Breakups, layoffs and walkaways: No love in real estate last week
Heartbreaks and headaches are just business as usual
It’s almost Valentine’s Day, but love isn’t in the hearts of some real estate players. Instead of love letters or flowers, it was pink slips and legal documents making their rounds.
Facing the impact of remote work and rising interest rates (of which there was another one Thursday), Scott Rechler’s RXR is preparing to part ways with some of his office buildings by handing them back to lenders.
In doing so, Rechler compared 10 percent of RXR’s portfolio to Kodak film, implying that portion is outdated. It’s also a sign of potential distress in the office market.
In the realm of commercial divorce, Tamir Shemesh, a top-producing Manhattan broker, was terminated from his employment at Serhant just a year after he and his four-person team joined the firm from Douglas Elliman. No reason was given as to what was behind the termination.
Meanwhile, The Agency became the latest residential brokerage to lay off employees; the California-based firm let go of 15 people, or about 4 percent of its staff.
The layoffs come amid an aggressive expansion push by the brokerage, which less than a year ago made its New York City debut after acquiring local brokerage Triplemint.
Still on the employment front, the number of agents closing deals in the Houston market dropped by nearly 10 percent in Q4 2022 year over year, according to data compiled by AgentStory, a company that tracks real estate markers. There were almost 8,200 active agents in Q4 2021, compared to a pool of just under 7,400 active agents in Q4 2022.
And, yes, there was news concerning an actual divorce, with the saga of the Meruelo family still playing out in Florida. Though Maria and Richard Meruelo dissolved their marriage last year, ownership of their Pine Tree Drive property is still in dispute. Billionaire Russell Weiner is also involved, as he bought the note on the property from a previous lender who sued for more than $6 million in unpaid mortgage payments.
Heartache also came by way of rejection. California officials rejected Berkley’s most recent housing element draft, meaning the East Bay city missed the Jan. 31 deadline for compliance.
It’s a big deal, because noncompliance on the housing element makes the city vulnerable to penalties, which can include loss of millions of dollars of state funding for housing and the loss of local control for zoning through the builder’s remedy legal clause.
Of course, even amid the most turbulent times, there’s always family to fall back on for support, encouragement and even, in some cases, continue a real estate dynasty. In The Real Deal’s latest issue, we took stock of some of the legacy kids — aka “nepo babies” — who have set up shop and built and sold towers across New York, Los Angeles and Miami. Is their success due to their talent and tenacity, their family ties or perhaps all of the above? We’ll let you be the judge.