of an ordinance that allows developers with more than 115,000 square feet of land to propose ground level additions up to 200 feet tall within the Ocean Drive/Collins Avenue Historic District between 16th and 21st streets. Combined, his three properties span more than 125,000 square feet of land. The Miami Beach City Commission passed the ordinance a year ago.
Shvo has said that the 200-foot luxury residential tower is necessary to finance the restoration of the Raleigh and the redevelopment of the South Seas and Richmond hotels.
But Finglass insisted that the developer needs a conditional use permit from the historic preservation board to pursue such a project, and that the maximum height of 200 feet is “not an entitlement.” Moreover, Finglass feared that the high-rise would horribly harm South Beach’s historic character.
“Please do not allow our historic beachfront to be chipped away and wind up like Aventura or Sunny Isles,” Finglass urged his members. “Save our historic skyline and historic views of the ocean.”
Several residents and property owners also spoke out against the 200-foot-tall tower designed by Kobi Karp. Among them were representatives of the Shore Club at 1901 Collins Avenue, the 385-foot-tall Setai Hotel and Residents at 2001 Collins Avenue, as well as Thomas Stern, managing director of Chieftain Capital Management and board member of the 215-foot-tall Faena House condominium at 3315 Collins Avenue.
Steven Avdakov, a consulting architect for the Shore Club, was also critical of Shvo’s plans to substantially demolish the South Seas and Richmond hotels, referring to it as “Disney deco.” Alfredo Gonzalez, Shvo’s attorney, insists that Shvo wants to restore all three properties to the original design created by noted architect Laurence Murray Dixon.
Board member Nancy Liebman fully supported Shvo’s plans, including its 200-foot height. Liebman even questioned the sudden neighborhood opposition.
“The skyline is already loaded with huge buildings and, wake up everybody, many more are coming. They are in the wings,” Liebman warned. “If you care this much, if you are sincerely dedicated to what you are saying, you need to keep watching what goes on here.”
However, other board members preferred that the tower be lowered in height. As a compromise, Karp offered 185 feet. But Finglass pushed for a height of 170 feet, which was roughly the same height as the neighboring Shore Club. Eventually, a compromise of 175 feet was reached among the members, which was approved by a vote of six to one, with Finglass dissenting.
A report shows major retailers paid 83 percent of August rent (iStock, Andy C via Wikipedia Commons)
Retail landlords can celebrate as rent collections are slowly but surely returning to normal levels after months of lackluster payments.
Major chains paid 83 percent of August rent, a new record, and only 14 percent below the nearly 97 percent that they paid during the same time last year, according to the most recent report by Datex Property Solutions. That’s a slight increase from last month’s 80 percent.
Mom and pop shops are similarly increasing, hitting 76 percent last month.
“Some categories were doing fine and some are still struggling very hard, but more and more of the categories are figuring it out,” Datex Property Solutions CEO Mark Sigal said, pointing to social-distancing solutions retailers are experimenting with, like outdoor dining and curbside pick up.
The major chains included in the survey all have a minimum gross monthly rent of $250,000, or lease 10 or more locations.
Banks have already hit last year’s collection rates, paying 98 percent in August. The same trend holds true with office supplies, which paid a stunning 99 percent.
Some stores are even surpassing last year’s rent levels, either because of pressure from landlords or because the pandemic is driving demand.
Home improvement stores, for example, have surpassed last year’s rate of 87 percent, with a payment rate of 95 percent.
The Home Depot paid 96 percent of rents, up from 75 percent last year.
The retailer with the highest jump in payments was the United States Postal Service, which paid close to all of its rent. That was up from 60 percent last month and up 70 percent last year. Sigal attributes the increase in payments to the attention the USPS has received over funding issues.
While many chains made strides in payments this month, some fell.
Francesca’s, a women’s clothing chain, stopped paying rent completely last month. The hair care franchise Fantastic Sams also dropped 16 percent from July, paying about half of all collections.
Justice and Lane Bryant, both owned by bankrupt Ascena Retail Group, continued paying no rent, as they have for most of the pandemic.
That’s not surprising, however. Apparel and hair care categories performed poorly overall, with retailers only paying 63 percent of rent. Others doing poorly include fitness, with 61 percent, and movie theaters, with 37 percent.
Sigal said that movie theaters’ woes are understandable.
