Compass adds first independent director to board

Pamela Thomas-Graham and, from left, Robert Reffkin, Ori Allon and Justin Wilson

Pamela Thomas-Graham and, from left, Robert Reffkin, Ori Allon and Justin Wilson

Under SoftBank’s eye, Compass has added an independent director to its board.

Pamela Thomas-Graham, a banking, fashion and media executive, will be the first independent director and first woman on the board, the brokerage announced. She joins executive chairman Ori Allon, CEO Robert Reffkin and SoftBank’s Justin Wilson. Bloomberg first reported her appointment.

The announcement comes in the wake of WeWork’s bungled public offering, as SoftBank looks to improve corporate governance among companies it has backed. Last summer, WeWork came under scrutiny after its prospectus filing revealed a fully male board. (This month, WeWork named its first female board member.)

Thomas-Graham, 56, currently sits on the boards of several public companies, including the Clorox Company, Bank of N.T. Butterfield & Son, Norwegian Cruise Lines Holdings, and Peloton Interactive, according to a press release. In a statement, Allon said she would bring perspective to the board, as well as serve as a “guiding voice.”

In addition to her board roles, Thomas-Graham is founder and CEO of Dandelion Chandelier, a digital media outlet covering the luxury market. She previously was a chief marketing officer at Credit Suisse, and had stints at Liz Claiborne, NBCUniversal and McKinsey & Co., where she was the first African-American woman to make partner.

Compass, which was founded in New York in 2012, was valued at $6.4 billion after its most recent funding round. It currently employs 18,000 agents and staff nationwide. Although it’s hit the brakes on new markets, Compass recently said it planned to open offices on the North Shore of Long Island.

In 2019, the private company reported $88 billion in sales volume. Last year, real estate data firm Real Trends ranked Compass as the No. 3 firm nationwide with $45.5 billion in sales in 2018, up from $14 billion in 2017.

Last month, it laid off 40 marketing and IT staffers amid a reorganization of roles to service agents.

This fall, in the wake of WeWork’s failed IPO, Compass took steps to distance itself from the co-working firm. In an email to agents, CFO Kristen Ankerbrandt shared talking points outlining the ways the companies are different, including divergent customer bases and business models.

“It may seem obvious,” she wrote, “But it’s worth stating that it is hard to draw any parallels between our businesses.”

South Florida by the numbers: Super Bowl LIV Impact

Miami skyline (Credit: iStock and Wikipedia)

Miami skyline (Credit: iStock and Wikipedia)

“South Florida by the numbers” is a web feature that catalogs the most notable, quirky and surprising real estate statistics.

The Kansas City Chiefs may have scored the most points, but one could argue that Miami was the real winner of Super Bowl LIV earlier this month. A series of anecdotal and data-driven reports have confirmed the dramatic economic impact of the game and associated events on the entire region, specific industries, and individual businesses. While South Florida is no stranger to the business boom generated by Super Bowls, having now hosted the affair 11 times, there was something extra special in the air this year. (And we don’t just mean Jennifer Lopez’s halftime performance). Join us in running up the score as we present this month’s edition of South Florida by the numbers.

135: Number of condominiums that sold during Super Bowl week, an increase of 53 (or 65 percent) from the prior week. [TheRealDeal]

200: Percentage increase in Miami area condominium tour bookings during Super Bowl week, according to eight real estate professionals. Local projects hosted a variety of special soirees and events during the week to increase their exposure to area visitors, including game-watching parties, exclusive dinners with NFL legends, and panel discussions. [MiamiHerald]

$26.4 million: Anticipated total short-term rental income generated by Airbnb hosts during Super Bowl week, according to a company spokesman. Nearly 84 percent of all local Airbnb listings were booked during the weekend of the game, even with hosts charging exorbitant rate increases. [TheRealDeal]

$175.20: According to data analysis firm STR, Miami hotels’ revenue per available room (RevPAR) value during Super Bowl weekend. In addition to the average daily rate (ADR) increase of 148.5 percent, year-over-year, these figures represented the highest-performing metric levels of any Super Bowl weekend, with occupancy in the market rising 11.3 percent to 92.8 percent. [STR]

More than $200 million: Estimated value of free publicity generated via media coverage of the game and its ancillary events, according to Miami Super Bowl Host Committee Chairman Rodney Barreto. Local companies also benefited through the event’s Business Connect program, which coupled nearly 300 local minority-owned businesses with vendor contracts to provide goods and services to the game and its related events. [SFBJ]

This column is produced by the Master Brokers Forum, a network of South Florida’s elite real estate professionals where membership is by invitation only and based on outstanding production, as well as ethical and professional behavior.

