The best of: TRD editors share their picks for the top stories of 2018
TRD editorial staff discuss their favorites from the past year
The Real Deal’s coverage reached all corners of the real estate industry in 2018.
From the Opportunity Zones craze and residential brokerage’s existential crisis, to a developer who’s become the poster boy for gentrification in Chicago and even the mid-term elections, TRD reporters and editors didn’t skip a beat.
Here’s a look at some of the top stories we reported in 2018, as selected by TRD’s team of editors.
The Real Deal’s reporters and editors kept quite busy in 2018. Each month we produced in the ballpark of 1,000 online posts and 200 magazine pages across our four cities. Amidst that mountain of copy, there was a lot that stood out when it came to finger-on-pulse, follow-the-money financial journalism. It’s hard to choose, but I will say this: “Rough Cut,” our investigative piece on how money from the murky global diamond trade has helped shape the New York skyline, was a deep-dive that made me particularly proud with its breadth and scope.
Meanwhile, our no-holds-barred interview with Charlie Kushner was our most read piece of the year. And for good reason – nobody else had gotten that kind of access to Kushner, at a time when his son Jared in the White House and his 666 Fifth Avenue property were the subject of intense scrutiny. The interview starts with Kushner threatening to throw reporters Will Parker and Konrad Putzier out of his office, and stays heated throughout.
Jill Noonan, Senior content director | The death of the brokerage
Picking a favorite is never easy, but our May magazine cover story headlined “The death of the brokerage” was definitely toward the top of my 2018 list. Not only did senior reporter E.B. Solomont do a superb job in reporting it, but she also managed to capture a hugely important moment in time for New York City’s residential brokerage community. The story, which was largely pegged to the collapse of Town Residential, detailed the perfect storm of financial challenges that have intensified for residential brokerages in the last year or two. And while these firms are still collectively transacting billions of dollars a year in business, the challenges laid out in the piece — from new technology pressures to competition from venture-backed firms to difficulties in retaining top agents — are clearly not going away anytime soon. We’ll have to stay tuned to see how it turns out in 2019 and beyond!
Damian Ghigliotty, Managing issue editor | When the glass ceiling won’t break
“When the glass ceiling won’t break” remains a very important and timely story that follows our January 2017 cover story “Real estate’s diversity problem.” Everything about this feature highlights The Real Deal’s ability to raise the bar when it comes to in-depth industry coverage. Kathryn Brenzel’s reporting for this story was incredibly detailed and uncompromising, and the collaborative effort among her, the research team and the magazine editors made the final outcome that much more impactful. We looked at gender diversity (and the lack thereof) at dozens of real estate firms, spoke to dozens of people about what has and hasn’t changed in recent years, and our photo shoot brought several industry executives from different sectors to our New York office on the same day — which was a feat unto itself.
James Kleimann, Managing web editor | The agent luxury rental landlords can’t live without
When Brookfield’s amenity-filled luxury rental tower the Eugene opened for leasing, many of us couldn’t fathom why any New Yorker would pay upwards of $10,000 a month to live above the Lincoln Tunnel. Reporters Will Parker and Konrad Putzier started with the obvious question: How did the hundreds of renters find their way to the windy badlands of Manhattan? And who were they? Parker and Putzier struck up a few conversations with people at the building, who were all too happy to share how the tale: a Flushing-based broker we had never heard of was filling the Eugene and other pricey rental towers from JDS, Extell, Durst, etc. with hundreds — maybe thousands — of “fuerdai,” Chinese students who receive $50,000 monthly allowances from their loaded parents. It’s a fantastic real estate story, and it’s my favorite TRD yarn of 2018! There are colorful anecdotes (one student at the Eugene had $1 million in cash stuffed inside his piano), insights into how agent Sunanne Zhu finds clients (a 5,000-member WeChat group), and a thorough breakdown of what it means for these developers (considering the state of the luxury market, it’s a gift from the heavens; but because rich students chase concessions and the latest amenities each year, things can quickly turn south). Give it a read if you haven’t yet!
