Hawaiian state officials are tightening restrictions on travel to Kauai.

Nonessential visitors to the island will have to quarantine for 14 days upon arrival, according to the Los Angeles Times.

Rules are different for each of the Hawaiian islands, but generally travelers don’t have to quarantine if they have tested negative for Covid-19 before flying there.

Kauai counted 18 active cases as of Nov. 27, a pittance compared with other parts of the country. But the island is home to just 69,000 people, and 18 is twice as many cases as six weeks ago, when officials began allowing visitors to fly in with a negative test.

Governor David Ige said Kauai needed a new rule because the island has the fewest ICU beds of the state’s five counties.

Several hotels on the lush island have recently claimed status as “bubble resorts,” which allows them to host people throughout their quarantine.

Visitors to those resorts must test negative in advance and can’t leave the establishments. They are subjected to another test after three or four days on the island.

Resorts in Hawaii, like hotels across the U.S., have seen business slow significantly throughout the pandemic, but some operators hope the bubble program will help.

Travelers, especially wealthy ones, have been lengthening stays, which is helping hotels and resorts get by.

Kauai Mayor Derek Kawakami asked for the new rules and said they will allow the island community to keep businesses open and youth sports active “as we conduct surge testing and contact tracing.”

“I will gladly repeal the moratorium once we have the virus under control again,” he said. [LAT] — Dennis Lynch 

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Airbnb is going even bigger for its IPO.

The home-rental company wants to boost the proposed share price, which would give it a valuation of as much as $42 billion, according to Bloomberg.

Airbnb now wants to set the share price range at between $56 to $60 according to the report. That’s up from $44 to $50, which gave it a target valuation of up to $33 billion.

Airbnb’s stock market debut is scheduled for Thursday on Nasdaq.

Last week, Airbnb executives started marketing its offering to mutual funds and hedge funds via the virtual investor roadshow. The company’s initial valuation target was already higher than expected, the Wall Street Journal reported.

December is typically a quiet time in the IPO market. But not this year. Food-delivery company DoorDash, video game firm Roblox; and ContextLogic, which operates online retailer Wish, are also expected to jump on the initial public offering wagon this month. [WSJ] — Akiko Matsuda

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With nearly $20 billion in loans issued, the first quarter of 2020 was the residential mortgage-backed securities market’s strongest quarter since the 2008 financial crisis. But then came Covid-19, which brought several years of rapid expansion to a halt.

Total RMBS issuance for 2020 is now expected to reach $55 billion, according to a recent report from Kroll Bond Rating Agency. That’s down 10 percent year-over-year, and down more than 20 percent from the $70 billion that Kroll analysts had forecast in late 2019.

While the nation continues to grapple with the economic fallout of the coronavirus pandemic, low mortgage rates and booming home prices mean the RMBS market may be set for a rebound in 2021.

“Mortgage rates are generally expected to remain low for some time, incentivizing refinance and purchase activity, while housing supply is expected to remain low,” Kroll analysts write in the report. “Delinquencies relating to COVID may continue their decline, especially as payment deferrals increase, while the performance of borrowers on such plans will be a key factor in the overall recovery of mortgage performance for this segment.”

The prime RMBS sector is expected to come back strongest with issuance rising by 60 percent, while the non-prime sector may recover at a slower rate, with issuance rising around 23 percent. Meanwhile, credit risk transfer (CRT) securities, which are issued but not guaranteed by Fannie Mae and Freddie Mac, could see issuance decline by 35 percent as the agencies’ regulatory future remains unclear.

In sum, Kroll’s predictions have RMBS issuance increasing by 27 percent to nearly $69 billion in 2021, with prime securities accounting for more than half of the total.

Existing RMBS loans have also faced greater stress amid the pandemic, with delinquency rates spiking in the summer and gradually recovering since then. At the peak, more than 5 percent of prime RMBS loans and more than 20 percent of non-prime RMBS loans were at least 30 days delinquent, according to the report.

The fallout of the pandemic also led Kroll to take its first downgrade actions against RMBS transactions in its 10-year history. Delinquency rates remain well above historical levels after coming down from their peak, and loan modification rates have continued to rise in recent months.

“Performance among borrowers who have received payment deferral will be an important post-pandemic indicator for COVID-affected loans,” the report notes.

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California’s stay-at-home order has kicked in for Los Angeles County, where the Department of Public Health reported 10,500 new cases of Covid-19 on Sunday.

