The Real Deal New York

Maryland AG investigating housing complaints at Kushner Companies affiliate, shopping malls are dragging down commercial property values, and more...

National cheat sheet
By James Klatell | December 01, 2017 11:00AM

Lennar CEO Stuart Miller

Lennar’s $5.7B buy of CalAtlantic creates largest U.S. homebuilder

There’s a new heavyweight in the homebuilding industry. The merger of Lennar Corporation with CalAtlantic Group in a $5.7 billion deal announced last month means the new company will be the largest homebuilder in the U.S., The Real Deal reported. Miami-based Lennar will also assume $3.6 billion of debt in the deal, making the purchase price a total of $9.3 billion. Lennar and CalAtlantic recorded revenues of more than $17 billion combined last year. The new entity will be in charge of 240,000 home sites and 1,300 communities in 49 markets across 21 states. 

60th construction crane rises over Chicago

There are now 60 tower cranes looming over Chicago — nearly twice the number as they were in 2016, Bisnow reported. The city has seen an increase in development across all asset classes over the last three years, with Mayor Rahm Emanuel touting the growth as evidence of the economic opportunities in Chicago. The latest addition in construction hardware comes courtesy of Belgravia Group, which is building an 18-story luxury condominium tower called Renelle on the River. The project is 50 percent pre-sold, and units are selling for between $1.6 and $3.2 million.

Growing Houston sees developments push into “deer huntin’ country”

A planned 4,500-home development north of Houston — in Conroe and the Woodlands — is the latest expansion of the fast-growing city into formerly untouched lands. Howard Hughes Corp. broke ground on the 2,000-acre master-planned Woodland Hills community last month. “I remember this as old deer huntin’ country,” Conroe Mayor Toby Powell said, according to the Houston Chronicle. In regards to exposure to flood risk in the wake of Hurricane Harvey, the Howard Hughes Corp. told the Chronicle that “home sites that builders purchase from us will allow the builders to construct homes at or above the 500-year elevation.”

An under-construction green roof in Denver

Denver voters favor ambitious green roof initiative

Voters in Denver approved Initiated Ordinance 300, which requires buildings to incorporate rooftop gardens and solar panels to increase energy efficiency. New buildings with at least 25,000 square feet will be subject to the new rules, as will older buildings that replace their roofs or expand their square footage. Mayor Michael Hancock was opposed to the measure but said he will work to implement the rules. “We have always made a good-faith effort to implement the initiatives — once the people have spoken, that’s our job,” he told the Denver Post.

Housing complaints surface at Kushner Companies Maryland affiliate

An affiliate of Kushner Companies is being investigated for allegedly coercive debt collection practices and poor maintenance at housing developments in Maryland. Attorney General Brian Frosh of Maryland is looking into the situation at multifamily housing run by Westminster Management in response to media reports, according to CNN. Both the New York Times and ProPublica described problems such as mold and vermin in the properties, while the Baltimore Sun described aggressive practices such as arrests of tenants. CEO Jared Kushner stepped down to join the White House in January.

Utah investor may be retried over alleged Ponzi scheme

Federal prosecutors intend to retry Utah investor Rick Koerber, who has been accused of running a real estate Ponzi scheme. His eight-week trial resulted in a mistrial on Oct. 16 because jurors were unable to reach a unanimous verdict, according to the Salt Lake Tribune. Prosecutors filed a motion last month requesting a scheduling hearing to set a new trial. The prosecution alleged that $100 million was entrusted to the defendant and more than $50 million was redistributed to other investors. Despite the time and cost involved in retrying the case, U.S. Attorney for Utah John Huber said, “it is the right thing to do.” 

Garden State Plaza Mall

Struggling shopping malls are dragging down commercial property values 

Mall valuations took a 6 percent dive from September to October and fell by 11 percent in the last 12 months, according to a report by real estate research firm Green Street Advisors. Those dwindling values are weighing down the entire commercial real estate market, Green Street found. The firm’s commercial property price index, which tracks real estate investment trust-owned properties, decreased by 1 percent from September to October — the largest month-to-month drop since the financial crisis, the Wall Street Journal reported.

Atlanta Civic Center sale opens path for $300M redevelopment

The City of Atlanta closed the long-planned sale of the Atlanta Civic Center, clearing the way for a $300 million redevelopment plan. With the aging arts center now under the control of the Atlanta Housing Authority, a mixed-use, mixed-income development can be built on the site. “This project will represent the largest commitment to affordable housing in the city of Atlanta in more than 15 years,” Mayor Kasim Reed said, according to the Atlanta Journal Constitution.