Alexis Manrodt

  • Stockholm, Sweden (Credit: iStock)

    Stockholm, Sweden (Credit: iStock)

    Institutional capital is piling into Nordic real estate as investors hunt for returns.

    The $49 billion or so invested in real estate last year in the north European region — Sweden, Norway, Denmark, and Finland — was the most ever recorded and appetites appear to be just as strong this year, according to Bloomberg.

    Linus Ericsson, CEO of Jones Lang LaSalle’s Swedish outfit said that demand is coming from deep-pocketed investors like pension funds. His firm hired three new senior advisors in the region this month.

    “They have massive amounts of money, and the bigger the better,” he said.

    Foreign investors were involved in a third of transactions by value last year and this year some of the world’s biggest investors are planning to expand their operations in the region, even as some worry that Europe’s real estate market could be approaching a bubble.

    New York-based Neuberger Berman is opening an outpost in the region, along with Goldman Sachs and a Luxembourg-based entity backed by the Qatari royal family.

    So-called hybrid bonds — designed either to convert to equity or absorb losses — are growing in popularity with real estate firms in the region looking to raise money, largely because they’re cheaper than equity.

    In 2018, only one real estate company offered a hybrid bond of benchmark size, but last year three did. In total, Nordic real estate companies issued $1.5 billion in hybrid debt last year.

    The influx of capital has caught the eye of domestic regulators in Sweden and Denmark, where interest rates have been below zero. The former’s Financial Supervisory Authority told banks to build capital against potential losses and Denmark’s regulatory body wants to ensure lenders don’t get lax with credit standards. [Bloomberg] — Dennis Lynch

  • Gregory Prosser

  • Akon and a rendering of Akon City in Senegal. (Credit: Getty Images and Hussein Bakri/BAD Consultant/Semer Group)

    Akon and a rendering of Akon City in Senegal. (Credit: Getty Images and Hussein Bakri/BAD Consultant/Semer Group)

    It’s something of a moment for smart cities built from scratch. In Indonesia, the crown prince of Abu Dhabi and Masa Son are building a new $34 billion capital city to replace Jakarta. But that doesn’t begin to compare to what’s happening in Senegal, where Akon is building a smart city that runs on his own cryptocurrency.

    The Senegalese-American musician and producer posted on social media recently that he had finalized an agreement with Senegalese tourism officials for his 2,000-acre “Akon City” megaproject outside Dakar, according to CNN.

    That’s right, Akon is behind one of West Africa’s largest, if not it’s largest real estate project underway in West Africa. There are some reports that the project broke ground last spring, while others say this month’s agreement will allow Akon’s team to break ground.

    Akon City is set for 2,000 acres outside the Senegalese capital gifted to him by Senegalese President Macky Sall. The 46-year-old musician announced the project in 2018. The site is a five-minute drive from Senegal’s new international airport that opened in 2017, according to CNN.

    Details are scarce, but renderings show what appears to be a mix of commercial and residential space. The development is focused on tourism and Akon plans for all transactions there to be done via his cryptocurrency Akoin.

    Cryptocurrency millionaire Jeffrey Berns is planning a similar, although significantly larger, “cypto-city” project on 67,000 acres in Nevada called Innovation Park.

    Akon spent the 2010s on hiatus from his music career, but has been working on business and philanthropic ventures across Africa. His most recent is Akon Lighting Africa, a solar power company that has installed infrastructure in 14 countries. He spent a significant portion of his childhood in Senegal, calling the country his “hometown.”

    Akon City is to be developed in phases. The second phase will begin in 2025 and Akon said it could be completed within 10 years. [CNN]Dennis Lynch

  • Gregory Prosser

  • Is January the new April for real estate? (Credit: iStock)

    Is January the new April for real estate? (Credit: iStock)

    Homebuyers and sellers are getting an early start to the spring housing market.

    Between 2015 and 2018, April was the hottest month of the year on Realtor.com, but January was the hottest in several markets across the country last year, according to a report by NBC.
    Mortgage rates have fallen a full percentage point since October 2018 to around 3.7 percent, so there could be a repeat of last year. Low interest rates are bringing more buyers to the market.

    “There’s even some talk that [interest rates] might go a little bit lower,” said Corey Burr of Washington D.C.-area’s TTR Sotheby’s International Realty. “But if I were a buyer right now, I’d be very satisfied with a 30-year mortgage at three and a half percent.”

    Markets around the nation’s largest metros, including the Bay Area, Boston, and Washington, D.C. are among the most competitive in the country. Activity around the nation’s capital has been particularly strong since Amazon announced it would open a campus in Crystal City in late 2018.

