Monthly Archives: June 2017

National Cheat Sheet: The Oracle of Omaha gambles on retail, Chinese investment in US industrial sector rises by 540%… & more

From left, Aaron Grad, CEO LG Fairmont, Warren Buffett. (credits: LG Fairmont, Huffington Post)

From TRD New York: Warren Buffett invests in retail’s future

This week, Store Capital Corp. revealed that Warren Buffett’s Berkshire Hathaway bought a 9.8 percent stake in the investment trust, which largely specializes in single-tenant retail properties, like chain restaurants, veterinary offices and fitness centers. Buffett paid $377 million for his company’s stake, the Wall Street Journal reported. Store Capital is in 48 states with 1,750 locations and is valued at $5.5 billion. [TRD]

Study says Chinese investors increased spending on U.S. industrial real estate by 540 percent

In the wake of the e-commerce boom, Chinese investors are taking notice of the noise currently surrounding industrial real estate, according to a new report by on industrial capital markets by Avison Young. A massive $284.9M investment in industrial real estate was attributed to Chinese buyers in in Q1 2017, up from $5.2M for the same period the previous year. It’s a jump of 540 percent over a 12 month period. [Bisnow]

As interest rates rise and refinancings drop, lenders lower FICO score requirements

The FICO credit score required by lenders from borrowers to originate mortgage loans declined in April according to Urban Institute’s latest report. It stated that the increase in interest rates and the drop in refinance applications has caused lenders to soften their credit requirements. Since the housing crisis, the median FICO score has increased by 23 points and now stands at around 645, compared to the low 600s a decade ago. [HousingWire.com]

Worker shortage forces contractors to turn down work amid construction boom

With construction spending rising by 5.8 percent, or $359.5 billion, nationwide in early 2017, compared to the same time last year, construction companies are struggling to find enough workers to keep up with demand. In fact, according to the Wall Street Journal, one-third of contractors surveyed said that they have had to turn down work due to worker shortages. [TRD]

Housing prices continue to soar

Housing prices continued their unassailable ascent into the stratosphere in April, increasing by 5.5 percent nationally according to S&P Dow Jones and CoreLogic’s latest report. Seattle registered the biggest gain, 12.9 percent, followed by Portland and Dallas. [HousingWire.com]

Real estate data companies Costar and Xceligent trade insults and accusations in antitrust suit

Citing “an obvious abuse of power,” real estate data company Xceligent filed an antitrust lawsuit against competitor Costar. Xceligent claimed that Costar was stopping its users from sharing their data and is seeking monetary damages. In a statement about the countersuit, Costar, which filed a copyright infringement suit against Xceligent in December, accused the company of “industry scale theft.” [TRD]

E-commerce industrial sector generates $150M fund for Robinson Weeks

Robinson Weeks Partners has raised $150 million for a fund intended to target industrial real estate investment opportunities.“We see this e-commerce effect is really driving demand this development cycle,” president David Welch said. The Atlanta firm is led by industrial real estate vets Forrest Robinson and David Welch with long term build-to-suit developer Ray Weeks remaining as chairman. [Bisnow]

Major Market Highlights

Santa Monica votes to force full disclosure of hotel ownership

Fueled by Chinese insurance giant Anbang’s sizable strides in the American hospitality business, the Santa Monica City Council is taking measures to discourage further foreign investment in the sector. A vote to disclose hotel ownership followed complaints after Anbang spent $6.5 billion to purchase Blackstone’s Strategic Hotels and Resorts Inc., which included the Loews Santa Monica Beach Hotel. Anbang is currently converting New York’s Waldorf Astoria, which it purchased for $2 billion in 2014, into condos and local community groups fear a similar conversion of the Loews. [TRD]

Conjecture swirls on the effect lead generation could have on rockstar brokers

When a rookie agent landed the sale of a $17 million penthouse in Soho, New York City’s high-powered brokers started buzzing. Why? The lucky agent’s startup brokerage, LG Fairmont, had purchased their leads. The success of StreetEasy’s Premier Agent and Broker platforms is leading to intense debate regarding the possible effect this new style of marketing may have on the city’s established broker power houses. [TRD]