Coronavirus is wreaking havoc on China’s landlords

Medical staff outside of a Beijing hospital in February 2020 (Credit: Getty Images)

Medical staff outside of a Beijing hospital in February 2020 (Credit: Getty Images)

The devastating coronavirus outbreak in China is starting to take its toll on some of the country’s biggest landlords.

Measures meant to curb the spread of the deadly virus have effectively put renting on pause in some parts of the country, while some short-term rental businesses are hurting without the seasonal bumps they banked on, according to Bloomberg.

The outbreak is also affecting the housing market — year-over-year price growth was the slowest in January since July 2018.

In Wuhan, the center of the outbreak, rental management company Danke — owned by Phoenix Tree Holdings Ltd — won’t pay rent to landlords for 90 days. Landlords rent units out to the company, which refurbishes, rents and manages them. The company is offering discounts to tenants who sign long-term contracts to drum up business.

Cities outside Wuhan, the center of the outbreak, have also adopted containment measures. Some rental associations want landlords to waive rents.

Landlords in Shenzhen and Hangzhou also have to alert authorities of any tenants from Wuhan’s province living in their buildings or face penalties. In some places, landlords are responsible for screening tenants and disinfecting common areas.
Renters in some cases can’t get into their own units because of lockdowns. Long-term rental startups Ziroom and You+ have received requests for waivers and refunds because they can’t return to their units. Airbnb recently announced it would freeze all business in Beijing for two months as well.

The financial pressure on those companies could have a knock-on effect — venture capital funds managed by Tencent, Warburg Pincus, and Sequoia Capital are among the investors who have poured billions of dollars into the rental management sector over the last few years.

In the United States, Coronavirus has not yet had a significant impact on the real estate trade, The Real Deal reported earlier this month.

[Bloomberg] – Dennis Lynch

Marine industry exec drops anchor at Brickell Flatiron

Jake Vogel and the upper penthouse 6201 at Brickell Flatiron (Credit: Facebook)

Jake Vogel and the upper penthouse 6201 at Brickell Flatiron (Credit: Facebook)

A Chicago marine executive closed on his $13.3 million penthouse in Brickell.

Jake Vogel, president of Polaris Boats, bought upper penthouse 6201 at Brickell Flatiron. The 64-story, 527-unit condo tower at 1000 Brickell Plaza was completed late last year. Ugo Colombo’s CMC Group developed the skyscraper.

Vogel plans to use the Miami condo as his second home, according to Cervera Real Estate. Karen Elmir of Cervera’s The Elmir Group represented Vogel along with Brett Firestone of Florida Capital Realty. Adriana Brito of Fortune Development Sales represented the developer.

The deal sets a record for condo sales in Brickell since 2007, the developer said. The all-time record is held by the $13.9 million sale of a five-bedroom unit at The Bristol Tower, another CMC project in Brickell.

The six-bedroom, 7,850-square-foot penthouse has six-and-a-half bathrooms, a den, family room, office and a rooftop deck with a pool, summer kitchen and changing rooms. The unit has ceilings of more than 20 feet tall and elevator access to all three levels.

The price breaks down to $1,694 per square foot.

In December, CMC Group paid off its $236 million construction loan for Brickell Flatiron. Colombo’s next project is likely Onda, an eight-story condo development he’s planning to build in Bay Harbor Islands with Valerio Morabito.

Architect Luis Revuelta designed the Brickell tower, and Massimo Iosa Ghini designed the interiors. The building features a 64th-floor amenities rooftop with a spa, pool and gym, a lap pool and children’s pool on the 18th floor, movie theater, billiards and cigar room, wine cellar, and electric car charging stations.

A London-based Japanese restaurant concept is expected to open in the ground-floor retail space. CMC sold 24,800 square feet of the ground floor and mezzanine level space to Avi Dishi and Haim Yehezkel for $22.5 million. The buyers, who closed on the space last year, are still pursuing a lawsuit against CMC that alleges the developer changed the design of the commercial space.

Heinz Brasil board member sells waterfront North Bay Road home for $14M

Chad Carroll, Mariana Trentini, and Fabio Lopes, with 5050 North Bay Road

The founder of a Brazilian food company sold his waterfront mansion on North Bay Road.

