National Cheat Sheet: WeWork eyes IPO after SoftBank retreat, Sears avoids liquidation, Trump’s troubles… & more

TRD New York /
Jan.January 11, 2019 08:00 AM

Clockwise from top left: Congress launching investigation into Trump mansion sale and Trump Organization loans, Sears’ board agrees to consider another offer from the company’s chairman, WeWork announces a new name as SoftBank cuts back on a planned investment and the Chrysler Building hits the market in Manhattan amid increased competition from other office towers.

WeWork mulls IPO, rebrands after SoftBank slashes stake
The co-working giant formerly known as WeWork is rebranding itself as The We Company after getting some disappointing investment-related news. A day after the Financial Times reported that Japan’s SoftBank Group only planned to invest $2 billion in the company — a far cry from the $16 billion it was considering — WeWork said it would adopt its new moniker, while also weighing the prospect of an initial public offering, according to the FT. The company’s office space brand, residential business and education-centric arm will be the three main branches of The We Company and will be called WeWork, WeLive and WeGrow, respectively. The We Company will aim to “elevate the world’s consciousness,” wrote co-founder and CEO Adam Neumann in a blog post. [TRD]

Sears board to consider another bid from company’s chairman
A week after Sears Holdings chairman Edward Lampert made a $1.8 billion bid for the bankrupt retail giant’s real estate, the company narrowly avoided liquidation by agreeing to consider his offer. Sears was planning to get permission to shutter its store and sell its assets earlier this week, but its bankruptcy lawyers ultimately decided to hold off. ESL Investments, Lampert’s hedge fund, submitted a $4.4 billion takeover bid at the end of December and even offered to scoop up all of Sears’ real estate if its board of directors did not accept that bid. Sears’ board is expected to consider Lampert’s latest offer, as well as bids from two liquidation groups, at a bankruptcy court auction in White Plains next week. [TRD]

Moody’s, CoStar could square off over CRE data
A war could be looming in the commercial real estate space. Moody’s Corporation, a financial analytics giant that last summer acquired Reis for $278 million, is now seeing commercial real estate data become a key part of its business. That has long been the bailiwick of CoStar Group, a juggernaut in the real estate information realm, but one whose market capitalization pales in comparison to Moody’s. “Banks tend to be our largest customer segment, and commercial real estate is a very important asset class to them,” said Keith Berry, a veteran Moody’s executive tapped to oversee the company’s expansion into new research technologies. [TRD]

Housing market expert shares gloomy prognosis for 2019
A housing expert who predicted last year’s slowdown has a less than positive forecast for 2019, Bloomberg reported. James Stack, who also predicted the 2008 crash, told the outlet the market “could be heading for its worst year since the last housing crash.” Stack expects “home sales to continue on a downward trend in the next 12-plus months,” Bloomberg reported. Stack told the outlet he couldn’t say yet if the market is in a bubble, as they can “only [be] recognized with 100 percent certainty in 20/20 hindsight.” Stack uses market-centric newspaper articles dating back to 1929 to make his predictions, according to Bloomberg. [TRD]

Congress to probe Trump mansion sale, Trump Org loans
A newly-launched House Intelligence Committee investigation is setting its sights on President Donald Trump’s real estate and business transactions. The new Democratic majority plans to probe two transactions: Trump’s sale of a Palm Beach mansion to a Russian billionaire in 2008 and loans that Deutsche Bank extended to the Trump Organization, the New York Times reported. Democrats on the committee believe the mansion sale could have been part of a money laundering scheme. Deutsche Bank, meanwhile, has been embroiled in scandal over separate money laundering allegations. The two probes are among a number of investigations Democrats are expected to launch. As if that wasn’t enough, Trump’s former personal lawyer, Michael Cohen, will testify next month before the House Oversight Committee, while White House senior adviser Ivanka Trump was the subject of a complaint filed by a watchdog group asking the U.S. Department of Justice to look into her family’s investments in Opportunity Zones. Natalia Veselnitskaya, a Russian lawyer who attended an infamous meeting at Trump Tower, was also charged with obstruction of justice by federal prosecutors. [TRD]

MAJOR MARKET HIGHLIGHTS

Chrysler Building owners list iconic tower amid increased competition, high costs
The owners of the Chrysler Building are putting the Manhattan landmark up for sale, the Wall Street Journal reported. The skyscraper is currently owned by Tishman Speyer and an Abu Dhabi government fund, both of whom hope the Art Deco office tower with draw international investors. CBRE will be marketing the building, according to the outlet. The Abu Dhabi Investment Council shelled out $800 million in 2008 for a 90 percent stake in the building. Tishman Speyer, meanwhile, poured $100 million into the tower for various improvements when it took it over in 1997. Their decision to sell comes amid “high costs and stiff competition from new towers,” the outlet reported. [TRD]

Brookfield Asset Management seeks $1B for Florida resort
The second-largest resort in South Florida has hit the market, and its owner could sell it for up to $1 billion, Bloomberg reported. Brookfield Asset Management plans to sell the Diplomat Beach Resort in Hollywood, a property only exceeded in size by the Fontainebleau Miami Beach. Brookfield subsidiary Thayer Lodging Group shelled out $460 million for the property — which includes 10 restaurants and 1,000 rooms — in 2014. Newmark Knight Frank and Hodges Ward Elliott are marketing the resort. [TRD]

Malibu rental market sees demand soar after Woolsey Fire
The fire that destroyed hundreds of homes in Malibu toward the end of last year has sent the area’s rental market into overdrive. Many of the residents who were displaced by the Woolsey Fire are now looking for temporary homes in the area, and owners are trying hard to meet the demand. In the month after Malibu residents were ordered to evacuate, 106 listings hit the market — a jump from the 18 new listings the month before the evacuation order went out, said Sotheby’s International Realty Malibu agent Mike Gardner, who noted that some owners are specifically opting to lease their properties in light of the demand. [TRD]

Rents dip, incentives surge as Seattle’s apartment inventory rises
Approximately 10.5 percent of the apartments in Seattle are currently vacant, compared to the end of 2017, when 9 percent of the city’s apartments were empty, the Seattle Times reported. Though the jump may not seem substantial, it’s indicative of the spate of construction the region has seen recently, according to the outlet. The ballooning bump in inventory has brought rents down and is pushing landlords to offer incentives ranging from Amazon gift cards to free months of rent and free parking. “I’ve been renting in Seattle since 2014, and this is the first time where I felt like I have negotiating power,” one renter told the newspaper. [TRD]

Silicon Valley neighborhood named priciest zip code in US
A neighborhood in Silicon Valley that doesn’t have any shops or restaurants topped PropertyShark’s list of the most expensive places in the U.S. to live last year. Atherton, located not far from Google and Facebook’s headquarters, had a median sales price of $6.7 million in 2018, noted the Robb Report. Oracle co-founder Larry Ellison and Stephen Luczo, executive chairman at Seagate Technology, are among Atherton’s current residents. Eighty-two of the 117 zip codes on PropertyShark’s list were in California. [TRD]

Mondelez International moving headquarters to Chicago
Food and beverage giant Mondelez International will move its global headquarters from the suburbs of Chicago to the Windy City itself. The company, which makes Chips Ahoy and Oreo cookies, Triscuit and Ritz crackers, Milka chocolate bars and other delicious items, is currently based in Deerfield, Illinois. Mondelez has now signed a long-term lease for 77,100 square feet of office space at a building in Chicago’s Fulton Market district. Uber Technologies, McDonald’s and Google are among several other companies that already have office space in the area. Thor Equities owns the building that Mondelez is moving into at 905 West Fulton Street. [TRD]


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