“All of the other categories, when I look at them, they all sort of have variations of strategies that are viable or viable-ish,” Sigal said. “That’s probably the one category I look at and just kind of, go, ‘it’s gonna be interesting.’”
The Datex Property Solutions report does not include rent relief negotiated between landlords and tenants.
Photo illustration of ICSC President Tom McGee (ICSC via YouTube, iStock)
Employees of the International Council of Shopping Centers woke up to an alarming message on June 3.
In an organization-wide email, more than 130 staffers were told they would soon receive calls about their employment status. The wait was agonizing, several former ICSC employees involved told The Real Deal.
The remaining 60 employees of the nonprofit — one of the leading trade groups for retail landlords and leasing agents — did not get a clear answer until they were informed in a virtual town hall that they had survived the bloodbath. For others, within half an hour of being told that they were no longer employed by ICSC, access to their work computers and cell phones had been shut off, they said.
An FAQ laid out that ICSC would ship all belongings to former employees. Any personal documents stranded on work computers would be retrieved by IT and sent back to their owners.
“It was an incredibly tragic day in the history of ICSC,” the trade group’s CEO Tom McGee said in an interview with TRD. “The only reason this took place was because of the pandemic.”
While countless other organizations have conducted layoffs in a similar way, the cuts at ICSC came as the influential trade group was plagued by internal strife and a rapidly changing retail landscape. The organization had been grappling with declining membership and revenue for years when Covid-19 undermined its main pillars — brick-and-mortar retail and industry conferences.
While e-commerce sales have soared during the pandemic, overall retail spending in the U.S. is expected to drop by more than 10 percent with in-store sales falling by 14 percent, according to a recent report by eMarketer. Though trends are expected to gradually moderate, the shockwaves sent to certain sectors, such as malls, have been devastating.
“We are undergoing a forced reimagination of retail,” said Andrew Lipsman, eMarketer’s principal analyst and the report’s author. “Now all of a sudden, there’s a gravitational force that’s pulling a lot of these anchor stores under, and then that cascades into taking the whole rest of them all with it.”
For malls in particular, he noted, “it’s not just the long slow decline that we’ve been experiencing for the last 15 to 20 years.”
The conference business, on the other hand, has been crushed solely by Covid. In a study of 1,776 industry professionals by PCMA, a network of business events strategists, more than 85 percent said their conferences had been called off because of the pandemic.
In interviews, a dozen former ICSC staffers — including five senior employees and a trustee — and five current members portrayed a workplace riddled with fear and an organization that lost touch with those it seeks to serve. The former staffers asked not to be named to avoid backlash or because they had signed non-disclosure agreements.
“It’s like watching a train wreck with so many people you love inside and hoping the train survives,” one said.
From root to fruit
On its website, ICSC describes itself as an organization built on humble beginnings.
The New York-based trade group started in 1957 with $500, seven people and a handshake. Over the next half-century it ballooned into a massive dealmaking network, connecting property owners and leasing agents with retailers and other industry professionals.
Revenue in recent years has been roughly $80 million, and its 2018 public filings show $100 million in net assets. And ICSC hosts some of the largest events in real estate, notably its annual RECon bash in Las Vegas, which reportedly drew about 30,000 attendees last year.
The extravagant conference, held at the Wynn Las Vegas resort and casino, brings together property owners, brokers, retailers and other industry players for days of networking, dealmaking and entertainment.
Exclusive after-parties hosted by real estate bigwigs have been known to feature stilt walkers, pool parties and concerts by Top 40 artists, like Imagine Dragons. The conference has also drawn criticism for alleged sexism and harassment among some ICSC members.
“It’s no secret that this pandemic has had a pretty significant impact upon our industry and ICSC is a byproduct of what’s taking place in the industry.” Tom McGee, ICSC
But Covid has canceled RECon and all other in-person ICSC events for the rest of 2020 — a huge hit that resulted in the recent layoffs. It has sparked fears of a sharp decline in membership, which had already been shrinking for several years.
As recently as February, ICSC’s website boasted 70,000 members around the world. But internal documents shared with TRD show the total had fallen to 64,200 in 2018 from 70,400 two years earlier. They projected — before the pandemic — a further decline to 52,700 by 2023.
But an Aug. 17 screenshot of ICSC’s member directory shows fewer than 45,000 active members.
