The Real Deal New York

National Cheat Sheet: Compass set to buy Pacific Union … & more

By Maya Rajamani | August 24, 2018 08:00AM

Clockwise from top left: Trump isn’t happy that his Federal Reserve chair has raised interest rates, Lendlease launches $2B multifamily fund, Compass plans to acquire San Francisco-based Pacific Union, and Michael Cohen sells stakes in Manhattan apartment buildings.

Compass plans to acquire San Francisco-based Pacific Union, CEO confirms
Compass plans to buy San Francisco-based Pacific Union International Realty, CEO Robert Reffkin confirmed in an email to the firm’s employees. Pacific Union, which is the fifth-largest brokerage in the country, did $14 billion in sales in 2017. It’s unclear what role Pacific Union CEO Mark McLaughlin will play in the company after the deal, as McLaughlin has criticized Compass in the past, including earlier this month. In April, McLaughlin told The Real Deal his firm was going to reach $18 billion in revenue this year. Compass, meanwhile, claims it reached $370 million in revenue in 2017. Given Compass’s stated goal of controlling 20 percent of market in the top 20 major U.S. cities, and Reffkin’s statements regarding the need for his company to do more fundraising, a big acquisition in San Francisco makes sense, experts analyzing the deal said. “They’ve purposely gone big in San Francisco because they want to dominate there, where the VC money is,” said one New York brokerage chief. “So they have a lot of visibility.” [TRD]

Brookfield unveils development plans to bolster GGP’s shopping malls
Last month, Brookfield Property Partners shelled out $14.8 billion for General Growth Properties. Now, it’s moving forward with its plan to revitalize the shopping mall real estate investment trust. Brookfield is planning to open new stores in malls that are performing the best, the Wall Street Journal reported. Malls that aren’t performing well will be reconfigured to include housing, office space and hotels, according to the outlet. And while Brookfield is hoping to bring partial owners onboard at some of the properties, it’s not likely to unload them. “These are some of the best malls in America and probably the world,” CEO Brian Kingston said. “We don’t want to sell them necessarily. Our preference is always the partnership model.” [TRD]

Lendlease’s $2B multifamily fund will help it create a US portfolio
A $2 billion multifamily investment fund Australia-based Lendlease is co-launching will help the construction company put together a U.S.-based portfolio. Lendlease is joining forces with an Australian superannuation fund, First State Super, to create a portfolio with properties across the country, including in New York City, Chicago and Los Angeles. Mixed-use development Southbank in Chicago and a residential project in Boston, Clippership Wharf, are already part of the portfolio. [TRD]

Anbang wants to sell 15-hotel portfolio that includes InterContinentals in Miami and Chicago
Chinese conglomerate Anbang Insurance Group is hoping to sell off a 15-hotel portfolio valued at $5.5 billion, including the InterContinental Hotels in Chicago and Miami and the Essex House Hotel in Manhattan. The company took the portfolio off of Blackstone Group’s hands for that amount two years ago, but is now looking to sell “as pressure builds on the company to raise cash following its seizure by the government,” the Wall Street Journal reported. The sale will likely be a direct deal between Anbang and the buyer, but a price tag for the portfolio is up in the air. The Waldorf Astoria, which Anbang bought in 2015, isn’t included in the portfolio it’s unloading. [TRD]

Trump isn’t happy that his Federal Reserve chair has raised interest rates
President Donald Trump may have nominated Jerome Powell to chair the Federal Reserve, but that doesn’t mean he’s happy with Powell’s recent moves. Three people who went to a Hamptons fundraiser hosted by Howard Lorber told Bloomberg that, at the event, Trump complained about the fact that Powell has raised interest rates five times so far. Last month, the president said he was “not thrilled” with the hikes, and on Monday, he maintained he should “be given some help by the Fed.” Jared Kushner and Treasury Secretary Steven Mnuchin were among the guests who attended the fundraiser, which raised around $3 million. [TRD]

MAJOR MARKET HIGHLIGHTS

Michael Cohen sells stakes in UES and East Village apartment buildings
Trump’s former attorney and fixer Michael Cohen pleaded guilty to fraud and campaign finance violations on Tuesday. Records filed with the city that same day and on Wednesday, meanwhile, show that Cohen has also sold stakes worth a total of $12.9 million in an apartment building in the East Village and an apartment building on the Upper East Side. Cohen’s joint venture partner, Vintage Group, was the buyer of the stakes at both apartment buildings. Last week, meanwhile, Cohen — who faces an increasingly dire financial situation — put his Tribeca apartment up for rent for $25,000 per month. [TRD]

Miami-based global president of CBRE leaves position amid restructuring
Mary Jo Eaton, who was global president of asset services and valuation and advisory services at CBRE for the past two years, is now “just an executive,” a spokesperson for CBRE said. Sources told The Real Deal that Miami-based Eaton, who’s been with the firm since 2011, left the position, but it wasn’t immediately clear what her new position will involve. The news follows the announcement last week of a national restructuring that saw several promotions and the elimination of several high-level managerial roles. [TRD]

Chicago clinches ‘greenest’ office market title for the second year in a row
The greenest office market in the U.S. is Chicago, according to a new study. The Windy City has more LEED or Energy Star certified office buildings than San Francisco, which came in second place, or Atlanta, which came in third place, Bloomberg reported. Chicago clinched the title last year as well, according to the outlet. More and more tenants are seeking sustainable buildings, as being green has “become a proxy for good building management,” CBRE senior vice president David Pogue told the outlet. “So many buildings have become dependent on this as a way of demonstrating quality to investors and corporate tenants,” he added. [TRD]

San Francisco seniors face up to 10-year waits for affordable homes
Senior citizens are facing years-long wait lists for affordable housing in San Francisco and across the country, Bisnow reported. More than 4,500 people over the age of 60 applied for 50 units for seniors at one development in San Francisco, according to the outlet. And the number of senior tenants across the country is slated to increase by more than 1.3 million by 2020. “Seniors are getting priced out of apartments,” Eden Housing CEO Linda Mandolini told the outlet. “They might not be living in optimal situations. Their kids aren’t super wealthy and don’t have enough room to accommodate their parents.” [TRD]