The Daily Dirt: Zillow becomes a New York City brokerage

An analysis of New York's top real estate news

TRD New York /
Feb.February 04, 2020 12:05 PM
StreetEasy CEO Richard Barton and RealDirect CEO Doug Perlson (Credit: JD Lasica via Flickr, RealDirect)

StreetEasy CEO Richard Barton and RealDirect CEO Doug Perlson (Credit: JD Lasica via Flickr, RealDirect)

Zillow is formally a brokerage in NYC. But the company says this doesn’t confirm agents’ fears that it’s coming for their livelihood.

Residential brokers have long speculated that Zillow, the parent company of StreetEasy, would eventually get into brokerage. That has now technically happened in New York — the company is officially a licensed corporate broker.

But company officials say Zillow doesn’t plan to get into traditional brokerage, Erin Hudson and E.B. Solomont report.

“As we work to redefine how real estate is done, and create product improvements for consumers, brokers and agents on our platforms, we will be performing activity for which many states require a license,” said Viet Shelton, a spokesperson for Zillow, in a statement. “In order to cover these new services, Zillow has been working to get traditional brokerage licenses across the country, even though we aren’t operating as a classic, traditional brokerage.”

It’s not yet clear what new services Zillow plans to roll out in NYC. The company is already licensed in Arizona, a move made in 2018 at the behest of regulators after debuting its instant home-buying service, Zillow Offers, which uses its controversial Premier Agents program to broker deals. At the time, Zillow stressed in a letter to regulators that it did not intend to cut brokers out of deals.

Still, that same year, then-CEO Spencer Rascoff announced Zillow’s acquisition of Mortgage Lenders of America, a Kansas-based mortgage brokerage. During an earnings call, Rascoff said the deal was part of Zillow’s efforts to become “an end-to-end provider on housing-related services.”

Prologis and Blackstone are racing for dominance in the industrial market.

By the end of last year, Prologis, the San Francisco real estate investment trust, had amassed a portfolio that spans nearly 814 million square feet (including 61 million square feet of development projects), according to the company’s most recent earnings statement. But Blackstone is rapidly catching up, Rich Bockmann reports. According to company representatives, Blackstone has grown its portfolio to roughly 800 million square feet.

“Prologis had that kind of exposure to industrial even at a time when Blackstone owned nothing,” said Dave Roders, an analyst at Robert W. Baird & Co. who covers Prologis. “Lately, though, Blackstone’s appetite and consumption of industrial assets has probably outpaced what [Prologis] has done.”

After Blackstone dropped nearly $19 billion on Singaporean international warehouse firm GLP and its 179 million square feet in June — the biggest portfolio deal ever — the company has continued to buy industrial space. A few months later, it acquired part of TA Realty’s industrial portfolio.

Still, Eric Frankel, an analyst at Green Street Advisors who covers Prologis, noted that the REIT has a “head start” when it comes to experience in managing these properties. Both companies also face competition from active players such as Duke Realty, which owns about 155 million square feet, and Exeter Property Group, which owns about 200 million.

What we’re thinking about: Will the state use eminent domain to make its Penn Station expansion plans a reality? Send a note to [email protected].

CLOSING TIME

Residential: The priciest residential closing recorded Monday was for a condo unit at 53 West 53rd Street in Midtown, at $6.8 million.

Commercial: The most expensive commercial closing of the day was for an office building at 273 Church Street in Tribeca, at $10.5 million.

BREAKING GROUND

The largest new building filing of the day was for a 3,283-square-foot residential building at 53 Montauk Avenue in Cypress Hills. Eddie Rosario filed the permit application.

NEW TO THE MARKET

The priciest residential listing to hit the market was for a condo unit at 27 West 72nd Street on the Upper West Side, at $14.3 million. Cushman & Wakefield’s Will Conrad has the listing. — Research by Mary Diduch

Word of the day

Closing costs – Expenses incurred in the purchase and sale of real property paid at the time of settlement or closing.

A thing we’ve learned…

Suffolk Construction just underwent an extensive rebrand that places a significant emphasis on the company’s tech offerings and investment in artificial intelligence and construction tech startups (six so far). The company also boasts “vertical service lines” that “include real estate funding, design, technology investment, and research and development.” California-based Katerra has a similar pitch.

Elsewhere in New York

— Three coronavirus cases are now suspected in New York City, according to the New York Post. Officials confirmed Sunday night that two more people in Queens are undergoing testing.

— The former owner of Taste of Persia, a popular restaurant tucked inside Pizza Paradise in the Flatiron District, claims the new owners kicked him out and stole his recipes, Gothamist reports. Saeed Pourkay alleges that they told him they wanted to “move in a different direction,” and he would need to leave the space. Friday was Taste of Persia’s final day, but when Pourkay returned to the business over the weekend, he found “Tasty Persia” had opened in his restaurant’s stead.

— The city’s worst escalator — based on its 24-hour availability rate last year — appears destined to retain that dubious distinction in 2020, as it probably won’t be fixed until September, The City reports. Located at the Lexington Avenue-53rd Street station, it broke down more than a year ago. The escalator is privately owned and maintained (or not?) by Metropolitan 885 Third Avenue.


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