Coming soon: The Real Deal’s Best of 2019

Best of TRD 2019 promo

With a brand new year rapidly approaching, The Real Deal is taking a closer look at the notable commercial, development and residential deals of 2019.

Dropping on the web and in the December issue, we’re revealing the most expensive home sales of the year, the juiciest lawsuits, the most valuable office leases, the top projects filed, the most active developers and much, much more!

You’re going to want to be a subscriber to keep up with all the 2019 records coverage as they drop, so make sure you join here.

To learn more about methodology, please email [email protected].

It will make you laugh, it will make you … cringe: Blackstone’s latest holiday video

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What’s Blackstone Group missing? That’s the question Jon Gray, the company’s CEO, posed in an unusual holiday video released Thursday.

The answer: A mascot.

The hulking grey “Mr. Stone,” with his grey skin, wild eyes and office-appropriate suit and tie, takes a while for some staff to warm to at the outset of the more-than-six-minute video. But as it wears on, he’s got them dancing and jumping around office tables and holding signs with his name.

The holiday cheer is well spread, but as in any good production, there’s a mystery afoot.

“I don’t know who’s inside that costume but I love what Mr Stone is bringing to this firm,” Gray tells the camera from behind his desk. (The tongue-in-cheek video is shot in the style of “The Office.”)

“Whoever’s in there is perfect,” said Christine Anderson, head of global public affairs and marketing.

You’ll have to watch until the end for the big reveal. [Bloomberg] — Sylvia Varnham O’Regan

Wall Street is collecting rent payments

Redwood Trust’s CEO Christopher J. Abate (Credit: iStock)

Redwood Trust’s CEO Christopher J. Abate (Credit: iStock)

Wall Street wants your rent.

Redwood Trust, one of Wall Street’s largest securitizers of mortgage bonds, is now packaging bonds backed by rent payments. The move marks a broader interest by Wall Street in rental properties amid of rise of home purchased by institutional landlords, rather than families or individual owners.

Doubling down on this bet, in October, Redwood paid $490 million to purchase CoreVest American Finance LLC, which is a lender to landlords. And the company recently sold a $376 million bond package backed by rent payments.

With its acquisitions, Redwood could originate more than $3 billion of loans to landlords and house flippers in 2020, according to the Wall Street Journal.

Investors are increasingly making up a larger part of the homeownership market. Purchases by such investors looking to flip or act as landlords accounted for more than 11 percent of U.S. home sales in 2018, their highest share on record, according to the Journal.

The first to try to take advantage of this trend was in 2013 when Blackstone Group’s Invitation Homes Inc. and American Homes 4 Rent, had begun to sell bonds backed by rent payments for thousands of homes they bought and leased out. [WSJ]Keith Larsen

South Florida home sales struggle in October, Cipriani and Terra plan luxury condo

Every day, The Real Deal rounds up South Florida’s biggest real estate news, from breaking news and scoops to announcements and deals. We update this page throughout the day. Please send any tips or deals to [email protected]

This page was last updated at 6 p.m.

October was a rough month for home sales in South Florida. Single-family home sales rose in Miami-Dade and Broward counties in October, but fell in Palm Beach County, and condo sales fell across the region, according to newly released figures from the Miami Association of Realtors. [TRD]

The Cipriani family’s next project will be a luxury condo tower in Coconut Grove. Less than a year after opening its Mr. C Miami hotel in the Grove, the Ciprianis are working with David Martin’s Terra to launch a Mr. C branded mixed-use condo project nearby at 2655 South Bayshore Drive, according to a press release. The development is the first major residential project for the Mr. C brand. [TRD]

The Miami Association of Realtors launched a commercial multiple listing service. South Florida Commercial Property Search is the only commercial MLS in South Florida with a consumer-facing website, according to a press release. The website was launched with the Beacon Council and Florida Power & Light. [TRD]

SoftBank is looking to whittle down its WeWork rescue package. The $9.5 billion agreement has drawn ire from WeWork employees because of a generous payout to founder and former CEO Adam Neumann, according to Bloomberg. [TRD]