    The national market overall however is less competitive than it’s been in recent years. Only 12 percent of offers on Redfin faced bidding wars last year, compared to 48 percent in 2018 and 53 percent in 2017. [NBC]Dennis Lynch

  • Kevin Rebong

  • Cheung Chung Kiu is no stranger to big real estate deals (Credit: Wikipedia)

    Cheung Chung Kiu is no stranger to big real estate deals (Credit: Wikipedia)

    There isn’t much known about the man behind the rumored $262 million purchase of a 45-room mansion overlooking Hyde Park in London, other than he loves shattering real estate records.

    In fact, there’s more public information about Cheung Chung Kiu’s real estate dealings than just about any other part of his life, according to Bloomberg.

    He set a new price record in Hong Kong in 2015 when he purchased a property on the Peak for $656 million, and the supposed deal for 2-8a Rutland Gate wouldn’t be his first in London.

    122 Leadenhall Street in London (Credit: Wikipedia)

    122 Leadenhall Street in London (Credit: Wikipedia)

    His company CC Land Holdings Ltd. has focused on the U.K. since 2017 and has purchased $2.6 billion worth of towers in London since then. Among its holdings are the so-called “Cheesegrater” skyscraper and an office block in Central London. The firm also has a stake in a former mall near its chairman’s new manse.

    Since 2014, CC Land has been slowly shifting its portfolio of long-term assets from Mainland China to Hong Kong and then to the U.K., which has earned him some criticism in China.
    Cheung himself is said to be worth at least $1 billion. Along with his own company, he has stakes in at least 15 public companies and sits on three boards.

    Cheung grew up in the city of Chongqing before moving to nearby Hong Kong after high school. He built an electronics business and started investing in real estate in the 1990s, according to Bloomberg.

    He appears to like his privacy, saying at a 2018 conference in China that his group is “in a lot of investments in China” and that he also invests in his own name, “but you just would not know about it.” [Bloomberg]

  • Kevin Rebong

  • (Credit: SimsWiki, Unsplash)

    (Credit: SimsWiki, Unsplash)

    A Kansas developer has a concept for below-market-rate housing in San Francisco, but it isn’t exactly pretty.

    Helsey Holdings wants to build two apartment buildings with 200-square-foot micro-apartments asking $2,000-per-month and 88 basement “sleeping pods” starting at around $1,000-per-month, according to Fast Company.

    For context, a one-bedroom unit in San Francisco costs on average about $3,700-per-month.

    Helsey’s Chris Elsey said the concept was borne from a goal to build the most affordable market-rate building possible without the need for government subsidies. The alternative option for providing affordable housing is building a traditional project with larger units and subsidizing some of those units with government dollars.

    (Credit: Elsey Partners via Fast Company)

    (Credit: Elsey Partners via Fast Company)

    At first glance, the basement pods in particular seem dystopian and at second glance they still seems rather dystopian, but Helsey’s Chris Elsey said it’s a better use of that space than using it for parking or storage, like most other buildings.

    The pods would be made out of plywood and several would share a common living space about the size of a traditional one-bedroom apartment. The center courtyard of the building is dug out to allow for full-size windows in each basement subspace, per city code.

    The micro-unit concept has only gained popularity in the U.S. in recent years, but they’re an established model in some housing-strapped cities. Hong Kong has had micro-apartments for years and they’ve proliferated and become even smaller recently.
    Helsey Holdings has submitted plans for the two apartment buildings to the city, but they haven’t yet been approved. [Fast Company]

  • Alexis Manrodt

  • Daniel Daggers is out at Knight Frank (Credit: Getty Images)

    Daniel Daggers is out at Knight Frank (Credit: Getty Images)

    A misstep on Instagram has cost one of the U.K.’s most successful agents his position at Knight Frank.

    Daniel Daggers resigned in November and will leave Knight Frank by February after 12 years with the firm, according to Financial Times. Daggers was a partner in the company’s super-prime division, selling properties worth at least £10 million.

    Daggers shared a photo of a client’s London home with his 30,000 Instagram followers without the permission of the client, who complained that it violated their privacy and created a security risk.

    Following Knight Frank’s announcement of his departure, Daggers posted a photo on Instagram of him mock-mowing a lawn with the caption: “me on gardening leave.” As of January 24th, he’s added another 1,000 followers on the platform.
    Daggers was among the first U.K. agents to embrace social media and branding in the way many U.S. agents have. Like his counterparts stateside, Daggers mostly posts photos to Instagram of luxury cars, homes, and exclusive events. His success building his online presence led him to teach classes for agents on the practice.

    Social media is a key marketing tool for agents in the U.S. and many U.S. agents have built their careers on various social media platforms and Instagram in particular.