Additionally, after years of slowly moving away from its international efforts, ICSC closed all of is foreign offices in the past two years. The China office went first. Europe, Mexico and Singapore followed last year and the Toronto office in June, when the layoffs in New York happened. Prior to the closures, ICSC had more than 170 employees globally, according to its 2018 filing.
Yet, McGee instructed employees to continue counting the more than 20,000 departed members, though their affiliation agreements had ended and they had stopped paying dues, according to internal communications and interviews with former senior employees.
McGee would not comment on the membership count discrepancies but acknowledged that the records reflect the termination of agreements.
“It’s no secret that this pandemic has had a pretty significant impact upon our industry, and ICSC is a byproduct of what’s taking place in the industry,” he said.
“We continue to view ourselves as an international organization,” McGee added.
A new captain
While McGee pointed to forces beyond his organization’s control, many former employees attribute the drop in membership to him.
McGee came on board in September 2015 after 26 years at Deloitte, where he had held several leadership roles. His hiring represented a sea change for the organization. Unlike his predecessor, Michael Kercheval, whose background in real estate dates back to the early 1980s, McGee had spent his entire professional career in accounting.
Still, on his arrival at ICSC, employees were excited by the thought of an outsider reinventing the organization. In a sense, he did.
A month into his tenure, McGee fired several executives, some of whom had been with the trade group for decades. Each was told to leave immediately or they would be escorted by security, according to former employees.
More employees and volunteers were sent packing every few months, seemingly at random, according to all of the former ICSC staffers who spoke to TRD. Many described a palpable tension throughout the trade group as they awaited emails about “organizational updates.” Some asked their bosses or IT for advance notice if their names were going to be on one of the dreaded messages.
New leadership “sometimes comes in with that ‘new sheriff in town’ mentality — very aggressive in their changes — and sometimes it’s not rolled out softly,” said Bran Noonan, a partner at the law firm FordHarrison who specializes in employment litigation.
“It’s like watching a train wreck with so many people you love inside and hoping the train survives.” Former employee, ICSC
In 2016, McGee brought in two former Deloitte colleagues to take over as head of communications and chief financial officer. It changed the office’s dynamic, according to former employees and others.
“Before, it was a club of friends. [Then, it became] more like a club of Wall Street people,” the former trustee said. “It’s like the difference between a family-owned business and a public company.”
McGee made attempts to smooth things over. He introduced regular town halls, which staff appreciated until realizing the meetings were less about transparency than about silencing discontent. Employees say questions were strategically dismissed with vague answers or assurances that they would later be addressed in an email.
At times, McGee would parade down an office corridor, saying hi to everyone. Other times employees were unsure whether to even make eye contact. “It was almost like theater,” one former ICSC staffer said.
One former employee said that staff would complain about having to endure bullying by the leadership or risk being fired.
“I’m not surprised that folks express concern around the changes that I made because I did make a lot of changes,” McGee said. “But those changes needed to be made.”
At the same time, e-commerce began to dominate the conversation among ICSC members and the retail world at large.
Turbulent times
The retail industry has been rocked to its core by the seemingly inexorable rise of internet shopping.
Americans spent $523 billion on online purchases in 2018, accounting for just under 10 percent of retail sales, according to eMarketer. This year that number is projected to reach $709 billion, or nearly 15 percent of sales.
While that growth has been expedited by the pandemic, the consensus is that e-commerce will continue to gain steam in the years ahead. For that reason, the Blackstone Group, one of the world’s largest alternative asset managers, and even Simon Property Group, the country’s largest shopping mall operator, have been pivoting to industrial e-commerce space.
An internal survey last year of more than 3,000 ICSC members, a copy of which was provided to TRD, showed that more than 70 percent see retailers with both online and physical stores as a valuable tenant class. Yet, retail tenants make up less than 10 percent of ICSC’s membership, and it’s unclear how many of them have an online focus. More than half of members are brokers and developers with 34.8 percent and 22.3 percent, respectively.
But some of the posts shared on ICSC’s website include such headlines as “Retail experience trumps e-commerce,” while interviews with members and other industry sources suggest a long-running dissatisfaction with the trade group’s core mission.
“I will renew because I’m loyal, not because it’s necessarily a good dollars-and-cents value for me right now,” said David Lobaugh, president of a geofencing research firm August Partners and a longtime ICSC member. “Historically, it has been extremely valuable. So, out of faith and out of continuity, I’ll go ahead and pay my dues.”