Property records show SPN Florida LLC, led by Salvador Paoletti Neto, sold the 10-bedroom, 7,746-square-foot house at 5050 North Bay Road for $14.2 million, a loss from the previous sale about six years ago. The buyer is unknown.

Paoletti Neto founded Quero Alimentos, which he later sold to Heinz Brasil, and is vice president of Heinz Brasil’s board of directors, according to published reports. In 2011, Heinz purchased an 80 percent interest in Quero Alimentos, which makes tomato sauces, condiments, spices and more.

5050 North Bay Road

5050 North Bay Road

The North Bay Road property includes a three-car garage, a guest house, summer kitchen, pool and oversized dock, according to the listing. It also has 10 bedrooms, 11 bathrooms and two half-bathrooms. The house was on the market with Chad Carroll and Mariana Trentini of Douglas Elliman. Fabio Lopes of Coldwell Banker brought the buyer. Lopes could not immediately be reached for comment, and Elliman declined to comment.

The house, which sits on a 32,085-square-foot lot, hit the market in 2015 for $33 million, and was later relisted, most recently for $16.5 million.

Records show the property last sold in 2014 for nearly $18 million.

Last year, retired Miami Heat player Dwyane Wade listed his home nearby at 5980 North Bay Road for $32.5 million.

In January, a waterfront lot at 4424 North Bay Road sold to Jennifer Taplin Sazant and Neil Sazant for $7 million.

In August, a California buyer purchased the waterfront spec mansion at 6360 North Bay Road for $23.85 million and a lot next door at 6342 North Bay Road for $11.55 million. The combined price marked a record for the year in Miami Beach.

The best (and worst) cities for divorcees

Minneapolis tops the list of best places to recover from divorce (Credit: iStock)

Minneapolis tops the list of best places to recover from divorce (Credit: iStock)

Just got out of a divorce? Here are the best and worst cities to get back on your feet.

Right off the bat, cross off New York City. A LendingTree study on post-divorce economics and relationship prospects across the U.S. gave New York the lowest score of all of the nation’s 50 largest metros, according to the New York Times.

LendingTree gave each city three scores based on data about divorced people. One is economic and includes median income, homeownership rates, and the cost to rent.

The other two were relationship based. One looked at the local dating pool and gender balance of the city. The “remarriage risk” category factored in the percentage of divorced people in the city and the number who had been married at least three times. More of either lowered the city’s score.

Minneapolis topped the list with excellent economic prospects and low remarriage risks. Milwaukee and Detroit followed behind. The top 10 included just two cities on the East Coast — Providence, Rhode Island and Hartford, Connecticut. Las Vegas was the city furthest west in the top 10. Denver, Pittsburgh, Cleveland, and Kansas City all made the top 10.

New York scored poorly across the board. A low economic score isn’t surprising given the cost of renting and owning in the city, although New Yorkers might disagree about the health of the city’s dating pool.

Divorcee-unfriendly economies also held down Riverside, California; Virginia Beach; and Sacramento. Shallow dating pools and remarriage risks were a factor in low scores in Memphis, Raleigh, Charlotte, Richmond, and Dallas. [NYT] — Dennis Lynch

One quarter of Americans don’t even know their mortgage rate

Around 27 percent of homeowners who responded to a Bankrate study said they don’t know what the interest rate is on their home (Credit: iStock)

Around 27 percent of homeowners who responded to a Bankrate study said they don’t know what the interest rate is on their home (Credit: iStock)

Mortgage rates hit a three-year low earlier this week, so is it time to refinance? That’s a tough question for one in four homeowners who don’t even know what their current rate is.

Around 27 percent of homeowners who responded to a Bankrate study said they don’t know what the interest rate is on their home, according to Fox Business. A third of homeowners between age 29 and 39 didn’t know their rate and 23 percent of people aged 56 to 74 don’t know their rate, the survey found.

The 30-year fixed-average fell to 3.45 percent this week, nearly a full percentage point below this time last year, and the lowest rate since the fall of 2016.

The lack of knowledge of some homeowners could lead to serious financial consequences for them. Around 11 million people could refinance their mortgages at current rates and save an average of $268 per month. Homeowners with adjustable-rate mortgages could find themselves unprepared for hikes.