The Related Group’s Jon Paul Pérez is partnering with an affordable housing developer to launch a new venture focused on Section 42 housing. Pérez, executive vice president at Related, is working with Patrick Plunkett on Perez Housing Associates. The company will operate independently from Related, and will focus solely on buying, rehabbing and running properties under Section 42 of the low income housing tax credit program. [TRD]

The Green Companies purchased a four-story Class A office building in Kendall for $13.2 million. The Green Companies bought the 63,206-square-foot building at 11731 Mills Drive in Miami for $209 per square foot, records show. The seller is Nuveen, a subsidiary of TIAA. The property is 84.6 percent occupied by two tenants, Everglades University and VITAS Healthcare. [TRD]

These stores are defying the retail norm. Department stores like Macy’s are struggling while discount stores like Target, Walmart, TJMaxx and Marshalls have increased their market share. Macy’s sales fell 3.9 percent at stores that have been open for at least a year. Target’s physical stores and online shop saw a 4.5 percent bump, with a 10 percent increase in clothing sales. [CNN]

Rep. Ilhan Omar’s housing plan has a $1 trillion price tag. The plan seeks to create 12 million affordable units and repeal the Faircloth Amendment, which has barred the construction of public housing units since 1998. The plan comes on the heels of plans released by Sen. Bernie Sanders and Rep. Alexandria Ocasio-Cortez. [TRD]

Sen. Kamala Harris and Rep. Maxine Waters are the latest federal politicians to introduce a housing bill. The proposal, dubbed the Housing is Infrastructure Act, would invest $70 billion in the construction of new public housing and $10 billion to ease zoning restrictions for new affordable housing. The pair also proposed $6 billion to invest in housing for the elderly, the disabled or veterans. [CNBC]

Do not hide or delete documents, WeWork execs tell employees amid layoffs. As thousands of WeWork employees prepare to be laid off this week, the embattled company’s leadership has issued a warning to them: don’t leak information, and don’t delete anything. [TRD]

Software exec sells Palm Beach vacant lot for $17M. A software executive sold a vacant lot in Palm Beach for $17 million, after receiving town approval for a new custom home. Bill and Julie McDermott sold the 0.8-acre property at 445 North Lake Way for $475 per square foot, records show. 444 North Lake LLC, led by Holly Gershon of Boca Raton, bought the property. [TRD]

Bridgewater wagers $1B on market drop. Bridgewater Associates LP has bet more than $1 billion that stock markets around the world will decline by March, according to the Wall Street Journal. The bet would pay off for Bridgewater if either the S&P 500 or the Euro Stoxx 50 decline, according to the Journal. [WSJ]

Developers land $74.5M loan for condo construction project at Ocean Reef Club

New York-based ACRES Capital made a two-year loan for construction of the 48-unit Residences at Ocean Reef

July 13, 2019 03:00PM

John Grunow Jr. and Ocean Reef Club

The developers of a condominium at the Ocean Reef Club near Key Largo borrowed $74.5 million to finance construction of the 48-unit project.

Long Island, New York-based ACRES Capital provided the construction loan for the condo project, called Residence Club at Ocean Reef.

The borrowers include John Grunow III and John Grunow Jr. of The Grunow Group and former Trammel Crow Residential executive Ronald Terwillger. Their partners in the project include Martin Levine of Redwood Real Estate Group.

Residence Club at Ocean Reef is designed as a three-building complex spanning 103,700 square feet at 1 Golf Village Drive at the Ocean Reef Club, a gated, 2,500-acre community just north of Key Largo.

Owners of the one-, two- and three-bedroom condo units will have access to the 18,000-square-foot private clubhouse at Ocean Reef Club and the community’s golf course and marina.

The developers have advanced the Residence Club at Ocean Reef, which would be built on the site of a 1970s condominium, despite initial opposition from eight owners of homes in the Ocean Reef Club community. [Commercial Observer]Mike Seemuth

Blackstone-backed mortgage lender Stearns files for bankruptcy

Blackstone-backed mortgage lender Stearns files for bankruptcy

Restructuring deal will wipe out $184 million in bond debt

July 09, 2019 11:30AM
Blackstone President and COO Jonathan Gray and Stearns Lending CEO David Schneider (Credit: Getty Images)

Blackstone President and COO Jonathan Gray and Stearns Lending CEO David Schneider (Credit: Getty Images)

Stearns Holdings, the parent company of residential mortgage lender Stearns Lending, filed for Chapter 11 protection Tuesday morning after agreeing on a debt-restructuring plan with majority owner Blackstone Group.

