Sheldon Adelson and the Venetian (Getty, The Venetian Resort® Las Vegas)
Sheldon Adelson’s Las Vegas Sands Corp. is reportedly soliciting interest for all of its three Las Vegas casinos.
The three properties — the Venetian Resort Las Vegas, the Palazzo, and the Sands Expo Convention Center — could sell for as much as $6 billion, Bloomberg reported.
The move would mean an exit from the U.S. gambling industry for the world’s largest casino company, but Adelson, who serves as chairman and CEO of the company, has expressed interest in building in New York City.
The U.S. market accounted for just 15 percent of Sands’ $13.7 billion in revenue last year.
The sale would leave the company with properties in Macau and Singapore, which accounted for 63 percent and 22 percent, respectively, of the company’s revenue last year.
The company wants to expand in those markets, which could be funded by a sale of the U.S. properties, said Bloomberg gambling and lodging analyst Brian Egger.
“We are seeing an uptick in real tourists on the ground in Macau,” said Ben Lee of Macau-based gaming industry consultancy IGamiX. “The profile of the Chinese tourists is dominated by young females and families — mainlanders taking advantage of the cheap accommodation on offer.” [Bloomberg] — Dennis Lynch
James Dyson and Guoco Tower (Getty; Wikipedia Commons)
James Dyson is taking a $7 million loss on a Singapore’s highest penthouse.
Britain’s richest person is selling the 21,000-square-foot penthouse at the 64-story Guoco Tower to Indonesian billionaire Leo Koguan for $47 million, according to Business Insider. He bought it last year for $54 million.
Dyson’s eponymous company — best known for its vacuum cleaners — moved its headquarters to the Southeast Asian country last year. It was there where the company planned to base an electric car project, but it cancelled that effort last October.
Dyson called the car “fantastic” but not commercially viable and said the company could not find a buyer for it.
Guoco Tower, also known as Tanjon Pagar Center, was designed by Skidmore, Owings, & Merrill and is Singapore’s tallest building at 951 feet. Dyson’s penthouse took up its top three floors, making it not only the highest residential unit in the city, but the tallest point in all of Singapore, period.
The tower has a mix of office, retail, and residential space. Its 181 residential units are located from the 39th floor and above and start at around $1.5 million.
The penthouse has a private garden and a rooftop terrace to itself, as well as five bedrooms, a 600-bottle wine room, a cabana and a lap pool.
Singapore’s residential market slowed significantly earlier this year when the coronavirus spread across the world, but it picked up in the second and third quarters. July’s 1,080 home sales were the most since November 2019. Pricing was generally flat in the second quarter. [Business Insider] — Dennis Lynch
Boeing headquarters in Chicago with Boeing CFO Greg Smith (Photos via Wikipedia Commons and Boeing)
Boeing may reduce its real estate footprint by as much as 30 percent because of the pandemic.
The Chicago-based company announced on Wednesday it is exploring its options for selling some of the real estate it owns around the country, the Puget Sound Business Journal reported.
“We’re reviewing every piece of real estate,” CFO Greg Smith said. “Every building, every lease, every warehouse, every site to see how we can be more efficient.”
Smith said the review aims to take advantage of “new and flexible remote work possibilities” that arose from the coronavirus pandemic, according to the Business Journal.
Job cuts will also allow the company to reduce space. The company plans to cut 30,000 jobs by the end of the year and announced 7,000 layoffs on Wednesday.
Boeing Commercial Airplanes’ 855,000-square-foot headquarters in Renton, Washington is among the properties that could end up on the market. It’s estimated to be worth more than $92 million.
The company listed some Southern California properties earlier this year.
The company posted a $754 million loss excluding special items in the third quarter as revenue fell 29 percent, according to CNN.
“The global pandemic continued to add pressure to our business this quarter, and we’re aligning to this new reality,” CEO Dave Calhoun said on a thirdquarter earnings call. [Puget Sound Business Journal] — Dennis Lynch
Social distancing at this secluded property won’t be too difficult.
A former military fortress in England is hitting the market for just over $5 million, according to the New York Times.
Known as Spitbank Fort, it was built half a mile off the coast of Portsmouth during the mid-to-late 19th century to guard against French ships.
It was decommissioned in 1950 and has been used for a variety of purposes, including a museum, nightclub, and most recently a hotel. It has never been for sale as a private residence.
The circular property is 150 feet in diameter and has about 33,000 square feet of living space across three floors, including 12 bedrooms, two kitchens, and a pool, according to the Times.
The interior spaces are built in two circular rings around a large central courtyard, encased in 15-foot-thick granite walls.
The rooms on the lower decks are built into cavernous spaces with vaulted brick ceilings, while bedrooms on the upper decks have riveted metal ceilings, windows and wood floors. There’s also one bedroom on an elevated crow’s nest.
Seller Mike Clare bought Spitbank Fort — along with two other similar but much larger forts in the strait — in 2009 and turned it into a hotel and event space. Clare likened the property to “a huge yacht.”
The two other forts are each three times as large, but only one has been renovated. They can also be had as a package deal for $12.4 million. [NYT] — Dennis Lynch
An assessment of how President Donald Trump affected real estate in terms of foreign investment, housing, taxes and general political sentiment. (Getty)
Nearly four years ago, Donald Trump was sworn in as the nation’s first developer-in-chief, surrounded by prominent figures from New York City real estate.
