To wine and dine clients or to not wine and dine clients? That is the question the title insurance industry must ask itself again and again and again.
For the second time, the Department of Financial Services is trying to reinstate a rule that prohibits title insurance brokers from showering prospective clients with dinners, lavish gifts and (in some cases) trips to the strip club.
Earlier this month, New York Supreme Court Judge Eileen Rakower struck down the agency’s rule, which was first implemented in February 2018. But DFS is now appealing this decision. Sound familiar? That’s because this is the second time this has happened.
Last July, Rakower repealed the law, ruling that it was intended to prevent kickbacks and commission rebates but was not meant to “prohibit ordinary marketing and entertainment expenses.” Seven months later, a state Appellate Court reinstated most of the controversial new regulations. When some parts of the case were remanded back to a lower court, Rakower once again overturned the entire law, saying it violated the First and Fifth Amendments of the Constitution. And now DFS is trying to reinstate the rules again, Eddie Small reports.
The restrictions followed a DFS investigation, which found that title insurance agents and companies spent millions on inducements and charged the prices back to consumers as “marketing costs.” But in a lawsuit, however, industry players said the rules would “wreak havoc” on business.
Blackstone is warehousing apartments in response to the new rent stabilization law.
In the lead up to and following the passage of the Housing Stability and Tenant Protection Act of 2019, landlords and attorneys warned that some owners would simply keep apartments vacant until the law changed. It appears one of the city’s biggest landlords, Blackstone Group, is doing exactly that.
The private equity giant is keeping 20 to 50 units vacant at its Stuyvesant Town Peter Cooper Village, Georgia Kromrei reports. Since the new law limits how developers can raise rents on regulated apartments, Blackstone’s decision to warehouse apartments suggests that it’s taking a wait-and-see approach. That is, the company is perhaps waiting to see if a legal challenge to the law pans out or if the state legislature will make changes that will once again make renting out the apartments profitable.
This is just the latest response to the new rent law by the financial behemoth. Blackstone announced in July that it would stop renovations at the 11,000-unit complex because of the new limits on the individual apartment improvement and major capital improvement programs.
Residential: The priciest residential closing recorded on Tuesday was for a condo unit at 565 Broome Street in Soho, at $36.4 million. Uber co-founder Travis Kalanick is the buyer, and Bizzi & Partners, Aronov Development and Halpern Real Estate are the sellers.
Commercial: The most expensive commercial closing of the day was for an apartment building at 245 Water Street at the South Street Seaport, at $12.3 million.
The largest new building filing of the day was for a 14,200-square-foot residential building at 37-25 32nd Street in Long Island City. Seagram Properties filed the permit application.
NEW TO THE MARKET
The priciest residential listing to hit the market was for a condo unit at 565 Broome Street in Soho (yep, same building as the top sale of the day), at $42.5 million. Douglas Elliman’s Stacy Spielman, Andrew Anderson, Benjamin Glazer and Joshua Lieberman have the listing. — Research by Mary Diduch
A thing we’ve learned…
Our office building is a magnet for famous people! Just kidding, but it appears that actress and rapper Awkwafina was on the eighth floor at some point Tuesday. Thank you to Eddie Small, who spotted signs announcing the star’s presence. Fingers crossed that Lizzo is the next person to make an appearance.
(Credit: Giphy, Awkwafina)
Top stories from our other markets:
Sterling Bay has found a buyer for its original headquarters in Fulton Market — and they’re well acquainted with the investor, principal Keating Crown’s own family members. According to Cook County property records, Sterling Bay sold 1040 West Randolph Street to Henry Crown & Company for $33 million. Henry Crown & Company bought the former Sterling Bay headquarters through limited liability corporations controlled by James S. Crown, A. Steven Crown and William H. Crown, property records show.
Multifamily giant Equity Residential is investing big in booming Koreatown and adding to its portfolio of Los Angeles properties. The Sam Zell-led firm paid $189 million for the 398-unit Next on Sixth apartment building at 620 S. Virgil Avenue, according to Los Angeles County property records. The seller, Santa Monica-based Century West Partners, completed the development last year. The 362,580-square-foot property was one of the largest projects to open in the L.A. area last year.
Miami developer Robert Zangrillo appears to still be involved in the $1 billion Magic City Innovation District project in Little Haiti. Zangrillo is among the dozens of parents – including actresses Felicity Huffman and Lori Loughlin – indicted earlier this year for their participation in the largest-ever college admissions scandal in the U.S. After the scandal broke in March, Zangrillo, a leading investor in the project, stepped away from the development and was replaced by developer Zachary Vella. But it looks like Zangrillo, a Miami Beach resident and founder and CEO of Dragon Global, is still involved.