The restructuring will erase $184 million in outstanding bond debt from the California-based firm’s balance sheet, the Wall Street Journal reported. Stearns is also seeking court authorization to continue normal business operations during the bankruptcy process, including the payment of suppliers and vendors, and salaries and benefits for about 2,700 employees.

Blackstone acquired a majority stake Stearns Holdings in 2015. The financial firm is providing $60 million in new money for the restructuring, as well as a bankruptcy loan of up to $35 million to help the lender continue operations. Warehouse lenders have committed $1.5 billion to the plan.

Stearns’ $184 million in outstanding bonds are due to mature next August. The company paid down some of its bond debt last year by selling off most of its mortgage-servicing rights. In its Chapter 11 filing, it listed assets and liabilities each between $1 billion and $10 billion.

Mortgage rates tumbled in recent months after the Fed held off on raising interest rates further. A preceding period of rising rates had cut into Stearns’ lending business. [WSJ] — Kevin Sun

Waning appetite? World’s largest institutional investors may slow their real estate acquisitions

Waning appetite? World’s largest institutional investors may slow their real estate acquisitions

IRE Real Assets reported that many leading institutional investors are nearing their portfolio-allocation targets for real estate assets

May 19, 2019 09:00AM
(Credit: iStock)

(Credit: iStock)

Many of the world’s largest institutional investors are moving closer to their portfolio allocations for real estate assets, which may slow the pace of their property acquisitions, according to a new report.

Survey data and interviews from IPE Real Assets show that 53 percent of top institutional investors expect to be net buyers of real estate assets in 2019 and 32 percent neither net sellers nor net buyers.

“There is no necessity to either actively increase or reduce real estate exposure,” said Rutger van der Lubbe, head of global real estate investment strategy at APG, which manages investments for pension funds in the Netherlands. “Our clients’ real estate exposures are currently within their targeted weightings.”

Johan Temse, real estate investment manager at Swedish pension fund AP1, says the fund is within its target allocation of 13 to 14 percent for real estate, so its property acquisitions are “limited” and “selective.”

“We’ve been very active through 2015 to 2018 but are looking at a slightly active year for real estate equity in 2019,” said Mikko Antila, head of international real estate at Finnish pension insurer Ilmarinen. “We anticipate to be quite active in real estate debt, however.”

The largest pension fund manager in Germany, Bayerische Versorgungskammer (BVK), expects to actively push its portfolio allocation to real estate above 20 percent. The regulatory limit in Germany is 25 percent. “While we are today at approximately 21 percent, we’re still having room to grow,” said Rainer Komenda, head of real estate funds at BVK.

But Komenda also said BVK this year will be “investing a little bit slower and continuing to be very selective,” with a new focus on “value creation themes.”

Allianz Real Estate, which handles the property investments by the Allianz group of insurance companies, also is shifting its attention to the value-add side of the real estate market and away from core assets, its historical focus. https://therealdeal.com/new-research/topics/company/allianz-real-estate-of-america/

The biggest institutional investors in real estate assets, as ranked by IPE, were Allianz Real Estate ($72.4 billion), China Investment Corporation ($52.9 billion), Abu Dhabi Investment Authority ($51.2 billion), APG in the Netherlands ($48.38 billion) and TIAA ($47 billion).

The average return expectations hovered around 7 percent, though Allianz generated a 10 percent return last year. It expects returns between 4 and 6 percent this year. [IRE Real Assets] – Mike Seemuth

Double play: A-Rod’s real estate firm closes multifamily fund and opens $50M fund

Former slugger’s Monument Capital Management will invest in workforce housing across the country

From left: Stuart Zook and Alex Rodriguez (Credit: Getty Images and iStock)

Retired Yankees slugger Alex Rodriguez’s real estate company just closed its first multifamily fund and is trying to score again with the opening of its fourth fund.

Miami-based Monument Capital Management said it closed its first multifamily fund with $21 million in equity. It’s now launching a $50 million fund focused on workforce Class B and C housing. The new investment fund will look at buying up existing apartments around the country, including in Houston, Texas and in Boise, Idaho, according to Stuart Zook, principal of Monument Capital Management.