The sight of his industry friends on the national stage seemed to send a clear message: Real estate had a powerful ally in the White House. But as Trump’s term comes to a close, a look back at his actions shows that his administration has been a mixed bag for the industry.
Tax breaks passed in 2017 were a boon to commercial real estate, and the makeup of various groups appointed by the president hinted that New York developers had his ear. But immigration policies and a trade war with China drove down foreign investment in luxury properties and hiked costs of construction materials.
Caps on state and local tax deductions drew the ire of residential brokers in the Northeast and California. And having a regulation-cutting real estate developer in the Oval Office likely fueled anti-industry sentiment in local politics and pushed blue-state legislatures further to the left.
“All in all, it hasn’t been an advantage to have a developer in the White House,” said George Arzt, a New York City-based political consultant whose clients include builders. “I think there is a general wariness about Trump among real estate developers. He has his supporters, but for the most part, people are very wary.”
Foreign investment fatigue
(Images via Getty Images and Mango Map)
U.S. real estate has long been viewed as a safe place for overseas investors to park their cash. But the flow of foreign money has declined each of the past three years.
After peaking at $153 billion in 2017, foreign investment in U.S. homes fell to $121 billion the following year and $77.9 billion in 2019, according to a report by the National Association of Realtors. Between April 2019 and March 2020, sales slid another 5 percent to $74 billion. The report also found that since 2016, the number of immigrants who have obtained lawful permanent status in the U.S. has declined by roughly 90,000.
“The major investors have been locked out. Chinese investment is no longer welcomed,” said Ed Mermelstein, a real estate attorney and co-founder of One and Only Holdings, a luxury real estate investment consulting firm. “Many other foreign investors have, in a sense, abandoned the U.S. due to visa issues, banking issues and the lack of feeling comfortable with the current administration’s position on keeping America protected from outside sources.”
In recent years, developers and investors have also moved away from the EB-5 program, which allows foreign investors to obtain a green card in exchange for investing in job-creating U.S. businesses. Despite opposition from the real estate industry, the Trump administration increased the minimum investment required for the program. It also made it harder for state governments to gerrymander census tracts. (EB-5 investments are supposed to target businesses in areas of high unemployment.)
Changes to the program, including lowering the investment threshold and making it easier for investors to obtain visas, were floated in March as part of Congress’ $2 trillion federal stimulus package bill, but ultimately were dropped.
Taxes gained, taxes lost
Mermelstein noted that while the luxury sector has struggled from a lack of foreign investment, housing markets — even throughout the pandemic — have remained “quite heated up,” which he attributed to record-low mortgage rates.
The housing market was dampened for some, though, with Republicans’ 2017 federal tax code overhaul. The measure capped deductions of state and local taxes at $10,000, a move that critics said made home ownership more expensive in high-tax states such as New York and New Jersey and drove buyers elsewhere.
The federal tax overhaul did, however, include major benefits for the industry. It capped the tax rate for “pass-through” businesses, such as LLCs and S-Corps. It introduced the Opportunity Zone program, which allows developers to defer or escape capital gains taxes if they invest in one of 8,700-plus areas designated as “distressed.” Investors have pumped at least $12 billion into Opportunity Zones as of September 2020, according to accounting firm Novogradac.
During a debate in October, the president praised the program, saying Black and Hispanic communities have been its biggest beneficiaries. Critics have said it has done the opposite by encouraging the construction of luxury towers and rewarding deep-pocketed developers.
Sean Raft, chief administrative officer of Urban Catalyst, an equity fund focused on Opportunity Zones outside San Jose, has watched the program evolve over the last three years and seen his investor base become increasingly comfortable with it.
“There wasn’t a lot of clarity when it first came out,” he said. “It was a little bit of a roller coaster in terms of structuring.”
The Internal Revenue Service and Department of the Treasury released guidance in April 2019 that cleared up much of the uncertainty. Still, Raft said the program is in a “fragile” place. He expects changes will be made under either a Biden or Trump administration, likely in the form of reporting requirements. But he thinks more substantial retroactive changes to the program could kill it.
“The Opportunity Zone law, I look at it like it is a prototype,” he said. “A prototype is not perfect. But if we destroy the prototypes, there will be no future versions.”
A little help from his friends
Richard LeFrak and Steve Roth (Credit: Getty Images
Just before he was inaugurated, Trump tapped developers Richard LeFrak and Steve Roth to lead a new infrastructure advisory council. Though the council was dissolved a few months later as members quit in the wake of Trump’s Charlottesville comments, its creation was part of a pattern of Trump bringing in people he knew from the business world. Most recently, in April, the president appointed several real estate executives to an economic recovery council, including Roth, Blackstone Group’s Jonathan Gray, David Simon of mall giant Simon Property Group, Stephen Ross of Related Companies and Steve Witkoff of the Witkoff Group.
But being associated with Trump has also backfired on industry bigwigs. Reports that Related’s Ross was hosting a fundraiser for the president last year inspired calls to boycott the developer’s other business ventures, including Equinox and SoulCycle. Ross later said he regretted the backlash suffered by his partners.
