The Democratic Socialists of America are scheming to expand their constituency, decommodify housing and undermine the real estate industry. (iStock)

Just a few months after nearly sweeping their state primary contests, socialists in New York City aren’t putting down their hammers and sickles.

The Democratic Socialists of America are scheming to build on those wins, including by establishing a City Council caucus.

The group also plans to take advantage of the economic crisis to decommodify land and housing by “systematically undermining” the political power of the real estate industry, according to an internal document obtained by The Real Deal. It also aims to organize working-class tenants of color against displacement, the document says.

To accomplish those goals — although the group has not won much besides elections since a crushing victory over landlords in the 2019 rent law battle — it is turning increasingly to city politics.

“[The City Council] doesn’t have a lot of power to enact a socialist agenda”

The project will be a multi-year endeavor, the document explains. The strategy is still under development but some plans are beginning to take shape, notably one to field a slate of socialist City Council candidates next year.

Using its blueprint from the state Assembly and Senate races, DSA will ask potential candidates to make a case for the group’s endorsement by filling out a questionnaire which asks, among other things, if the candidate will run openly as a socialist.

Candidates who come through the grilling would get the socialist juggernaut’s support, including a door-knocking, phone-banking ground game that few foes have overcome.

Should socialists gain a foothold in the New York City Council, it would surely alarm real estate developers and business leaders, even if it is not yet clear what the group could accomplish.

Chicago offers some clues. There, a campaign to peel back a state restriction on rent control catapulted the coalition into legislative power: a socialist caucus of six aldermen. That group represents just 12 percent of the City Council, however, so it needs help from other members to accomplish its goals, which include making universities pay property taxes and raising the real estate transfer tax on properties that sell for more than $750,000, according to Medill Reports.

Chicago alderman Jeanette Taylor (Chicago City Clerk)

One of the Chicago socialists, Jeanette Taylor, the alderman of Chicago’s 20th ward, was able to negotiate a community benefits agreement with developers for affordable housing around the Obama center. And Carlos Ramirez-Rosa, representing the 35th ward, successfully fought for a 100 percent affordable development.

However, the caucus’ legislative demands for housing relief in light of Covid were not met, according to Robin Peterson, co-chair of the Chicago DSA, largely because of Chicago Mayor Lori Lightfoot.

In September, Chicago’s socialist members teamed up with progressives to introduce a plan requiring developers to set aside more affordable units in new buildings.

Socialists’ next big election is a City Council contest in Los Angeles, where the DSA chapter endorsed Nithya Raman, an urban planner who worked with slum-dwellers and squatters in India. She faces incumbent David Ryu in a run-off Nov 3. Raman has made ending homelessness her top priority and toward that end says she would push for tenants to have a right to counsel, a rent freeze and emergency cash if they face eviction.

In New York City, where socialists have already enjoyed significant electoral success, winning several of the 51 City Council seats is well within the realm of possibility.

But a socialist perch at City Hall would not lead to an overhaul of city taxes, as that authority largely belongs to the state, as does any expansion of rent regulation.

One DSA member said the City Council, which derives most of its power through its control of land use, can in theory “enact a capitalist agenda, but it doesn’t have a lot of power to enact a socialist agenda.”

“It has the potential to be immensely counter-productive”

It would, however, enable socialists to win land-use fights in districts they represent, as the full council typically defers to the local member on rezoning proposals. A socialist caucus could also draw more attention to zoning proposed in colleagues’ districts, potentially obstructing real estate development in New York City.

But there’s a rub: In interviews with half a dozen DSA members who have a hand in crafting the strategy for such a caucus, it emerged as likely that socialists would flout City Council customs, notably deference to the local member on land use matters.

Members who break that tradition could not expect deference from the rest of the chamber when a development project came to their own districts.

One DSA member said on condition of anonymity that rules including member deference would certainly be publicly disrespected by any DSA-backed Council member. Those elected under DSA’s mantle would be expected to “play hardball” with the speaker of the City Council, the person added, emphasizing that they would not just be “part of some gentleman’s club.”

On social media, one DSA member opined that a socialist City Council could block rezonings, holding the real estate industry “hostage” to extract legislative wins on the state level, such as repealing the Affordable New York tax benefit for developers, passing Sen. Julia Salazar’s Good Cause eviction bill, and putting more units under rent stabilization.

Paul Selver, Kramer Levin

Paul Selver, co-chair of land-use at law firm Kramer Levin, likened that strategy to a “Mitch McConnell tactic,” referring to the U.S. Senate majority leader.

“It has the potential to be immensely counter-productive,” Selver said. “We’re not really in a position where people should be stopping development or foreclosing the potential for good projects to move forward in order to achieve some other objective that is otherwise unrelated to the project.”

It is a convoluted if not far-fetched scenario in any event, and would require socialist City Council members to gin up significant support from colleagues.

““We want to fight back in a coordinated way”

Another DSA member said that the group would be “walking into an inherited nightmare” in 2021, as the economic plight of New York City will likely lead to reductions in the city workforce and social services. In addition, whoever wins the mayoralty in 2021 will likely not be a DSA-backed candidate, the person said.

But even if the socialists win only a handful of seats, it could influence other City Council members to support far-left causes, lest they face socialist challengers in the 2025 elections. Incumbents, once nearly invulnerable in New York City elections, have in the past three years become susceptible to insurgent candidates running under the DSA banner.