The state order takes effect in any region 24 hours after its intensive care unit bed availability falls below 15 percent. L.A. County reported 3,000 coronavirus-related hospitalizations alone on Sunday, according to the L.A. Times.

The measure further restricts business activity and targets in-person shopping.

Retail businesses are limited to 20 percent of indoor capacity and others — including hair and nail salons — must close altogether. Restaurants are limited to take-out.

Some of those measures were already in effect for most of the county. The city and county imposed identical stay-at-home orders last week.

Some owners of restaurants and other businesses have said they are being unfairly targeted.

Restrictions earlier this year forced businesses across L.A. County to close and some owners worry they won’t be able to make it through the latest round.

“We had the two closed already, and this one comes at the busiest time of the year,” Hilary Goldner, the co-owner of a hairdressing salon in Seal Beach, told the Times. “Everyone is trying to move forward with their lives, and we play a role in that. It’s unfortunate and disappointing.”

But many Covid victims are not moving forward with their lives, as the disease has killed more than 280,000 Americans and more than 2,000 on several days last week. California in the past seven days has reported more than 128,000 cases.

The state order is set to expire 21 days after it took effect on Saturday, although it could be in place longer. The state will roll back the order based on the four-week projection of ICU capacity in each region. [LAT] — Dennis Lynch 

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Goldman Sachs Group is considering moving its asset management division to South Florida, potentially joining other financial giants who have left New York for the Miami area.

The investment bank has looked at spaces in Palm Beach County and Fort Lauderdale, Bloomberg reported. Goldman Sachs is looking to take advantage of tax benefits if it opens a home base in Florida. Florida, which lacks a state income tax, has increasingly attracted wealthy executives throughout the pandemic.

Goldman Sachs’ asset management arm brings in about $8 billion a year, accounting for about a quarter of its revenue, according to Bloomberg. Investment professionals and back-office staff would eventually work out of the Florida office.

Earlier this year, Goldman Sachs managing director Douglas Sacks paid nearly $12 million for a condo at Eighty Seven Park in Miami Beach.

A number of major investment firms have opened offices or moved their headquarters to South Florida. Ken Griffin’s Citadel, Paul Singer’s Elliott Management Corp. and Blackstone Group are all making the trip south. Blackstone will operate out of the Southeast Financial Center in downtown Miami until it moves to a permanent location for its tech employees nearby, executives said during a recent webinar.

Singer is moving the headquarters of his hedge fund to West Palm Beach from Midtown Manhattan, as his expected successor, Jon Pollock, relocated to his West Palm home during the pandemic.

If Florida doesn’t pan out, Goldman Sachs is instead considering expanding in Dallas. [Bloomberg]— Katherine Kallergis

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J.C. Penney has been rescued from bankruptcy, but challenges remain for the beleaguered retailer.

The department store chain completed the sale of its retail operations to Simon Property Group and Brookfield Asset Management on Monday, Bloomberg News reported. J.C. Penney will essentially be split into two: an operations firm led by Simon and Brookfield, and a property one that its lenders will control. The former is now out of Chapter 11 bankruptcy, while the latter will not be fully organized until next year, according to Bloomberg.

While the retailer was hit hard by the pandemic, its issues predate the Covid-19 outbreak — namely debt, as well as a decline in sales as shoppers turned to other stores and e-commerce.

Still, with one of those issues gone, there may be some hope for a renewed J.C. Penney.

“The brand still has value and Soltau’s initiatives are on the mark to improve results,” said Poonam Goyal, who follows the retail industry for Bloomberg Intelligence. “Debt was its biggest issue, so if it can start with a clean slate, the retailer can find ways to reclaim itself.”

The agreement is also helpful for Simon and Brookfield, both of whom have experienced issues at their malls as other retailers close or declare bankruptcy.

“They basically got a low-cost option on what they can do with all those JCPenney properties,” Jan Rogers Kniffen, a former department store executive and founder of the consulting firm that bears his name, told Bloomberg. “If you’re in that mall, you’re certainly better off with JCPenney operating than with a dark box.”

[Bloomberg News] — Sasha Jones

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SoftBank feasts on flurry of IPOs

WeWork’s botched IPO left SoftBank with egg on its face — and red on its balance sheet.

But a flurry of IPO-bound portfolio companies could rewrite the Japanese conglomerate’s recent track record. In May, Masayoshi Son told Forbes that as many as 15 of the Vision Fund’s 88 portfolio companies could go bankrupt but another 15 are likely to succeed.

