These real estate companies got fat PPP loans
New data shows brokerages, landlords, hotels, architecture and construction firms among those receiving forgivable loans of $1M or more
In New York, California, Florida and Illinois a total of more than 1,000 real estate and real estate-related businesses received forgivable loans worth at least $1 million each through the Paycheck Protection Program.
That’s just a fraction of the newly-released loan data detailing recipients of PPP assistance, which includes tens of billions of dollars that went to brokerages, landlords, construction firms, architecture firms and hotels.
The Trump administration’s release of the massive data set follows the government’s July 4 approval of a third phase of applications for the $670 billion in PPP funding.
According to the SBA statistics released Monday, loans worth $1 million or more accounted for just 1.7 percent of all PPP loans issued, but made up 34.8 percent of the total monetary value.
The SBA’s figures show that $65 billion in PPP loans went to the hard-hit construction industry, $42 billion went to accommodations and food services — including hotels and restaurants, while another $16 billion went to real estate, rental and leasing.
The government data release does not provide specific loan amounts, only broad ranges like $5 million to $10 million, $2 million to $5 million and $1 million to $2 million, making it difficult to calculate total amounts by city or sub-industry. The Real Deal’s parent company also received a PPP loan.
In New York state, 24 real estate businesses received loans of $5 million or more, including co-working firm Knotel (retained employees: 159), Meridian Capital Group (retained employees: 330), and CIM Group’s the Dominick at 246 Spring Street, formerly known as Trump Soho.
CIM Group acquired the then Trump-branded hotel from developers the Sapir Organization and the Bayrock Group in a foreclosure auction in 2014, and the property no longer has any connection to President Trump.
Conflict-of-interest rules prevented businesses controlled by Trump and other senior government officials from receiving funds from the $2 trillion stimulus package in March. But businesses with less direct ties to the president — and the political elite in Washington more generally — have still been able to benefit greatly from the program.
And companies connected to the president’s son-in-law Jared Kushner, including Observer Media and two New Jersey hotels, have received PPP funds, the Daily Beast reported Monday.
The newly-released data also comes amid continued controversy over the program’s implementation, whose first two rounds saw hundreds of millions of dollars in Small Business Administration loans go to large, well-capitalized corporations. That’s despite the program’s stated goal of supporting small businesses hit hard by the coronavirus pandemic.
One of the largest recipients of PPP loans, Texas hotelier Monty Bennett, returned $68 million in PPP funds in May, citing “inconsistent federal guidance” and “compliance risk.” It also followed pressure for him to do so. Companies like Shake Shack, the Los Angeles Lakers and AutoNation also returned millions of dollars in loans.
PPP from coast to coast
Other notable New York-based recipients of PPP funds include Extell Development ($2 to 5 million, 88 employees), Pyramid Management Group ($2 to 5 million, 302 employees), and Thor Equities ($1 to 2 million, employee count not provided).
In Los Angeles, luxury residential brokerage the Agency received a $2 to 5 million PPP loan to retain 104 employees, according to the SBA data. Stimulus recipients in L.A. also included a number of Chinese developers, like Greenland Group, which received two $1 to $2 million loans to retain a total of 339 employees; and Shenzhen New World Group, which received two $2 to $5 million loans for a total of 533 employees. Shenzhen New World has been implicated as a major player in a bribery scheme surrounding recently-arrested City Councilmember Jose Huizar.
While U.S. subsidiaries of foreign companies are not barred from receiving PPP assistance, lack of guidance in the early days of the program had led to significant confusion among potential borrowers.
Last month, an L.A. marketing agency that had received a PPP loan sued its Canadian landlord Onni Group, alleging the foreign company was seeking “back-door” access to the program by demanding the funds be used to pay rent.
In South Florida, notable PPP recipients include Related Group affiliate PRH Investments LLC, which received $2 to $5 million to retain 232 employees, and Jeffrey Soffer’s Fontainebleau Development, which received $1 to $2 million to keep 87 employees.
In Chicago, one major recipient of PPP funds was the city’s oldest residential brokerage, Baird & Warner, which received more than $5 million for an unspecified number of employees.