WeWork’s cash flow troubles, selling NYCHA’s air rights and more: Daily digest

TRD New York /
Oct.October 22, 2019 03:05 PM
The Daily Digest - Tuesday

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This page was last updated at 3:05 p.m.

 


Video produced by Sabrina He

 

Facebook wants to tackle California’s housing crisis. The company says it will provide $1 billion to build 20,000 housing units in the Bay Area and Silicon Valley. The money will come in the form of grants and loans, and follows Google and Lendlease’s pledge in June to co-develop $15 billion worth of master-planned communities throughout Silicon Valley. [NYT]

 

Former WeWork CEO Adam Neumann and SoftBank Group chairman Masayoshi Son (Credit: iStock, Getty Images)

SoftBank Group is taking control of WeWork. The Japanese conglomerate will provide a total of $6.5 billion in financing and buy $3 billion worth of investor shares. That wasn’t the only offer on the table. JPMorgan Chase put together a $5 billion debt package, which included high-interest bonds. SoftBank’s deal values WeWork at less than $8 billion — a humbling number, given its $47 billion valuation in January. [TRD, NYT]

 

But WeWork’s bills are only getting higher. The co-working company is facing rising costs from its leases and the need to build out its new spaces. According to company filings, WeWork has committed to lease payments from mid-2019 through 2023 that total $10.2 billion. And the cost of constructing new workstations could go over $1 billion. [WSJ]

 
(Credit: iStock)

(Credit: iStock)

The J-51 tax abatement is due for an overhaul. The program provides a tax exemption and abatement for up to 34 years to landlords who renovate multifamily buildings, but applications have dropped 69 percent in the past 10 years. The concern for some landlords seems to be the program’s requirement that apartments remain rent-stabilized throughout the life of the program. [TRD]

 

No stars for Hudson Yards. Though the mega-development includes restaurants by globally renowned chefs, the latest New York Michelin Guide doesn’t honor any of its many eateries with a star. The guide, widely considered the authority on fine dining, did give Thomas Keller’s TAK Room and David Chang’s Kawi a lesser Plate designation — the category just below a star. [WSJ]

 
148 East 28th Street and Governor Andrew Cuomo (Credit: Google Maps and Getty Images)

148 East 28th Street and Governor Andrew Cuomo (Credit: Google Maps and Getty Images)

Multifamily buyer demands money back. An LLC owned by Manoucher “Manny” Malekan is suing in an effort to recover its $668,000 down payment on a Murray Hill building with one rent-stabilized unit. Malekan argues the new rent law constitutes a “force majeure” and he’d never have entered into contract on the building had his firm known how the law was about to change. [TRD]

 
Miki Naftali and 1045 Madison Avenue (Credit: Getty Images, Google Maps)

Miki Naftali and 1045 Madison Avenue (Credit: Getty Images, Google Maps)

Love thy neighbor? A resident across from Naftali Group’s proposed Upper East Side mixed-use development is suing to stop it. She claims Naftali is violating zoning laws by building too close to her cooperative. [TRD]

 

Slowing foreclosures could be bad. A new study finds that policies designed to slow the home foreclosure rate can end up doing more harm than good to the housing market. The authors of the report say the unintended consequence occurs if homeowners are not able to sort out their financial problems in short order. [Inman]

 

Tapping NYCHA’s air rights. A report released today claims the New York City Housing Authority could raise billions of dollars if the city allowed it to sell its air rights more liberally to developers. [NYDN]

 

Real estate’s men in the outer boroughs. Campaign finance records show Democratic Rep. Max Rose is getting help with re-election campaign in Staten Island from leading real estate companies and Wall Street financiers. And so is City Council member Ritchie Torres, who is running for an open House seat in the Bronx. [Crain’s, The City]

 

Paramount Group’s selling spree continues. The company is shopping its Midtown office tower at 900 Third Avenue. Cushman & Wakefield brokers Adam Spies and Doug Harmon are marketing the property for more than $400 million. [Crain’s]


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