Councilmember Bob Blumenfield and Bothwell Ranch

The season appears ripe for a battle over the San Fernando Valley’s last remaining commercial orange grove and its potential sale to a developer.

The 14-acre Bothwell Ranch in Tarzana hit the market in April for $13.9 million. But this week, Los Angeles City Councilman Bob Blumenfield moved to protect the property, according to the Los Angeles Daily News. Blumenfield wants to designate Bothwell Ranch as a Historic-Cultural Monument, which wouldn’t necessarily bar development, but could restrict certain changes to the property.

Colliers International marketing material says that zoning would allow the property to be split into 26 half-acre single-family lots worth $2-4 million each.
A Historic-Cultural Monument would mean any redevelopment plan would be subject to more stringent review and could significantly lengthen the entitlement process. Those are some of the reasons why community advocates use designation motions as leverage to negotiate concessions from developers and discourage development altogether.

Blumenfield’s move freezes any building permits for the property until the city decides on a designation.

The 1,500-orange tree Bothwell Ranch sits in a single-family neighborhood at 5300 N. Oakdale Avenue, south of the 101 Freeway and east of Woodland Hills.
Bothwell Ranch was founded in the 1920s by prominent University of Southern California cheerleading coach Lindley Bothwell and his wife Ann Bothwell, when the San Fernando Valley was largely farmland.

Ann Bothwell ran the grove operation until her death in 2016. The Bothwell family still owns the property. [LADN] — Dennis Lynch 

Arizona Governor Doug Ducey, Nike’s Betsey Ross Sneaker, and Colin Kaepernick (Credit: Getty Images and Nike)

A new Nike factory in Arizona has become a pawn in a footwear controversy that’s dividing local politicians.

After Nike heeded pitchman and former NFL quarterback Colin Kaepernick’s request to nix the new Air Max 1 USA sneaker, a Fourth of July-themed shoe, the company’s recently-approved $185 million factory in Goodyear, Arizona got dragged into the controversy, Reuters reported.

The state’s Republican governor Doug Ducey, who vehemently opposed Nike’s decision to backtrack on its shoe design, withdrew the $1 million grant the state had agreed to as part of the deal, according to the publication.

The shoe features the so-called “Betsy Ross” flag with 13 white stars that represent the original U.S. colonies, which Kaaeprenick said was offensive because it dated back to the American Revolution, when slavery was legal.

“Words cannot express my disappointment at this terrible decision. I am embarrassed for Nike,” Ducey wrote on Twitter. “Nike has apparently decided that Betsy Ross is unworthy, and has bowed to the current onslaught of political correctness and historical revisionism.”

Later in the thread, he tweeted: “Nike has made its decision, and now we’re making ours. I’ve ordered the Arizona Commerce Authority to withdraw all financial incentive dollars under their discretion that the State was providing for the company to locate here.”

However, the mayor of Goodyear, Georgia Lord, who’s also Republican, quickly rebuked Ducey’s stance, assuring Nike that the city would “honor the commitment we made in our agreement,” which includes $2 million in waived fees and bonus cash for the 500 jobs the factory is slated to create.

The Democratic governor of nearby New Mexico, Michelle Lujan Grisham, seized on the disagreement to try to entice Nike to consider moving its factory: “Hey @Nike, let’s talk,” she tweeted. Her office reportedly reached out to the company as well.

In a statement to CBS News, Nike said “[we] remain committed to creating jobs in the U.S., including a significant investment in an additional manufacturing center which will create 500 new jobs.”

The dispute comes months after political opposition scuttled Amazon’s $5 billion headquarters that was initially destined for Long Island City in New York City. [Reuters] — Erin Hudson

From left: David Geffen and the view from his new Beverly Hills development property, and Spelling Manor in Beverly Hills with Petra Ecclestone (Credit: Wikipedia and Getty Images)

Move over, Peter Morton. An unknown buyer broke a record in the county this week, spending $120 million to purchase one of L.A.’s crown jewels, the Spelling Manor. Other than that, entertainment mogul David Geffen made a splashy land-only purchase in Beverly Hills. Celebrities also listed more homes for sale.

After three years on the market and a 40 percent price chop from its original asking, the palatial Spelling Manor sold for $120 million this week. The seller, Formula One heiress Petra Ecclestone, had been looking to unload the 56,500-square-foot home in the tony Holmby Hills since 2016. It’s unclear who bought the property, originally built by television icon Aaron Spelling. The massive residence includes 123 guest rooms, tennis court, swimming pool, a bowling alley and nightclub.

Geffen, a businessman whose net worth circles around $8 billion, has spent $30 million to acquire one of the last buildable lots on Beverly Hills’ Billionaires’ Row. The 1-acre spread is undeveloped but comes equipped with plans to build a 24,500-square-foot mansion designed by Shubin Donaldson. If built according to plan, the home would have seven bedrooms, 14 bathrooms, a bar, theater, gym, bowling alley and nightclub. There would also be a 140-foot swimming pool running the length of the home.