    Last year, Daggers told Spear’s magazine that he had been involved in around 500 sales totaling £3bn, or $3.9 billion. He worked on the £95m sale of a Georgian house near Buckingham Palace, which was bought by American hedge fund billionaire Ken Griffin, who shattered the price record in the U.S. when he paid $238 million for a penthouse at 220 Central Park South in Manhattan. [Financial Times] – Dennis Lynch

  • Gregory Prosser

  • Microsoft CEO Satya Nadella (Credit: Getty Images and Microsoft)

    Microsoft CEO Satya Nadella (Credit: Getty Images and Microsoft)

    Earlier this month, Microsoft promised to go carbon negative by 2030. It’s the first major tech company to publicly make such a pledge, setting the bar for other industry giants.

    Microsoft president Brad Smith earlier this month outlined a plan “to reduce and ultimately remove Microsoft’s carbon footprint” by 2050. By 2025 the company claims it will use 100 percent renewable energy and by the end of the decade will remove more carbon from the air than it produces, according to The Information.

    “…by 2050 Microsoft will remove from the environment all the carbon the company has emitted either directly or by electrical consumption since it was founded in 1975,” Smith said in a blog post.

    The ambitious pledge puts it out in front of many other tech companies, at least as far as promises go. Apple and Facebook have no timeline for carbon neutrality. Alphabet has been carbon neutral since 2007 — five years longer than Microsoft — but hasn’t set a carbon negative goal.

    Amazon pledged last year to use 100 percent renewable energy by 2030 and go carbon neutral by 2040, the same year that New York Governor Andrew Cuomo said the state will go carbon neutral.

    Microsoft’s plan includes supporting tree-planting operations and working with companies that capture and store carbon underground. It will also internally “tax” its divisions for carbon emissions and use that money to fund sustainability efforts.

    Electricity is almost impossible to track through a grid, so most large companies reduce emissions by purchasing renewable energy credits. Credits “claim” green energy production on the grid, but allows them to still pull electricity from traditional producers. [The Information]Dennis Lynch

  • Keith Larsen

  • Harvey Hernandez (Credit: Airbnb)

    Harvey Hernandez (Credit: Airbnb)

    Airbnb accuses Miami real estate developer Harvey Hernandez of defrauding the short-term rental company and diverting funds that were to be used for an apartment-sharing concept.

    Airbnb claims it invested $11 million in a partnership with Hernandez’s Newgard Development Group to offer Airbnb-branded apartments. Newgard was supposed to open at least seven of these projects, including in one in Kissimmee, Florida, in in 2019, according to Airbnb’s lawsuit filed Thursday in Northern California. So far, Newgard has failed to open a single project.

    Hernandez could not immediately be reached for comment.

    The lawsuit comes as Airbnb prepares for its planned initial public offering this year.

    According to the suit, Airbnb planned to provide the capital, and Newgard and Hernandez were to then manage, operate, and market rental properties throughout the United States.

    Instead, Airbnb alleges “NGD and Hernandez stole funds, made unauthorized loans to other Hernandez-controlled companies, fraudulently backdated documents, breached contracts, and then lied repeatedly in an attempt to cover their tracks.”

    Airbnb alleges Hernandez siphoned off $1 million of the investment into another one of his projects, Natiivo in Miami. Airbnb alleges Hernandez and Newgard tried to disguise the investment as a loan by producing fraudulent and backdated documentation that showed Hernandez as the signatory on behalf of both borrower and lender. The “loan” is now in default and remains outstanding, according to the lawsuit. Airbnb is demanding the return of its $11 million investment and wants out of its contract.

    The Financial Times first reported the lawsuit.

    It is not the first time Hernandez has faced major legal issues with his real estate developments.

    In 2016, Hernandez’s development company was sued over a failed robotic car garage he installed at the luxury condo tower Brickell House in Miami. In September, a Miami-Dade County judge awarded the Brickell House condo association $40.6 million from the development group after the technology malfunctioned and left residents without a working garage.

  • Gregory Prosser

  • From left: Authentic Brands Group CEO Jamie Salter, Simon Property Group CEO David Simon, and Forever 21 CEO Do Won Chang (Credit: Getty Images)

    From left: Authentic Brands Group CEO Jamie Salter, Simon Property Group CEO David Simon, and Forever 21 CEO Do Won Chang (Credit: Getty Images)

    Last summer, struggling fast-fashion retailer Forever 21 reportedly reached out to its landlords to ask for investment in the company. Now, with bankruptcy proceedings well underway, one landlord might be ready to take up that offer.