David Perlmutter, president of real estate brokerage Perlmutter Properties and an ICSC member for more than 30 years, compared the trade group’s e-commerce strategy to “warm beer.” He said ICSC was “slow out of the gate” in helping members adapt to the shift in consumer habits over the past decade.
Even when those inside the organization moved to embrace change, ICSC’s top brass fought back, according to several people with close ties to the organization.
Nick Egelanian, president of the consulting firm SiteWorks and an adjunct professor at the University of Maryland, said he has tried to advise ICSC on its outlook on retail.
In speeches at ICSC events, Egelanian has emphasized the importance of e-commerce as
mall owners and other retail landlords look to reinvent their business models. And despite speaking to ICSC on several occasions about how the organization could update its strategy, he said he’s been told to “be more positive.”
“I’m not making positive or negative statements. I’m making factual statements,” said Egelanian, who wrote a chapter on the retail market in the Urban Land Institute’s “The Investor’s Guide to Commercial Real Estate.”
Rick Caruso, CEO of development firm Caruso Management Company, served on ICSC’s board between 2012 and 2014. After giving a speech suggesting that the traditional shopping mall is “dead,” Caruso was asked to step down, according to a lawsuit his company filed against ICSC in December 2018.
Caruso declined to comment.
“In a membership as large and as diverse as ICSC and with as much change that happens in the industry, people are going to have different viewpoints,” McGee said. “And that’s totally fine.”
But others are calling out ICSC for retaliating against those with different viewpoints.
“Part of an association is not having your own narrative,” one former senior employee said. “ICSC didn’t do that.”
Paying dues
Some of the younger players in real estate’s retail sector have struggled to understand ICSC’s mission.
A former employee who worked in a department at ICSC meant to recruit younger members said the organization has failed to evolve. The employee recalled being silenced in meetings, even for suggesting ideas like trivia night or changing marketing materials for recruitment.
“We were looking at members as dollar signs,” another former senior employee said.
Kearney, the consulting firm that was brought in to better understand members, attributes some of its recruiting and retention issues to high costs — especially compared to other industry trade groups, according to recommendations from the company obtained by TRD.
ICSC membership costs firms $800 per year plus $125 per employee. RECon 2020 tickets for members were priced at $680 for those who paid in advance.
Many small companies and younger brokers can’t afford the fees, Kearney found. Senior ICSC leaders warned McGee that the dues structure was limiting membership. ICSC is now providing a free membership year for anyone who has lost a job, as well as a 90-day membership extension and $125 event credit for all members.
In the organization’s own survey, 32 percent of its members rated the value they receive for paying dues as poor or adequate.
In response to the feedback, ICSC planned to cut entry costs for small companies. But McGee, shortly before he was to present the plan publicly, pulled the plug, according to former employees and internal communications. Instead, ICSC attempted to massage the membership numbers, even to staff and the executive board.
For example, while some senior employees consider “active members” to be those who pay dues, McGee has given leeway to include members whose accounts expired within 30 days, according to interviews with former senior employees. McGee declined to comment on the differences and ICSC refused to comment on any plans to restructure its dues.
“We remain focused on supporting the industry and helping it evolve by providing resources for all of our members and building additional programs and services for new members, including students,” an ICSC spokesperson said in a statement.
Coming to a head
In June 2018, an anonymous email made its way into ICSC’s executive board’s mailboxes, CC’ing former trustees.
It alleged that employees’ jobs were advertised before they were fired, that workers were told to write positive Glassdoor reviews and that McGee referred to members as “customers,” encouraging his staff to turn a profit from them.
“ICSC staff can save ICSC from this bully,” the email read. “He has Zero Respect for you … or us. Ask us again in secret … we will tell you the full story.”
ICSC declined to comment on the email.
“There are not a lot of deals being done because of the crisis and therefore commissions are few and far between. That frustration leads to [members] wanting to have as many tools as they can.” Rudy Milian, Woodcliff Realty Advisors
Internal powerpoints support the allegations. In a 2016 presentation, staffers were told to embrace a “client service culture.” In another presentation two years later, the organization compared itself to for-profit event companies to examine ways to drive revenue.
At times, employees felt they were prevented from objecting to the executive board.