On a larger scale, many have pointed to Trump’s presidency as a galvanizing force in local politics. Riding a wave of motivated, Trump-hating voters, Democrats in New York took control of the state Senate in the 2018 elections and the next year made massive, pro-tenant reforms to the state’s rent stabilization law. Socialists, who until recently were fringe players in New York politics, have won several seats. And real estate contributions, once a reliable source of campaign cash, are now viewed by many as a liability. Several mayoral and City Council candidates are rejecting them.
It might not be possible to put that genie back in the bottle.
“There’s definitely been a huge wave of anti-real estate sentiment from the political standpoint, and that probably has quite a bit to do with the current administration,” Mermelstein said. “Having spoken to many progressive government officials, I don’t believe a change in administration will change the flow of those waters.”
Jon Needell, president and chief investment officer at California-based Kairos Investment Management, said Trump’s time in office has proven to be both positive and negative for the industry. Trump has kept the capital gains tax rate low and maintained the 1031 tax exchange program, Needell said. At the same time, having a developer as president has thrown an unwelcome spotlight on what many in the industry consider part of the normal course of business, such as the use of depreciation to minimize tax bills.
“The reality is, some of the things that stayed under the radar may get more attention,” he said. Needell added that he considers recent reports that Trump paid only $750 in taxes in 2016 and 2017 a different matter entirely, as that was made possible by huge losses.
“That sheds a bright light on something I don’t get,” he said. “And all that’s going to happen is I’m going to get punished for it.”
Despite Trump’s claim that he will boost property values, it’s not clear that those have grown that fast in places where he won handily in 2016 (Getty; iStock)
In July, President Trump announced that the Department of Housing and Urban Development would repeal an Obama-era rule requiring localities that receive federal funding to break down barriers to fair housing.
“I am happy to inform all of the people living their Suburban Lifestyle Dream that you will no longer be bothered or financially hurt by having low income housing built in your neighborhood,” Trump tweeted. “Your housing prices will go up based on the market, and crime will go down.”
Though it’s too soon to see the effects of the repeal, The Real Deal used election and housing data to see how property values changed across the country over the last four years.
In pitching himself as a protector of the suburban way of life, Trump was playing to his base. In the 2016 election, he dominated in smaller counties with high rates of homeownership, according to an analysis of American Community Survey estimates and election data from that year.
Counties where more than 70 percent of the electorate voted for Trump saw a median increase of 19.5 percent in property values between September 2016 and September 2020, according to the Zillow Home Value Index. That’s a marginal increase over blue and purple counties.
In Shackelford County, Texas, for example, 92 percent of the electorate voted for Trump in 2016 — the highest percentage of any county for which Zillow tracks home values. There, the typical property’s value increased by 22.7 percent between September 2016 and September 2020.
Counties across the board saw a median increase in property values of 24.5 percent.
Blue counties, however, have significantly higher property values to begin with. That’s because they tend to be more populous and based around major cities like New York and San Francisco, which drives up demand and prices for real estate. Blue counties had a median value of $266,504 in September 2020, according to Zillow. Red and purple counties had a median of $119,018 and $162,453, respectively.
TRD also assessed how property values changed during previous presidential terms to see how Trump stacks up. Of the five terms analyzed, former President George W. Bush’s first term saw the steepest growth. During Bush’s first term, executive agencies eased lending restrictions, which contributed to the housing bubble that eventually burst at the tail end of Bush’s second term.
That led to a fall in housing values during former President Barack Obama’s first term, but they began to recover after he was re-elected in 2012. That recovery continued into Trump’s first term.
Source note:TRD analysis of MIT Election Lab’s county-level 2016 presidential election data and the Zillow Home Value Index. Alaska was excluded from the analysis of property values because votes in Alaska are collected at the District level and the Zillow Home Value Index does not aggregate data at the District level. Homeownership rate data came from the 2018 American Community Survey 5-year estimates, which are the most current, accurate comprehensive demographic estimates available.
Yoko Ono and John Lennon with 720 South Ocean Boulevard (Getty Images; Zillow)
The Palm Beach estate formerly owned by the late John Lennon and Yoko Ono sold for $36 million, five months after it was listed for sale.
Former Bear Stearns executive John Sites and his wife Cindy sold the oceanfront property at 720 South Ocean Boulevard, according to the Multiple Listing Service. It hit the market in May for $47.5 million with Christian Angle of Christian Angle Real Estate. The Corcoran Group represented the buyer.
A young family from the Northeast purchased the estate, according to the Wall Street Journal.
The late Beatle and his singer-songwriter-artist wife paid $725,000 for the mansion in January 1980, and Lennon was killed in December of the same year. Ono sold the 1.3-acre property in 1986 for $3.2 million.
The home was designed by architect Addison Mizner and originally built in 1920.
The Sites paid $23 million for the seven-bedroom, 14,000-square-foot mansion in 2016. The property includes a tennis court, two swimming pools, a beachfront cabana and 180 feet of ocean frontage. It also features a three-car garage, nine bathrooms, three half-bathrooms, an oceanfront owner’s wing and a grand salon with a wet bar.
Though Lennon and Ono owned the mansion together for less than a year, they had time to make headlines in Palm Beach. “Pop Culture Florida” author James P. Goss wrote in his book that Lennon and Ono were once turned away from The Breakers because their companions weren’t wearing neckties.
