The Real Deal New York

National Cheat Sheet: Office leasing slows down, Redfin prepares for IPO … & more

By Grace Guarnieri | July 07, 2017 05:00PM

Clockwise from top left: Harvard Universit,y, Wilshire Grand and other Downtown Los Angeles office buildings, Redfin CEO Glenn Kelman and a Marriott hotel

Office leasing slows nationwide: report

Five of the nation’s largest office leasing markets — Los Angeles, New York, Chicago, Houston and Dallas — experienced a decrease in absorption in the second quarter of 2017, according to a new report from data firm Reis. In the three-month period ending in June, a combined total of 789,000 square feet of office space became available. The first quarter, by comparison, saw a positive absorption of 3.63 million square feet of office space. [TRD]

Redfin prepares for an IPO

Redfin, the online housing brokerage, filed for an IPO on last week with the SEC. Under the ticker symbol “RDFN,” the company plans to start trading on the Nasdaq exchange and estimates the size of its offering to be $100 million. It expects a larger real number as IPO day approaches. Redfin is based in Seattle and was founded in 2005. Glenn Kelman serves as Redfin’s current CEO. [TRD]

MCR sells 18 hotels to American Hotel Income Properties REIT 

MCR, one of the biggest hotel builders and managers in the country, has just sold Marriott and Hilton hotels in New York, New Jersey, Maryland and Pennsylvania in a sale to American Hotel Income Properties REIT that was announced last week. The $407.4 million selloff of a total of 2,187 rooms works out to $186K per room at a 7.9 cap rate, according to an official statement on the deal. [Bisnow]

Consumer Financial Protection Bureau cracks down on “credit-repair” companies that target home loan applicants

Several firms that promise to fix the bad credit scores of consumers seeking home loans have come under fire by the Consumer Financial Protection Bureau. Prime Credit LLC, IMC Capital LLC, Commercial Credit Consultants and Park View Law and executives at several of those firms were accused of charging illegal fees and misleading customers, particularly in regards to their “money back guarantee” offers. The bureau claimed the practices were violations of the Consumer Financial Protection Act and the Telemarketing Sales Rule. The firms did not admit guilt or deny the charges and agreed to pay a settlement. [TRD]

Republican Senators ask Homeland Security to rethink EB-5 requirement increase

The EB-5 program, which gives green cards to foreign investors in real estate, is up for renewal in late September. The Department of Homeland security proposed reforms in January, among them a requirement for $1.35 million investments from foreigners rather than a $500,000 investment. Republican Senators Dean Hell, John Cornyn, and Rand Paul asked Homeland Security Secretary John Kelly to withdraw the rule. “This type of shock will be detrimental to the EB-5 program’s future viability and will be detrimental to employment in our states,” the senators from Nevada, Texas, and Kentucky wrote in a letter to the DHS. [TRD]

Major Market Highlights

JPMorgan takes steps towards becoming the dominant NYC commercial real estate lender

JPMorgan Chase is close to providing two major construction loans for large, high-end New York residential projects. The banking giant signed a term sheet for a $900 million loan for Extell Development’s Central Park Tower. The property is set to become the priciest residential project in the city’s history. JPMorgan is also in talks to sign a $850 million loan to Macklowe Properties, which plans to convert One Wall Street into residences. [TRD]

Harvard University to shed almost $2 billion in real estate endowments

Harvard University is looking to sell about $2 billion in endowments from its real estate, venture capital and private equity assets. Harvard Management Company, the company that handles the university’s $37.5 billion in endowments, has committed to selling its real estate funds to Landmark Partners, Bloomberg first reported. The university’s current real estate assets are worth $1.6 billion. [TRD]

In Austin, Texas, pre-sales begin for the country’s largest zero-energy community

Pre-sales have begun for 7,500 green single and multifamily homes in Austin, Texas. Whisper Valley, the community developed by local builders Avi Homes and Pacesetter Homes, is the largest zero-energy capable housing development in the country, according to HousingWire. The homes will be sold in the $200,000 to $300,000 range. On about 2,100 acres, the community  is worth around $2 billion. An estimated 237 phase-one homes will be available for move in by the end of summer 2017.  [HousingWire]

StreetEasy rivals are trying to grab market share amid NYC listings battle

Big brokerages angered by StreetEasy’s move to begin charging brokerages to post New York City rentals on the website have fought back with a plan to syndicate listings exclusively through Real Estate Board of New York. In the meantime, Apartments.com, a subsidiary of CoStar Group, started to reach out to executives at some of the city’s brokerages late last week as a reminder that their web platform is an alternative to StreetEasy. Other rivals, like Leasebreak, have also swooped in during the brokerage-vs.-StreetEasy battle. [TRD]