Here are recent IPO updates from its proptech bets:

View, a smart-glass company, said it plans to go public in a blank-check deal with a Cantor Fitzgerald-sponsored SPAC. Since 2007, the San Francisco startup has raised $1.8 billion, including $1.1 billion from the Vision Fund in 2018. The IPO would generate $800 million in proceeds, and values View at $1.6 billion.

After layoffs and cutbacks, Compass is reveling in a hot housing market. It recently hired bookrunners for a potential IPO next year, and has bulked up its independent board. With $1.5 billion in backing, the brokerage claimed record revenue in June, July and August. Last year, it sold $91.2 billion worth of real estate, but it’s not yet profitable.

Insurance startup Lemonade saw its valuation soar to $3.8 billion when it went public in July — up from a target of $1.6 billion. The insurance startup aims to disrupt firms like Allstate and State Farm, and it offers policies via an AI-powered mobile app. Despite losing $108 million in 2019, the stock is trading at $83.71 per share, up 188 percent from its stock market debut. SoftBank holds a 21.8 percent stake, according to regulatory filings.

Beike Zhaofang, a Beijing online real estate platform, had a massive stock pop when its parent company KE Holdings went public in August. Shares jumped 87 percent on Day 1 — topping Twitter’s performance in its 2013 debut. The company’s market cap is currently $71.2 billion.

Opendoor plans to go public with Chamath Palihapitiya’s blank-check company. The iBuyer generated $4.7 billion in revenue in 2019, but lost $339 million. The IPO will give it $1 billion in cash. SoftBank, which invested $400 million in Opendoor in 2018, will hold a 13.8 percent stake, according to Opendoor’s IPO filing.

Even WeWork is looking for a “redo” of its botched IPO last fall. The co-working startup will revisit plans for a public offering next year, reported Bloomberg. “I’m a big believer in one step at a time so let’s hit profitable growth first, and we’ll then revisit the IPO plan,” CEO Sandeep Mathrani told reporters in October.

“I thought up the Zillow business model years before Zillow did, but thought about it for a couple of days and realized it was unethical.”

FTC sues CoStar to block rental monopoly

Federal regulators are suing to block CoStar’s $588 million purchase of troubled rental listing platform RentPath.

In an administrative complaint, the U.S. Federal Trade Commission said the deal would unfairly consolidate CoStar’s footprint in the rental listings arena — specifically, for large apartment complexes in 49 metro areas.

CoStar and RentPath have been fierce rivals, but that competition has kept advertising rates low.

Since 2014, CoStar has spent more than $1 billion on residential acquisitions, including Apartments.com, ApartmentFinder, ForRent, Cozy Services and Homesnap. It’s been named as a bidder for CoreLogic. RentPath operates Rent.com and ForRent.com.

In a statement, CoStar said it believes the FTC is “wrong in its assessment.”

Superhost?

Airbnb is targeting a valuation of $30 billion to $33 billion for its upcoming IPO.

The higher-than-expected number reflects the home-rental company’s rebound in recent months. After losing $1 billion in bookings overnight, Airbnb’s valuation plunged to $18 billion in the early months of the pandemic.

Executives kicked off a virtual roadshow on Tuesday, ahead of the planned public offering, according to the Wall Street Journal. During the third quarter, Airbnb reported $219 million in profits and revenues of $1.3 billion.

Starcity scoops up co-living startup Ollie’s assets, tech

Co-living startup Ollie has been scooped up by a well-funded rival after the pandemic took a toll on the industry as a whole.

San Francisco-based Starcity acquired Ollie’s technology, assets and management contracts, reported Commercial Observer.

Terms were not disclosed, but the deal gives Starcity a total of 1,500 units, plus access to Ollie’s roommate matching program and amenities program. “They have tech that matched our roadmap,” Starcity CEO Jon Dishotsky said.

Ollie was founded in 2013 by brothers Andrew and Chris Bledsoe, who left the company earlier this year. Starcity, launched in 2016, has raised $50 million from investors.

STAT OF THE WEEK

$27.7B

Flex-office conundrum

Flex-office startups Knotel and Convene are being squeezed by NYC’s struggling office market.