“The standard reaction is that, if you’re being primaried from the left, they won’t want [a rezoning] because developers will make money,” said Selver. “But in a world where everyone is rational, the Soho-Noho rezoning would move forward and be a place where the left, right and center could get together to bring the zoning up to date and provide a social good.”

The socialist group hopes to create a citywide vision instead of attacking each proposed rezoning separately. In justifying such an approach, Andrew Hiller, a member of DSA in Lower Manhattan, argued that the mayor and the real estate industry coordinate to advance a citywide agenda, so it’s not unreasonable that the left would as well.

“We want to fight back in a coordinated way,” said Hiller, “instead of having a defensive posture and fighting one-by-one.”

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Davie property and Will Blodgett, founding partner of Fairstead

Fairstead paid nearly $18 million for the Federation Davie Apartments in Davie, with plans to renovate the senior affordable housing property.

The Jewish Federation of Broward County sold the 80-unit building at 5701 SW 82nd Avenue for $17.9 million, or about $223,000 per unit, records show. The Housing Finance Authority of Broward County provided Fairstead with a $21.35 million loan. The financing includes the issuance of low-income housing tax credits and tax-exempt bonds.

Fairstead is planning a $12 million renovation of the building, including installing new kitchens, bathrooms, windows, lighting fixtures, flooring, a new roof and an upgraded community space, according to a press release. The Davie property was developed in 1991. It will remain an affordable housing property for the next 30 years.

The purchase marks Fairstead’s seventh acquisition of senior affordable housing in South Florida over the past year. In June, the Jewish Federation of South Palm Beach County sold the Gould House affordable senior housing complex in Boca Raton to Fairstead for $33.8 million.

Will Blodgett, founding partner of Fairstead, said in the release that the Davie property brings the company’s total number of South Florida units to more than 700.

A number of new affordable projects are in the works in South Florida. Earlier this week, Miami-Dade County approved short-term leases that will enable three developers, including the Related Group, to redevelop county-owned affordable housing projects in south Miami-Dade.

The post Fairstead buys senior housing in Davie for $18M appeared first on The Real Deal Miami.

The death of the mall is an idea as ingrained today as the waft of baked pretzels and department store perfume less than a generation ago.

Even David Simon — who took the country’s leading mall owner public in 1993 and continues to reign over the firm — has his doubts.

“Do we have too many malls?” Simon Property Group’s CEO rhetorically asked investors during the company’s second quarter earnings call. “Sure.”

David Simon, Simon Property Group

Traffic at the country’s largest malls dropped 51 percent in the first eight months of 2020 compared to the same period last year, according to data Placer.ai provided to The Real Deal.

The Covid-induced emptiness comes as real estate investment trusts squabble with retailers over lease payments and struggle with their own mortgage bills. “The biggest issue for malls is their debt and lack of access to capital,” said Alexander Goldfarb, a senior analyst at Piper Sandler.

Such problems were underscored last month when Brookfield Property Partners and Nandar Realty each punted on mortgage payments at individual malls, catapulting the shopping centers into special servicing. Meanwhile, two of the biggest malls in the country — the Mall of America in Minneapolis and American Dream Mall in East Rutherford, New Jersey — have missed millions of dollars in mortgage payments.

A recent Credit Suisse report noted that 25 percent of U.S. malls are set to close by 2022 and the no-frills website deadmalls.com lists centers that have already shuttered.

“There will be a lot of shopping malls that simply won’t survive,” said Michael Soto, research director at Savills.

There is, however, a mall-half-full version of this story in which the REITs that cut their losses and reposition can endure, a view held by Soto and a number of brokers, analysts and even some owners.

Weathering the storm, experts say, depends on following a few strategies: partnering with e-commerce companies including 800-pound gorilla Amazon, swapping out department and clothing stores for grocery and health retail, and even leveraging nostalgia for the mall as a community gathering space.

Malls may not return to their former glory — or ever again symbolize U.S. consumerism — but they can survive. Here’s how:

Embrace the saboteur

Retail developers tend to see Amazon as an enveloping force of evil that has severely weakened brick-and-mortar stores and made lenders reluctant to invest in physical shopping centers.

Barry Sternlicht, Starwood Capital Group

“They are demolishing the Main Streets of America,” Starwood Capital Group’s Barry Sternlicht said of Amazon in a May interview with TRD.

After all, as mall REITs saw declining revenues in the second quarter, the Seattle-based company raked in $106 billion in online shopping sales, a 40 percent year-over-year leap.

But Amazon has become so omnipresent, analysts and brokers say it might actually be wise for mall owners to embrace their enemy. One such partnership that may already be in the works entails using mall space as Amazon distribution hubs, or “fulfillment centers.”

“The argument is that if you want to have a viable long-term mall, we’re all taking emergency steps to get through this together, and that’s why this is a pill that might need to be swallowed for now,” said Casey Sobhani, head of DLA Piper’s U.S. leasing practice. “It’s a good argument, because it’s a true argument.”

Casey Sobhani, DLA Piper

Simon Property reportedly entered into talks with Amazon in August to convert space now leased by imperiled department stores such as J.C. Penney and Lord & Taylor into fulfillment centers. (Simon Property also teamed up with Brookfield to buy J.C. Penney out of bankruptcy.)

Messages left with Simon Property were not returned.

“The brands that sold clothing did so well in the past, but it is now a bizarre, different time.”