Zook said the company already has a 167-unit townhome complex under contract in a western suburb of Chicago. The new fund will total about 12 real estate assets. He said the company often buys older properties and then renovates them and adds amenities.

The company is focusing on acquiring multifamily properties near large universities where demand for rentals is strong, according to Zook.

Rodriguez, a former Major League Baseball player and Coral Gables resident, started investing in real estate in 2004. Monument Capital Management has spent $700 million acquiring multifamily assets in 13 states, including in Florida, the Gulf Coast and Texas. Zook said the firm plans to open another fund in 12 to 18 months.

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Florida East Coast Realty’s $425M Panorama Tower refi is among city’s biggest

Florida East Coast Realty’s $425M Panorama Tower refi is among city’s biggest

Tibor Hollo’s firm financed construction of 85-story mixed-use tower with $340M loan

Jerry Hollo and Panorama Tower (Credit: Wikipedia)

UPDATED, Feb. 1, 9:45 p.m.: Florida East Coast Realty closed on a $425 million refinancing of Panorama Tower, one of the largest such loans in Miami in recent years.

Wells Fargo financed the new debt, which replaces the $340 million construction loan the bank provided on the 85-story tower in 2015. It was one of the largest construction loan in Miami-Dade at the time.

FECR, led by Tibor Hollo and his sons Jerry and Wayne Hollo, completed the 1.3 million-square-foot skyscraper last summer. Its TWJ 1101 LLC closed on the five-year, 42 percent loan-to-value loan on Thursday, a spokesperson said.

The law firm Rosenthal Rosenthal Rasco announced the refinancing. Founding partner Kerry Rosenthal represented the downtown Miami-based developer on both the construction loan and refinance.

The project, at 1101 Brickell Bay Drive, includes 821 luxury apartments with more than 45,000 square feet of residential amenities, a 208-room Hyatt Centric hotel, 70,500 square feet of office space, 47,360 square feet of retail space, a 2,000-space parking garage. The loan also covers two office buildings totaling about 272,000 square feet at 1101 Brickell Avenue.

It’s also one of the most expensive new rental buildings in Miami-Dade, with rents ranging from $2,500 a month for a one-bedroom to over $6,700 for a three-bedroom apartment. FECR hired Fortune Development Sales, one of Miami’s top condo sales and marketing firms, to handle leasing of the tower last year, and more than half its units are now leased out.

The Brickell tower is the tallest residential building south of New York on the East Coast. It is also part of a wave of new luxury apartment buildings in Miami-Dade and Fort Lauderdale that are creating competition for individual condo investors and putting pressure on the shadow rental market.

FECR is also planning at least two mixed-use projects in the Brickell area that would be taller than Panorama, including The Towers by Foster + Partners, a pair of connected high rises planned for 1201 Brickell Bay Drive. It’s partnering with Corigin Real Estate Group and McCourt Global Properties on that development.

Soaring costs threaten the Wave streetcar project in Fort Lauderdale

A streetcar in Kansas City similar to the type planned in Fort Lauderdale
Unexpected increases in estimated costs threaten the planned development of a streetcar system in Fort Lauderdale.
Contractors bidding to build the streetcar system, called the Wave, want more money than expected to build it, at least $74 million more.
That means the total cost of the system could top $270 million, or almost twice the $142 million originally estimated.
The Wave streetcar system would operate on a 2.8-mile route inding through and around downtown Fort Lauderdale.
Wave streetcars would be operated on tracks embedded in street lanes and would be connected to overhead electrical wires over most of the 2.8-mile route.
The project already had cost more than $23 million as of July 18. The partners in the streetcar project are Fort Lauderdale, the city’s Downtown Development Authority, and the Broward Metropolitan Planning Organization, plus the county, state and federal government.
Jenni Morejon, executive director of the Downtown Development Authority, told the Sun-Sentinel that soliciting bids for large projects more than once is one way to lower their cost.
Lowest among bids to design and build the streetcar system is a $188.7 million bid, which excludes a separate $31.4 million expense the county authorized to acquire five streetcars and spare parts.  [Sun-Sentinel] — Mike Seemuth

Source: The Real Deal Miami