    Simon Property Group is considering a bid to acquire Forever 21 as it teeters on the edge of liquidation, Bloomberg reported. The Indianapolis-based mall owner would team up with Authentic Brands Group in this potential deal to operate the stores and the brand.

    The bid could be Forever 21’s last shot at survival. Unable to borrow more money, the company “is turning to you in an effort to continue operating,” it told suppliers in a letter that asked them to ship goods in exchange for 50 percent IOUs, as it continued negotiations with an unnamed potential buyer to be announced in the coming weeks.

    The retailer’s attempts to borrow money, or to find buyers, have been hampered not only by poor sales but also by the founders’ insistence on retaining control. Founders Do Won Chang and wife Jin Sook even borrowed $10 million from the trusts of their adult daughters to help keep operations afloat.

    Any arrangement for suppliers to ship goods on credit would require the bankruptcy court’s approval.

    When Forever 21 declared bankruptcy in October, Simon Property was revealed to be the retailer’s largest creditor among landlords, with more than $8 million in unsecured lease claims outstanding, followed by Brookfield Properties and Macerich.

    Simon operates 233 malls and outlets globally, and posted return losses of about 7 percent last year — still relatively strong performance for a mall REIT, amid the industry’s struggles. The company recently invested $280 million in online discount retailer Rue Gilt Groupe to expand their purchasing platforms.

    Authentic Brands Group, founded in 2010, recently acquired Barneys for $270 million following the luxury department store’s bankruptcy. The brand management company’s portfolio includes other retailer like Aéropostale and Juicy Couture, as well as well as such celebrities as Muhammad Ali and Marilyn Monroe. [Bloomberg]Kevin Sun

  • Keith Larsen

  • The mortgage industry is booming

    January 24, 2020 06:00PM By Keith Larsen
    Refinancings spur mortgages to record high

    Refinancings spur mortgages to record high

    Now sure is a great time to be a mortgage lender – they issued $2.4 trillion in home loans last year, which was the most since 2006.

    In fact, the $2.4 trillion was a 46 percent increase from 2018, according to industry research group Inside Mortgage Finance.

    Many homeowners are looking to refinance their mortgages after the Federal Reserve lowered interest rates three times last year. Lowering interest rates also makes other asset classes such as bonds less attractive, which has caused investors to turn to higher-income producing assets like real estate.

    The news comes as a reprieve to the housing market, which reported signs of a slow down in 2018 after years of home price gains.

    Overall, refinancings made up 38 percent of mortgage originations last year, according to the Wall Street Journal, which cited data from the Mortgage Bankers Association. The mortgage jump also aligns with December sales of existing homes, which rose nearly 11 percent from the year before, according to the National Association of Realtors.

    The housing market still faces pressing challenges including rising construction costs and a limited supply of entry level single-family homes. Rising construction costs, particularly labor costs, have shrunk homebuilders margins which makes them less incentivized to build affordably-priced homes for first time buyers.

    A jump in mortgage lending is generally a good sign for the housing market, but some academics and regulators are concerned about the rise in nonbank mortgage lending. Nonbank residential mortgage companies like Quicken Loans and LoanDepot now originate a majority of the residential mortgages in the U.S., compared to a decade ago when traditional banks dominated the space and are more regulated than nonbanks. [WSJ]Keith Larsen

  • Georgia Kromrei

  • U.S. Rep. Alexandria Ocasio-Cortez and Sunnyside Yards (inset) (Credit: Getty Images and Wikipedia)

    U.S. Rep. Alexandria Ocasio-Cortez and Sunnyside Yard (Credit: Getty Images and Wikipedia)

    Rep. Alexandria Ocasio-Cortez resigned from the steering committee planning the development of a 180-acre Queens site after being pressured by community groups.

    In a letter today, AOC said she quit the Sunnyside Yard Steering Committee because not enough feedback was being incorporated into the New York Economic Development Corporation’s vision for the massive project, which opponents fear will cause gentrification.

    “This feedback, both from community members and from my office, includes but is not limited to community land trusts, truly affordable housing, and public and green infrastructure of the scale necessary to meet our 21st century housing and environmental justice challenges,” AOC wrote to the EDC, the main economic-development arm of the de Blasio administration.

    Officials at the agency acknowledged AOC’s resignation Friday afternoon. In a statement, a spokesperson said, “Sunnyside Yard presents an opportunity to build a stronger New York for generations to come that includes more open space, transit, affordable housing, jobs and green infrastructure in Western Queens. This planning process has always put community engagement at the center.”

    Groups opposing development in Queens, including the Democratic Socialists of America, had targeted the de Blasio administration and the development’s steering committee, a roster of community leaders and elected officials, including AOC.

