The Real Deal New York

National Cheat Sheet: Realogy’s new growth plans, Toll Brothers public offering raises $400M … & more

By James Klatell | January 25, 2018 05:30PM

Clockwise from top left: Miami’s Hall South Beach hotel sold for $58 million, Elliman’s Gordon von Broock and Jay Phillip Parker will relaunch a sports and entertainment division, Ensemble Investments is proposing a 22-story residential tower in Philadelphia, and Doug Yearley and David Von Spreckelsen of Toll Brothers.

New CEO plans to grow Realogy by focusing on technology and data
Realogy, the $5.8-billion-dollar owner of residential brokerages across the country, including Corcoran, Coldwell Banker and Century 21, faces challenges on many fronts, but new CEO Ryan Schneider plans to leverage technology and data to move the company forward. At a New York City real estate conference on Thursday, Schneider said Realogy has more data than its competitors but needs to quickly develop tools to use that derive insights from that information to help agents. These were the first public comments from the former executive at Capital One since taking over on Jan. 1 from Richard Smith, who had led the company for 21 years. [TRD]

Public offering raises $400M for luxury homebuilder Toll Brothers
Pennsylvania-base homebuilder Toll Brothers raised $400 million through a public offering announced last week. The company specializes in custom luxury suburban developments and operated in 30 markets across the country. Its City Living division broke into urban communities in 2004 and has properties in New York, New Jersey and Maryland. Toll Brothers reported $5.82 billion in revenue last year. In a release on the public offering, the company stated that it plans to use the new funding to pay off debts and use it for general corporate purposes. [TRD]

Construction startup Katerra gets $865M investment from SoftBank
Katerra, a three-year-old construction startup, got an infusion of $865 million from SoftBank’s Vision Fund. Katerra, which is a one-stop construction shop, plans to use the funds to build new factories, increase manufacturing and speed up the launch of its customer-facing platform. The three-year-old company already has $1.3 billion in construction contracts for multifamily, student housing and hospitality. [TRD]

“People don’t believe housing is in a bubble” warns money manager 
James Stack, a money manager who predicted the last recession in 2005, issued a warning about the current high-flying housing market. “It is 2005 all over again in terms of the valuation extreme, the psychological excess and the denial,” Stack told Bloomberg. “People don’t believe housing is in a bubble and don’t want to hear talk about prices being a little bit bubblish.” [TRD]

Elliman rebooting its sports and entertainment division
The sports and entertainment division at Douglas Elliman was meant to tap into the celebrity market for high-end real estate, but more than two years after it launched, the division is undergoing a reboot. Elliman will create a network of 15 agents in New York City and 20 in Florida tackling celebrity leads. The firm will also hire consultants from sports leagues and management agencies to help, according to Jay Parker, the CEO of Douglas Elliman Florida, who considers himself the “de facto” leader of the operation. [TRD]

Shares in REITs aren’t keeping up with the stock market boom
Over the first weeks of 2018 real estate investment trust stocks were down 2.4 percent even as the stock market overall continued to climb. According to industry experts, REIT stocks are isolated from the bull market for two reasons, according to the Wall Street Journal. First, they do not benefit from the new federal tax law because REITs do not pay income taxes, and secondly, investors fear rising interest rates could hurt the real estate market. [TRD]

MAJOR MARKET HIGHLIGHTS

Realtor.com takes on StreetEasy in NYC ad campaign
Rupert Murdoch’s Realtor.com is gunning for more marketshare against rival Zillow’s New York City brand StreetEasy, and the former company has launched a marketing campaign to win over real estate browsers. With ads posted throughout the city, Realtor claims it has 20 percent more listings than StreetEasy. While Realtor does have an advantage in listing volume, the numbers might not match up with what the advertising states, TRD found. StreetEasy’s general manager, Susan Daimler, said her firm “has always been, and will continue to be, focused on the quality of our listings data, not the quantity.” [TRD]

High-end retailers are buying into Downtown Los Angeles
Downtown L.A. hasn’t always been known as a shopping destination, but a host of high-end retailers are moving into the area and more space is being built. With additions such as fashion brand Theory, German eyewear brand MYKITA and Andrea Lieberman Collection, the Broadway theater district is leading the way with adaptive reuse projects. “We have to remember that in 2004, we didn’t have any retail in DTLA at all,” said Brigham Yen, a Realtor with commercial brokerage Miren.co. [TRD]

Miami’s Hall South Beach hotel sold to Spanish group for $58M
An American affiliate of the the Spanish conglomerate Grup Peralada paid Rockwood Capital $58.2 million for the 163-key Hall South Beach hotel. Rockwood bought what had been the Haddon Hall hotel and the neighboring Camden Apartments in 2013 for $34.5 million and combined the two Collins Avenue properties into one hotel in 2015. The Hall South Beach deal is Miami Beach’s most expensive hotel sale since 2016, when the Confidante Hotel sold for $229 million. [TRD]

Investor betting $87.6M on pair of 21-story office towers in Chicago’s suburbs
American Landmark Properties, a Skokie, Illinois-based real estate investor, is in contract to buy two half-occupied office towers in the suburbs north of Chicago. The two 21-floor towers, now known as Schaumburg Towers, were once the headquarters Zurich North America. The properties are expected to go for $87.6 million, with American Landmark looking to raise $29.9 million in capital and financing $57.7 million in debt. [Crain’s Chicago Business]

With nearly 11K apartments added in 2017, metro Denver expects another 12K in 2018
Developers added nearly 11,000 new apartments in the Denver area in 2017, and another 12,000 more should come online in 2018, according to RealPage, a real estate technology and analytics firm. The occupancy rate for apartments in metro Denver held steady at 94.3 percent, RealPage found, and rents rose 3.2 percent in 2017. With supply continuing to grow, however, rents should not spike, experts said. [Denver Post]