The sale of the waterfront estate adds to a number of closings in Palm Beach. Buyers are snatching up luxury properties shortly after they hit the market, as the pandemic fuels demand. Just last week, the non-waterfront home at 201 El Vedado Road sold for nearly $21 million.
Nearby in North Palm Beach, billionaire Russell Weiner recently flipped the North Palm Beach homes he acquired in September from Elin Nordegren, the ex-wife of golfer Tiger Woods. He sold them for more than $48 million, marking a 45 percent gain in one month.
The giant has just purchased Germany-based Emporis, which has data on 700,000 buildings, to “jump start” its international business. The deal caps a string of buys for CoStar, including Ten-X ($190M), hotel data provider STR ($450M) and RentPath ($588M).
CEO Andy Florance said CoStar’s international market opportunity is “more than twice” that of North America — and that’s pretty big. CoStar’s third-quarter revenue jumped 21 percent year over year to $426 million. Its quarterly profit was $58 million, a drop from last year’s $79 million and $60 million in Q2. Meanwhile, the company has a $4 billion warchest.
One potential target could be CoreLogic. The data and analytics firm received multiple takeover bids at more than $80 per share. According to Bloomberg, CoreLogic is in talks with CoStar and a consortium including Warburg Pincus and GTCR.
In September, CoreLogic rejected an unsolicited offer for $66 per share from shareholders Senator Investment Group and Cannae Holdings. “No decision has been made to enter into a transaction at this time,” the company said Wednesday. Shares rose 13.2 percent to $77, following the news.
“When we took @Zillow $Z public in 2011 it was … a facepalm moment. We priced at $20, but the stock hit $60 moments after it started trading. Our employees and VCs were penalized by the broken IPO system.”
Masa should probably stop texting
After WeWork’s bungled IPO, SoftBank agreed to pay shareholders $3 billion. But new court documents show CEO Masayoshi Son told executives to “use whatever excuse” to delay the tender offer. In a text message exchange, Marcelo Claure told Son he would, citing antitrust approval. “I am turning good at excuses like someone I know very well :),” Claure wrote.
Ultimately, SoftBank scrapped the offer to repurchase stock from shareholders, including founder Adam Neumann, who is suing SoftBank. A SoftBank spokesperson said “cherry-picking” quotes didn’t change the fact that SoftBank had “no obligation” to complete the tender offer.
But there’s more. WeWork CEO Sandeep Mathrani said this week that the company would likely revisit plans for an IPO as soon as next year once it turns profitable, Bloomberg reported. “Nazar na lag jaye,” he told Indian reporters, using a Hindi expression to avoid casting an evil eye on WeWork’s turnaround.
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Show them the money
Camber Creek, a backer of VTS and WhyHotel, raised $155 million for its third and largest fund, which included backing from Texas Employees Retirement System. Since 2011, the firm had raised a total of $37 million and invested in 25 startups. Its latest raise is four times the size of its first two funds combined.
“We were dramatically underinvesting,” Jake Fingert, a general partner, said. He said the later-stage market’s gotten bigger and more competitive. “As early investors, we have the opportunity to continue to support those companies; we want to make sure we had the right amount of capital.”
STAT OF THE WEEK
$96.1B
Amazon’s record-breaking Q3 revenue, with $6.3B in profits
Tishman gets SPAC’ed
Billionaire Bill Ackman. Investor Chamath Palihapitiya. Former House Speaker Paul Ryan. And now, Tishman Speyer.
The landlord jumped on board the SPAC craze, forming a blank-check company that’s looking to raise $300 million for a proptech deal. With 78 million square feet under management, Tishman is hoping its industry experience will give it an edge in an increasingly crowded space. Since 2017, Tishman’s “selectively invested” in 11 startups.
Trouble in iBuying?
Despite betting big on iBuying, Zillow has cut 80 jobs from its home buying and selling business. The real estate giant does not disclose how many of its 5,300 employees work for Zillow Offers. But a spokesperson told GeekWire the cuts would allow Zillow to invest in iBuying by “realigning our resources and staffing levels.”
Zillow lost more than $300 million on iBuying last year, and it loses about $6,500 per home. It recently said it would hire in-house brokers to represent it on home purchases, allowing it to reduce brokerage fees and take a step toward breaking even.
40M ways to make mortgages less “lousy”
You’ve heard of a $1 million seed round, even a $5 million one. But $40 million? That’s how much two former Zillow execs just raised for a new mortgage startup called Tomo.
Founded by Carey Armstrong and Greg Schwartz, Tomo bills itself as a fintech startup that aims to streamline homebuying for buyers and agents. “Buying a home is a lousy experience,” Schwartz said. “Despite years of tech companies focusing on real estate, the overall process has not changed.”
Tomo’s initial funding was led by Ribbit Capital, Zigg Capital and NFX, a firm co-founded by Trulia co-founder Pete Flint. Spencer Rascoff, co-founder and former CEO of Zillow, is also an investor, along with SVB Capital, Ted Ackerley, Alex Sacerdote, Kurt Mobley and Eli Weinberg.
Small bytes
✄ Knotel laid off 20 staffers, bringing its headcount to 250. But CEO Amol Sarva is hoping for profits early next year.
Jack Chandler, BlackRock’s former real estate head, is joining CrowdStreet’s investment committee.
Airbnb said it will go public on Nasdaq.
Caliber Home Loans and AmeriHome are delaying their IPOs due to market volatility.