Mortgage rates rose through 2018 as the Federal Reserve raised their benchmark interest rate, which heavily informs mortgage rates. That worried builders, who figured higher rates would discourage buyers, particularly those who live in areas with historically high home prices like Los Angeles.
The Fed steadied and then began dropping its interest rate last summer, bringing down mortgage rates with it. The benchmark rate has been 1.55 since November.
Buyer sentiment has been strong this winter, prompting more open houses than usual across the country. Low rates are expected to drive strong activity in the typically slow first quarter. [Fox Business] – Dennis Lynch

Condo buyer sues Metropica developer over delays

Metropica and Joseph Kavana (Credit: iStock)

Metropica and Joseph Kavana (Credit: iStock)

Metropica has been pegged as a “city within a city” in western Broward County, a development that plans to span over 4 million square feet with more than 2,250 residential units overlooking the Florida Everglades.

But now, more than five years after launching sales for the first condo building at 2000 Metropica Way in Sunrise, called One Metropica, one couple is suing the development group over delays.

The buyers, Alvaro Juan Llosa and Olga Llosa, allege the unit was supposed to be completed by November 2019 under the terms of their contract and are seeking a refund of their $151,250 deposit, according to the complaint.

The Llosas put their deposit down for a $605,000 condo in the 28-story, 263-unit building in 2015, according to the suit. The couple wanted to be close to their grandchildren before “friends and cellphones become more of a priority,” the lawsuit alleges.

The couple alleges the contract requires that the unit be completed and delivered within three years after the estimated completion date of November 2016. So far, the building has not been completed.

Joseph Kavana of K Group Holdings, who is spearheading development of Metropica, called the lawsuit “groundless.”

“We are within the contract terms. We had some delays as it happens in any project,” Kavana said.

The lawsuit alleges that in August of last year, the development group said an electrical system serving multiple floors of the building sustained water damage and needed to be repaired.

In November 2019, the buyer’s attorney sent a notice of default to Metropica’s attorneys.

Kavana said the contract allows for the development group to have more time to complete the project if it runs into issues. He said the delays were caused mainly by infrastructure issues and also that its construction company and some subcontractors couldn’t deliver on time.

The project should receive its temporary certificate of occupancy by March, according to Kavana.

The Llosas want their deposit returned with earned interest. They are alleging breach of contract, unjust enrichment, and are seeking declaratory action.

In all, Metropica is $1.5 billion development that will include up to 485,000 square feet of retail space, 650,000 square feet of Class A office space, and public spaces in addition to the residential portion.

With units starting in the $450,000s, One Metropica is about 75 percent presold and the development group, according to Kavana.

On Collaborative by Coldwell Banker was tapped to take over sales and marketing of the building about a year ago, but Kavana recently brought sales in house. Kavana said the group is not planning to offer any incentives or discounts on remaining units to lure in buyers.

Next, the developer plans to launch sales for the second luxury residential tower this spring. Kavana hopes to complete the retail space by 2022. Construction will begin on 165,000 square feet of office space and a multifamily project in 2020.

Kavana is also seeking to fill the place of one major tenant, iPic after the movie theatre company declared bankruptcy in August. He said the group is in talks with two other movie theater companies to take its spot.

England’s broker fee ban offers clues on the impact NYC’s version could have 

UK’s former Chancellor of the Exchequer Phillip Hammond (Credit: iStock, Getty Images)

UK’s former Chancellor of the Exchequer Phillip Hammond (Credit: iStock, Getty Images)

New York City real estate players are scrambling to understand the implications of the ban on tenant-paid rental broker fees, a week after the state’s decision caught much of the industry by surprise.

Across the pond in England, a similar ban called the Tenant Fees Act was also implemented, but only after lengthy deliberation. The private rental sector there was given over two years to prepare for the ban on “letting fees” — their version of rental fees — which finally went into effect last June.

The U.K.’s then-chancellor of the exchequer, Phillip Hammond, first announced plans to eliminate letting fees in a statement to parliament in November 2016.

“In the private rental market, letting agents [rental brokers] are currently able to charge unregulated fees to tenants,” said Hammond, a member of the Conservative Party. “We have seen these fees spiral, often to hundreds of pounds. This is wrong. Landlords appoint letting agents and landlords should meet their fees.”

In the following years, studies were commissioned by both the private and public sectors in England, to argue against or in favor of the proposed bill.

Their conclusions could help provide a sense of how the broker fee ban in New York might play out.