MedMen co-founder Andrew Modlin has found a new home in the Bird Streets. The weed mogul paid $11 million to acquire a 6,400-square-foot property, which includes five bedrooms and seven bathrooms. Designed by KAA Design Group, the home also features a cactus garden, wine cellar and gym, Variety reported. It first listed for $15.9 million, roughly 30 percent higher than its final sale price.

In the Beverly Hills Post Office, actor Steve Martin is looking for a new neighbor. The comedian has put the home next door to his on the market for $2 million. Martin purchased the two-story home in 1997 for $995,000. It includes four bedrooms and four and a half bathrooms over almost 2,000 square feet. The home is next door to the actor’s main estate, which he purchased for $3 million in 1995 from actors Corbin Bernsen and Amanda Pays.

From left: 548 Capital managing partner A.J. Patton, partner Erica Johnson and director of acquisitions Charles Cole (Credit: iStock)

A local investment group took a leap this month in its sweeping plan to update and preserve thousands of units of affordable housing in Opportunity Zones across the city’s South and West sides.

548 Capital closed on a $2 million capital infusion for its Solar Chicago Fund, which would pay to acquire some 3,300 units of subsidized homes and gut-renovate them during the next three years. The fund has “soft-circled” about $20 million in non-binding funding commitments, with a goal to raise up to $100 million by the end of the year, managing partner A.J. Patton told The Real Deal.

The first round of funding will back 548’s acquisition of four aging apartment complexes on the South Side.

It’s a rare venture going after Opportunity Zones in Chicago, where investors have complained the tax benefit mostly avoids fast-growing parts of the city in favor of the low-income census tracts the program was designed to target.

Redevelopment without gentrification

Instead of raising rents on apartments, the Solar Chicago Fund would yield returns through the long-term energy savings it anticipates from building rooftop solar panels, Patton said.

“We’re trying to show through our investment strategy that you can redevelop a community without gentrifying it,” Patton said. “Energy efficiency has always paid for itself, it’s just that no one has ever had the patience to make that commitment to low-income communities.”

548, named for the unit number in the Indiana housing complex where Patton spent his childhood, is under contract to buy two apartment buildings in South Shore and another two in Englewood, combining for 160 units, Patton said.

The group will join Power 52, a solar power developer co-founded by former Baltimore Ravens linebacker Ray Lewis, to install rooftop panels and build a 50-acre solar farm on an undetermined separate site. The new solar generation would be enough to power about 1,700 units in the planned portfolio, Patton said.

Once each building is acquired, it would undergo a wholesale renovation to replace the flooring, plumbing, heating and appliances. Most units would be kept affordable to renters earning less than 80 percent of area median income.

548 closed this month on its first round of funding from A&O Advisors, a boutique wealth management firm based in Chicago. A&O was looking for an Opportunity Fund to back before a potential recession, and 548 was one of the few local ventures that showed it could generate an annual return above 9 percent, A&O President Oliver Kupe said.

“It’s been a struggle for the past couple years for our clients to harvest their capital gains without tax consequences, and when we see where the market is heading, they want to move away from equities,” Kupe said. “So it’s a huge benefit for us to have Opportunity Zones to invest in.”

On top of 548’s “socially aware mission,” A&O was lured to the solar fund by its promise of “two streams of income” from annual rent and an internal rate of return that would generate a big windfall when investors cash out, Kupe added.

An accidental Opportunity Fund

Fund managers have raised billions of dollars to invest in Opportunity Zones since late 2017, when Congress created the incentive as part of a tax overhaul. The program allows investors to defer paying taxes on money they invest in high-poverty areas, with extra benefits for those who hold on to their stake for more than five years.

But many real estate industry players remain reluctant to chase Opportunity Zones, fazed by the program’s short timeline for investment and slow drip of federal regulations.

Observers have been especially cool on Chicago’s zones, with some high-profile exceptions, like the Michael Reese Hospital site and several tracts on the Near West Side. Chicago-based Origin Investments, which raised more than $100 million for its Opportunity Fund, is not targeting any zones in its home market, Principal David Scherer said.

Patton never envisioned the Solar Chicago Fund as an Opportunity Fund, but it became one when officials drew zone boundaries around most of the areas 548 was already targeting, he said.

A local touch

The finance industry veteran began assembling his team in 2016, when he was vice president of American investments for Hong Kong-based Equity First Holdings. When an investor asked him to consider a solar farm venture, he asked if the energy savings credits could be sold to multifamily building owners instead of large corporations.