NYC employers, including Deloitte and NBC, are using a “Health Pass” app from CLEAR to screen workers for Covid. Upon entry, workers snap a selfie and get a temperature check.
L.A.-based Stay Open, which turns unused commercial spaces into pod hotels and co-living units, raised $2 million in seed funding. Its first project is a Budget Rent a Car into a 240-room hotel.
Finnish iBuyer Kodit.io raised €100 million, or $116M, in a debt and equity round led by NREP.
Housing prices in the Rockies see a bump as tech workers move in from the coasts (iStock)
Housing prices are rising fast in Western mountain communities where newly liberated tech workers are moving in.
Major tech firms, including Facebook, Twitter and Stripe, have implemented flexible work-from-home policies for their employees — some permanent — since the onset of the pandemic. And some of their employees who were previously tied to the Bay Area are flocking to towns around the Rockies, such as Boise, Idaho, and Park City, Utah, the Wall Street Journal reports.
That’s good for local businesses, but it’s creating tension because of the widening wealth gap as well as the rising housing prices. Remote-working tech workers with generous paychecks snatch up available homes sometimes with all-cash offers, according to the Journal.
In Bozeman, Montana, the median home price has risen to $515,000 from about $432,000 in a year, according to the Bozeman-based Gallatin Association of Realtors.
Amy Alvarado, a Bozeman real estate agent with Engel & Völkers, told the Journal that about 95 percent of her clients since the pandemic are from the Bay Area, and many make all-cash offers.
The transplants from the Bay Area have been a boon for businesses like restaurants and bike stores, but they also drive up cost of living, said Casey Metzger, owner of the Top Shelf mobile bartending and consulting service in Park City, Utah.
“If we don’t pay attention to low-income housing, we’re going to be in trouble,” Metzger told the Journal.
JLL CEO Christian Ulbrich didn’t exactly say Cushman & Wakefield wasn’t worth a page out of its checkbook. But the executive did throw shade on a pipeline of M&A deals rumored to include JLL’s smaller rival.
“The opportunities are increasing quite significantly at the moment,” Ulbrich said during the brokerage’s third-quarter earnings call Monday morning.” At the time we haven’t seen anything we think would be worth spending our shareholder’s money on.”
The statement came after JLL was rumored to be in discussions with Cushman about a potential acquisition, and as M&A activity in the commercial real estate brokerage industry is on the rise.
JLL and Cushman had reportedly been in talks recently about a potential merger, according to a recent news story. One source at JLL confirmed to The Real Deal that the talks had taken place. Cushman also reportedly made an offer to buy Newmark, which the latter rejected. And Marcus & Millichap recently inked a deal to buy Mission Capital Advisors.
Cushman’s large debt load, however, poses a complication for any potential tie up. The company’s debt of $3.2 billion exceeds its market cap of $2.8 billion. And the company’s earnings are trending in a direction that could trigger a technical default under the loan agreements.
JLL is a much larger company with a market cap of nearly $6.3 billion and also has a stronger balance sheet with a lower debt-to-earnings ratio. On Monday’s call, JLL CFO Karen Brennan said the company reduced its net debt by $320 million in the third quarter, bringing the company’s borrowings down to the level they were prior to JLL’s acquisition of the brokerage HFF in 2019 for $2 billion.
JLL’s earnings for the third quarter declined 19 percent compared to the same time last year to $244 million, driven by large declines in its leasing and capital markets businesses.
One financial indicator did, however, show improvement. The company’s EBITDA margin — a measure of earnings to revenue that filters out some financial variables — increased by 90 basis points to 17.4 percent.
JLL executives said the increase was due largely to layoffs and the benefits of government relief programs tied to Covid-19. The company in mid-October went through a large round of layoffs, as TRD reported last week.
Brennan said the company realized about $135 million in savings from reduced salary and benefits, 50 percent of which came from its Middle East region and 40 percent from the Americas.
Friendly’s announced Sunday that it has filed for Chapter 11 bankruptcy (Getty)
The Covid-19 pandemic hasn’t been friendly to Friendly’s.
The restaurant chain announced Sunday that it has filed for Chapter 11 bankruptcy, according to a press release. The company has already entered into a sales agreement with Amici Partners Group, which invests in and runs eateries.
The sale price is less than $2 million, Restaurant Business reported. The filing isn’t expected to dramatically affect the chain’s more than 130 locations, nearly all of which should remain open. At one point, the chain had more than 500 locations.
“We believe the voluntary bankruptcy filing and planned sale to a new, deeply experienced restaurant group will enable Friendly’s to rebound from the pandemic as a stronger business, with the leadership and resources needed to continue to invest in the business and serve loyal patrons, as well as compete to win new customers over the long-term,” George Michel, CEO of FIC Restaurants, said in a statement.
This isn’t the first time the chain has entered bankruptcy: It filed for Chapter 11 protection in 2011, and ended up closing more than 60 restaurants. It exited bankruptcy in 2012, and was subsequently acquired by Dean Foods in 2016 for $155 million.
Amici Partners Group is an investment group affiliated with Brix Holdings, the parent company of chains like Red Mango and Souper Salad. The sale price
Other restaurant franchises have struggled since the pandemic hit. Among those who have filed for bankruptcy in recent months are Chuck E. Cheese parent GNC, Le Pain Quotidien and Ruby Tuesday.