Two former senior employees said McGee questioned them if they talked to board members, even after common events and meetings where such interactions were natural. The former employees said they felt the need to get McGee’s approval beforehand and that they would lose their jobs if they didn’t.
“At Deloitte he worked with Fortune 500 companies, where you keep everything secret,” one employee said. “But in a trade association, transparency is so important.”
McGee denied ever preventing an employee from talking to the board.
A fresh start?
Looking to the future, several members and former employees expressed confusion over ICSC’s focus. Many said they are grappling with why the trade group would lay off so many employees at once and what its plans for recovering from the pandemic are.
Conventions, conferences and member meetings brought ICSC $55 million in 2018, making up 69 percent of its revenue, according to the organization’s public filings. But McGee’s layoffs cost ICSC’s events team 18 of its 22 members, according to documents shared with TRD.
“To lose people that have the relationships with and the trust of members is scary,” Lobaugh said.
Some employees said they believe that ICSC could have afforded to keep them, but the pandemic and economic fallout presented an opportunity to clean house, as McGee’s arrival had five years before. With so many staff members gone, those remaining struggled for footing in a new virtual reality, according to former employees.
Barry Wolfe, senior managing director of investments at real estate brokerage Wolfe Retail Group, was said to have attempted to organize a virtual RECon convention after the live event was called off. Instead, he was served a cease-and-desist letter, Wolfe wrote on LinkedIn.
Wolfe did not respond to requests for comment.
Between mid-March and the beginning of August, ICSC said it hosted 38 webinars and its first virtual conference. “Our role right now really is to be an anchor in a storm,” McGee said.
But some fear that’s not enough.
“There are not a lot of deals being done because of the crisis and therefore commissions are few and far between,” said Rudy Milian, president and CEO of consulting firm Woodcliff Realty Advisors, who worked at ICSC for nearly 20 years and served as a senior vice president until 2015.
The trade group, he added, “is really not there for [members] right now because it is not offering the typical networking events that we have relied on for so many years from ICSC.”
Milian said he hopes the organization returns to its former glory.
Others said that even if ICSC gets through the pandemic, resumes its conferences and restores its balance sheet, the cataclysm in retail demands a lot more than networking events from such a major trade group.
“The industry as a whole and many of its leaders have simply never grasped how and why shopping has been evolving for over the last 40 years,” Egelanian said.
The condo association for a Miami River project is suing a group of developers and subcontractors, alleging $10 million in design and construction defects.
Terrazas Riverpark Village Condominium Association filed suit last month in Miami-Dade Circuit Court against more than 80 parties. The association alleges that unit owners only discovered the defects in the 328-unit project, at 1861 Northwest South River Drive, after buying their condos.
Terrazas has two towers, 21 stories and 27 stories tall, built in 2010. The project was developed by Miami-based B Developments, led by Miguel Angel Barbagallo.
In the 930-page suit, the association accuses the defendants of negligence, violating building codes and breaching warranty. Among the defendants named in the lawsuit are the developers, the architect and even a provider of broadband network related labor.
Attorneys representing the condo association did not respond to requests for comment. Multiple defendants also did not respond to requests for comment.
The lawsuit includes a report from Miami-based construction and engineering consulting firm EC Consulting Partnership. EC inspected 34 random units in the towers and determined that repairs will cost about $7 million. Some of the more expensive repairs include $1.2 million to repair slab, $745,000 to fix the roof membrane system and $600,000 to fix the balcony slope.
The report notes the “generally poor conditions” of the roofing system, water leaks in some of the units, cooling towers “in a state of abandonment and [that] require significant repairs and maintenance” and a smell of gas and fuel in the boiler room that “may present a life safety issue since such gas may be flammable.”
Terrazas has a complicated history. Miami-based B Developments, one of the defendants named in the lawsuit, built the towers with financing from Argentine investors, according to the South Florida Business Journal. Principal Miguel Angel Barbagallo wanted to target the middle-class market, and built the towers on the site of a former mental institution.
In 2006, New York-based lender iStar Financial, also named as a defendant in the lawsuit, lent $84.5 million to build the towers, but subsequently received a deed in lieu of foreclosure when no condos sold, the Journal reported.
In 2010, Area Property Partners and Wood Partners bought Terrazas in an off-market deal, intending to lease the “distressed property” as rentals, according to a press release. In 2013, Ares Management bought Area Property Partners, according to a press release from that time.