And now, StreetEasy takes aim at the NYC rental market

Following the victory with the Premier Agent and Premier Broker programs, StreetEasy has the rental market in its cross hairs. The site, which is owned by Zillow, has announced plans to charge agents $3 per day for each listing advertised. [TRD]

Miami takes a tough stance against Airbnb

South Florida doesn’t play when it comes to protecting its hotel industry from online home sharing companies like Airbnb and Home Away. Last year, Miami Beach raked in almost $1.6 million in fines, which start at $20,000 and double and triple for further violations. Short-term rentals are only permitted in certain areas of the city, but the Miami-Dade County Commission is considering extending the ban to other areas, despite the considerable protestations of Airbnb. [TRD]

Source:: The Real Deal

Want a taste? SLS Lux reveals renderings of Katsuya restaurant and more

Related Group and the Allen Morris Company have just revealed new renderings for the SLS Lux.

The renderings give a glimpse into the 58-story tower’s 15,000-square-foot ground floor restaurant Katsuya, by chef Katsuya Uechi, and cocktail lounge by SBar. Related’s executive Carlos Rosso previously told The Real Deal the buildout for Katsuya cost $22 million.

The photos also show off the tower’s 9th floor garden, the restaurant’s entrance and the tower’s lobby designed by Yabu Pushelberg. Pushelberg also designed its designer suites. Arquitectonica was behind the designs for the mixed-use building.

Once complete, the luxury tower at 801 South Miami Avenue will have 450 luxury condo units and 78 condo-hotel suites. According to a release, the SLS Lux is 99 percent presold with only two penthouses left. The 1,200-square-foot units feature 12-foot ceilings, custom gourmet kitchens and views of the city, bay and ocean.

Related secured $166.1 million in financing for SLS Lux in 2015. The tower will offer amenities like a rock climbing wall, fitness center, outdoor theater, wine cellar and cigar room, a Lux sky library and limo services to Hyde Beach.

In November, Related slashed deposits on the condo tower from 50 percent to 30 percent. Units range from the $500,000s to more than $5 million. Related also cut deposits at Brickell Heights earlier in 2015.

The tower is expected to be completed this fall. – Amanda Rabines

Source:: The Real Deal

Miami board green lights Verzasca’s plans for former City Hall restaurant site

Renderings of 2000 Biscayne and Tim Lobanov

Verzasca Group received approval from a city of Miami board for its 2000 Biscayne apartment tower.

The Urban Development Review Board OK’d the 36-story, 393-unit apartment tower proposed for 2000 Biscayne Boulevard, the former site of City Hall restaurant. Verzasca originally planned to build condos on the 32,775-square-foot site, which it purchased in March 2016 for $13 million, but instead announced last month that it would be rentals.

The Edgewater project will now go before Miami’s Planning and Zoning Board for approval, according to a press release. Iris Escarra and Carlos Lago of Greenberg Traurig are representing the developer.

2000 Biscayne was designed by Fort Lauderdale-based Dorsky + Yue and will include 25 studios, 175 one-bedrooms, 181 two-bedrooms, 12 three-bedrooms and an eight-story parking garage.

Part of Verzasca’s deal to purchase the land last year included an agreement to give the seller an unspecified number of condos in the building. It’s unclear if that agreement still stands. The developer could not be reached for comment.

Other Edgewater rental projects in the pipeline include Modera Edgewater and Biscayne 27.

The 2000 Biscayne development would mark the first rental project for Verzasca, which has focused on boutique condo projects in Bay Harbor Islands, such as Pearl House and Le Jardin Residences, and in Sunny Isles Beach since launching in recent years. It will break ground on Aurora, a 61-unit condo building at 17550 Collins Avenue, this summer. – Katherine Kallergis

Source:: The Real Deal

Sandor Scher buys final piece of North Beach assemblage for $14M

7441 Collins Avenue and 7449 Collins Avenue. Inset: Sandor Scher and Silvia Coltrane

Developer Sandor Scher just closed on the final piece of his Ocean Terrace assemblage in North Beach, The Real Deal has learned.

The acquisition comes about a year after the Miami Beach Commission approved an overlay district for the Ocean Terrace historic district, which will allow Scher, co-founder of Claro Development, to build parts of his mixed-use project.