A spokesperson for Amazon declined to discuss those negotiations but told TRD that the e-commerce giant has warmed to malls. Amazon has even opened 23 bookstores in both enclosed and outdoor shopping centers throughout the U.S. — perhaps a cruel irony for former mall stalwarts such as Borders and Waldenbooks that argued they were pushed out of business by Amazon.

“It made sense to open a bookstore, because books is how Amazon began,” the spokesperson said. “There are still things people want to touch and feel before bringing them into their home.”

Besides 4,500-square-foot bookstores, Amazon is also opening pop-up shops in several malls. A store at Unibail-Rodamco-Westfield’s Century City mall in Los Angeles, for example, is currently showcasing rotating televisions for sale.

Some smaller mall REITs want to go one step further: Offer Amazon and other e-commerce sites affordable rents and other concessions in exchange for incentivizing shoppers to come pick up their purchases.

Lou Conforti, CEO of Columbus, Ohio-based Washington Prime Group, said he sees distribution hubs replacing department stores as the anchor tenants that draw customers into the mall.

“Amazon is a partner, not an enemy,” Conforti maintained. “For us to completely negate and stiff-arm a mode of getting a good or a service — primarily e-commerce [products] — to a consumer is the dumbest darn thing on the planet.”

Find new essential tenants

Jay Luchs, a retail broker at Newmark Knight Frank, argued that “malls are confused as to who is going to stay and who isn’t.”

“The brands that sold clothing did so well in the past, but it is now a bizarre, different time,” he said.

Department stores such as Neiman Marcus and apparel chains like the Gap, the backbone of American malls in the late 20th and early 21st centuries, have either stopping paying rent, face bankruptcy, or both.

The “inessential” tag for many retailers amid the pandemic, Luchs said, mirrors the pre-Covid trend that consumers no longer need the mall for clothes — just as malls no longer need department stores to anchor their space.

Jim Sullivan, a managing director at the financial services firm BTIG, said it would be a “good trade” said for malls to replace their department stores with anything that would help bring in more wanderers. “Retailment” options such as restaurants like the Cheesecake Factory and Dave & Buster’s are a proven traffic generator, even as malls reopen, Sullivan argued.

In contrast to that, along with fading department stores, are essential tenants: pharmacies, grocery stores and other businesses that have seen increased foot traffic and in-store sales amid the pandemic.

Thomas O’Hern, Macerich

During Macerich’s second quarter earnings call, its CEO Thomas O’Hern practically serenaded supermarkets. “We think it’s a great use,” he said. “In many cases we’ve had interest from the grocery store but we haven’t had the space.”

With J.C. Penney and Macy stores on their way out of several Macerich-owned malls, O’Hern said, “it’s going to give us the opportunity to do more of that.”

Another business with perhaps a more reliable customer base is medical clinics.

Gary Weiss, a commercial real estate leasing agent in Century City, pointed to the Westfield Century City mall’s recent placement of a walk-in UCLA Medical Clinic as a shrewd idea — perhaps the patient strolls around the shops after getting a clean bill of health.

More radical ideas, Weiss said, include converting movie theaters into public storage space. “Even when these theaters were built there was the idea that one day people would stop going to the movies, and these could be repurposed,” he noted.

Perhaps the most “essential” mall tenant yet is to be found in the struggling Mall of America. The Minnesota Transitions Charter School is paying a monthly cost to lease space at the 5.6 million-square-foot property, the Minneapolis Star-Tribune reported earlier this month. The charter school was damaged in the unrest following the killing of George Floyd.

School officials told the paper that the mall could lead to “job shadowing and internships for students” as well as using the mall’s famous indoor roller coaster for physics lessons.

Curate space with purpose

More broadly, for some, the typical U.S. mall — once seen as a den of mind-rotting teen consumerism — is now being reimagined as a public square.

“It’s work. This isn’t: I’m gonna sit back on my ass in the mall office and wait for the rent checks to come in.”

One retailer lessor mentioned using mall space for voting booths and community meetings, for example.

Dominic Lowe, Unibail-Rodamco-Westfield

“We’re evolving beyond the mall,” claimed Dominic Lowe, executive vice president of design, development, and construction for Unibail-Rodamco-Westfield. “We want to reshape our asset to become a more diverse micro city or micro village.”

In order to assure lenders and maintain a baseline relevance to customers, each mall may need to more intentionally define its focus.

“Mall operators need to find ways to make the mall experience less homogenous and more curated,” said retail strategist Marshall Kay. “Some have operated more like the owners of flea markets, who are filling stalls.”

For some high-end urban malls in Los Angeles and New York, Newmark’s Luchs noted, that can be as simple as doubling down as a spot for luxury brands.

But such curation may not play out the same way in smaller markets like Peoria, Illinois.

Lou Conforti, Washington Prime

Conforti of Washington Prime, which has malls in Peoria and other mid-sized cities throughout the Midwest, said his general managers walk the downtown streets and seek to lure businesses that can provide an antidote to (often struggling) national chains.

“It’s work,“ Conforti said. “This isn’t: I’m gonna sit back on my ass in the mall office and wait for the rent checks to come in.”

Local tenants could help malls’ hoped-for reputation as community gathering space.

“Communities have used shopping centers as a way to provide a sense of normalcy,” said Sandy Sigal, CEO of Woodland Hills-based retail REIT NewMark Merrill. “That is the role retail is going to play in the long term.”

Keep an e-friendly mindset

Brokers and analysts say they would like to see mall REITs use tech to their advantage instead of viewing it as a threat to their business models.