In 2013, Ladder Capital bought Terrazas, according to the website of SRF Ventures, which assisted Ladder in underwriting and due diligence. The price was reported as more than $75 million. Both companies are defendants in the suit.
In 2014, the executives at Terrazas Miami, as the building is also called, marketed the units as condos once again, targeting middle-income buyers with prices between $224,000 and $500,000.
An online listing for Terrazas lists condos between one and three bedrooms for rent from $1,495 to $2,485. The website for the property lists one- to two-bedroom units for purchase, priced between $325,500 and $412,800.
The Miami River towers aren’t the only project entangled in legal woes tied to alleged construction defects. Unit owners at the ultra-luxury condo development Glass in South Beach filed suit in June, alleging the development group failed to build the 10-unit, 18-story condo development in accordance with building codes, manufacturers recommendations and permitted plans. Meanwhile, the condo association for Aria on the Bay filed suit in August, alleging a litany of construction defects at the 53-story luxury tower near Edgewater.
1200 N State Road 7 and 5300 Coconut Creek Parkway (Credit: Google Maps)
A CVS pharmacy and adjacent drive-thru bank building in Margate sold for $7 million.
A company connected to Aleksandr and Ekaterina Dolganov of Osprey bought the properties near the intersection of State Road 7 and Coconut Creek Parkway, according to records.
The seller — a company tied to Lawrence A. Freeman of Boca Raton — paid $6.85 million for the properties in 2005, records show.
The 500-square-foot drive-thru was built in 2004. The 14,000-square-foot CVS was built the following year.
The Margate CVS sale isn’t an anomaly — pharmacies have proven an attractive investment during the pandemic.
A Walgreens in Lauderdale Lakes sold in April, and changed hands again in August for $8.1 million. The seller was a company tied to SunTrust Equity Funding, which flipped a Pembroke Pines Walgreens the week before that, for $9 million.
In July, Eastern Industrial Development Corp. snagged a Hialeah CVS building for $10.5 million, and in May, Walgreen Co. sold a store in North Palm Beach for $6.9 million.
The average size of a home loan hit a new record of $368,600 (iStock)
As rates slipped, the volume of Americans seeking mortgages rose — and the average size of loans hit a new high.
Applications for mortgages to purchase homes increased 3 percent, seasonally adjusted, compared to the final week of August, according to the Mortgage Bankers Association weekly survey.
The MBA metric, known as purchase index, is up 40 percent year-over-year, according to the association’s Joel Kan, head of industry forecasting, though he noted the timing of Labor Day skews the comparison. The increase marks the 16th week running of annual growth for the purchase index.
Kan noted that a drop in rates drove a rebound in refinancing activity last week. MBA’s refinance index increased an adjusted 3 percent week over week, though the volume of activity was up 60 percent compared to the same period in 2019.
It comes a week after the Federal Reserve approved a change in setting interest rates, which it will now allow inflation to rise past 2 percent. The announcement signals a low-rate environment for borrowers is likely here to stay.
Kan also highlighted the new high for average loan size, which last week increased to $368,600 from $326,200 the week before. In July, the median price of a home exceeded $300,000 for the first time.
The rates for a 30-year, fixed-rate mortgage fell by 1 percentage point to 3.07 percent from 3.08 percent the prior week. Jumbo rates dropped to 3.40 percent from 3.41 percent.
MBA’s overall index increased an adjusted 2.9 percent compared to the volume a week earlier. Its weekly survey covers 75 percent of the residential mortgage market and has been conducted since 1990.
WeWork CFO Benjamin Dunham and Kimberly Ross (LinkedIn)
WeWork is swapping out its finance chief after just six months.
The shared-office giant’s CFO Kimberly Ross, who took the position in March, will be stepping down at the end of this month, WeWork announced Wednesday.
The company said Ross, a 25-year veteran of the corporate finance world, is leaving “for personal reasons.”
She will be replaced by Benjamin Dunham, who for the past two years has served as the head finance officer for WeWork’s Americas division.
He will report directly to company CEO Sandeep Mathrani.
WeWork recently received a commitment from SoftBank to lend the co-working company $1.1 billion, multiple outlets reported last month. At the time of the news, WeWork had not yet tapped the loan, which gives the company 12 months to draw down on.
WeWork hired Ross soon after Mathrani joined the company in February, tasked with turning the money-losing startup around after its botched IPO last year.