The developer paid $14 million for the properties at 7441 Collins Avenue and 7449 Collins Avenue, a deal that breaks down to about $730 per square foot, Scher said.

Scher and his main investor, Alex Blavatnik of Access Industries, spent at least $65 million assembling land before this deal. In all, it totals 2.2 acres of land with about 350 feet on the ocean, and the development will have condo, hotel and retail components.

Silvia Coltrane of Real Estate Transactions Inc., who has worked with Scher on his assemblage, brokered the sale. Daniel Faust of Akerman LLP and Sanford Reinhard of Sanford & Reinhard PA represented Scher, and attorney Joel Piotrowski represented the seller, 7441 Collins Avenue LLC, which is led by investors Haim Yehezkel and Avi Dishi.

Yehezkel is founder and CEO of North Beach-based Elysee Investments, according to his company’s website. Tenants of the buildings include Venetian Nail Salon & SPA and Ace Cash Express.

“We’re pleased that this transaction is complete and we’re looking forward to the future,” Scher said, declining to comment on his timeline or elaborate on plans for the properties, which include restoring the historic Broadmoor and Ocean Surf hotels.

The commission’s vote last year was the culmination of nearly two years of efforts by the developer. In 2015, the Ocean Terrace project lost a citywide vote on increasing the floor area ratio in the area from 2.0 to 3.0. Scher then brought in architect Richard Heisenbottle, who specializes in historic preservation, and urban planner Cesar Garcia-Pons, an associate principal at Perkins+Will Miami and Revuelta Architecture, to draw up new plans for the area that would also address the concerns of neighbors and preservationists.

In May 2016, affiliates of Claro Development closed on a $15 million construction loan for the properties between 73rd and 75th streets.

Source:: The Real Deal

Deutsche Bank cannot legally turn over info on Trump’s loans, lender claims

President Donald Trump (credit: Getty Images) and Deutsche’s John Cryan

From TRD New York: The battle between Deutsche Bank and Congressional Democrats over real estate loans made to President Trump took another turn Thursday, when the German lender said it cannot legally hand over documents related to the loans.

But the bank may be able to share confidential information in response to a formal committee request, the bank’s attorneys said in a letter to lawmakers.
“We respectfully disagree with the suggestion that Deutsche Bank freely may reveal confidential financial information in response to requests from individual members of Congress,” the lawyers wrote, reported Bloomberg.

Earlier this year, the bank refused to hand over information on its business dealings with Trump following a request from Congressional Democrats.

The bank has been a key lender to Donald Trump’s real estate business, issuing around $300 million in loans on his hotels and gold courses. Democratic lawmakers argued that this poses a conflict of interest. Trump has personally guaranteed his Deutsche Bank loans.

Earlier this month, the Democrats said federal laws preventing the disclosure of client information didn’t apply to Congress. They argued that banking secrecy laws cannot be used to hide potential fraud.

“This bank has lent hundreds of millions of dollars to Donald Trump and his family members, and reportedly conducted an internal review of whether their accounts had any ties to Russia,” said Rep. Maxine Waters of California, the top Democrat on the Financial Services Committee, said in a statement. “Efforts by Trump, his family members and associates, and Deutsche Bank to avoid scrutiny only intensify our resolve to follow the Trump money trail.” [Bloomberg] — E.B. Solomont

Source:: The Real Deal

WeWork goes suburban, to open in Coral Gables this fall

Rendering of Giralda Place and Adam Neumann

Co-working giant WeWork will open a location in Coral Gables this fall, The Real Deal has learned.

WeWork will lease space at Giralda Place, a mixed-use project under construction in downtown Coral Gables, a spokesperson confirmed on Thursday.

WeWork Ponce De Leon will take up 6,300 square feet including the first floor and floors 3 to 7 of the eastern office tower at 2200 Ponce de Leon Boulevard. It will offer spaces for up to 550 members, with private office for one to 16 people, conference rooms, phone booths, community bars, pantries and event space, according to the WeWork spokesperson.

Developers Heidi Eckes-Chantre, Kim Tabet and Christopher Brown are building the mixed-use project, which will have 101,300 square feet of office space and nearly 14,000 square feet of retail on the ground floor. WeWork will be located in the existing seven-story, 43,602-square-foot building fronting Ponce de Leon Boulevard that’s being renovated.