Convene closed three NYC locations, or a fifth of its portfolio. A spokesperson said they were among the company’s older locations. Founded in 2009 and backed by RXR, the Durst Organization and Brookfield Asset Management, Convene has built out three broadcast centers for its virtual meeting platform. It plans to build out another two by early 2021.

Knotel, which is looking to shrink its global portfolio by 60 percent, is facing an escalating barrage of evictions and lawsuits seeking millions of dollars in back rent. In recent weeks, Knotel’s landlords have filed more than a dozen claims against it, court records show.

Startup offers on-demand warehouses

You’ve heard of flex-office space? Here comes flex-warehouse space.

Flexe, a startup that lets big box retailers purchase on-demand warehouse space, just raised $70 million to accelerate growth amid an e-commerce boom. The Series C was led by T. Rowe Price with participation from Activate Capital, Tiger Global, Madrona Venture Group, Redpoint Ventures, Prologis Ventures and others, according to GeekWire.

Based in Seattle, Flexe has raised a total of $134 million since 2013. The firm bills itself as a warehousing-as-a-service company for retail clients, whose brick-and-mortar stores are struggling. “There is a very strong increase in demand for these flexible, dynamic logistics networks — and that’s precisely what Flexe provides,” CEO Karl Siebrecht told GeekWire.

Small bytes

Versatile, an AI-powered construction startup, raised $20 million from Insight Partners, Entree Capital and others.

Trinfico Investment Group and PropTech Russia have launched Proton Capital, a $40 million proptech fund.

Knock expanded Home Swap, which lets sellers buy new homes before selling their old ones by pre-funding new mortgages, to South Florida.

Juwai, an online marketplace for homes based in Shanghai, said it turned profitable as of July. Transactions are up 55% this year, compared to 2019.

iBuyer Offerpad announced a partnership with New Home Star, a major seller of new homes.

HomeX, a home-repair startup, named former eBay CTO Steve Fisher to its board.

JLL’s chief product officer, Sharad Rastogi, was tapped to head JLL Technologies.

Opendoor named Kushal Chakrabarti, an Amazon and UC Berkeley alum, as vice president of research and data science.

✄ CBRE lowered the size of its upcoming SPAC IPO to $350 million from $400 million.

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The mystery behind the $49 million purchase of Dennis Miller’s Montecito estate in September has been solved. And the buyers are no surprise.

Ellen DeGeneres and Portia de Rossi, two of Southern California’s most active luxury residential investors  and home flippers, closed on the estate in an off-market deal, the Wall Street Journal reported.

The deal for Miller and his wife Carolyn Espley-Miller’s four-acre estate closed two months before DeGeneres and de Rossi sold their Bali-inspired estate Montecito estate for $33.3 million.

DeGeneres and de Rossi’s new investment includes three parcels and a number of standalone structures, as well as a large lily pond and a swimming pool, the Journal reported. Espley-Miller wrote on Instagram last year that the garden “is heaving with lavender, protea, bottlebrush, sweet peas, & strawberries,” as well as an almond tree and a fig tree. 

The $49 million purchase was among the priciest deals ever recorded in Santa Barbara County and that’s saying quite a bit considering the big-ticket deals that closed in recent months.

Actor Rob Lowe sold his 3.4-acre property in Montecito for $45.5 million in October. Later that month, a 240-acre estate known as Rancho San Carlos sold to construction billionaire Riley Bechtel for $63 million.

[WSJ] — Dennis Lynch 

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The co-living space is going through an era of consolidation and investment. Last week, Ollie was scooped up by rival firm Starcity, after the latter raised $30 million in April.

The biggest player in the space is Common, which closed on a $50 million Series D funding round in September, cementing its position as the most well-capitalized co-living startup. The firm is also partnering with institutional players such as Nuveen and Tishman Speyer on projects.

Common’s CEO Brad Hargreaves recently sat down with The Real Deal‘s Hiten Samtani to discuss the firm’s approach to the multifamily industry — and why he thinks his company can grab a significant chunk of the $250 billion multifamily pie.

Watch highlights from the discussion above. For an extended version of this conversation in print, subscribers can read here — TRD Staff

The post WATCH: “When everyone’s hitting their pro formas, there’s no incentive to try anything else”: Common’s Brad Hargreaves on the future of multifamily appeared first on The Real Deal Los Angeles.

Ziel Feldman’s HFZ Capital Group relinquished its interest in more than 10 million square feet of warehouse space across the country — the first major loss for the company as it struggles with a number of troubled investments.