Specific innovations include virtual reality advancements for “virtual dressing rooms.”

“Mall-based apparel retailers can utilize virtual dressing rooms to attract customers back to stores to inspect products, yet offer the safety of not having to try them on physically,” said Jie Zhang, a professor of retail management at the University of Maryland business school.

Another example cited is the widespread use of radio frequency identification technology, or RFID, which tracks inventory, making it easier to ship products from store to store and reduces the labor costs of refilling inventory.

Beyond any specific fixes, many mall owners are frustrated with tenants they view as not trying to modernize.

Sigal, at the California-based mall owner NewMark Merrill, grumbled that Covid non-rent payers like Bed Bath & Beyond are guilty of “self-inflicted” damage.

But perhaps the onus to modernize rests more on the mall than the tenants.

Reposition, in part

While mall REITs have their fair share of financial troubles looking ahead, many of the malls still sit on extremely valuable property.

“Communities have, in a lot of cases, been built up around these malls,” said Donald Bredberg, managing director of the retail advisory firm StoneCreek Partners.

That means that if all else fails, in some cases, mall owners can make a tidy sum either selling off their land or repurposing it.

The latter is happening now in Los Angeles, where Unibail-Rodamco-Westfield’s Westside Pavilion is being rented out to Google, and in New York, where the shuttered Neiman Marcus in Hudson Yards is being marketed as future office space.

Bredbreg noted that repositioning part of a mall can help bring in more foot traffic to the remaining retail.

As with other facets of the U.S. economy, mall post mortems are already being penned.

But in revising the make-up of their tenants, understanding which companies are friend and foe, and making a few modernizations, Bredberg said: “Not all is lost.”

The post The American mall: A survival guide appeared first on The Real Deal Miami.

(iStock)

Millions of renters believe they will be evicted from their homes in the next two months due to eviction, according to the results of a new survey.

The U.S. Census Bureau found that of 58 million households it surveyed, 14.7 million — or a quarter of the total — had no or only slight confidence in their ability to pay rent next month, according to a Household Pulse Survey conducted for the week ending Oct. 7. The same survey found that in half a million households, rental payments are currently on hold, or will be soon.

Nearly half of 8.3 million renter households surveyed by the Census said they were “very” or “somewhat” likely to leave their home in the next two months due to eviction.

Efforts to prevent mass displacement during a health crisis at the state and federal level have mostly focused on preventing evictions for non-payment, or allowing landlords to defer mortgage payments for a period. As bills stack up while talks for a new stimulus sputter, it is unclear who will pay when eviction protections and forbearance agreements expire.

“No one is going to pay nine months’ back rent when this is all over,” said Robert Gilman, who co-chairs the real estate group at public accounting firm Anchin.

Gilman said he’s concerned about what will happen when forbearance agreements expire and property taxes come due in January in New York. “I’m not saying it’s wrong,” Gilman said, of the limits on evictions. “The majority of people really do need help — but you have to look at both sides of the ledger.”

In New York, limits on some evictions were extended through the end of the year, and they now apply to evictions that were filed before the pandemic. A CDC eviction ban for nonpayment of rent is also in place through the end of the year. But even with those stopgap measures, uncertainty among renters across the nation about their ability to continue to make rent payments remains high.

An industry survey of market-rate apartment payments paints a rosier picture than the Census surveys show.

According to the National Multifamily Housing Council, a trade group representing large rental landlords, rent collections improved slightly from September to October. In the nearly 12 million apartments it tracks, which does not include subsidized apartments, 79.4 percent of households made a full or partial rent payment by Oct. 6, compared to 76.4 percent that had paid by the same time in September.

“Despite ongoing efforts by apartment community owners and operators to help residents facing financial distress through creative and nuanced payment plans, rent relief and other approaches, renters and the broader multifamily industry are confronting growing challenges,” said Doug Bibby, president of NMHC.

The mixed results support the idea of a K-shaped recovery, where those who are more affluent make a rapid recovery, while lower-income earners lag behind. At a presentation by the St. Louis Federal Reserve in September, economist Bill Emmons noted that the current crisis has had more of a disproportionate impact on low-income households than past crises have.

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The late Kate Ford with 300 North Lake Way (Credit: William Jacobellis/New York Post Archives /(c) NYP Holdings, Inc. via Getty Images, and Google Maps)

The lakefront Palm Beach estate that belonged to the late Kathleen DuRoss Ford was listed for sale for $58 million.

Known as Kate Ford, she had the seven-bedroom, two-story mansion at 300 North Lake Way built in 2002. Ford was married to the late Henry Ford II, who led the Ford Motor Company. He died in 1987, and she died in May of this year.

The waterfront property, with nearly 27,000 square feet of indoor and outdoor space, hit the market with Lawrence Moens of Lawrence A. Moens Associates, the Palm Beach Daily News reported.

It was designed by Palm Beach architect Jeffery Smith and includes a temperature controlled wine room, four-car garage, exercise room and library.

Ford assembled the 1.5-acre property in the late 1990s.

The listing joins a number of other mansions priced at $30 million and up in Palm Beach, which has had a busy summer season, the Daily News reported.

Former MagicJack Chairman Donald Burns recently sold his longtime Palm Beach estate at 1021 North Ocean Boulevard for $28 million. And in July, pulmonologist Dr. Norman Traverse sold his ocean-to-lake mansion at 1744 South Ocean Boulevard for more than $51 million. [Palm Beach Daily News] – Katherine Kallergis

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Anthony Casa (AIME)

The founder and chairman of the Association of Independent Mortgage Experts will formally step down, months after sending lewd videos to a Quicken Loans executive.