Danielle Balbi, Deputy web editor | The anatomy of construction corruption
It’s the $45.3 billion backbone of New York’s real estate world: the construction industry. And in “The anatomy of construction corruption,” reporter Kathryn Brenzel illustrated how, for decades, graft has creeped its way through a network of middle men — from dry wall installers to building suppliers — into developers’ bottom lines. The story serves as a perfect primer to what makes construction sites so vulnerable to scandals like overbilling schemes and bribery, which have become so commonplace that firms just see this as the cost of doing business. And Brenzel’s reporting brings to light an industry-wide inertia that allows such corruption to continually flourish.
Will Parker, Special projects editor | At star-studded 443 Greenwich, condos are smaller than advertised
For New Yorkers of ordinary means, slick brokers with a penchant for embellishment are not an occasional misfortune, but an expectation. And even for the wealthy in this city there is no magic line of privilege whereafter it is no longer normal. Senior reporter E.B. Solomont wrote this year about how Manhattan condominium buyers are consistently forking out seven- and eight-figure sums for luxury homes that are much smaller than advertised, in some cases up to 20 percent smaller than the stated square footage. Nowhere is this trend more evident than at 443 Greenwich Street, a West Village conversion that has been successfully marketed as a must-own for celebrities, including actors Meg Ryan and Jennifer Lawrence.
Brokers maintain that a square footage fib of up to 10 percent is “not-material” and insist that what is square footage and what is not is largely subjective (state regulators, meanwhile, allow developers to measure it however they want, including the use of non-usable space). Over the last two decades, buyers have fought back by suing, and some brokers, in turn, have adjusted to that reality, but mostly just by ceasing to advertise square footage at all in order to avoid getting sued.
More recently, a group of residential agents has assembled to get serious about standardizing square footage in the industry, so that numbers match reality. “Tape measures exist for a reason,” broker Leonard Steinberg told Solomont. “We didn’t build buildings with spandex. There’s a gross square footage to every structure in New York City and they can be measured — and they should be.”
Hiten Samtani, Editor-at-large | Rough cut
Origin stories always make for juicy reads, and this one dug (no pun intended) into the gemstone-filled past of some of New York’s most important developers. In an exhaustively reported narrative that took the reader from Sierra Leone to Antwerp and to the corridors of money and power in Manhattan, Konrad Putzier was able to detail the nexus between the diamond and real estate industries, and even explain how the two professions are so similar. There are rich anecdotes throughout, but the piece is also anchored by original research on the extent that former diamond traders have shaped the city’s skyline.
My favorite bit from the story shows the similarity between the trades: The diamond game is all about acquisition of the rough, the financing of the purchase, deciding how to cut the diamond, and then refining and marketing it to achieve maximum value. Sound familiar?
“In the mind,” said Yitzchak Tessler, a former diamond trader and now condo developer, “it’s not such a big jump.”
Heidi Patalano, Special issues editor | The indestructible tenant
As the special issues editor, I treasure the work I get to do with staffers in LA and Miami on their print editions. But this year, one of the pieces I was most fascinated by was written our frequent freelancer C.J. Hughes, who covered the proliferation of dollar stores for our retail issue. Discounters like Dollar Tree, Family Dollar and Five Below are increasingly referred to as “teflon tenants” and its easy to see why, since they can compete with Amazon on pricing for basic household items. One broker said dollar stores were “e-commerce immune.” We’ve all heard so much about the need for “experiential tenants” in retail spaces, but I found the tale of this thriving segment of traditional retail to be a telling example of Darwinian survival.
Alexi Friedman, National editor | Will real estate developers seize on ‘Opportunity Zones’ tax incentive?
I’ve got two words for you: Opportunity Zones. Everyone is talking about the federal program that provides tax incentives for investors to focus developments in distressed areas. It’s the real estate industry’s newest, shiniest toy. Even Anthony “The Mooch” Scaramucci wants in. But not many knew about it in early summer — including this editor — when Keith Larsen laid out its possibilities and perils. His story, “Will real estate developers seize on ‘Opportunity Zones’ tax incentive?” homed in on Miami’s Little Haiti neighborhood, a designated zone ripe for redevelopment. Other TRD reporters have followed with excellent stories of their own in all four of our markets, including Erin Hudson’s video primer: “Everything you always wanted to know about Opportunity Zones.” But the questions Keith’s reporting raised: will investors pour money into Opportunity Zone areas apart from existing projects, why are some upscale neighborhoods in designated zones, and will the program benefit the region or just be a gift to wealthy developers, continue to be debated today.