    “You love to see it,” said Alex Crowley, a member of the leadership of the Queens branch of the socialist group, upon learning of AOC’s resignation.

    Groups including the Queens Anti-Gentrification Project, Justice for All and Woodside On the Move previously criticized the development process for being conducted undemocratically. They said that after Amazon’s exit, the EDC put together the steering committee featuring AOC and other officials but gave it little accountability, rather than engaging with dissenters.

    City officials hope to establish a mix of affordable housing, schools, parks and open spaces over the rail yard, situated between Sunnyside and Long Island City. The administration has been trying to portray the planning process as inclusive to avoid the kind of opposition that killed plans for an Amazon campus in nearby Long Island City.

    The ambitious project, if it comes to pass, would not happen until after Mayor Bill de Blasio’s term expires at the end of next year.

    The EDC has a hand in efforts to develop Willets Point in Queens and Hunts Point in the Bronx, the aborted Amazon campus and the Brooklyn Army Terminal in Sunset Park.

  • Josh Aaron Siegel

  • Knotel CEO Amol Sarva

    Knotel CEO Amol Sarva

    Proptech is a $20 billion industry that’s already reshaping and upending traditional real estate as we know it. And this is just the beginning. Each Thursday, The Real Deal’s Future City newsletter breaks down the biggest news in proptech across the globe, from 3-D printer homebuilders in Long Island, to emerging tech brokerages in India, to crowdfunding property startups in San Francisco. Of course, we also cover the intrigue around firms backed by SoftBank. There are lots of them.

    Our newsletter features exclusive interviews, insight and analysis that’s a must-read for brokers, developers and VCs alike. You can sign up here.

    Here is the Jan. 23 edition

    Das rental middleman

    Home, a German startup that connects tenants and landlords, just scored €11 million in a Series A funding round led by early stage VC firm Capnamic and EQT Ventures. The company works as a digital middleman, signing leases directly with owners and renting out the units to tenants. They claim that 1,100 landlords request to sign up for their service a month. Home’s goal is to use the new funds to expand past Berlin, Munich and Hamburg to seven additional German cities by April 2020.

    Homebuilding, from start to finish

    Proptech focused VC firm Fifth Wall Ventures just led a $35 million Series B round for tech-fueled general contractor Homebound. The startup guides homeowners through each step of the building process, giving them digital access to building plans, budgeting, and construction progress. Founder Nikki Pechet started the company in response to the Tubbs Fire, which wiped out thousands of homes in Northern California in 2017.

    Bonuses at Airbnb
    Safety is still on Airbnb’s mind this week. They’ll be factoring in guest safety metrics in employee bonuses, per the Wall Street Journal. The change would tie the bonuses of more than 6,000 employees, along with executives, to the safety of guests and hosts on the platform. A shooting killed five at an Airbnb home on Halloween last year and the company responded by announcing new safety measures including plans to verify all 7 million of its listings, which sounds almost impossible to pull off.

    Stat of the Week
    93%

    That’s how much WeWork’s leasing activity plunged in the fourth quarter. The flailing company signed just four new leases in the U.S., covering 184,022 square feet of space compared to an average of 2.54 million square feet in the last four quarters.

    They’re clearly rushing to cut costs after the whole IPO debacle. In that vein this week, WeWork’s selling off its stake in women-focused co-working startup The Wing. They’ll join a long list of startups that were once part of the WeWork sphere, including Managed by Q, Meetup, and Teem.

    No-no Knotel
    WeWork isn’t the only co-working company scrambling to make cuts. As much as a third of Knotel’s New York-focused staff received pink slips last week, sources told TRD. Around 20 people were laid off from the 50-to-60-person team at their New York location. Sales reps, customer service employees, a construction project manager and workers from Knotel’s furniture business were among the layoff victims. The cuts come not long after the firm’s head of corporate finance left. Knotel, which claimed to have raised $400 million six months ago to reach unicorn status, has been struggling with high vacancy rates in New York. Former Knotelers told TRD‘s David Jeans that the business model was quite similar to that of WeWork, which reminds us of this A+ tweet from CEO Amol Sarva:

    Getting ready to move

    Corporate relocation startup Shyft just nabbed $15 million in a Series A round. The startup is aimed specifically at employees whose company will cover the cost of their move. Users chat with a “move coach” to help them through the corporate relocation process and get estimates from movers.

    Startup Spotlight

    The land of milk, honey and con-tech

    It’s no secret that Israel has been a hotbed for tech startups over the past few years with navigation app Waze as the country’s biggest success story. But it’s not just Waze that’s been making waves. The country’s proptech industry has ballooned along with the wider expansion of the tech industry, bringing some unique startups, especially in construction, to the field.

