Editor’s note: Pain and promise as 2020 comes to a close

Stuart Elliott
Stuart Elliott

They say hindsight is 20/20.

And fortunately, 2020 is nearly in our hindsight as well.

There are reasons to be optimistic heading into next year with the first vaccines being administered. A possible return to normal life seems within sight, suddenly. 

But, clearly, there is still pain all around. There’s the human toll with more than 300,000 deaths in the U.S., an unimaginable number.

There’s the financial toll too. In our corner of the business world, many real estate players are struggling to ride out the pandemic and economic storm that have disrupted everything. 

In our cover story this month, we take a look at HFZ Capital Group, which could possibly implode in one of the biggest boom and bust stories of the era. Ziel Feldman’s firm has continually made big bets since the Great Recession, paying record amounts for land along Manhattan’s High Line and stretching itself with a big portfolio of condo projects.

As reporters Rich Bockmann, Sylvia Varnham O’Regan and Keith Larsen write, the company is now fending off several foreclosure actions that threaten to, at the very least, strip the company of many of its properties. Its lender on its flagship project is shopping for a new sponsor. Feldman and his wife have personally guaranteed many of the loans tied to its portfolio, and Feldman’s former partner, Nir Meir, abruptly left the firm this month.

HFZ’s not the only one fighting to hold on, of course. While judicial foreclosures are still banned in many places, there has been a rise in Uniform Commercial Code foreclosures by mezzanine lenders that can bypass state courts. Observers say this could be the canary in the coal mine with lots of distressed properties expected to hit the market in the next year.

And take a look at our piece on the plight of mom-and-pop landlords, who are largely being ignored by city and state legislators that are mainly focused on helping tenants.

The new year will also see a big test when it comes to IPOs. As it prepares for what would be one of the most anticipated public offerings of a residential firm in years, Compass has overhauled its C-suite and reorganized key departments. We take a look at who wields clout at the 18,000-agent firm. If it’s anything like the success that Airbnb achieved going public earlier this month, when its stock started trading at more than double the offering price, Compass execs will be very pleased.

Others see opportunity amid the tumult, as well. Our Closing interview this month is with Sam Nazarian, the founder of SBE Entertainment Group. In a bold strategy shift, Nazarian recently sold off his entire stake in his hotel business to go all-in on digital restaurant brands and so-called ghost kitchens that prepare delivery-only meals.

Family offices for wealthy individuals also see opportunities with many having missed out on buying real estate following the Great Recession. See page 66.

Meanwhile, for some perennial bright spots, check out our examination of the industrial market, which remains hot as e-commerce keeps expanding (page 60). And don’t miss our profile of Kurt Rappaport, who has long sat at the top of the heap of luxury residential agents in California.

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Finally, I’m proud to announce that TRD recently won 14 awards from the National Association of Real Estate Editors for our industry coverage last year — a record number of wins for us. That included the prize for the best commercial and residential trade magazine (the very magazine you are reading right now) and a silver award for best website. Reporter Kathryn Brenzel also won an award for her daily subscriber-only newsletter, Daily Dirt.

Here are all the other (well deserved) winners:

• “Real Estate’s surveillance state,” by Rich Bockmann

“Drama at the Agency,” by Natalie Hoberman

• “Inside Playboy’s struggle with notorious investor Adam Hochfelder,” by Erin Hudson

• “A free penthouse for Steve Ross, now on the market for $75M,” by E.B. Solomont

• “Senate and Assembly reach deal on rent laws. It doesn’t look good for the industry,” by Kathryn Brenzel and Georgia Kromrei

• “Elevated Risk,” by Kathryn Brenzel and David Jeans

• “Ghost Towers,” by E.B. Solomont and Kevin Sun

• “Here’s what the new rent law will do to the average stabilized apartment,” by Kevin Sun

“The art in the deal,” by Aimee Rawlins

“Cracking the bro code,” by E.B. Solomont and Katherine Kallergis

Enjoy the issue, and here’s to a brighter 2021.