“The economics are tough to go through an individual subscription model, where you have to strike a deal with each building owner,” Patton said. “So I said, ‘What if I own the building and the solar farm, and I was the off-taker of the farm?’”

He recruited construction consultant Erica Johnson to join as the venture’s partner and multifamily investor Charles Cole as its director of acquisitions. They were busy crafting their business strategy when Congress created the federal Opportunity Zones program, creating an extra incentive for investors to jump on.

The group joins a handful of other investment firms, like North Wells Capital and DAX Real Estate, that have looked for returns in South Side apartment renovations.

But in a part of the city facing high poverty and creeping fears of displacement, it takes a local touch to be able to pull off a venture that benefits investors and neighbors alike, Cole said. Patton’s mother is from Chatham, and Cole grew up in nearby Gary, Indiana. Both have worked on the South Side before.

“There are always going to be investors who want to buy a property with an attractive yield, but when you’re talking about vacant properties that are in bad shape, that will narrow the investor pool,” Cole said. “You’re going to need someone who knows local contractors, can get support from the community … and understands what needs to be done to make it vibrant again.”

An aerial view of construction at the former Kai Tak Airport

A former airport in housing-hungry Hong Kong is becoming one of the city’s next big real estate developments.

The city has made HK$173 billion in selling land from the old Kai Tak Airport to developers, Bloomberg reported, citing figures from Savills Plc. Hong Kong expects the area to be redeveloped into a neighborhood with parks, stadiums, hotels, offices and 90,000 residents by the mid-2020s.

The old airport, roughly the size of New York’s Central Park, sits along Victoria Bay. It served as the city’s main international airport from 1925 to 1998, and was known for the proximity in which planes flew to apartment buildings; passengers could see in residents’ homes.

Now, developers are paying record prices for the prime real estate. Last week, China Resources Land Ltd. and Poly Property Group Co. paid HK$12.9 billion ($1.7 billion). Last year, Hong Kong-based development company Sun Hung Kai Properties Ltd. bought land for HK$25.2 billion. At $2,625 per square foot, a two-bedroom unit would likely ask $2.5 million.

Given the high prices, Thomas Lam, an executive director at Knight Frank LLP, told Bloomberg that the area probably will not emerge “as a particularly affordable housing location.” Hong Kong is already enduring a housing crisis, with the city even proposing spending $80 billion to create artificial islands on the South China Sea.

According to Knight Frank, the government could collect another HK$110 billion from sales of the land that remains available. [Bloomberg] – Mike Seemuth

Federal Bureau of Investigation Headquarters at 900 Pennsylvania Avenue NW (Credit: iStock)

A watchdog in the Justice Department is putting his nose to the ground after plans to move the FBI to the suburbs were canceled.

Inspector General Michael Horowitz announced, in a letter to Congress, his office will look into the FBI and the Justice Department for their roles in the decision to nix the relocation plan and, instead, renovate the existing FBI headquarters.

The investigation looks to clarify President Trump’s personal involvement. The site of the J. Edgar Hoover building is directly across Pennsylvania Avenue from a Trump International, and redevelopment of FBI HQ could have brought a new hotel and competition for the Trump property.

Democrats claim President Trump was looking out for his business instead of the FBI staff who contend the Hoover building is outdated and gradually falling apart. The president has retained ownership of his businesses while ceding responsibility for daily management to his adult sons.

Last year, the inspector general at the General Services Administration reported that officials from the GSA, FBI and White House held meetings in January 2017 to discuss plans for the FBI headquarters, and President Trump was personally involved in one of the meetings.

According to the GSA inspector general’s report, GSA Administrator Emily Murphy said the FBI decided to terminate the relocation plan and to renovate the existing headquarters.

House of Representatives members Gerry Connolly of Virginia and Elijah Cummings of Maryland had called for further review after promoting locations in their respective states for a new FBI headquarters. [Wall Street Journal] – Mike Seemuth

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In the second episode of The Real Deal‘s new series “Brokers In Cabs,” the Corcoran Group’s Sydney Blumstein talked about agent gossip, how a dating competition in her rental broker days led to gobs of new business, the appeal of first-time homebuyers, and why she thinks many developers are three years behind the curve and out of touch with buyers.

Blumstein, a New York native who works with her parents on the Blumstein Team, has eight active listings, including a cast-iron building in Tribeca for $17.5 million.

Check out the video above!

Know of a broker who should be featured? Email James Kleimann at james@therealdeal.com.

Blackstone President and COO Jonathan Gray and Center Parcs’ Villages Nature in Paris

Trust Blackstone Group to prove that even holidays can be used to make paper.

The investment giant has entered exclusive negotiations to sell a portfolio of European holiday parks for about 60 percent more than it paid in 2006, sources familiar with the talks told Bloomberg.