The west tower is a nine-story, 57,700-square-foot building that topped off in March and will be delivered in December. Overall, Giralda Place will also have 33 luxury condos, a fitness center and pool deck.

Cushman & Wakefield’s Gordon Messinger, who is handling office leasing for the project, could not be reached for comment.

WeWork will test the depth of the Gables office market’s appetite for co-working space.

Other shared office provides have launched in Coral Gables in recent years. Pipeline opened in 2015 at 95 Merrick Way, which is a five-minute walk from WeWork’s future space. Regus has two locations in the Gables, one at One Alhambra Plaza and the other at 2332 Galiano Street.

Adam Wacenske, general manager for WeWork’s southern region, said in a statement that the company is “encouraged by the interest and growth we’ve seen in the region.”

In South Florida, WeWork has opened at Brickell City Centre and in Miami Beach, and announced a lease in 2015 for the 16-story Security Building in downtown Miami, the latter of which totals about 96,000 square feet. WeWork has yet to open that space.

WeWork has so far opened in Miami in smaller buildings where it can have a bigger footprint, said Steven Hurwitz, a partner at Coral Gables-based CREC. That gives “Corporate America” the option to immediately lease an entire floor, for example, with the flexibility to control their investment and time commitment to a market like Coral Gables, he said.

Source:: The Real Deal

Single-family home project planned in Palm Beach Gardens at Bonnette Hunt Club

5307 and 5309 Hood Road (Inset: Lynn B. Telling)

After purchasing 7 acres of land in Palm Beach Gardens, a developer has revealed plans to build 28 single-family homes.

The homebuilder, Parkwood Distinctive Homes, bought the land at 5307 and 5309 Hood Road earlier this month for $2.55 million. The sale breaks down to about $8 per square foot.

Illustrated Properties Real Estate’s Lynn B. Telling arranged the sale.

The homes will span about 2,400 square feet, and prices for the homes will range from $500,000 to $800,000, according to a release. Construction is expected to be completed by summer 2018.

The project will encompass the site of the Bonnette Hunt Club, a former Palm Beach County attraction that was sold by the Navy warrant officer William Bonnette’s daughter Alix Dummett and Major C. Fussell. The slice of old Florida once counted among its regulars Burt Reynolds, Bing Crosby, Jack Nicklaus, King Hussein, Claude Kirk Jr. and Lawton Chiles.

Last year’s merger between the Keyes Company and Illustrated Properties created one of the largest independently run residential brokerage firms in South Florida. The two firms were already large before the merger.

In May, Keyes Company president Mike Pappas said at a new development showcase that the single-family home market under $500,000 is in demand, citing robust interest for such homes and a sharp decline in foreclosed and distressed properties.

Last month, Prominent homebuilder Pulte Homes bought 44 acres in Tamarac for $10.2 million. The Atlanta-based company is building 152 single-family homes that range from 2,400 square feet to 3,320 square feet and will be priced starting in the $400,000s. – Amanda Rabines

Source:: The Real Deal

Gramercy Property Trust buys warehouse in Medley for $18M

7321 Northwest 75 Street Inset: Gordon F. DuGan, CEO of Gramercy Property Trust

An affiliate of the New York City-based Gramercy Property Trust paid $18 million for a warehouse in Medley, records show.

The 110-acre warehouse at 7321 Northwest 75th Street sold for about $151 per square foot.

Property records show the seller, Venevision Studios LLC, an entity of the Coral Gables-based Cisneros Real Estate, paid $10 million for the warehouse in 2005. The seller, also known as Grupo Cisneros, is an international conglomerate of media entertainment, digital media, property investment, tourism development and consumer product companies. It was originally based in Venezuela. Cisneros Real Estate’s portfolio includes some beachfront residences and hotels in the Dominican Republic’s Bay of Samaná, according to its website.

Records show the warehouse sits on 178 acres and was built in 1971. The warehouse is next to Cisneros Media Distribution studios, Cisneros’ broadcast arm.

Demand for industrial space in the Airport West submarket is strong, brokers say, due to limited access to land and low vacancy rates. A first quarter report from Colliers International South Florida predicts about 2 million square feet of warehouse space will be delivered in Medley and Doral over the next two years.