Angel Febres, partner, Homecookin’ Hospitality and Metro 1 Managing Director Andres Nava
A nightclub building in Wynwood is hitting the market, unpriced.
Miami-based commercial brokerage Metro 1 has the listing for the property at 150 Northwest 24th Street. The sole tenant is the nightclub Rácket, according to a release. It is operated by Miami Beach-based Homecookin’ Hospitality Group, led by Angel Ferbes.
The owner is HJK Holding, led by CEO Hadassah Keynan. HJK bought the building in 2005 for $760,000, records show.
The 6,700-square-foot building is listed unpriced, but comparable properties in the area have sold for $1,100 per square foot to $1,500 per square foot, according to the release. That would translate to a price of $7.37 million to $10 million.
The one-story building was built in 1951, according to records.
In November, Metro 1 listed Wynwood Crossings, a 1.38-acre site in Wynwood’s southeast quadrant, for $21.5 million.
Among other recent listings in Wynwood, the Related Group and its partner, Block Capital Group, are looking to sell their apartment-hotel, Domio Wynwood, which has a whisper price of $90 million.
Recent sales in Wynwood include Related closing on a development site in May for $18.5 million.
Homebuilders continue to be responsible for the majority of dollars spent on construction (iStock)
Construction spending this year is up 4.1 percent from last year, according to new data for September.
During the first nine months of the year, some $1.058 trillion has been put toward public and private construction, compared with $1.016 trillion for the same period in 2019.
The housing sector powered the gain, though growth tapered off in September.
Construction spending for the month was estimated to be $1.4 trillion, seasonally adjusted, which is a marginal 0.3 percent gain from August, according to the Census Bureau’s monthly report.
September’s spending represents a 1.5 percent year-over-year increase from $1.39 trillion in 2019.
Private residential construction was once again responsible for the majority of construction costs — and the only sector tracked by the report that saw month-over-month growth. Private homebuilders’ work was estimated at $610 billion in September, seasonally adjusted, up 2.8 percent from August’s $594 billion.
Sentiment among homebuilders hit an unprecedented high level last month, though buyer demand for newly built homes waned. Home prices continue to climb, however, amid record low levels of inventory. Housing starts in September were up 2 percent from August and 11 percent year-over-year.
Nonresidential private construction totaled $464 billion in September, down 1.5 percent from August’s estimated $471 billion. Public construction spending was also down with a total spend of $339 billion. That’s a drop of 1.7 percent from August’s $344.8 billion.
PREIT CEO Joseph Coradino and CBL Properties founder Charles B. Lebovitz with the Fashion District in downtown Philadelphia and the Burnsville Center Mall in Minneapolis (Google Maps)
The Covid-accelerated retail apocalypse has claimed two more victims.
Mall owners CBL Properties & Associates and Pennsylvania REIT (PREIT) filed for Chapter 11 bankruptcy on Sunday, adding to the growing list of retail and mall owners that have faced a financial reckoning this year.
Chattanooga-based CBL Properties first announced plans to file for bankruptcy in August to restructure its debt. By filing for bankruptcy, the company said, it can reduce its debt obligations by $1.5 billion.
CBL’s portfolio consists of 107 properties totaling 66.7 million square feet across 26 states. The company is generally focused on Class B and C malls which bring in less money per square foot than higher-end, Class A malls.
The company filed in the U.S. Bankruptcy Court for the Southern District of Texas.
Philadelphia-based Pennsylvania REIT owns and operates over 22.5 million square feet of retail with most of its mall properties in the Philadelphia and Washington, D.C., metropolitan areas, according to its website. PREIT owns the Fashion District in downtown Philadelphia, a 1.47 million-square-foot retail center that boasts bowling, coworking and an AMC movie theater.
In the second quarter PREIT reported that revenue decreased $20.1 million, resulting in part from bankruptcies and store closings, and an increase in credit losses for struggling tenants. The company said it had secured $150 million in borrowing to recapitalize its business and extend the company’s debt schedule, according to a recent press release. It filed for bankruptcy in Delaware.
Shopping centers and malls have taken a major blow from the pandemic as retail tenants have declared bankruptcy or stopped paying rent. And while most malls have reopened, many customers are still reluctant to shop. Traffic at the country’s largest malls dropped 51 percent in the first eight months of the year compared to last year, according to data from Placer.ai.
Charles Ayres and John Idol, with Palm Beach Biltmore
John Idol, the chairman of Capri Holdings Limited, which owns Michael Kors, Versace and Jimmy Choo, sold his Palm Beach Biltmore penthouse for $9.6 million.
Records show John D. Idol sold unit C13 at 150 Bradley Place to Charles Ayres. Ayres is a managing partner and chairman of Trilantic North America, a New York-based global private equity firm.
Idol purchased Michael Kors Holdings — now called Capri Holdings — for $100 million in 2003, according to published reports. He was named CEO that same year and became chairman of the publicly traded company in 2011.
Idol also owns an 8,973-square-foot waterfront mansion in Palm Beach that he bought for $21.16 million in 2018.
In 2015, Idol bought the Biltmore condo from Sarvenaz Pahlavi for $7.4 million, according to records. The two-bedroom, three-bathroom penthouse totals 3,299 square feet, according to records.
