The Real Deal New York

National Cheat Sheet: Chinese real estate firms set to consolidate, Facebook plans to build affordable housing … & more

By Grace Guarnieri | July 14, 2017 06:04PM

Clockwise from the left: Redfin CEO Glenn Kelman, Mihir Shah of JLL and Dalian Wanda’s headquarters.

Chinese real estate investment industry is set to begin rapidly consolidating

Dalian Wanda Group’s $9.3 billion sale of nearly 90 tourist and hotel assets to Sunac China Holdings was just one indicator of the rapidly consolidating Chinese real estate market. Real estate companies in China are projected to spend more than $27.6 billion in acquisitions in 2017. Analysts at Citigroup say that the country’s 10 top firms will increase their market share from 20 percent in 2016 to 35 percent by 2020. Their shares are projected to hit 28 percent by the end of this year. [TRD]

What Redfin’s IPO means to the real estate tech sphere

As Redfin prepares to go public, its success or failure could determine the future of other real estate tech startups, particularly companies like Compass, TripleMint, ZipRealty, Findwell, and LG Fairmont. Redfin has not been profitable since its 2004 launch, and in March had a deficit of $613.3 million. Donna Olshan of the eponymous New York brokerage Olshan Realty told TRD, “It’s a mystery to me why anyone would buy this as an IPO. It makes no money and it’s just another discount brokerage business masquerading as tech. If this ends up to be a successful IPO, I want to know the secret to the sauce.” [TRD]

Real estate appraiser jobs are being threatened by the internet

Advances in technology may soon make professional real estate appraisal obsolete. Zillow Group announced that it developed algorithms that price indicators of a property, including neighborhood values. Moreover, Freddie Mac and other financiers are starting to accept transactions without human appraisal. Opponents are striking back against the shift. “Freddie Mac’s decision to veer away from fundamental risk management practices appears to harken back to the loan production-driven days in the years leading up to the 2007-2008 financial crisis,” the Appraisal Institute wrote in a letter to the Federal Housing Finance Agency. [TRD]

Realogy’s Title Resource Group unveils TRG Commercial, a new division for national commercial title services

On the heels of acquiring the assets of New York title service EAM Land Holdings, Title Resource Group rolled out its new national commercial title services division, TRG Commercial. TRG is a national provider of full-service title and settlement services and is. a subsidiary of Realogy Holdings Corp. Cheryl Baillis will serve as president for the new outfit. TRG also announced the merger of its existing company, Skyline Title with EAM in New York to form Pro National Title Agency, LLC. [Housingwire]

JLL’s new division JLL Spark will focus on real estate tech

This week, Chicago-based commercial real estate agency JLL announced that it would launch JLL Spark to develop real estate tech services. Mihir Shah and Yishai Lerner will serve as JLL Spark’s co-CEOs. The team plans to build on JLL’s previous development of advanced analytics tools by expanding new products and incubating real estate property technology startups. [Bisnow]

Major Market Highlights

Donald Trump Jr.’s reputation in the New York real estate scene

Thrust into the national spotlight with his own Russia scandal, Donald Trump Jr.’s notoriety within the New York real estate community came due for examination. Opinions on his stature in the community were mixed, TRD reported. One source said, “Everybody knows Eric, not that many people know Donald Jr. … I always found Ivanka and Eric more approachable than their brother.” But another source felt empathy for the scion’s troubles: “I’ve had more meetings with Russians claiming something than I should have had.” [TRD]

Facebook and Google to build affordable housing for Silicon Valley employees

Facebook announced plans to redevelop 56 acres for housing its Silicon Valley employees. The company plans to develop Menlo Science and Technology park into 1,500 housing units (15 percent will be affordable) with 125,000 square feet of community retail space for amenities like a pharmacy and a grocery store. Facebook plans to complete the project in 2121. Alphabet, the parent company of Google, also announced that it would pay $30 million in temporary housing provisions for 300 of its own employees. [Housingwire]

South Miami is set to become the first city in Florida to require solar paneling on new homes

Owners of new South Miami homes may soon be required to install solar panels. The ruling, which is set to be finalized in a vote on July 18, also calls for panels on existing properties that are increasing their size by 75 percent or more. The legislation is deeply unpopular with developers, consumer protection groups and some South Miami home owners, who say the expense is excessive, but proponents argue that a federal tax credit and a decrease in energy expenses will offset the costs. If the regulation passes, South Miami would join San Francisco and two other California towns as the only municipalities in the country to require solar paneling. [TRD]

Northwest sees the most homes listed in June 2017 since May 2008

In June, the counties in and around Washington State added 13,658 new listings, which is more than any single month since May of 2008. The figure comes from the latest report of the Northwest Multiple Listing Service. Northwest MLS director George Moorhead first told Housingwire that core areas in the Northwest saw increased listings, while listings outlying areas continued to drop. [Housingwire]