Kushner-founded real estate startup inks deal with Goldman Sachs
Cadre, the real estate startup co-founded by Jared and Joshua Kushner, has struck a deal with Goldman Sachs that will allow the bank’s clients to invest in commercial properties using Cadre’s platform, Reuters reported. The Kushners’ firm, headed by CEO and fellow co-founder Ryan Williams, buys into properties then lets its members purchase small stakes in them and claims to have already closed more than $1 billion in property deals. Goldman Sachs has reportedly committed $250 million in investment to Cadre. [TRD]
Why stock market is unimpressed by Newmark’s IPO
Commercial real estate firm Newmark Knight Frank went public in December, but it has received a decidedly rough welcome on the stock market. Owned by Howard Lutnick’s BGC Partners, Newmark intended on selling 30 million shares on the NASDAQ exchange but only sold 20 million. The expected share price was between $19 and $22, but ended up at $14 when the IPO launched on December 14. Some investors had trouble comparing Newmark to competitors such as CBRE or JLL because it didn’t use the standard GAAP measure for its earnings, the Wall Street Journal reported. [TRD]
Founders of recently shut down Xceligent rule out starting up a replacement
The founders of Xceligent, the real estate data company that filed for bankruptcy at the end of 2017, are scrapping plans to launch a successor company. Doug and Erin Curry say the threat of legal action from Xceligent is preventing them from moving forward. “We are concerned with the risk and cost of pursuing the Intrepid CRE Initiative at this time and have decided not to go forward,” Erin Curry wrote in a statement. The Currys founded Xceligent in the late 1990s but were ousted in October. The company filed for Chapter 7 liquidation as it faced a costly legal battle with rival CoStar Group. [TRD]
“Million dollar listing” doesn’t mean what it used to
There are four times as many homes worth $1 million today as there were in 2002, according to new data from real estate site Trulia. Across the top 100 U.S. metropolitan areas, roughly 4.3 percent of homes are now million dollar properties, Trulia found. But a million dollars doesn’t denote “luxury” like it had before: in many places — New York and San Francisco among them — nine figure home values are closer to the middle of the market than the high end. [CBS News]
Buying client leads online can mean relying on unethical or illegal businesses
While StreetEasy’s NYC Premier Agent program can represent the upside of finding clients online, brokers are finding many lead generator services are less than reliable and sometimes less than ethical, an in-depth report from The Real Deal found. It’s “kind of like the used car industry back in the 1970s,” said Michael Urbanksi, founder of a Annapolis, Maryland-based lead platform called Qazzoo. [TRD]
MAJOR MARKET HIGHLIGHTS
Art of the deal: When Donald Trump sold his son a NYC penthouse apartment for $350K
Eric Trump is combining three apartments atop the Trump Parc East into a valuable penthouse suite, but one of those condo units was sold to him by his father, and the building’s developer, Donald Trump, for just $350,000 in the spring of 2016. Eric Trump paid about half of the listed price for the apartment, a sale which would normally be treated as a gift by the IRS. If the apartment had been a gift, Donald Trump could have been taxed up to 40 percent of the market value. Experts guessed that the unit was sold for $350,000 so that it would look like a “fair market sale” and not a gift. [TRD & ProPublica]
Franchisees rapidly souring on New York City’s Rapid Realty
A lawsuit to be filed in New York claims that Rapid Realty founder Anthony Lolli is pushing a deceptive business model to attract franchisees. Nine Rapid Realty franchise owners are signed on to the impending lawsuit. It claims, among other charges, that Lolli is selling franchises in New York two years after Rapid Realty’s registration expired with the Attorney General’s Office. It adds that a program to provide high-interest loans to franchises was only used to enrich Lolli. A statement from Rapid acknowledged the lapsed paperwork but denied any wrongdoing. [TRD]
Revised plans for Obama Presidential Center in Chicago aim to win over critics
After initial plans for the Obama Presidential Center in Chicago met with widespread criticism, the $500 million project’s backers unveiled a revised proposal that they hope will fit better with nearby Jackson Park. The complex’s museum tower, which many thought was monolithic in the original plan, is taller and thinner in the second version. The Obama Foundation, the nonprofit behind the center, also agreed to scrap an aboveground parking structure. The plans still need approval from the Chicago Plan Commission, as well as federal regulatory reviews, but the foundation hopes to break ground by year’s end. [Chicago Tribune]
Lawsuit claims Miami Beach hotel is at the center of money laundering scheme
Miami-based investor David Brillembourg is being sued by his former partner for allegedly running an “elaborate shell game” involving the Raleigh Miami Beach hotel and a resort on the island of Anguilla. According to the suit, Brillembourg put the Miami Beach hotel, which had been owned by Brillembourg and others, up for collateral on a loan used to fund the resort in Anguilla after moving the loan through two shell companies that he owned. Brillembourg later made a profit off the Anguilla investment, but his former partners in the Raleigh say they should get the money because the hotel was used in the original loan. [TRD]
Freed from Bureau of Prisons, DC office building plans new life
As the Bureau of Prisons prepares to move out, the owners of 500 First Street NW in Washington D.C. are preparing the building for its future. Government Properties Income Trust acquired the building when it bought First Potomac Realty Trust for $1.4 billion in July 2017. Government Properties hired RMR Group to manage the building. RMR plans a major renovation of the property and has selected Avison Young as leasing agents for the 130,000-square-foot space. [Bisnow]
Plans approved for $100M rental tower in Minneapolis
The design for what will be one of Minneapolis’s biggest rental buildings have gotten the green light from planning officials. Developers hope to break ground on the 26-story tower this summer. The Expo, a joint venture between Doran Cos. and CSM Corp., will contain 372 rental units, 3,175 feet of retail space and 400 parking spaces, to be built in a historic district near the Mississippi River. At an estimated cost of more than $100 million, construction on the 2.5-acre site is expected to take two years to complete. [Minneapolis Star Tribune]