    Construction tech startup Intsite aims to shorten project times by integrating AI with construction cranes. The Tel Aviv-based company created tech that helps automate the navigation of tower cranes. They’re not the only ones testing out unique solutions at construction sites around Israel. The country’s construction industry trade association, Bonei Yisrael has a tech initiative that focuses on 3D printing materials and drones that monitor building projects.

    Credifi’s back from the dead

    Mortgage data firm Actovia is buying up a former competitor that suddenly shuttered last month. Just a few weeks ago it seemed like it was the end for the Tel Aviv-based data startup Credifi. But with the acquisition, the CRE data company will be back as a separate company under the Actovia umbrella. Actovia CEO Jonathan Ingber told TRD that they may merge with Credifi in the future to form one big CRE data firm.

  • Kevin Rebong

  • Michelle Williams and Tommy Kail and their Brooklyn Heights townhouse (Credit: Getty Images, Google Maps)

    Michelle Williams and Tommy Kail and their Brooklyn Heights townhouse (Credit: Getty Images, Google Maps)

    Actress Michelle Williams and Hamilton director Tommy Kail scooped up a $10.8 million townhouse in Brooklyn Heights.

    The deal for the 3,000-square-foot home may be one of the most expensive for the neighborhood, according to the Wall Street Journal.

    The couple, who paid for the 1820s-era home through a trust connected to Kail also acquired a plot of land behind the house, according to the WSJ. The property was not on the market when it sold.

    Other celebrities have been drawn to Brooklyn Heights of late. A year ago, actors John Krasinski and Emily Blunt dropped $11 million on a pair of apartments at the Standish building.

    This is not Williams’ first real estate purchase in the borough. In 2015 the actress paid $2.5 million for a mansion in Prospect Park. Williams sold a townhouse in Boerum Hill in 2014 for $8.8 million.

    Kail and Williams, who recently worked together on the television show “Fosse/Verdon,” are engaged and expecting their first child together. [WSJ] — Mary Diduch

  • Kevin Rebong

  • RFR Realty's Aby Rosen, Brookfield's Ric Clark and the Lever House at 390 Park Avenue (Credit: Getty Images and Google Maps)

    RFR Realty’s Aby Rosen, Brookfield’s Ric Clark and the Lever House at 390 Park Avenue (Credit: Getty Images and Google Maps)

    Aby Rosen’s new landlords at Lever House are trying to wrest control of the Park Avenue landmark.

    Brookfield Office Properties and Waterman Interests filed a petition in court asking a judge to appoint an appraiser to help settle a dispute over the rent reset on the property, Crain’s reported.

    Rosen and the Brookfield-Waterman partnership each commissioned their own appraisals of the property last year. But when the two sides couldn’t come to an agreement, Rosen refused to agree to have a third appraiser break the impasse, according to Crain’s

    Brookfield declined comment to Crain’s and a representative for Rosen’s RFR Realty did not immediately respond to a request for comment.

    Rosen, who has controlled the famed mid-century office building at 390 Park Avenue for two decades, has struggled to refinance the property due to reset that could see the rent skyrocket.

    The lease was scheduled to reset Jan. 1 to a figure that equals 7.5 percent of the property’s fair market value. That could push the rent up from about $6 million a year to $20 million.

    Rosen had butted heads with the property’s landlord, the Korein family, over the rent reset. So in 2018 the Koreins struck a deal to create a “sandwich lease” with Brookfield and Waterman that inserted them into the deal between the Koreins and Rosen, effectively making Brookfield and Waterman Rosen’s new landlords.

    RFR last year sued Waterman, claiming company principal Philip M. “Tod” Waterman III used information he gleaned from discussing a possible partnership on the Lever House with RFR partner Michael Fuchs to go behind the company’s back and cut a deal with the Koreins. [Crain’s] — Rich Bockmann

  • Eddie Small

  • 83 Clifton Place in Clinton Hill and 37 Greene Street with Acadia Realty Trust CEO Kenneth Bernstein (Credit: Google Maps)

    83 Clifton Place in Clinton Hill and 37 Greene Street with Acadia Realty Trust CEO Kenneth Bernstein (Credit: Google Maps)

    Just two mid-market investment deals were made public this week in New York City: a multifamily building in Brooklyn and a commercial condo unit in Manhattan. Here are the details:

    1. A Midtown-based LLC purchased 83 Clifton Place in Clinton Hill for $22.9 million from an LLC linked to G-Way Management. The six-story Brooklyn apartment building contains 40 residential units and spans about 58,000 square feet, according to the city.