Brian Baxter, Tri-state editor | Search and destroy: How CoStar became a $15B juggernaut
When presented with the opportunity to join the editorial team at The Real Deal in late 2018, I set about doing my due diligence on the place. The bylines of a handful of reporters, some on different continents, for the magazine’s October cover story examining the CoStar Group’s rapid rise demonstrated to me that TRD is committed to insightful coverage that informs its audience by peeling back the layers on a sometimes opaque market. The incredible amount of hard work that goes into such a feature story — from reporters, researchers, editors, designers and countless others — is not something to take lightly in today’s media world, where in-depth projects at the daily and monthly level can often fall by the wayside amid the ever-present competition for clicks and readers. That’s not the case at TRD, and as a relative newbie to the real estate beat, I hope to uphold that standard.
Ina Cordle, South Florida managing editor | Florida governor’s race: DeSantis defeats Gillum
It was a night to remember: In one of the most closely watched races in the country, former Rep. Ron DeSantis won the tight race for governor of Florida, defeating Tallahassee Mayor Andrew Gillum. Katherine Kallergis and I were each watching the election results during the night. Katherine had written profiles of the candidates for our magazine, including on deep-pocketed real estate investors Jeff Greene and Philip Levine, and had pulled together all the campaign contributions from the real estate industry. When Gillum conceded and gave an emotional speech about 11 p.m., we knew it was time to post the election results. As DeSantis’ gave his victory speech, Katherine quickly finished writing the story, and I edited it. It posted at 11:44 p.m.
Katherine Kallergis, South Florida associate web editor | Rough Cut
I don’t think I can pick just one (“When the glass ceiling won’t break,” “Kushner unfiltered,” and “The death of the brokerage” are a few of my top TRD reads this year), but senior reporter Konrad Putzier’s magazine story on how the diamond trade has influenced New York City’s real estate market was one of my favorites. It’s an in-depth look at the parallels between both industries and a number of developers “previous lives,” which are often forgotten about or hidden but end up explaining so much. The story, which includes money laundering, cartels, secret backers, had all the elements of a great TRD feature with strong research and historical context.
John O’Brien, Chicago managing editor | As developers cash in on Logan Square, one property owner has become the face of gentrification
TRD’s first year in Chicago has been filled with a number of memorable stories for me and the staff here, everything from serious politics (Mayor Rahm Emanuel’s real estate legacy as he heads for the exit) to just plain fun (a swimsuit calendar featuring male resi brokers, Michael Jordan’s mansion sale airball). But the most memorable for me was Alex Nitkin’s look at developer Mark Fishman, who has grown to become the face of gentrification in the Logan Square neighborhood. Fishman owns a number of properties in the area, where rents and home prices alike have been growing significantly. Many outlets have written about him and his properties and the protests surrounding them, but no one sought to go beyond the vilification of Fishman until Alex did. What he found was other developers and investors who’ve raised rents as much or more than Fishman. I talked to a number of respected journalists here about the story, and they all said it was the first truly fair portrayal of Fishman and what’s happening in Logan Square. That fairness and journalistic integrity are among the qualities we hope to keep bringing to Chicago in our second year here.
Alexei Barrionuevo, Los Angeles managing editor | Who is Tejon Ranch? A NY-backed firm plots massive communities in California
Natalie Hoberman dug into the backers and backstory of Tejon Ranch, the company trying to develop massive master planned communities about 60 minutes outside of Los Angeles. The developments — one of which the county board of supervisors has approved since Natalie’s story — could shape an otherwise untouched slice of California. The two-decade struggle to get them approved has come to symbolize the tension between the need to alleviate L.A.’s housing shortage and the fears over creating new urban sprawl.
Natalie detailed how Tejon Ranch is backed by Wall Street money, including a scion of the Tisch Family. And she traced the fascinating history of the company back to the Chandler family and the end of the Mexican-American War, when California’s first Superintendent of Indian Affairs established a military outpost meant to supervise the Indian tribes on the land.
It’s worth checking out. It’s an example of the kind of story-behind-the story that we plan to do more of in 2019.