England was the last of several European countries to introduce restrictions on rental broker fees over the past decade. To the north in Scotland, “premiums” for brokers were technically illegal since 1984, though enforcement of this rule only began in 2011 following a government clarification.

New York’s ban led to an immediate backlash from brokers. On Monday, a judge granted a temporary restraining order, preventing it from taking effect.

The English way

England’s version “primarily implies a redistribution from letting agents and landlords to tenants — a transfer of costs or benefits from one group to another.” That was from a 2018 impact assessment from the Ministry of Housing. In that case — like the New York version — the landlord and not the tenant would have to pay the agent the fee.

But as real estate pros in New York City have been saying since the Department of State’s new guidance was circulated last Tuesday, a portion of a tenant’s savings in fees will be replaced by increases in rent. A complete pass-through of costs from brokers back to tenants seems unlikely.

According to a 2017 impact assessment from a London-based consultancy, the firm said it did not “believe that agents or landlords will be able to pass through the entirety of the costs” due to market competition. The report was commissioned by the U.K.’s Association of Residential Letting Agents, the industry lobbying group.

The study concludes that brokers will likely be able to pass on about 75 percent of the cost of the ban to landlords, who will then be able to pass on 50 percent of that to tenants in the form of rent hikes.

The Ministry of Housing’s study goes further, arguing that many agents “may currently rely on overcharging or double charging in order to maintain their profits,” which means they will be able to pass on even less of those costs, given landlords’ relative stronger market position compared to tenants — more landlords may simply opt to not use brokers, an option that tenants did not have.

The U.K’s ARLA study warns that as many as 4,000 of England’s 58,000 residential leasing jobs would be lost following a ban — a loss that the Ministry of Housing seems prepared to accept.

“Those agents losing business are likely to be those most reliant on supernormal profits, benefiting from market failures, and in turn who are not able to adapt their business models effectively,” the Ministry of Housing assessment argues. “If it is the most inefficient agents that leave the market, then in turn market efficiency would improve.”

In the roughly six months since the Tenant Fees Act went into effect, some of those predictions have come true. In a survey conducted by U.K. rental platform Goodlord in January, more than 80 percent of rental brokers reported declines in revenue. About a quarter of the respondents reported drops of more than 20 percent.

Before the ban, U.K. rental brokers derived about 20 percent of their revenue from letting fees, the ARLA study noted.

The study argues that the impact of the Scottish ban was “ambiguous,” and that the German experience — where the market was not significantly impacted — is “not reflective” of the English situation because long-term renting is far more widespread in Germany.

Similarly, the impact of a broker fee ban across England is not directly comparable with its impact on New York City. But given the similar dynamic between brokers, landlords and tenants, it seems likely that brokers will take the biggest hit, while only a fraction of those costs will go to rent increases.

Illustrated Properties acquires Jupiter Hills Village Realty

Steve Reibel and Mike Pappas

The Keyes family of companies just got a little bigger.

Keyes’ Illustrated Properties closed on the acquisition of Jupiter Hills Village Realty, a 10-agent firm in Tequesta, just north of Palm Beach County.

Mike Pappas, president and CEO of Keyes, said that Illustrated will keep the Jupiter Hills Village Realty name, phone number and website. Broker/owner Frank Todd is among the 10 agents joining Illustrated.

Illustrated Properties has had an office in the community, called Lost Tree Realty, since before Keyes acquired Illustrated in 2016, said Steve Reibel, senior vice president at Keyes. Denice Sexton leads Lost Tree Realty.

Reibel said the average home sale in the Jupiter Hills golf course community, averaged about $850,000 last year, with some homes selling for more than $1 million.

Todd has been a broker in the neighborhood since the development was first built in the 1990s, Reibel said. Jupiter Hills Village Realty agents will work out of the Lost Tree Realty office, and Illustrated plans to revamp the website.

Reibel said that Keyes is looking to make more acquisitions in markets like Jupiter, Wellington, Fort Pierce, Palm Beach County and throughout South Florida. He declined to disclose terms of the deal with Todd.

In May of last year, Keyes brought on the Fort Lauderdale-based Coloney Group, a 30-agent group that was previously affiliated with RelatedISG International Realty.

In 2018, Keyes acquired Rickenback Realty in Key Biscayne, the Palm Beach County Realty Group of Boynton Beach and the Realty Pros, also in Boynton Beach.