The buyer is German real estate company Aroundtown SA. Sources confirmed Aroundtown agreed in private negotiations to pay about 1 billion euros, or $1.1 billion, for the seven Center Parcs Europe properties, the outlet reported.

Eastdil Secured is serving as a deal adviser in the negotiations. Blackstone, Eastdil and Aroundtown representatives declined to comment.

Pierre & Vacances SA is the operator of the seven properties, which are all branded as Center Parcs Europe resorts. The portfolio spans Belgium, Germany and the Netherlands and were sold by Pierre & Vacances to Blackstone for approximately 630 million euros back in 2006. Pierre & Vacances still owns and operates other Center Parcs properties in continental Europe.

In recent years, several private equity investors have acquired European holiday parks with histories of family ownership, cut costs and added revenue-enhancing amenities with broader appeal.

Brookfield Asset Management paid 2.4 billion pounds ($3 billion) in 2015 for Center Parcs U.K., for example, and another private equity firm in Canada, Onex Corp., paid about 1.4 billion pounds for Pardean Resorts, a U.K. caravan park operator in 2016. [Bloomberg] – Mike Seemuth

Construction crews poured the last of 14,000 cubic yards of concrete at about noon on Sunday, marking the end of the foundation spread for the Aston Martin Residences condo tower in downtown Miami.

The marathon concrete pour began at 9 p.m. on Friday at 300 Biscayne Boulevard.

G&G Business Developments, led by the Coto family of Argentina, is developing the 66-story, 818-foot, 391-unit luxury tower. Coastal Construction is the general contractor.

Cervera Real Estate is handling sales and marketing of the building’s units, which range in price from $750,000 to $50 million for the largest penthouse. Presales are currently at about 50 percent, Alicia Cervera Lamadrid said.

Developer German Coto, CEO of G&G Business Developments, said in a release that he was happy with the progress of construction and sales.

The steel piles, which were installed in December, run 15 feet deep. Vertical construction is expected to begin this week.

The developer secured a $200 million construction loan from Brazilian lender Itaú BBA International in November.

5Pointz Towers and David and Gerald “Jerry” Wolkoff (Credit: CityRealty and Pixabay)

It’s been five years since G&M Realty whitewashed and then demolished the graffiti mecca at 5Pointz in Long Island City. Now, the developers are now hoping to bring artists back to their luxury apartment development — but artists are skeptical.

David and Jerry Wolkoff’s firm is currently requesting modifications to a special permit it received in 2013, in order to increase the size of the development at 22-44 Jackson Avenue, The City reported. The new plan will include 15,000 square feet of artist space, slightly up from the 12,000 originally planned.

“It’s hard when you get bashed in the papers, but we’ve always been pro-artist and we always wanted artists and we would love to have some of the artists that were at the building before to come back again,” David Wolkoff told The City. “That’s up to them. I would love to speak to them.”

Last year, a court ordered David and Jerry Wolkoff’s company to pay $6.7 million in damages to artists whose work was destroyed. The Wolkoffs have appealed the decision.

Artist Jonathan Cohen, who originated the 5Pointz name and was one of the 21 plaintiffs in that lawsuit, said that he will “not work with the Wolkoff family.” He asserted that their continued use of the 5Pointz name is a copyright infringement.

“They showed their true appreciation of the art on November 19, 2013 [when the graffiti was whitewashed], and they are consistently showing that they like exploiting artists rather than supporting them,” Cohen told The City.

The developers have been able to keep the 5Pointz name after filing for a state servicemark — rather than a federal trademark — in 2015.

The Wolkoffs have long said that they plan to bring graffiti artists back to the project. “The work these artists do with a spray-paint can is mind-boggling to me. I really appreciate their work,” Jerry Wolkoff told The Real Deal in 2014, soon after the whitewashing took place.

“For 25 years I allowed them to do [graffiti there], and I love what they did. I didn’t whitewash it to be mean,” Wolkoff told TRD last December, adding that he whitewashed the graffiti to deter protestors who would have been arrested. [The City] — Kevin Sun

Tuscany, Italy (Credit: iStock)

The number of ultra-wealthy taking up residency in Italy may surge this year.

The influx of high-net-worth individuals is due to a new tax program for residents, Bloomberg reports. Known as the “New Resident Regime,” which the Italian government introduced in 2017, foreigners who establish a residence in the country can cap their income tax on worldwide income at €100,000, or US$114,000.

Establishing a residence entails buying or renting a home, without a minimum investment required — a key difference to countries like the U.S., where a so-called investor visa requires parties to lay down a minimum of $500,000.

As a result, the number of Italian residency applicants is expected to increase “significantly in 2019” from 150 last year, according to Knight Frank partner Kate Everett-Allen.