The 11-story Palm Beach Biltmore was built in 1925 on the Intracoastal Waterway as the Alba Hotel. It was converted into condominiums in 1978.
Ayres joined Trilantic North America in 2009, the year it was founded. He was previously the managing director at Lehman Brothers Merchant Banking, according to Trilantic’s website.
Other deals in the Palm Beach Biltmore include a top Charlotte Hornets executive purchasing a condo for $5.4 million and a two-bedroom double condo selling for $7.65 million.
Ron Shuffield and Alirio Torrealba with a rendering of Biltmore Row (EWM, Twitter/MG)
MG Developer tapped Berkshire Hathaway HomeServices EWM Realty to take over the remaining sales of its Coral Gables projects, Althea Row and Biltmore Row, marking the third brokerage in a year and a half.
One Sotheby’s International Realty most recently handled sales and marketing of the projects. The townhome developments mark the final phase of the Coral Gables developer’s Biltmore Square community. Fifteen units remain: 10 at Biltmore Row and five at Althea Row. Both are located on the corner of Valencia Avenue and Anderson Row in Coral Gables.
The townhouses range from 4,500 square feet to 5,500 square feet and start at $3.4 million. EWM agents Frank Kissel and Annie Tabraue now are in charge of sales of the remaining units, said Ron Shuffield, president and CEO of the brokerage.
Shuffield said that the developer approached his firm to take over sales and marketing. He noted the substantial increase in out-of-state buyers throughout the pandemic. “Some days it seems surreal that this is happening,” Shuffield said.
Biltmore Square includes the residential projects Biltmore Parc and Beatrice Row. The developer also has Valencia Townhomes, The Ponce and Villa Blanc.
Fernando de Nuñez y Lugones, executive vice president of One Sotheby’s, said in a statement that the company is “proud to have nearly sold out Biltmore Parc, fully leased Villa Blanc, and we will continue to represent The Ponce.”
One Sotheby’s took over from Fortune International Realty in June 2019.
Althea Row is expected to be completed next year and Biltmore Row will be completed in 2022, according to a release. The developer recently secured $16.2 million in equity financing that was arranged by Colliers International brokers Jeffrey Donnelly and Dmitry Levkov.
Building materials cost around $250 billion a year. To help keep spending in check, construction heavyweights Tishman Speyer and Suffolk Construction have just backed a startup aimed at streamlining the supply chain.
San Francisco-based Agora announced a $7 million Series A on Friday, bringing its total funding to $11 million. The company connects construction managers, purchasing agents and vendors on a single platform where they can place, track and manage orders in real time
The round was led by 8VC with participation from Tishman, Suffolk, Abstract Ventures, BoxGroup and Eventbrite co-founder Kevin Hartz. In a statement, 8VC’s Alex Kolicich said construction is a $10 trillion industry that still runs on “antiquated software,” and that Agora seeks to fix a “core workflow.”
Agora was founded in 2018 by Maria Rioumine, a former investment banker, and Ryan Gibson, an engineer with past stints at Facebook, Google and Microsoft. The two met at 8VC, where Gibson worked on the investing team and Rioumine was chief of staff to the firm’s co-founder, Joe Lonsdale, also a co-founder of Palantir. Previously, 8VC has backed proptech startups Qualia, which digitizes real estate closings, and Common, participating in the co-living company’s recent $50 million round.
According to Rioumine, the construction industry places billions of dollars of purchase orders each year, all managed with pen and paper or primitive spreadsheets. “That, to us, seemed crazy,” she said.
“Having the support of those industry groups, who really understand these problems and who live them day in and day out was a huge vote of confidence for us,” she added.
Through the company’s subscription-only app, workers can submit product orders, track deliveries and report errors. Purchasing teams can also use the app to price shop and process orders. Its average customer places 1,500 purchase orders each year, according to Rioumine.
A wave of venture capital is flowing into construction startups like Katerra and Procore. In September, Mosaic Building, which converts blueprints to Ikea-like assembly instructions, inked a $100 million deal with Mandalay Homes to build 400 houses in Arizona.
Overall, investors poured $5.1 billion into construction tech between 2015 and 2019, according to CB Insights. This year, funding is expected to hit $1.3 billion, a 56 percent year-over-year increase.
Covid threw a wrench in Agora’s plans, but only briefly. “Saving cost is more important than before, so we saw a huge spike in demand in March that has continued,” Rioumine said. Agora is currently processing $1 million in orders weekly, for an annualized rate of $50 million a year.
Rioumine declined to disclose revenue, but said the company’s user base has grown 50 times since March, while revenue was up 3 times during the same period.
The company currently has 19 employees in San Francisco and Austin, and will use the new funding to hire across its product and engineering teams. So far, the platform has been offered to electricians working across multi-family, retail, office and industrial projects, but it will eventually expand to other verticals.
Suffolk and Tishman both have venture arms: This fall, Suffolk launched an accelerator program for startups, while Tishman has backed nearly a dozen real estate and construction tech startups, including VTS, Latch and Lyric. Last month, it formed a $300 million blank-check company in order to take a proptech company public.
Bell Partners CEO Jon Bell and the Bell at Broken Sound complex (Bell Partners, Google Maps)
An apartment investment and management company bought a pair of multifamily complexes in Boca Raton for a combined $94.25 million.
