The Real Deal New York

National Cheat Sheet: How Amazon’s Whole Foods deal changes retail, Freddie Mac sells off modified loans … & more

By Jeff Vasishta | June 23, 2017 05:30PM

Clockwise from top: Whole Foods, Adam Neumann and Jonathan Gray (Getty)

Examining the impact of Amazon’s Whole Foods acquisition

The mother of all buyouts went down, and it makes a ton of sense. Amazon’s success, fueled by a market cap of $500 billion, is decimating retail shopping and Whole Foods has been hemorrhaging cash, recently announcing plans to close stores. If Amazon was going to make a brick-and-mortar statement anywhere, a struggling but well-regarded Supermarket Chain Would Be The Place, experts said. Amazon’s data acquisition, e-commerce and distribution know-how are expected to be key components in reversing the fortunes of Whole Foods. [TRD]

Freddie Mac aims to get back in the black by selling modified loans

Borrowers who had their mortgages modified after the 2008 housing crash have recovered enough to have their notes sold by Freddie Mac for $292 million to Towd Point Master Funding. The loans have an average balance of $231,100 and are valued at 101 percent of the loan amount according to broker priced opinions, Housing Wire reported. This is part of Freddie Mac’s long-term strategy to lessen its riskier assets.  [Housing Wire]

Israeli stock market to launch an index of North American real estate companies

Approximately $4.1 billion in bonds issued by North America real estate companies will start to trade on the Tel Aviv Stock Exchange on July 16. It will include 25 bond series issued by 18 companies but will not be limited to only North American or real estate companies. Included in the initial group are heavyweights such as Joel Wiener’s Pinnacle Group (the largest at 11.1 percent of the index), Extell Development, Related Companies and Wharton Properties. [TRD]

WeWork will go public, CEO confirms — just don’t ask him when

With CEO Adam Neumann talking up a projected $1 billion in revenue this year, an IPO offering for co-working giant WeWork seems as inevitable. And while Neumann does confirm the company will go public, he doesn’t have any specifics yet. The company has thus far raised $1.8 billion in investor funding and was recently valued at $17 billion. [TRD]

Property management software company RealPage continues its acquisition spree

RealPage says its $70M purchase of American Utilities Management, a multifamily utilities and energy management solutions platform, is a big step towards its goal of becoming a $1 billion dollar company by 2020. The deal will contribute around $15 million in revenue to RealPage, which has been on a buying spree of late, paying $75 million for Axiometrics and $300 million for LRO earlier this year. As a result of the recent transactions, RealPage now services 2.5 million rental units nationwide.  [Bisnow]

Mall landlords eye retail-geared tech start-ups to offset a decline in business

If you can’t beat ‘em, join ‘em. As e-commerce decimates mall landlords, some are throwing their lot in with technology start-ups. The Wall Street Journal reports that landlords including Macerich, Simon Property Group, Westfield Corporation and CBL & Associates Properties have invested in retail-oriented tech ventures. So far, results are mixed. Macerich’s $10 million gamble in WithMe, a company geared towards bringing online sellers to physical retail locations, didn’t fare well. On the flip side, CBL’s pilot program, in which in-store devices interact with mobile apps to offer discounts and coupons to customers, has been moderately successful. [TRD]

Highlights from major US markets:

NYC brokerages pull a 180, buy into StreetEasy’s Premier Broker program

After a contentious few months that saw major New York City real estate firms offer more verbal put downs of StreetEasy’s controversial “Premier Broker” program than the lead up to a Floyd Mayweather fight, they have decided to pay for the service. Real estate powerhouses the Corcoran Group, Douglas Elliman, Nest Seekers International and BOND New York have officially opted into the service that was launched on March 1 in the city. “Premier Broker” lets firms buy bundles of buyer leads from its platform. [TRD]

Florida’s top developers switch gears in a soft condo market

The shaky condo market has forced developers such as the Verzasca Group and the Melo Group to begin trading the jet set for rent checks, as they focus on steadier multifamily projects and commercial development. Jorge Pérez’s Related Group has adopted a multipronged approach by including affordable housing, mixed-use properties and rentals in its plans for future projects. [TRD]

Government data shows EB-5 visa program linked heavily to New York and New Jersey

Seventeen percent of all EB-5 visas approved between 2014 and 2017 came from a regional center that services New York and New Jersey, the hub of major real estate development during that period. Nick Mastroianni’s US Immigration Fund (USIF) collects money from the government program, which approves visas for those investing $500,000 or more in U.S. construction projects. [TRD]

Why Blackstone’s LA selling spree continues

Blackstone Group has been cashing out its L.A. properties like chips at a casino. The New York real estate giant has sold five major L.A. office buildings in the last six months, raking in $1.2 billion. Sources expect the firm to continue its divestment in that market, for a total of $2.3 billion in sales. The spree is a result of a company strategy to flip L.A. properties it acquired in 2006 and 2007. [TRD]