Everett-Allen told Bloomberg that her firm has worked with foreign investors representing “over 93 nationalities seeking Italian property.” The upticks comes as the country’s residential market is recovering from a 40 percent decline in prices during the 2007-2013 period, she added.

Investors who participate in the program avoid Italy’s progressive income tax on income from outside the country. Wealthy Chinese investors were among the first batch of approved applicants to the residency program, real estate agents said.

Property-seeking investors from China and Hong Kong are particularly interested in wine estates in the central region of Italy, according to Riccardo Romolini, chief executive officer of Agenzia Romolini, an affiliate of Christie’s International Real Estate. Romolini said areas popular among foreign investors include Tuscany as well as Chianti, Brunello di Montalcino and Umbria.

He told Bloomberg that interest in Italian real estate “is part of a growing trend for Asian investors wanting to diversify their portfolio in more varied locations due to constraints back home.” [Bloomberg] – Mike Seemuth

Gordon Ramsay (Credit: Getty Images)

Gordon Ramsay, the shouty British chef who famously called someone “an idiot sandwich” on television, is partnering with a private equity firm to open 100 new restaurants across the U.S. within the next five years.

Ramsay, who already has five eponymous restaurants in Las Vegas and three others across the country, told Forbes he started seeking a partner a year ago to invest equity in his restaurant business.

That led to a deal with Lion Capital, with offices in Los Angeles and London, to invest $100 million over the next five years in restaurants bearing his name. Lion has acquired 50 percent of Gordon Ramsay North America, and Ramsay himself retained the other 50 percent.

In the United States, Ramsay plans to introduce two restaurant concepts, Gordon Ramsay Street Pizza and Gordon Ramsay Bread Street Kitchen.

He already has opened restaurants under the Gordon Ramsay Bread Street Kitchen brand – which he describes as a “modern Cheesecake Factory” – in Singapore, Hong Kong, Dubai and London.

Slated for expansions are three of his existing Las Vegas restaurants: Gordon Ramsay Steak, Gordon Ramsay Pub & Grill and Gordon Ramsay Fish & Chips. His London operation, which has had three starts for nearly 20 years, is not affected by the deal with Lion Capital. [Forbes.com] – Mike Seemuth

Gil Dezer (Photos by Sonya Revell)

Ride the elevator along with swimsuit-clad hotel guests to the 31st floor of Trump International Beach Resort and you’ll find the headquarters of Dezer Development. Hidden within the full-floor suite at 18001 Collins Avenue in Sunny Isles Beach is a winding staircase that leads to the adjoining lairs of Gil Dezer, 44, and his father Michael Dezer, 78.

With a large patio from which he can watch his towers rise, Gil’s office is partly a testament to the company’s history of development in South Florida and partly a shrine to Donald Trump.

For nearly two decades, Dezer Development has helped transform the oceanfront on Collins Avenue, often creating towers that carry the Trump name through licensing agreements. Among Dezer’s projects are the Trump Grande, consisting of Trump International, Trump Palace and Trump Royale; Trump Towers I, II and III; and Porsche Design Tower.

The company is currently focusing on finishing Residences by Armani/Casa, which it is developing with the Related Group and Rockpoint Group. The 56-story condo tower is expected to be completed in November. Dezer is also redeveloping the Intracoastal Mall in North Miami Beach, which could be a decade-long project, he said. It is zoned for 2,000 residences and 600,000 square feet of retail.

And other projects are on the horizon. Dezer Development owns four other oceanfront sites on Collins Avenue in Sunny Isles Beach that it plans to redevelop, including the Travelodge Monaco Beach Resort and the Days Hotel by Wyndham Thunderbird Beach Resort.

“We’re probably the only developer in town that can keep going for the next 25 years without buying anything else,” Dezer said.

Here are some of Dezer’s favorite — and kitschiest — items in his office.

Toy tanks

Dezer and his colleagues play with the remote controlled tanks, shooting each other with lasers. “If we have an argument, we settle it with tanks,” he said.

Concrete pump

The miniature concrete pump was given to Dezer as a memento by C&C Concrete Pumping. Dezer uses the company’s pumps for all its projects.

Monopoly – Dezer Florida Edition

The game was given to Dezer many years ago by Matthew Mark, the company’s former general manager in New York who has since passed away, so it holds special significance, Dezer said.

Shovels
The shovels, mounted above the door to Dezer’s office, were used for the groundbreakings of Ocean Grande, in July 2000; Ocean IV, in October 2004; and Porsche Design Tower, in April 2013.

Donald Trump doll

The doll, a likeness of a suit-wearing Trump, was given to Dezer while Trump was on “The Apprentice.” When you push a button on its back, it speaks.

Fragrances

Dezer has bottles of Donald Trump: The Fragrance and Porsche Design Fragrance. He sometimes spritzes himself “before a meeting, if you need to smell good,” he said.

