The Real Deal New York

National Cheat Sheet: SoftBank mulls majority stake in WeWork, Sears hires bankruptcy advisers … & more

By Maya Rajamani | October 12, 2018 09:00AM

Clockwise from top left: SoftBank could buy a majority stake in WeWork according to a report, Sears hires advisers ahead of possible bankruptcy, NAR hires former Trump administration official as its top lobbyist, and Richard Meier steps down from his firm months after sexual harassment allegations.

SoftBank could buy a majority stake in WeWork, according to a report
SoftBank is considering buying a majority stake in WeWork, the Wall Street Journal reported. The Japanese firm could end up investing between $15 billion and $20 billion in the coworking behemoth if it does. Money for the investment would likely coming from its Vision Fund. SoftBank already has a nearly 20 percent stake in WeWork, and if the deal goes through, it would be “one of the largest and more momentous deals of the past decade’s startup boom,” according to the outlet. But people familiar with ongoing talks between the two companies say it’s not certain the deal will actually pan out. Earlier this year, SoftBank was considering a less significant investment in WeWork. And earlier this week, Bloomberg reported that Saudi Arabia’s Public Investment Fund was planning to pour $45 billion into SoftBank’s second Vision Fund. [TRD]

Sears hires advisers ahead of possible bankruptcy, but its CEO aims to avoid that
While the Sears CEO is still trying to avoid bankruptcy,  the company has hired advisers in anticipation of that possibility, the Wall Street Journal reported. The company, which has to make a $134 million debt payment by Monday, hired M-III Partners LLC to prepare a filing, sources told the outlet. Its chairman and CEO Edward Lampert has bailed the company out in the past and could do so again, but his broader plan is to sell off real estate, divest assets and start to eliminate the company’s debt in an effort to make it profitable again. A source told the Journal that Lampert “views bankruptcy as risky for retailers.” Toys “R” Us, for example, aimed at a restructuring but instead ended up liquidating. Sears has already closed hundreds of stores and has suffered more than $11 billion in losses since 2011. [TRD]

NAR hires former Trump administration official as its top lobbyist
The National Association of Realtors’ first female chief lobbyist is a former Trump administration official, Inman reported. Shannon McGahn, who’ll take the helm at the lobbying group on Oct. 15, was an official at the Treasury Department, but took a post on the staff of Republican Congressman Jeb Hensarling, of Texas, in 2017. McGahn is married to Donald McGahn, the outgoing White House Counsel and assistant to President Donald Trump. She’s taking over from Jerry Giovaniello, who’s retiring at the end of this year. NAR also hired Victoria Gillespie, who was the senior vice president of enterprising marketing and communications for Northwest Federal Credit Union, to serve as its chief marketing and communications officer. [TRD]

Architect Richard Meier steps down from his firm months after sexual harassment allegations
Seven months after the New York Times published an article in which five different women accused Richard Meier of sexual harassment, Meier, the founder and managing partner of Richard Meier & Partners Architects, is stepping down. After the report came out, Meier took a six-month leave of absence, saying he was “deeply troubled and embarrassed by the accounts of several women who were offended by my words and actions,” but in a September interview with the Times, he maintained he took the leave of absence for health reasons and said he had “no plans to retire.” He also said that he didn’t recognize any of the women who had come forward, according to the outlet. In a statement, the firm said Bernhard Karpf would replace Meier, but that Meier would be “available to colleagues and clients who seek his vast experience and counsel.” [TRD]

Lennar Corp may end up selling its real estate lending unit
Lennar may end up selling its real estate lending unit, known as Rialto Capital, to private-equity firm Stone Point Capital due to a the fact that the housing market is slowing down, the Wall Street Journal reported. Lennar is also anticipating a decrease in home deliveries in the fourth quarter — a likely result of Hurricane Florence. None of the parties agreed to provide a comment about the possible sale to the outlet, and “there is no guarantee that there will be a deal,” but Lennar in April did say it was thinking about selling Rialto. Lennar’s homes have an average price of around $400,000, and some of the buyers it’s targeting may end up looking for less-pricey homes, analysts told the outlet. Lennar became the country’s largest homebuilder by revenue earlier this year when it snapped up its competitor CalAtlantic Group. [TRD]

MAJOR MARKET HIGHLIGHTS

New York City is the biggest destination for real estate investment, report says
New York City saw more real estate investments over the past year than any other city, according to a new Cushman & Wakefield global capital market report. The report, which ranks the top 50 cities for real estate investment, says New York City saw $49.6 billion worth of investments between June 2017 and June 2018. The city also saw a 31 percent increase in its retail real estate sector, but that news may be dampened by the fact that 20 percent of  storefronts in Manhattan are vacant, per a recent Douglas Elliman survey. Los Angeles took second place on the Cushman & Wakefield report’s list, with $40.7 billion in investments, and had the strongest industrial market, the report said. The next three cities on the list were London, Paris and Hong Kong, in that order. [TRD]

Kushner Companies sells Chicago tower that was part of a White House ethics probe
An Angelo Gordon-led venture is buying Kushner Companies’ only property in Chicago. Kushner put the Loop office tower on the market for $315 million back in 2014, but it’s not clear how much the venture is paying for the 30-story building. Kushner bought the building for $276 million in a sale-leaseback deal with AT&T in 2007. AT&T still has a lease at the building, but that will expire at the end of 2022. The building was part of a probe that White House ethics investigators launched earlier this year. Angelo Gordon has stakes in a number of properties in Chicago, and recently bought the Presidents Plaza office towers near O’Hare Airport in partnership with GlenStar Properties. [TRD]

Victoria and David Beckham sell their Beverly Hills home for $33.1M
Victoria and David Beckham have sold their Beverly Hills home for $33.1 million. A limited liability company snapped up the H-shaped estate, which the power couple bought for $22 million a decade ago, after David signed with the L.A. Galaxy. The one-story home designed in 2007 has nine bedrooms, an elevator, a library and a media room, according to the Los Angeles Times. Recently, the soccer champion has been busy trying to secure a site for a Major League Soccer stadium he and his partners are hoping to bring to Miami. Residents will be voting on the proposal on Nov. 4. [TRD]

Second beam cracks in San Francisco’s new transportation hub
San Francisco’s $2.2 billion Transbay Transit Center opened on Aug. 11, but two beams at the hub have already cracked, the San Francisco Chronicle reported. The center was temporarily shuttered on Sept. 25 due to a 2.5-foot-long tear in a beam holding a rooftop park above a bus deck. Now, crews are trying to shore up the building after finding a second, smaller crack on a different beam. It’s not clear what caused the beams to crack at the hub, but the cracks upset San Francisco’s Mayor London Breed, who said that “someone needs to be held accountable once the cause is determined.” A host of development projects are planned around the hub, including 6 million square feet of office space and 4,400 housing units. [TRD]

Dallas is the top city in the country for real estate, a new report says
A report released by PwC U.S. and the Urban Land Institute on Wednesday has named Dallas the top city in the country for real estate. Last year, Dallas took fifth place on the list, but it moved back up due to its “young workforce and high business startup activity,” Bisnow reported. “It’s instructive that in light of how much development has gone on in Dallas during this recovery that it is still a No. 1 investment destination,” PwC U.S. real estate leader Byron Carlock Jr. told the outlet, adding that Dallas has strong “leadership, investment in infrastructure, urbanism and exurbanism.” Brooklyn clinched the second place on the list, and Raleigh-Durham took third place, the outlet reported. [Bisnow]