    2. Acadia Realty Trust bought a commercial condo unit at 37 Greene Street in Soho from Premier Equities for about $15.4 million. The six-story building spans about 21,400 square feet with eight units overall, according to the city. Artist Eric Fischl sold his unit in the building about a year ago for $4.75 million.

  • Kevin Sun and Yoryi de la Rosa

  • Office leasing in Manhattan

    • Midtown office leasing hit a new all-year high in November with 2,750,000 square feet in leases inked, up 36% from the prior month’s record and up 58% year-over-year. The leasing spurt pushed the availability rate down to 11.3%, while the average asking rent fell by nearly $2 to $87.03, all thanks to the month’s headline deal — Facebook’s 1.5 million-square-foot lease across three buildings at Hudson Yards, which accounted for more than half of all Midtown space leased.

    • Midtown South saw a total of 430,000 square feet in leases inked in November, down 4% from the month before and 38% year-over-year. The availability rate rose to 9.8 percent, and the average asking rent fell to $83.67 per square foot. The submarket’s largest deal went to Japanese advertising company Dentsu Aegis Network, which took up 322,000 square feet at Tishman Speyer’s Morgan North Post Office redevelopment at 341 Ninth Avenue.

    • Leasing activity in Lower Manhattan totaled 330,000 square feet in November, down 3% from the month before and down 27% year-over-year. The availability rate slid to 11.6%, and the average asking rent rose to $62.79 per square foot. The largest deal in this submarket, and citywide, went to the investment bank Morgan Stanley, which renewed its 1.25 million-square-foot lease at 1 New York Plaza.

    Top deals

  • Kevin Rebong

  • Keeping lawns freshly cut and outdoor spaces in tip-top shape could result in greater rewards for sellers. (Credit: iStock, IMDB)

    Keeping lawns freshly cut and outdoor spaces in tip-top shape could result in greater rewards for sellers. (Credit: iStock, IMDB)

    Inner beauty is something we all strive for. But when it comes to selling homes, that may not be enough.

    Keeping lawns freshly cut and outdoor spaces in tip-top shape could result in greater rewards for sellers. A new analysis of Google Street View and data from nearly 90,000 home sales found that, on average, a property with strong curb appeal sells at a 7 percent premium to a comparable home in the same neighborhood with less curb game. In buyer’s markets, that premium shot up as high as 14 percent.

    The findings from the study conducted by University of Texas at Arlington professor Sriram Villupuram and the University of Alabama’s Erik Johnson and Alan Tidwell were published in the Journal of Real Estate Finance and Economics and reported by the Wall Street Journal. The study gauged curb appeal by factors such as lawns and landscaping, and used machine learning to assign values to the dataset of homes in the greater Denver area.

    Current appraisals generally bake in factors such as number of bedrooms and bathrooms, square footage and any home improvements. Villupuram told the Journal that the findings could help large-scale real estate investors and lenders make better estimates about property values. [WSJ] — TRD Staff

  • Kathryn Brenzel

  • 45 Broad Street and Madison Equities CEO Robert Gladstone (Credit: Getty Images)

    45 Broad Street and Madison Equities CEO Robert Gladstone (Credit: Getty Images)

    Developers of this Lower Manhattan tower are blaming the sluggish market for their decision to delay their project.

    Gemdale Properties and Madison Equities “broke ground” on 45 Broad Street in 2017. Little progress has been made since on the 1,115-foot tower planned for the site. The development team — which for some reason no longer includes Pizzarotti — acknowledged Thursday that they plan to hold off on the project. They also indicated that 80 feet will be taken off the tower’s originally planned height to meet Federal Aviation Administration requirements.

    “45 Broad Street remains a top priority for the development team, and we have strong long-term confidence in the project’s viability,” a spokesperson for Madison and Gemdale said. “Due to short-term conditions in the Lower Manhattan market, we have decided to delay on constructing the building in the near future.”

    The reference was perhaps to FiDi sales at the end of 2019, which plunged nearly 45 percent quarter over quarter, according to a market report from Platinum Properties. There were 26 deals in the final quarter, the report showed, compared with 47 the previous quarter and 32 in the same period one year ago. Also, Manhattan is dealing with an oversupply of luxury inventory.

    Pizzarotti hasn’t returned requests for information on why it’s no longer a part of the development. A few blocks away from 45 Broad, the construction company is locked in a legal dispute with the developer of 161 Maiden Lane, another luxury condo tower.

    The murder of a real estate agent in Minneapolis highlights the dangers brokers face.