A collage of photos from Miss Universe from 2002

When Dezer first started working with Trump, the now-president invited him to San Juan, Puerto Rico, to attend the Miss Universe pageant.

Letter from Trump

The February 2002 letter to Michael Dezer from Trump has a handwritten postscript that says, “Gil will be a great success.”

Wells Fargo stagecoach

In 2011, amid the recession, Dezer Development paid off a $275 million mortgage from Wells Fargo for Trump Towers. Dezer had asked for a life-size stagecoach for his father’s car museum. “They said this is the consolation prize,” he said.

New Yorker Hotel manager Ann Peterson, Mickey Barreto and the New Yorker Hotel at 481 Eight Avenue (Credit: iStock)

Obscure rules surrounding rent-stabilized hotels have occasionally allowed savvy tenants to secure cheap rent for life. But one tenant now claims he had the legal right to take over an entire hotel — and for the moment, city property records agree.

In late May, a certain Mickey Barreto filed deed documents with the Department of Finance transferring ownership of the New Yorker Hotel to his nonprofit, Mickey Barreto Missions, and began presenting himself to lenders, tenants and city agencies as the property’s new owner. As the New York Post first reported, he says he was able to do this because the hotel’s “prior” owners, the Holy Spirit Association for the Unification of World Christianity (or the “Unification Church” for short), broke the law by denying him a rent-stabilized lease a year ago.

“I found out that I could request a lease at the hotel, and when I requested a lease I will automatically become a tenant, a permanent tenant,” Barreto told a judge in New York State Supreme Court last month. He had booked one night at the hotel for $149, shortly after being expelled from his previous residence because of an “illusory tenancy” scam, Barreto says.

“Anybody can do that. Anybody can go there and request a lease with the legal rate, rent stabilized rate.”

The hotel’s management disagreed, and evicted Barreto soon after. But a month later, Barreto secured a decision in his favor from housing court, ordering the hotel to restore him with possession of “the subject premises” — and things got weird.

“That building was never subdivided. It’s all one lot. It’s all one parcel. So what affects that part of the building called [room] 2565, whatever happens in there, happens to the whole lot, the whole parcel,” Barreto, who is representing himself pro se, told the judge.

According to him, that fact — combined with the landlord’s violation of housing law and the fact that he planned to use the building for “a public purpose” with his nonprofit — meant that he was now the building’s new owner. The Department of Finance apparently accepted this line of reasoning, and recorded a deed document on May 28 for over $189 million.

The Unification Church, of course, disagreed, and filed a lawsuit against Barreto last month. The Church’s “interest in its valuable real property, which is unique, cannot be replaced or replicated, and is worth hundreds of millions of dollars” had been placed in “grave risk of danger and harm” because of the fake deed, the lawsuit stated, pointing out that Barreto could potentially take out a mortgage on the property or sell it to a third party.

The Church, founded in 1954 by the late Sun Myung Moon, a self-proclaimed “messiah” born in what is now North Korea, acquired the property at 481 Eight Avenue in 1976 after the previous owner’s bankruptcy. The building underwent a major renovation in 2014 in anticipation of the arrival of Hudson Yards.

According to the lawsuit, soon after filing the deed, Barreto contacted the hotel’s restaurant tenants, lender M&T Bank, and operator Wyndham claiming to be the building’s new owner. He also demanded access to the hotel’s bank accounts, and once called the FDNY to demand an evacuation over a nonexistent gas leak.

The court has already issued a temporary restraining order against Barreto to block him from presenting himself as the hotel’s owner or taking any action as such.

“Barreto’s theory as to how he and Missions own the subject property is bizarre and has no basis in law or fact,” Judge Robert Kalish stated in a decision. “At most, Barreto has certain rights to occupy a particular room within the Hotel pursuant to the Rent Stabilization Law, but this clearly did not give him ownership of the entire Building.”

On the other hand, the court has declined to vacate the deed that has been recorded in property records, noting that the appropriate course of action is to record a copy of the final court decision when the time comes.

Barreto has submitted a cross-motion seeking to get the lawsuit dismissed.

The Rent Guidelines Board voted last week to freeze rent increases on rent-stabilized hotels, while approving up to a 2.5 percent rent increase on rent-stabilized apartments.

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The need to light up while at work isn’t the kind of thing that Silverstein Properties chairman Larry Silverstein “would be attracted to,” but, for his tenants, he puts personal taste aside.

In a one-on-one interview with The Real Deal‘s publisher Amir Korangy, Silverstein described how he’s convinced hip companies like Swedish music-streaming giant Spotify to move into the Financial District. The key, according to the 87-year-old developer, is accommodating their “different” needs for an office space. And, in the case of Spotify, that apparently means a designated smoking room in 4 World Trade Center‘s upper floors since it’s banned on the development’s grounds. Check out the video above to hear his thoughts on catering to tenants.