After taking a leave of absence from AIME, Anthony Casa said he will make his departure permanent, HousingWire reported.

In July, Casa sent a video message to Quicken Loans Austin Niemiec along with comments of a sexual nature about Niemiec’s wife. Casa shared the video with executives of other firms, including Kevin Peranio, chief lending officer at Paramount Residential Mortgage Group, and Ramon Walker, the owner of Mount Diablo Lending.

The following week, Theresa Niemec sued Casa for defamation. The suit alleged that Casa and his business affiliates, for competitive reasons, tried to damage Quicken Loans’ wholesale lending operation.

The backlash was immediate. Plaza Home Mortgage, Flagstar Bank and Caliber Home Loans said they would sever ties with Michigan-based AIME, and the National Association of Mortgage Brokers made a statement against the sexist remarks.

“After much consideration and heart-to-heart conversations with family and friends, I have decided to officially hand the reigns [sic] over to the extremely capable hands of Katie Sweeney and Marc Summers,” Casa, a New Jersey resident, said in an extended statement announcing his departure.

Casa continued that he would start a mortgage brokerage in Philadelphia and will remain an active member of AIME. He did not provide specifics on the new business venture, but said he would be “back in the weeds of serving and educating borrowers.”

[HousingWire] — Georgia Kromrei

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Southland Mall, 20505 South Dixie Highway in Cutler Bay with JLL’s Tom Hall and Danny Finkle (Google Maps, JLL)

JLL is marketing the $65 million commercial mortgage-backed securities loan that the former owner of Southland Mall in Cutler Bay defaulted on earlier this year.

The CMBS loan is tied to the 990,000-square-foot indoor mall at 20505 South Dixie Highway. The mall’s former owner, Investcorp, defaulted on the loan in April and handed the keys over to its CMBS lenders this summer. The mall is currently in foreclosure and a receiver was appointed by a Miami-Dade Circuit Court judge.

The loan is structured with a two-year term with three one-year extension options, according to a press release. The JLL Capital Markets team representing the seller includes Tom Hall and Danny Finkle.

“We predict a significant uptick in transaction volume in the first half of next year,” Hall told The Real Deal. “The smart sellers are getting out ahead of that wave.”

Hall said JLL doesn’t have an asking price, but he doesn’t view the property as distressed because of redevelopment potential and because the mall is in an Opportunity Zone.

Investcorp defaulted on loan payments in April, prompting a foreclosure suit by Wells Fargo as a representative of the CMBS investors.

CMBS-backed loans can be harder and lengthier to modify, with no refinancing or additional debt allowed.

In April, South Florida’s retail market had an outstanding CMBS loan balance of $6.3 billion, according to data provided by Trepp. It was the third highest CMBS exposure of any metropolitan statistical area after New York City and Los Angeles.

The commercial mortgage-backed securities loan for another mall, the 317,513-square-foot Westfield Broward mall, at 8000 West Broward Boulevard in Plantation, entered special servicing in June.

Twenty-five percent of all hotel CMBS loans and about 17 percent of all retail CMBS loans were being handled by special servicers by the end of August, according to Trepp.

The post Southland Mall’s troubled $65M CMBS loan for sale appeared first on The Real Deal Miami.

Eric Trump and New York Attorney General Letitia James (Getty)

Lawyers for the Trump Organization have persuaded a Manhattan judge to reconsider allowing New York Attorney General Letitia James to enforce a subpoena.

On Wednesday, Supreme Court Judge Arthur Engoron ruled that although he said last month that attorneys for the Trump Organization should hand over documents related to property valuations, he will now review those documents first, Bloomberg reported.

Engoron granted a petition from the Trump Organization to reconsider whether its lawyers had foregone attorney-client privilege by not providing the state an accurate log of the documents.

The ruling is a setback for James, although the judge may still provide her with the documents after he reviews them.

James previously argued that the Trump Organization failed to provide an appropriate accounting of the documents, despite repeated attempts, and took legal action in August. In September, Engoron ruled that President Donald Trump’s son Eric Trump, who oversees the Trump Organization’s business, would sit for a sworn deposition sometime before Oct. 7.

James initiated the probe into the Trump Organization’s finances in 2019 after Michael Cohen testified before Congress that the company falsely reported the values of its real estate assets.

Four properties are at the center of the investigation into whether the Trump Organization inflated property values to secure financing and property tax benefits: the mixed-use building 40 Wall Street, Seven Springs Estate in Westchester County, the Trump International Hotel and Tower in Chicago and the Trump National Golf Club in Los Angeles.

The New York Times reported that the Trump Organization valued the Seven Springs Estate at $291 million in 2012, but in 2018 the business reported it was worth $50 million. During that period, the Trump Organization received a $21 million tax break for land conservation. [Bloomberg] — Georgia Kromrei 

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Julian Johnston, Gatien Salaun, and 709 East Dilido Drive

A Brazilian billionaire sold a Venetian Islands waterfront home for $10.2 million, The Real Deal has learned.

NN2 Dilido LLC, a Michigan-based entity tied to agent Pomeroy Financial and Pomeroy Living, bought the house at 709 East Dilido Drive, according to Gatien Salaun of Aria Luxe Realty.