Earlier this month, Dallas, Texas-based Lincoln Property Co. added the Miami International Logistics Center to its portfolio for $27.4 million – more than two times its last sale – and a warehouse at 6095 Northwest 72nd Avenue sold to a South Carolina-based trucking company for $8.45 million.

This isn’t the first time Gramercy buys property from a media company.

Last year, Gramercy purchased the building where the South Florida daily newspaper the Sun Sentinel keeps its printing press for $25.5 million. It was sold by Tribune Media, the newspaper’s landlord and former parent company of the Sun Sentinel’s owner, Tribune Publishing.

Source:: The Real Deal

One Sotheby’s expands with Turnberry International Realty acquisition

Daniel de la Vega, George Perez and Seth Kaufman

One Sotheby’s International Realty acquired George Perez’s Turnberry International Realty, president Daniel de la Vega told The Real Deal.

The deal adds about 100 agents, an Aventura office and a kiosk at Aventura Mall to One Sotheby’s, marking another sign of the firm’s continued growth in Miami-Dade. De la Vega plans to buy two more firms by the end of the summer.

He declined to comment on the terms of the deal, citing a confidentiality agreement.

Don Soffer, who developed Aventura, sold Turnberry International Realty to his son-in-law, George Perez, in 1998. Perez and managing broker Seth Kaufman will stay on with One Sotheby’s, with Kaufman also overseeing about 175 agents in Aventura, Bay Harbor Islands and Sunny Isles Beach, he said. Perez is now a One Sotheby’s business development consultant.

The Aventura firm fielded offers over the years, but wanted to remain a boutique brokerage. “We’ve been approached for years by several companies, the biggest names in real estate, but we never wanted to move in that direction,” Kaufman said. “But the times are changing. We knew how important it was for our agents to have that global reach like Sotheby’s.”

Kaufman said the overall residential market slowdown did not have an impact on the decision to sell to One Sotheby’s. It marks the 12th office for One Sotheby’s, which now has 675 agents.

South Florida’s luxury brokerages have been expanding over the past couple of years. One Sotheby’s acquired Bay Harbor Islands-based Crescendo Real Estate last year, absorbing its 15-agent office and about $250 million of inventory, and Diane Lieberman’s South Beach International Realty in 2015. Brown Harris Stevens picked up Avatar Real Estate Services and Zilbert International Realty, and Douglas Elliman acquired Tauriello & Co. Real Estate and its 60 agents in November.

Turnberry International Realty is bringing with it about 240 listings totaling $100 million. Last year, the firm closed about $500 million in sales, Kaufman said.

“We’re not buying just to buy, we’re buying companies that fit our culture and our mantra. If they don’t, they’re not for us,” de la Vega said.

Source:: The Real Deal

DDR scores $18M loan for retail center in Palm Beach Gardens

Northlake Commons (Credit: DDR)

An affiliate of the publicly traded real estate investment trust DDR Corp. just took out an $18.1 million mortgage on a Palm Beach Gardens shopping center called Northlake Commons.

Property records show DDR’s DDRM Northlake Commons LLC closed on the financing from Morgan Stanley and Citigroup Global Markets Realty Corp.

Tenants include Arby’s, Five Below, Home Depot, Jo-Ann Fabric and Craft Stores, Ross, Starbucks and Taco Bell. It has four spaces available that range from 2,400 square feet to 4,600 square feet, according to its website. The property also has about 20,000 square feet to 30,000 square feet of land that could be developed, a site plan shows.

DDR bought the 5.6-acre property at 3880 Northlake Boulevard in 2003 for $24.3 million.

Last year, the retail REIT paid $26.4 million for a fully leased retail center in Jupiter in joint venture with Blackstone Real Estate Partners. It owns and manages 309 retail properties, representing 103 million square feet in the U.S., according to its website.

Palm Beach County’s retail market showed strength in the first quarter of this year, according to Colliers International South Florida. Retail sales tripled during the first quarter to $236 million, and vacancy rates dropped marginally by 0.2 percent quarter-over-quarter to a ten-year low of 4.4 percent, Colliers said.

DDR could not immediately be reached for comment.

Source:: The Real Deal