An affiliate of Greensboro, North Carolina-based Bell Partners, led by CEO Jon Bell, bought the complexes at 5500 Broken Sound Boulevard and 950 Northwest Broken Sound Parkway, according to records. Built in 2018, the two complexes are within a mile of each other.
Mainstreet Capital Partners sold the 180-unit community at 5500 Broken Sound Boulevard for $56.5 million, or about $314,000 a unit. Mainstreet, which is based in Fort Lauderdale and led by managing partner Paul Kilgallon, bought the land in 2015 for $8.5 million, records show.
Bluerock Residential Growth REIT sold the 90-unit apartment community at 950 Northwest Broken Sound Boulevard for $37.75 million, or about $419,000 a unit. Bluerock, which is based in New York and led by CEO Ramin Kamfar, bought the land in 2016 for $4 million.
According to an online listing for The Bell at Broken Sound at 5500 Broken Sound Boulevard, the community has a 24-hour gym and a dog park. Units range from studio to three bedrooms. An 800-square-foot, one-bedroom, one bath apartment rents for $1,800 a month. A 1,640-square-foot, three bedroom, three-bath apartment rents for $3,404 a month.
Bell Partners has been active in South Florida’s multifamily market. In 2019, Bell Partners bought an apartment complex in Pompano Beach for $58.5 million, and also paid about $62 million for an apartment complex in Miramar.
In 2018, A partnership between Mainstreet Capital Partners and an investment fund managed by the Davis Companies sold an office building at the Park of Broken Sound at 900 Broken Sound Parkway for $23.7 million.
Other recent multifamily sales in Boca Raton include the Jewish Federation of South Palm Beach County selling an affordable senior housing complex in Boca Raton to Fairstead for $33.75 million.
26 Indian Creek Island Road with Jeffrey and Jackie Soffer (Realtor, Getty, iStock)
Jackie Soffer is keeping it in the family.
The Turnberry Associates CEO sold her waterfront Indian Creek Village teardown to her younger brother, Jeffrey Soffer, for $17 million, property records show.
Soffer had listed the nearly 2-acre property at 26 Indian Creek Island Road for sale, asking $29.5 million, in 2017. Records reveal her 26 Indian Creek Land Trust sold the 6,400-square-foot home to an LLC controlled by Jeffrey. Jeffrey owns the property next door at 27 Indian Creek Island Road.
The siblings co-led Turnberry Associates, the company their father, Donald Soffer, had founded, for 25 years before splitting up in early 2019. https://therealdeal.com/miami/2019/03/04/turnberry-partners-and-siblings-jackie-and-jeffrey-soffer-split-up/ Jackie stayed on at Turnberry Associates as chairperson and CEO, as well as principal owner of Aventura Mall and Town Center Aventura, among other properties. Jeffrey started Fontainebleau Development. His properties include the Fontainebleau Miami Beach, the JW Marriott Miami Turnberry Resort & Spa and Turnberry Ocean Club Residences, the latter of which was recently completed.
Jackie paid $11.5 million for the Indian Creek lot in 2007. The property includes a house that was built in 1948. Soffer lives with her husband, Miami Design District developer Craig Robins, in Miami Beach.
Mirce Curkoski, Alexa Eve Iacovelli and Albert Justo of One Sotheby’s International Realty previously had the listing.
The exclusive island, with about three dozen homes, is west of Surfside. Some of America’s 500 wealthiest people own properties on the island, including activist investor Carl Icahn, car dealership mogul Norman Braman and hedge fund manager Eddie Lampert.
In early 2019, a waterfront mansion on Indian Creek sold for $49.9 million, then a new record for single-family home sales in Miami.
ByteDance founder & CEO Zhang Yiming (Credit: Zheng Shuai/VCG via Getty Images)
ByteDance, the parent company of social video platform TikTok, has leased an enormous amount of data-center space in a Virginia corridor known as “Data Center Alley.”
ByteDance was behind three data center transactions in northern Virginia in the first half of 2020, Business Insider reported, citing a person with knowledge of the transactions.
The company’s new 53 megawatts of data center capacity — which is likely to take up hundreds of thousands of square feet in real estate — could accommodate hundreds of thousands of servers for cloud computing and data processing, according to Business Insider.
The data center business is booming as streaming services grow in popularity. Data center real estate investment trusts have flourished during the pandemic, rising on average by about 25 percent, even as the overall REIT market has declined.
With the added capacity, China-based ByteDance is adhering to the federal government’s requirements to store domestic TikTok users’ data in the U.S., Jennifer Cooke, an IDC analyst, told Business Insider.
The Trump administration has been pressuring ByteDance to give U.S. investors a majority share of the company, citing national security concerns. An agreement was made for Oracle and Wal-Mart to take control of the company, but disagreements between the parties have kept the deal from being finalized.
In May, ByteDance inked a lease with the Durst Organization for 232,000 square feet at One Five One in Times Square, in one of the biggest office leases signed during the pandemic. [BI] — Akiko Matsuda
Jack Chandler, BlackRock’s former real estate head, is 
Airbnb said it will go public on Nasdaq.
NYC employers, including Deloitte and NBC, are using a “
L.A.-based Stay Open, which turns unused commercial spaces into pod hotels and co-living units, raised $2 million in seed funding. Its first project is a Budget Rent a Car into a 240-room hotel.
Finnish iBuyer 