Text by Erin Hudson

Luxury villas along the Bosphorus Strait in Turkey (Credit: iStock)

High-earners and those looking to purchase luxury homes in Turkey have gotten a brief respite before new taxes are slated to go into effect.

The country’s Treasury and Finance ministry prepared the tax measures and other proposals to contain the government’s growing budget deficit, which leapt 225 percent in the January-May period. But the proposed tax hikes in Turkey for high-income individuals and a new tax on luxury homes would not take effect until October, two sources familiar with the matter told Reuters.

Under the new measures, Turkey’s income tax rate would jump from 35 percent for those with annual income of one million lira (roughly $175,000) to 50 percent. It was not clear what the new tax would be on luxury property.

Reuters reported last week that the Treasury and Finance ministry drew up the measures, but they will not become effective immediately due to a recess expected to start July 15.

“Luxury housing and income tax items are postponed to October,” one source said. Another source told the outlet that taxes on luxury homes and high income have been excluded from the parliament’s pre-recess agenda.

In New York City, the residential market saw a flurry of transactions leading up to the implementation of new progressive taxes on residential real estate. [Reuters] – Mike Seemuth

(Credit: Douglas Elliman)

What’s in a name? The Florida Real Estate Commission wants you to know.

New advertising regulations enacted this month require agents to adhere to a slew of new rules concerning team names — including one that requires the company logo to be at least as large as their own team.

Effective July 1, the FREC rules allow agents to call themselves a “team” or “group,” but prohibit the words “agency,” “associates” or any other word “suggesting the team or group is a separate real estate brokerage or company.”

Sources told The Real Deal that the new rules promote transparency in terms of the agent-brokerage relationship — but some also see the change as something of a demotion for top agents, whose star power has made them household names.

“It is amazing that when you look at an ad, it can be like, ‘What company is it? Is it the agent’s company?’” said Carmen D’Angelo Jr. of Premier Estate Properties in Boca Raton. “I hate to say, it has to be clarified to the public who you’re dealing with.”

Star power

The brokerage world is full of agents who enjoy name recognition — like Jill Eber and Jill Hertzberg of Coldwell Banker, better known as “The Jills” and now part of the Jills Zeder Group, or Oren and Tal Alexander of Douglas Elliman, with their eponymous “Alexander Team.”

The phenomenon isn’t limited to Florida, either, thanks to high-profile agents like Ryan Serhant of Nest Seekers International in New York City or Tracy Tutor of Elliman Josh Flagg of Rodeo Realty in Los Angeles, both of whom appear on Bravo’s “Million Dollar Listing.”

But although star agents are known to reel in big business for firms, a competing school of thought is that agents benefit from their association with a recognizable brokerage brand.

“The agents are with us because of the company — they like the brand, they like the support,” said Phil Gutman, president of Brown Harris Stevens’ Miami brokerage, adding that BHS intentionally invests in building up its own name. BHS’ reputation, he said, is an asset to agents who are pitching new business, and for that reason the firm’s marketing materials are designed to feature the agent’s name prominently without overshadowing the brokerage.

“More professional”

The concept of agent teams has been around for two decades, but they only spiked in popularity over the past few years. A 2018 survey by the National Association of Realtors found 26 percent of agents are on teams.

But teams have also put a strain on firms. A study last year by Imprev, a marketing firm based in suburban Seattle, found that 64 percent of brokerage heads said teams cut into their firm’s profits. And 52 percent of brokerage heads said they view teams as a competitive threat.

In Florida, the new advertising rule was designed to reduce consumer confusion.

Beth Butler, president of Compass’ Florida region, said the rule will be a tough one to swallow for agents at firms like eXp Realty, which haven’t invested a lot of money in building their own corporate brand. (Instead, agents at outfits like eXp are given a lot of autonomy to run their own businesses.) “It will be interesting to see how some of these changes will impact their models,” Butler told The Real Deal earlier this year.

Bill Hernandez, who heads Elliman’s Bill and Bryan Team in Miami Beach with Bryan Sereny, said without rules to clarify what firms top agents are associated with, less-reputable agents have preyed on consumer’s naivete.

“We had competition in South-of-Fifth,” said Hernandez, describing an agent who scooped up a domain name online. “When a buyer sees that online, they think they’re working for an exclusive company — and they’re not.”

In addition to policing bad actors — and bolstering the firm’s brand — the new Florida rule underscores the fact that listing agreements are between the seller and the brokerage firm.

At the end of the day, Hernandez said, the firm has the fiduciary responsibility to act in the client’s best interest. “Remember, anybody can get a real estate license,” he said. “We need these [regulations] in place to make our business more professional.”

