The Real Deal New York

National Cheat Sheet: Warren Buffett’s Berkshire Hathaway pays $130M for Brookfield stake … & more

By Maya Rajamani | May 11, 2018 08:00AM

Clockwise from top left: WeWork hires Bjarke Ingels as its ‘chief architect’ (credit: Alexei Hay via WeWork), Michael Cohen puts up apartment as collateral for loans (credit: Getty Images and CityRealty), Warren Buffet buys Brookfield out of brokerage (credit: PxHere, Pixabay, Wikimedia Commons) and Douglas Elliman loses $8.1 million in Q1.

Warren Buffett’s Berkshire Hathaway pays $130M for Brookfield stake
Berkshire Hathaway has shelled out $130 million for Brookfield Asset Management’s stake in Berkshire’s real estate brokerage, Berkshire Hathaway HomeServices. Brookfield had a one-third stake in Buffett’s brokerage and would have maintained the status quo, but the arrangement “was made several years ago in the context of a broader, very successful real estate services initiative,” Brookfield CEO Cyrus Madon said. [TRD]  

Danish architect Bjarke Ingels is WeWork’s new “chief architect”
WeWork has tapped Danish architect Bjarke Ingels to be its new “chief architect.” The co-working behemoth’s cofounder said Ingels will design the ground-up developments the company plans to build this year. He’ll also design its new headquarters in the Lord & Taylor building in Manhattan, while continuing to head up his architecture firm. Next year, WeWork plans to focus on “campuses” that will be comprised of offices, apartments and a school. [TRD]

Trump attorney Michael Cohen using Park Avenue apartment as collateral for loans
Michael Cohen is using his $9 million dollar Park Avenue apartment as collateral for loans his struggling taxi company secured, Bloomberg first reported. The move comes as Trump’s attorney deals with legal pressures; last month, FBI agents raided the Manhattan apartment he was staying at to search for business records as part of a possible bank fraud investigation. [TRD]

‘Challenging’ New York real estate market loses Douglas Elliman $8.1M in Q1
It was a rocky start of the year for Douglas Elliman, with the brokerage losing $8.1 million in the first quarter, its chairman Howard Lorber said. Lorber blamed a “challenging” New York real estate market and the costs of acquiring Los Angeles brokerage Teles last year for the loss, but noted that cash from Elliman and its parent company Vector Group Ltd. would allow it to invest and deliver returns to shareholders. Elliman also recently received $2.5 million in punitive damages in an agent-poaching case. [TRD]

Survey finds women in commercial real estate face sexual discrimination
More than 90 percent of women who responded to a National Real Estate Investor survey said that they’ve faced discrimination in the commercial real estate industry — from lower salaries to being passed over for promotions and assignments — compared with 57 percent of men who took the survey and said they’d faced discrimination. Eighty-seven percent of women who responded, meanwhile, said discrimination was either “rampant” or a “common occurrence but not widespread.” [TRD]

MAJOR MARKET HIGHLIGHTS

Plaza Hotel minority owners counter investors’ plan to buy out majority owner in New York
Investors Shahal Khan and Kamran Hakim signed a contract to buy out Subrata Roy, the majority owner of the Plaza Hotel, for $600 million, but the hotel’s minority owners aren’t having it. Ben Ashkenazy’s Ashkenazy Acquisition Corporation and Saudi Prince Al-Waleed bin Talal exercised their right of first refusal and put up their own $600 million. Khan notes that the bid isn’t official until Azhkenazy “back[s] it up with money.” [TRD]

LeBron James’ store Unknwn signs lease in Miami’s Wynwood neighborhood
LeBron James’ fashion retailer Unknwn is setting up shop in Miami’s Wynwood neighborhood. The sneaker and apparel retailer signed a lease for a 9,500-square-foot property that will house a 2,300-square-foot flagship store and an outdoor garden. Unknwn, which was founded by the NBA star and his childhood friends, currently has a location in Aventura Mall. [TRD]

Most new homes in California will have solar roofs, per new requirement
Most new homes in California will be required to have solar roofs as part of the California Energy Commission’s new energy-efficiency standards. The requirement will increase the cost of building a new home by $9,500, but save homeowners around $19,000 in the long run, the CEC found. Solar energy company stock prices jumped following the announcement. [TRD]

Chicago homeowners’ lawsuit against Zillow over ‘Zestimates’ dismissed
A group of homeowners in Chicago filed a lawsuit against Zillow claiming the online listings company misleads buyers into thinking its “Zestimates” are exact calculations, but a federal judge on Monday dismissed the suit. The Zestimates “are not false or misleading representations of fact likely to confuse consumers,” the judge said. The judge dismissed a previous version of the homeowners’ suit in August. [TRD]

Property prices are going up in Atlanta as the city attracts foreign investors
Foreign investors are zeroing in on Atlanta and property prices are rising as a result, Bisnow reports. “We have seen more offshore foreign capital I would say over the last 12 to 18 months than I can remember,” CBRE Chairman Will Yowell said, according to the outlet. Investor interest has risen as markets like New York and Los Angeles have become saturated with “unrealistically high” prices. [Bisnow]