    On New Year’s Eve, Monique Baugh, a 28-year-old broker and mother of two, was fatally shot after agreeing to meet her attacker — whom she did not know — for a home showing, according to officials. In the weeks following her death, brokerages have been mulling ways to increase agent safety.

    Modern Spaces CEO and founder Eric Benaim says his firm is thinking about installing Google Nest cameras in its development projects, Erin Hudson reports. Douglas Elliman has a no-questions-asked buddy system.

    Compass’ McKenzie Ryan says she’s careful about what information she discloses on Instagram. She doesn’t tag close friends or family, list contact information on her profile or reveal her location in real time.

    “I don’t want to be the grim reaper here, but you’re asking for it by constantly sharing where you are,” she said. “I think that, in and of itself, is pretty dangerous.”

    What we’re thinking about: What will happen to Fairway Market? Send a note to [email protected].

    CLOSING TIME

    Residential: The priciest residential closing recorded Thursday was for a townhouse at 57 Willow Street in Brooklyn Heights, at $10.8 million.

    Commercial: The most expensive commercial closing of the day was for an industrial building at 18-51 Flushing Avenue in Ridgewood, at $37.6 million.

    BREAKING GROUND

    The largest new building filing of the day was for a 92,837-square-foot, mixed-use building at 134-11 221st Street in Laurelton. Myron Berman filed the permit application.

    NEW TO THE MARKET

    The priciest residential closing of the day was for a townhouse at 73 Perry Street in the West Village, at $12 million. Compass’ Lise Lebeuf has the listing.

    — Research by Mary Diduch

    A thing we’ve learned…

    Air rights play a pivotal role in the 2010 film “Burlesque,” which stars Cher and Christina Aguilera. In fact, Aguilera’s character gets an important lesson in how such rights work, while also learning some hard lessons about love. Anyway, according to Wikipedia, a luxury condo developer actually plays something of a hero in the movie. Thank you to Alexis Manrodt for providing this fun fact.

    Elsewhere in New York

    — Andy Byford, a.k.a. “Train Daddy,” is calling it quits, the New York Times reports. The president of NYC Transit has been thinking of leaving for months and was apparently put over the edge when his duties were scaled back as part of a reorganization. He and Gov. Andrew Cuomo didn’t get along.

    — In other important MTA news, six subway stations will sell Star Trek: Picard–themed MetroCards over the next three weeks, Gothamist reports. Yes, I know, this is an advertisement. But it’s a good one.

    — Last month, Cuomo vetoed a bill that would’ve legalized e-scooters and e-bikes. But in his 2021 budget proposal, he made a similar proposal! According to the New York Post, the governor’s pitch included a helmet mandate for riders under age 18.

  • Nicholas Severin

  • Here are two real estate events next week.

    Host: Inman
    Date: Jan. 28 to Jan. 31
    Time: 7 a.m. to 11:30 a.m.

    Inman is hosting its Inman Connect New York 2020 event over four days at the Marriott Marquis Times Square, 1535 Broadway. The event will provide chances to network along with panel discussions, exhibitions and town halls addressing an array of trending real estate topics. Speakers include Adam Contos of RE/MAX and Josh Team of Keller Williams.

    Host: Bisnow
    Date: Jan. 30
    Time: 7:30 a.m. to 11:30 a.m.

    Bisnow is hosting its NYC Construction & Development Summit at Studio Gather, 45 Rockefeller Plaza. This event offers networking opportunities along with discussions of the construction and design innovations entering the industry. Chris McCartin of Tishman Speyer and Sanat Patel of AVANA Capital will be among the speakers.

    Submit industry events to [email protected].

  • Eddie Small

  • Joseph Chetrit and 88-20 153rd Street (Credit: Getty Images, Google Maps)

    Joseph Chetrit and 88-20 153rd Street (Credit: Getty Images, Google Maps)

    The Chetrit Group is planning another major project at its Mary Immaculate Hospital site in Queens.

    The company will build an eight-story, 207-unit residential building at 88-20 153rd Street in Jamaica of about 133,000 square feet, according to plans pre-filed with the Department of Buildings Wednesday. The project will stand 80 feet tall.

    Chetrit is also planning a four-building, 481-unit complex on the hospital site at 150-13 89th Avenue. The project in Wednesday’s filing will be in addition to that one, not part of it, according to a source familiar with the company. Hill West will design both developments, which are on the same block, a short walk from the Parsons Boulevard subway station serving the E and F lines.

    Representatives of the Chetrit Group did not respond to a request for comment.

    Chetrit landed $200 million in construction refinancing from Square Mile Capital for the four-building complex in November. It previously received about $127.5 million in construction financing for the deal in 2016 from Bank OZK and Arbor Commercial Mortgage.

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