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Brookfield’s deal to sell 777 Tower in Downtown LA collapsesBrookfield’s deal to sell 777 Tower in Downtown LA collapsesGlossier founder is buyer of $22M Brooklyn townhouseGlossier founder is buyer of $22M Brooklyn townhouse“I wouldn’t use it, I would just lock the door”: Landlords pan new rehab law“I wouldn’t use it, I would just lock the door”: Landlords pan new rehab lawSwig finds new bottom with DTLA office sale at $94 a sfSwig finds new bottom with DTLA office sale at $94 a sf
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This Week in Comments

Rental volume picks up as rents drop: report
Don’t ask too much from these reports. They are marketing tools and not intended for serious research. That’s why they are laid out like sales brochures and offer poor analysis. Given that these data are based on Citi deals, they should at least report the measurable incentives like free months, etc., [which the firm doesn’t] even make an attempt to quantify.

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LEM acquires W Union Square for $2 million at mezz auction
1. Since $214 million ($212 plus the $2 million to acquire this) is ridiculous today. The B-note will sell at a huge discount if it’s not completely underwater. However, LEM is probably just protecting its existing $20 million investment by buying time to eventually maybe get out rather than being liquidated to zero dollars today, and LEM has possible opportunity to restructure or buy at a discount the debt. Sounds like the other buyer competing for this was the equity behind LEM, so this deal is not a market trade of a hotel that offers anything on valuation and pricing today.
2. This deal is not a purchase; it is a debt extension disguised as a purchase. Time will tell.
3. The miracle in this transaction will be the speed at which this property reappears on the market. LEM has bought this property when it is already underwater. The assumption of this amount of debt, which, can in no way be serviced from the asset, is ludicrous. Unless there is some hidden secondary transaction happening here, the lender will be busy with another foreclosure within six months.
4. I think the point here is that virtually all desirable properties that have securitized debt and complex financing stacks will have similar issues during any inevitable workout process.

New York gets crushed in year of record lows
1. Fundamentals have not changed much. Market psychology has improved for residential. This will not last once people realize that this is not close to being over. Brokers will always say, “Now is [the] time to buy.” I remember being told this in mid-2007 by a broker who was an acquaintance, and of course came the tumble. Broker speak is BS. Wait six months to let things settle. Prices will drop a bit more and stay there for many years — at least five years is my guess.
2. New York real estate will drop like a rock when interest rates go up… another Greenspan bubble in the making with all of this cheap money artificially keeping prices up.