Zillow president to step down, Compass buys AI startup

A daily roundup of New York real estate news for November 19, 2019

TRD New York /
Nov.November 19, 2019 03:30 PM
The Daily Digest - Tuesday

Every weekday, The Real Deal rounds up New York’s biggest real estate news. We update this page throughout the day, starting at 9 a.m. Please send any tips or deals to [email protected].

This page was last updated at 3:30 p.m.

 

Long Island politicians want HUD to investigate real estate discrimination. U.S. representatives Kathleen Rice and Thomas Suozzi are drafting a letter to HUD Secretary Ben Carson to call for an investigation into the “steering” Newsday found was commonplace in the broker community. The representatives will also request that the department end its “harmful rollback of fair housing measures.” [Newsday]

 

RFR Realty has filed its second Lever House lawsuits in two weeks. Aby Rosen and Michael Fuchs’ firm sued its new landlords, Brookfield and Waterman, after being warned that it could lose its lease on the well-known Midtown office building because of a sprinkler-system violation. Last week, Rosen sued Waterman principal Philip M. “Tod” Waterman III for using confidential financial information to make a deal with the prior landlord behind his back. [TRD]

 

Evictions are happening less often in most of New York, but rising in the Bronx. A new report from NYU’s Furman Center found that the number of evictions in the city in 2017 was nearly 8 percent less than the number in 2010. On the other hand, eviction filings in the Bronx have steadily risen, and now account for 39 percent of the total. [Curbed]

 

Abu Dhabi Investment Authority is selling another Manhattan trophy property. The sovereign wealth fund, which sold the Chrysler Building at a loss earlier this year, is the 40-story office building at 330 Madison Avenue to the huge German reinsurance firm Munich RE. Munich RE was able to preempt a second round of bids with an offer well above ask. [TRD]

 

A collector of hand sculptures has listed his Manhattan loft for $19 million. Photographer and philanthropist Henry Buhl, who spent decades filling the loft with hand-themed sculptures, is now downsizing. Buhl comes from a wealthy Detroit family who were early investors in General Motors, and had a career as a mutual-fund manager before turning to art collecting. [WSJ]

 

Proptech startup Eden raised $25 million in its Series B funding round. The San Francisco based company, which helps landlords manage parts of the workplace like scheduling cleaning services and ordering snacks, has now has raised a total of $40 million. Soho-based venture-capital firm Reshape led the funding round. [TRD]

 

Milonas’ UES condo debacle raises questions about risks at small condos. Some brokers say such properties present “a special risk” to buyers, while others note that cases like the logjam at East 72nd Street — complicated by a family feud — rarely happen. If even one owner stops paying dues in a condominium building with few units, it blows a large hole in the budget and imposes a significant burden on the others. [TRD]

 


Video produced by Sabrina He

Zillow president and 12-year veteran Greg Schwartz is leaving the firm. Schwartz, who joined Zillow in 2007 as vice president of sales and mostly recently served as the real estate tech giant’s president of media and marketplaces, will leave at the end of the year. He oversaw Zillow’s internet, media and technology segment, which had long been the firm’s top revenue generator before the rapid growth of iBuying platform Zillow Offers. [Inman]

 

Compass has made its first AI-related acquisition. The SoftBank-backed brokerage bought New York-based Detectica last month for an undisclosed sum. Co-founded in 2015 by two NYU data-science professors and originally focused on providing AI fraud-detection for financial firms, the startup has been working exclusively with Compass since July. [WSJ]

 

NYC brokerages condemn the widespread race discrimination in Long Island found by Newsday. Among 11 brokerages who responded to TRD’s inquiries, most expressed outrage at the race-based steering of homebuyers — including 49 percent of black shoppers — that Newsday discovered. Douglas Elliman, whose agents were tested in the report, attacked the newspaper’s methods as “unreliable, unethical, and unscientific.” [TRD]

 

The New York State Attorney General is also investigating WeWork. Letitia James’ office is reportedly looking into multiple transactions involving former CEO Adam Neumann that were scrutinized for potential self-dealing. The Securities and Exchange Commission reportedly launched a separate probe into the company last week. [TRD]

 

Outgoing T-Mobile CEO says he was “never having discussions to run WeWork.” John Legere, who is set to be replaced by operating chief Mike Sievert in a carefully planned handover in May, denied reports that he was in talks to head the embattled firm. However, he is considering a move to another company that could use the “cultural transformation, leadership and things similar to what we’ve demonstrated here.” [WSJ]

 

Community groups in Gowanus are still waiting for the city’s environmental impact statement. As big real estate deals in the to-be-rezoned neighborhood continue to roll in, local stakeholders have raised concerns about unresolved details of the plan, ranging from the impact on public housing and the retention of industrial jobs to clean-up efforts on the Gowanus Canal. [City Limits]

 

Tourist traffic is helping Times Square weather the city’s retail storm. While asking rents in the area are still down about 24 percent from where they were five years ago, Soho’s Broadway saw a 43 percent drop over the same period, while asking rents on upper Madison Avenue have fallen 46 percent. [WSJ]

 

Tishman Speyer has landed a major tenant for Morgan North’s top floors. Dentsu Aegis Network, a subsidiary of Tokyo-based advertising and public relations giant Dentsu, is taking 320,000 square feet on the top floors of the 1933 building, which Tishman is leasing from the U.S. Postal Service for 99 years. Dentsu had previously eyed space at Vornado’s Farley Post Office project, which is now being considered by Facebook and Apple. [NYP]

 

Online deal platform Ten-X Commercial slashes staff after failing to sell the company. Close to 100 employees at Ten-X offices in Texas, New York and California were given notice on Monday morning during a call with executives. The private equity firm that owns Ten-X has been trying to sell the company since the start of the year, and sources said CoStar Group had been in talks for a potential acquisition until recently. [TRD]

 

Landlords are illegally “ghosting” prospective tenants with housing vouchers. Instead of rejecting applicants outright, some landlords appear to have found that cutting off communication is just as effective — although this also violates New York City’s Human Rights Law. Source-of-income discrimination can be “a proxy for other, more historical forms of discrimination,” city officials say. [The City]

 

“iRenting” startup Bungalow raised $47 million. The co-living firm, which leases single-family homes and rents them out room-by-room to tenants, says it has more than 3,200 tenants living in 730 homes across 10 markets, including New York City, Chicago, and Los Angeles. Opendoor co-founder Keith Rabois is closely involved with the firm as well. [Inman]

 

As it awaits redevelopment, Vornado’s Hotel Pennsylvania is getting new rooms. The hotel’s hundreds of guest rooms will be furnished with a “lighter, contemporary palette of white and pale beige,” new carpeting and “rejuvenated” bathrooms, publicists told the New York Post in response to an article last week that called the hotel “gloomy.” [NYP]


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