Records show the seller is Cana Brava Delaware LLC. Salaun said it is a Brazilian billionaire, but declined to disclose more specifics.

Salaun represented the buyer, whose true identity he declined to disclose. Julian Johnston of Corcoran represented the Brazilian seller, but declined to disclose his name. He said the buyer is local, and plans to do some cosmetic renovations.

Cana Brava Delaware LLC bought the 5,782-square-foot house for $12 million in 2015, records show.

It was listed in 2018 for $13.5 million, according to Realtor.com. The price dropped multiple times, most recently to $10.9 million in November.

The two-story home, built in 2015, was designed by Max Strang and has six bedrooms, six-and-a-half bathrooms, a pool and a dock on the Intracoastal Waterway.

Other recent Venetian Islands sales include a former Ford executive selling his estate for $18 million, a group of developers selling a spec mansion for $13.6 million and professional race car driver and investor Chapman Ducote selling his house for $8.4 million.

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Microsoft CEO Satya Nadella and Chief people officer Kathleen Hogan (Getty; iStock; Microsoft)

Microsoft is joining the ranks of Facebook, Twitter, Zillow and other companies that have developed permanent work from home options for their employees.

The tech giant unveiled “hybrid workplace” guidance that permits employees to work from home for less than 50 percent of their working week, or receive manager approval for permanent remote work, according to the Verge. Under the guidance, employees give up their office space if they choose to work remotely, but may use available Microsoft space whenever needed.

“The Covid-19 pandemic has challenged all of us to think, live, and work in new ways,” says Kathleen Hogan, Microsoft’s chief people officer, in a note to employees, the Verge reported. “We will offer as much flexibility as possible to support individual workstyles, while balancing business needs, and ensuring we live our culture.”

The company has already announced it won’t reopen its offices until January 2021 at the earliest.

Twitter and Facebook separately announced work from home plans in May, and Zillow joined the club in July.

[The Verge] — Sasha Jones

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Aria Mehrabi and renderings of the projects

Part of Aria Mehrabi’s planned development for North Beach got the OK to move onto permitting this week. And Miami Beach officials will review more of his plans in November.

The Miami Beach Design Review Board on Tuesday gave the green light to the planned 12-story tower with 170 residential units anchored by a 25,000-square-foot Target at 6948-6988 Abbott Avenue and 6957-6965 Byron Avenue. The board wanted nominal design changes, including removing stairs and ramps in the building’s northeast corner.

Mehrabi, the principal of Pacific Star Capital, expects construction to start early next year, he told The Real Deal.

At its Nov. 3 meeting, the board will review his separate, 14-story, 118-residence tower project at 6961-6985 Abbott Avenue, 300-326 71st Street and 6972 Harding Avenue. Staffers previously had concerns about several design elements of the building, including a tunnel-like vehicle entrance on Harding Avenue, as well as requested variances for the project related to loading areas and surface parking.

Meanwhile, Robert Finvarb expects construction on his own North Beach mixed-use project at 409 71st Street, 430 72nd Street, 7124-7140 Abbott Avenue and 7117-7135 Byron Avenue to start next year, he told The Real Deal.

Robert Finvarb, Aria Mehrabi seek approval of mixed-use projects in North Beach

Other projects coming to the North Beach neighborhood include a new Bodega Taquerias taco shop location and a new Urbanica Management hotel.
https://therealdeal.com/miami/tag/miami-beach/

Menin plans major expansion of Bodega Taqueria

Urbanica scores approval for new hotel in North Beach

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(iStock)

In a typical year, the holidays are peak season for malls — but this isn’t a typical year, and shopping centers that have already been hurt by the pandemic will continue to feel the economic crunch in the leadup to the holiday shopping season.

Only 45 percent of shoppers plan to visit a mall to do some or all of their holiday shopping, down from 64 percent last year, Bloomberg reported, citing data from a survey by the International Council of Shopping Centers.

Consumers will still be shopping, and about 80 percent of respondents said they still planned to spend money in a physical store. But many said they’d patronize small businesses instead of larger shopping centers.

More than half of respondents said that sales would affect their holiday purchases, and many plan to shop online this year.

More than three-quarters of respondents said they expected to start shopping earlier than usual. The survey was based on responses from more than 1,000 U.S. shoppers between Sept. 28 and 30.

“We have to look at this year somewhat in isolation,” ICSC CEO Tom McGee said in an interview with Bloomberg. “We’re in the midst of a pandemic and that’s clearly going to temper people’s appetite for going out to public spaces.”

Traffic at the country’s largest malls dropped 51 percent in the first eight months of 2020 compared to the same period last year, according to data Placer.ai provided to The Real Deal. [Bloomberg] — Sasha Jones

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1616 West 28th Street, Sunset Islands and Marsha Soffer (Realtor, World Red Eye, iStock)

Marsha Soffer, daughter of Aventura developer and Turnberry Associates founder Donald Soffer, sold her Miami Beach waterfront mansion for $10.8 million.

Soffer sold the 8,567-square-foot house at 1616 West 28th Street on Sunset Island 1 to RSB LA LLC, a Delaware LLC, according to records.

Records show Soffer, formerly known as Marsha Rappaport, and her former husband, Jon Rappaport, bought the property in 1997 for $1.1 million. The home, originally built in 1937, has gone through a couple of renovations, first starting in 2001. Soffer acquired the property in 2010 in a marital settlement agreement.

The property’s asking price has seen many changes and delistings over the last five years. It was first listed at $13.9 million in February 2015 and most recently listed at $10.95 million in 2017. It sold in an off-market deal.