Equal billing

Nancy Klock Corey, regional vice president of Coldwell Banker in Southeast Florida, said she has been reminding agents on a weekly basis of the new advertising rules. Corey oversees 19 Coldwell Banker offices and 1,700 agents, including The Jills Zeder Group.

Corey said that because of the merger in March between The Jills and the Zeder Team, formerly at EWM Realty International, the new group rolled out new ads and marketing materials ahead of time. Corey said agents are supposed to clear marketing materials with their managers, but if they haven’t, “obviously we wouldn’t know.”

Alex Miranda, who in May joined Compass with his team of 14 agents, said the reality is that if an agent has an issue giving equal billing to their firm, they should switch firms.

“You should be proud of where you work,” said Miranda, who leads the Alex & Joe Team with his husband, Joe Padula. “If you’re proud, it’s because you think the company is adding value.”

(Credit: iStock)

While major street protests rage on in Hong Kong, the city’s residential sales market got a boost from other geopolitical movements.

The city saw its third biggest weekend of sales last week, with local agents attributing the activity to President Donald Trump and Chinese President Xi Jinping’s agreement to resume trade negotiations, according to the South China Morning Post.

Developer Wheelock Properties saw about 90 percent of the flats at the 504-unit Grand Montara development in Tsueng Kwan O, a town in Hong Kong, sold by last Saturday evening. The developer received 7,800 bids for the 504 units, or about 15 offers per flat. An earlier phase of the Grand Montara development sold out in June.

In the Hong Kong town of Tuen Mun, half of the 38 flats at the Mount Regency development have been sold by Sun Hung Kai Properties.

Buyers also were encouraged by the U.S. Federal Reserve’s move to hold interest rates steady. The easier monetary policy at the Fed allows the Hong Kong Monetary Authority to keep the value of the local currency pegged to the U.S. dollar, which would mean lower interest rates on mortgage loans for Hong Kong home purchases.

As Fed mulls rate cuts, real estate enjoys the good times but fears bad times ahead

“Overall, sentiments have strengthened,” said Louis Chan Wing-kit, vice chairman of Asia-Pacific at Centaline Property Agency.

This month, Chan expects developers to launch sales for more new residential projects and to stop discounting their prices. [SCMP] – Mike Seemuth

(Credit: iStock)

Investor demand for prime office space in Milan has surged amid a shortage of Class A buildings in the financial capital of Italy.

Sources told Bloomberg negotiations that could change the ownership of several trophy office buildings in Milan are underway. Among other potential deals, the State Oil Fund of the Republic of Azerbaijan may sell Palazzo Turati for about 112 million euros to Invesco Real Estate.

The billionaire Rovati family is in talks to acquire Piazza Cavour for about 170 million euros to DeA Capital Real Estate SGR SpA.

Blackstone Group is offering up Goldman Sachs’ new Milan offices for more than 100 million euros.

A lack of development in Milan has led to a shortage of office space. The global financial crisis a decade ago had a prolonged impact on the real estate market in Italy due to the slow pace of recovery among banks, which restrained lending.

Average monthly office rent in Milan rose to 585 euros per square meter in the first three months of the year, up 1.7 percent from the same period last year, while office vacancy fell by about a half percent, according to JLL.

Last year, the volume of new office leases in Milan hit a record 381,000 square meters, or 4.1 million square feet, CBRE reported.

Prime yield, or annual rent as a percentage of the price of an office building, is roughly 3.6 percent in Milan, compared to 3 percent in Paris and Amsterdam and less than 3 percent in Berlin and Frankfurt, according to first-quarter data compiled JLL. [Bloomberg] – Mike Seemuth

Uber founder Travis Kalanick (Credit: Getty Images and iStock)

Startups are trying out a new model for restaurants in the age of food delivery: shared kitchens in warehouse spaces with limited storefronts.

The move could solve a quandary that has long plagued the restaurant industry: profit margins for delivery are thin, and restaurant space comes at a premium. But scrapping space for dine-in eaters and instead focusing on delivery only would allow restaurants to save on rent and meet growing delivery app demand.

Some investors are already making bets on industrial spaces that will likely become desirable when more restaurants make the switch to delivery-only. CloudKitchens, a Los Angeles-based startup backed by Uber founder Travis Kalanick, acquired at least 10 properties in several major U.S. cities since early 2017. The venture received financing from Goldman Sachs, according to property records, the Wall Street Journal reported.

And as more consumers order groceries online, cold-storage space is becoming more desirable. CBRE estimates that in the next five years, the U.S. will need an additional 70 to 100 million square feet of refrigerator space. BentallGreenOak, a real estate investment advisor, already has several cold-storage facilities and plans to develop an additional $50 million refrigerated warehouse in Savannah, Georgia with Bridge Development Partners LLC. [WSJ] — Georgia Kromrei