Mike Fernandez and Grove at Grand Bay unit 1901S (Getty, Lifestyle Production Group)
Miami billionaire Mike Fernandez sold a unit at Terra’s Grove at Grand Bay for $8 million.
Fernandez, a Coral Gables businessman who made his fortune in the healthcare industry, sold unit 1901 in the south tower of the luxury condo project at 2675 South Bayshore Drive in Miami, according to a press release. The sale marks the most expensive resale to date at Grove at Grand Bay. It sold for $1,284 per square foot.
Fernandez purchased the five-bedroom, 6,231-square-foot unit in October 2017 for nearly $5.8 million through Dinnerview 1901S LLC. That means he sold it for about $2.2 million more, excluding commission costs and other fees.
Gabriela Dajer
Allison Blumenthal
The buyer is unknown, and the latest sale has not been recorded with Miami-Dade County. Allison Blumenthal of Brown Harris Stevens represented the buyer, and Gabriela Dajer of One Sotheby’s International Realty represented the seller.
Fernandez lives in a sprawling waterfront estate in the Gables Estates community of Coral Gables. His private equity firm, MBF Healthcare Group, is also based in the Gables.
His Grove at Grand Bay unit was previously rented out for $36,000 a month, according to the release. It has five bathrooms, two half-bathrooms, marble, porcelain and hardroom floors, and views of the city and of Biscayne Bay.
Fernandez had purchased the unit in 2017 from Dan and Jan Lewis. Dan Lewis is the son of Progressive Insurance Company co-founder Joseph M. Lewis.
Fernandez has bought and sold other units at Grove at Grand Bay, according to the release. At the nearby Park Grove development, built by Terra and the Related Group, he flipped a penthouse at Two Park Grove for nearly $6.6 million, or about $142,000 more than he paid.
BMO Capital Markets CEO Dan Barclay and Paul Vanderslice (BMO, LinkedIn)
Paul Vanderslice, who recently exited Cantor Commercial Real Estate, is joining BMO Capital Markets to lead a new CMBS origination team.
Vanderslice’s move to Bank of Montreal’s investment banking subsidiary was first reported by Commercial Observer.
Less than two weeks ago, Vanderslice left CCRE, two years after being brought in to reboot and lead one of the commercial mortgage industry’s big bookrunners.
Levent Kahraman, a co-head of securitized products at BMO, said the firm intends “build out a first-rate CMBS origination team…Paul is the first step in that process.”
BMO’s operation will begin with a focus on conduit, single asset-single borrower, agency CMBS and warehouse lending, CO reported. Vanderslice will start Sept. 14.
Vanderslice spent 30 years at Citigroup and most recently ran its U.S. CMBS group. In 2018, he joined CCRE, which Lutnick launched in 2010 to compete with powerhouses like Deutsche Bank, JPMorgan and Wells Fargo. He took over for CCRE CEO Anthony Orso, who left to run Newmark Knight Frank’s capital markets strategies. [CO] — Sasha Jones
Temperature checks will be required at the door for all customers, one member of the diners’ group will have to provide contact information for tracing purposes and there will be no bar seating.
The city and state had been putting off an announcement over the timeline of indoor dining, and last week were hit with a $2 billion lawsuit over the delay. The mayor said Wednesday that he was hopeful to make a decision as early as this week, but he was beaten to the announcement by Cuomo.
After the governor broke the news, de Blasio released a statement saying his administration and Cuomo’s had come up with the terms together.
“Working with the state and public health officials, we’ve achieved a plan that puts health and safety first by including strict capacity limits, a close monitoring of citywide positive testing rates and a coordinated inspection regimen,” the mayor said.
He warned that if the rate of positive Covid tests in the city reach 2 percent, he would “reassess” indoor dining. The rate has been under 1 percent for more than a month. It does not appear that the mayor could end indoor dining without Cuomo’s consent.
David Cordish and renderings of Isle Casino (Cordish Companies, city of Pompano Beach)
Two companies redeveloping the 232-acre Isle Casino property in Pompano Beach want to make a pandemic-based pivot to industrial space and shrink the office component.
Cordish Companies and Caesars Entertainment want to change the zoning and approved land use for Isle Casino so they can include 1.5 million square feet of industrial space in their mixed-use redevelopment of the property, while reducing the maximum amount of office space by 650,000 square feet.