The home is on nearly half an acre of land and has eight bedrooms, five bathrooms and two half-bathrooms. The house also has 100 feet of waterfront, a dock and a boatlift.

Soffer, through her company, Chandler Chase LH, sold a Chase Bank branch near Little Havana for $7.5 million in 2018.

October has been active for Miami Beach sales. Two adjacent waterfront properties on Sunset Islands sold for $44.5 million, a Normandy Isles home sold for $7 million and developer Todd Glaser sold a spec mansion for $15.2 million.

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(iStock)

Renewed hope for an economic stimulus package lifted markets to their highest level in three months, with real estate stocks largely following the trend.

The market volatility index VIX fell this week by 10 percent, a reflection of fewer trading swings.

Housing construction continued to be a bright spot: Lennar, one the nation’s largest homebuilders, has notched record high stock values each week since August. On Friday, the company reached a record $84.07 per share, nearly double six months ago.

Hospitality firms also saw a boost: Hilton Worldwide closed 2.8 percent above where it began the week, at $91.37. Marriott International gained 2.4 percent to close at $99.34. Diamond Rock Hospitality and Park Hotels & Resorts, which both have assets concentrated in hotels and motels, saw stocks increase 1.9 percent and 4.3 percent, respectively.

Despite renewed stimulus hopes, industries facing economic shifts that could outlast the pandemic struggled this week to mount gains.

Retail giant Simon Property Group’s stock edged down this week, closing at $67.72. In February, its price climbed above $142 before nationwide lockdowns shuttered many of the businesses that had signed leases within its malls.

Office REITs also face an uphill battle as many workers have transitioned to remote work. Microsoft is the latest company to join the work-from-home forever club, alongside Zillow, Facebook, Twitter and others.

Boston Properties, which specializes in office real estate, fell 2.9 percent this week to $82.78, and has lost 40 percent of its stock value since February.

The White House is reportedly preparing a $1.8 trillion aid package aimed at struggling businesses and laid-off workers, a reversal from last week when President Donald Trump quashed the effort. It remains to be seen if the package will make it through Congress, however.

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8 Circle St in Pennysylvania (Photos via Global Panorama via Flickr; Eileen Allan and Shannon Assad)

One of the creepiest homes in cinema history is hitting the market — and just in time for Halloween.

A four-bedroom house in the western Pennsylvania town of Perryopolis is asking just $300,000. Its claim to fame? It appeared in the 1991 thriller “The Silence of the Lambs” as deranged killer Buffalo Bill’s home, according to Inman.

The home is an otherwise modest 110-year-old Victorian that sits on 1.76 acres about 30 miles outside Pittsburgh. In the 1880s, the property was home to a general store and train station, and it sits adjacent to land that was once owned by George Washington.

The main house has decorative flourishes that date back to when it was first built: hardwood floors and moldings, fireplaces, pocket doors and even wallpaper. The general store was turned into a three-car garage and there’s a vintage caboose on the property, along with newer amenities like a swimming pool. (As for whether there’s a creepy basement lair, a virtual tour of the property shows that it’s unfinished, but otherwise normal.)

Potential buyers should know that the property gets plenty of visits from fans of the Academy Award-winning film, despite its relatively remote setting. “What’s crazy is, [the seller] said probably at least once per week, he has someone in his front yard taking a selfie or knocking on the door,” said listing agent Eileen Allan.

The listing notes that it “would make for an amazing Airbnb” — not surprising, given the success of pop culture properties like Harry Potter’s childhood home or the mansion from “The Fresh Prince of Bel-Air.”

Allan shares the listing with Shannon Assad. They’re both with the Allan Assad Team at Berkshire Hathaway HomeServices. [Inman] — Dennis Lynch

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Renderings of Popshelf (Photos via Dollar General)

Dollar General is launching a new brand aimed at higher-income earners — and keeping the focus away from the “dollar” in its name.

The new brand, Popshelf, will still sell inexpensive products in its stores, with most items priced at $5 or less, the Wall Street Journal reported. But the stores will carry fewer Dollar General staples (like food) and more nonconsumable items, including home decor, craft supplies, and beauty products.

Dollar General, which operates more than 16,300 stores nationwide, started working on the concept two years ago. The company has consistently been one of the top discount retailers in the country, and its sales have grown even amid the pandemic. The company looked to hire 25,000 workers early in the pandemic.

Emily Taylor, chief merchandising officer at Dollar General, said the pandemic hasn’t affected its plans for Popshelf and that “the need for this store is very relevant now and maybe increasingly so.”

CEO Todd Vasos said executives determined that a brand separate from Dollar General would help attract the more affluent customers they’ve long sought.

“There is nothing wrong with that traditional Dollar General,” he said. “But customer-facing-wise, we are going to do our best to keep those two brands separated.”

The company plans to open 30 Popshelf locations nationwide by the end of the year in suburbs of larger cities. It’s starting with two stores outside Nashville, Tennessee. [WSJ] — Dennis Lynch 

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Donald Trump and the Trump National Doral golf course (Getty, Trump Hotels)

President Donald Trump’s real estate firm has earned millions as its hotels and resorts served as political backrooms for those seeking favors from the administration.

The Trump Organization’s hotels and resorts received $12 million from 60 patrons with business before the government during the first two years of Trump’s presidency, a New York Times investigation found.

Many of those customers — including developers, financial institutions and foreign governments — saw their interests advanced, according to the investigation, which relied on interviews with roughly 250 executives, lobbyists, employees and members of Trump Organization clubs, as well as those close to the administration.

“Once he became president, everyone wanted to be around him,” said billionaire and Florida developer Jeff Greene, contending that it wasn’t influence-peddling. “People like to be where presidents are.”

Golf outings, corporate events, dinners and galas were hosted at the Trump International Hotel in Washington, D.C., the Trump National Doral and Mar-a-Lago Club in Florida, and the Trump National Golf Club in Bedminster, New Jersey. More than 70 groups brought new events to Trump properties. The president attended 34 fundraisers for his campaign at those properties, bringing the firm $3 million in revenue.

GEO Group, a private prison REIT, moved its annual leadership conference to the Doral and paid at least $32,100 to Mar-a-Lago during the first two years of Trump’s presidency, the Times found. In 2018, founder George Zoley reportedly told a business associate that he viewed the Trump administration as “transactional.” GEO’s government contracts grew to $900 million last fiscal year, up from $500 million during the last year of Obama’s presidency.

Eric Trump, who along with his brother Donald Jr. took over day-to-day management of the Trump Organization, sometimes informed his father of which groups were booking events at Mar-a-Lago, according to the Times.

A representative for the Trump Organization did not respond to the Times’ inquiries for comment. A White House spokesperson said that Trump had “kept his promise” to “drain the swamp and always put America first.” [NYT] — Danielle Balbi

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Qatar is hoping to attract foreign buyers to its housing market,

Qatar is offering incentives to noncitizens and foreign investors amid an oversupply in the housing market that has sent prices falling.

The government, which limits the regions where non-Qataris can buy property, said it will expand that area in an effort to attract a wider buying pool, according to Bloomberg.

The country will also adopt a two-tier residency program to open up government benefits to some foreign property owners of luxury real estate. Those benefits were previously limited to Qataris citizens and longtime permanent residents.

Foreign buyers of a property valued above $1 million will be eligible for permanent residency, which comes with government benefits including health care and education. Foreign buyers of a property worth around $200,000 will be able to obtain semi-permanent residency without the need to be sponsored by an employer, Bloomberg reported.

Qatar is dealing with an oversupply of residential properties tied to the 2022 FIFA World Cup, which it is hosting. The country had an excess of 80,000 homes at the end of the June and has another 7,250 properties set to hit the market by the end of the year, according to consulting firm ValuStrat. Property prices are down 26 percent since the beginning of 2016.

Officials in nearby United Arab Emirates are dealing with oversupply problems of their own. Last year, the capital city of Abu Dhabi opened property ownership to citizens of countries outside the Gulf Cooperation Council for the first time. Foreign buyers are also restricted to buying property in certain areas there. [Bloomberg] — Dennis Lynch

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(Courtesy of Hillrose 28)

In an oversupplied market slowed by the pandemic, it seems anything that can set a Manhattan condominium apart may be worth pursuing.

The marketing team behind Forkosh Development’s under-construction Hillrose28 came up with a boozy promotion to attract potential buyers — a rosé created for the building and available exclusively at the sales gallery, according to the New York Post. The wine is aptly named Hillrosé28.

Corcoran Sunshine just launched sales for the 43-unit building at 181 E. 28th Street. Units start at $1.35 million and go up to $9.95 million for the largest penthouse. The 20-story tower is expected to be completed next spring.

The name of the building itself is a throwback to Rose Hill, an old name for the neighborhood between NoMad, Murray Hill, Kips Bay, and Gramercy that’s been used sparingly since the 19th century. Marketing materials refer to Rose Hill as a “neighborhood-within-a-neighborhood.”

Units at Hillrose28 are a mix of studio- to three-bedrooms. Common amenities include a roof terrace with a bar and grill, and a 24-hour gym. Designer Andres Escobar with Lemay + Escobar designed the interiors.

Manhattan condo sales have sunk since Covid hit — contracts fell 38 percent in August year-over-year and listings were up 30 percent — although there have been recent signs of life. Oversupply was already slowing the market before the pandemic.

Meanwhile, sales in Brooklyn and New York City suburbs have generally trended upward, a possible sign that the pandemic has made space a priority for buyers. [NYP] — Dennis Lynch 

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Sting and the house (Credit: Stefan Hoederath/Getty Images, and Beauchamp Estates)

A London townhouse that Sting once called home has hit the market for £12.95 million, or approximately $16.9 million.

The British multi-hyphenate — he sings, acts, writes musicals — and his wife, Trudie Styler, lived in the home, located in the borough of Westminster, for about two years, though it’s not clear when, Mansion Global reported. The current owners bought the five-bedroom, six-bathroom home in 2009.

The seven-story property was built in 1775 in the Georgian style, and has retained some of its original details, including marble fireplaces and sash windows. It’s also gotten some modern upgrades, including a sleek new kitchen and a roof deck that overlooks the city.

The home’s location is also likely to be a selling point: It’s close to London’s government buildings, including 10 Downing Street and the Palace of Westminster, and is a short walk to Buckingham Palace. It also overlooks St. James’s Park and Birdcage Walk.

As for Sting and his wife, they’ve spent the past few years buying and selling property in New York City: The couple sold their penthouse at 15 Central Park West in 2018 for $50 million, and picked up a penthouse at 220 Central Park South in 2019 for $65.7 million.

[Mansion Global] — Amy Plitt

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