“What happened to us has happened all over the country as Covid has caused offices to work remotely,” David Cordish, chairman of Baltimore-based Cordish Companies, told city commissioners at a meeting on Tuesday.
In a 4-2 vote, commissioners gave approval on first reading to a rezoning and land-use plan amendment that would reduce office entitlements and introduce industrial space at Isle Casino at 777 Isle of Capri Circle.
The changes cut the maximum amount of office space from 2 million square feet to 1.35 million square feet and allow up to 1.5 million square feet of industrial space. Other components of the master plan for redeveloping Isle Casino would remain unchanged, including 950 hotel rooms, 300,000 square feet of retail space and 4,100 residential units. The property, which now includes a casino and a horse track for harness racing, would be rebranded as Live! Resorts Pompano.
Last year, the city approved a proposal by Cordish Companies and Eldorado Resorts that more than tripled the maximum number of residential units at the Isle Casino property and more than doubled the maximum amount of office space. Eldorado, which merged with Caesars Entertainment in July, acquired the Pompano Beach property as part of its $1.7 billion purchase of Isle of Capri Casinos in 2017.
Industrial development “is not our core business,” Cordish acknowledged during the virtual city commission meeting Tuesday. “Our core business is the rest of the site … residential, entertainment, retail.”
Cordish also said his company and Las Vegas-based Caesars have a non-disclosure agreement with a prospective industrial tenant that would occupy more than 1 million square feet and employ 1,200 workers at the Isle Casino property.
By late October, “we hope we’ll have a letter of intent, which would release us from the NDA,” he said. The prospect is a “major international e-commerce” company that could “jumpstart a project of this magnitude … in a difficult environment.”
However, several city commissioners and Pompano Beach citizens criticized the planned introduction of as much as 1.5 million square feet of industrial space at Isle Casino. They said the developers lack critical details about their planned industrial space, including truck traffic and hours of operation, and have not solicited opinions from enough homeowners in the nearby Palm-Aire and Cypress Bend communities.
“That’s too big a change without enough information,” said Pompano Beach Mayor Rex Hardin. He voted for the rezoning and land-use change, but said the developers “need to have better communication” with homeowners who live near Isle Casino. “You really need to nail things down between now and the second reading … You’ve really got to get out there and talk.”
City commissioners are expected to consider enactment of the proposed rezoning on second reading at their meeting on Oct. 27. If they approve the proposed land-use change on second reading, the change could be enacted sometime next year following a review by county and state agencies.
Miami-Dade Mayor Carlos Gimenez (Credit: Jason Koerner/Getty Images)
Bars, nightclubs and movie theaters will remain closed in Miami-Dade County, though some outside activities can restart, and the curfew has been extended an extra hour.
Miami-Dade Mayor Carlos Gimenez announced that more outdoor activities will be allowed beginning next week, two weeks after indoor dining was allowed to resume. Zoo Miami and Jungle Island will be able to reopen on Monday with masks and social distancing enforced. Most indoor spaces and playgrounds at both Zoo Miami and Jungle Island will remain closed.
Other venues also will remain closed. “I don’t foresee opening bars and nightclubs in the future until we get a vaccine,” Gimenez said.
Movie theaters will also remain closed for now. Gimenez said the county’s medical advisers “felt it was better to hold off on that” until after next week.
Rental bike, scooter and moped companies can resume operations, but must provide sanitizing wipes and disinfect daily.
The 10 p.m. curfew will be extended to 11 p.m. starting on Monday, as long as the number of new coronavirus cases continues to fall, the mayor said. The extra hour means restaurants can stay open later for diners.
Those attending the University of Miami Hurricanes football game on Thursday at Hard Rock Stadium will be able to stay for the entire game if it ends after the current 10 p.m. curfew.
The county has issued citations to 612 businesses, and 140 businesses had been shut down as of Tuesday for violating rules, Gimenez said.
To date, Miami-Dade has had 162,433 coronavirus cases and 2,740 deaths. Statewide, 652,148 positive cases of Covid-19 have been reported, and 12,115 deaths, according to the Florida Department of Health.
Restaurants were allowed to reopen at 50 percent indoor capacity Aug. 31, as long as tables are spaced at least six feet apart with a maximum of six people per table. It marked the second time restaurants could restart their indoor dining, after being shut down again In June due to a surge in positive coronavirus cases.