The Manhattan-based development firm lost its equity stake in a portfolio of 12 last-mile distribution centers it co-owned with Westchester investor Reich Brothers in a UCC foreclosure auction on Wednesday. 

HFZ’s lender, Monroe Capital in Chicago, credit bid the amount it was owed on the $126 million loan to take control of HFZ’s equity interest.

A representative for Monroe Capital confirmed the results of the UCC auction and declined to comment further. A spokesperson for HFZ declined to comment. 

Cushman & Wakefield handled marketing for the auction. 

HFZ had teamed up with Reich Brothers in 2018 to form a joint-venture partnership that has since invested in 11.7 million square feet of warehouse space in Upstate New York, Illinois, Florida, Wisconsin, Ohio, Oregon, Tennessee, Oklahoma and Arizona.

Over the summer, though, HFZ ran into trouble when it failed to make debt-service and quarterly amortization payments totaling about $25 million. Monroe Capital sued in August to collect the loan, which Feldman and his wife had personally guaranteed, but then decided to move forward with the foreclosure action.

It’s the first major loss for HFZ, which is also fending off a similar UCC foreclosure on a portfolio of pre-war Manhattan buildings the company is converting to condominiums. CIM Group earlier this year scheduled a UCC auction for HFZ’s stake in four properties the Los Angeles-based firm holds junior mezzanine loans with a balance of $89.5 million: 88-90 Lexington Avenue, The Astor at 235 West 75th Street, and Fifty Third and Eighth at 301 West 53rd Street.

HFZ sued last month to halt the auction, and the judge in the case granted a temporary injunction.

The company recently laid off a large number of employees in its construction management division. And Feldman last month put his personal home on the Upper East Side up for sale with an asking price of $39 million.

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A developer is planning to build a 75-unit rental complex in Pico-Union that would be 100-percent affordable.

HM Land Development, a Delaware-based LLC, filed a proposal for 1228-1240 South Normandie Avenue, near the intersection with Pico Boulevard. The site consists of three lots totaling less than a half-acre of land.

HM Land Development is tied to Calabasas-based law firm Cornelius & Cohanghadosh, according to property records. The law firm did not immediately return a request for comment.

The Pico-Union properties are now owned by an entity managed by a different Delaware-based LLC, HM Land Development OZ Fund; it is tied to the same law firm. Delaware’s laws regulating limited liability companies are some of the most flexible in the country, making it a welcome place for businesses.

The properties were purchased in July for $3.5 million. The three parcels now consist of an existing duplex, a single-family home, and three-unit building developed.

The owner’s OZ Fund name suggests it had intended to develop the project through the federal Opportunity Zones program. Investors in eligible projects nationwide can defer and in some cases waive capital gains taxes on their development.

The recent filing also includes a handful of entitlements requested through Los Angeles’ Transit Oriented Communities program. That program allows developers to build out their projects outside of current zoning codes in exchange for reserving a percentage of units as affordable. The developer is seeking base incentives, including a density bonus, as well a height increase and reductions, records show.

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Disgraced former Los Angeles City Council member Jose Huizar intends to fight the government’s sprawling corruption case against him, as does a real estate developer, his company and a former top city official implicated in the alleged pay-to-play scheme.

On Monday, Huizar, developer Dae Yong Lee and his company entered not guilty pleas in federal court in L.A., the U.S. attorney’s office said. Huizar’s plea came first; he denied the government’s 34-count criminal complaint against him, the government said. The appearances were all made through video hookup.

Former L.A. Deputy Mayor for Economic Development Raymond Chan also pleaded not guilty to related charges that included racketeering and bribery. The government accuses Huizar and his associates of accepting cash bribes and other payoffs from the developers who sought favorable treatment on real estate projects.

While representatives for Lee’s 940 Hill LLC also entered a formal not guilty plea for the company, still to be arraigned are China-based development firm Shenzhen New World Group and its chairman, Wei Huang.

Lee, Huang, their companies and Chan were indicted Nov. 30.

Huang, who has a residence in San Marino but is now in China, is scheduled to surrender to authorities next week. A warrant had been issued for his arrest.

Huizar’s criminal trial is scheduled for June 22. Trial dates for the other defendants have not been set. Lee and 940 Hill LLC have another court date scheduled for Tuesday.

Following a two-year probe, the U.S. Attorney’s office in June charged Huizar with running what it called a money-making criminal enterprise through his role as chairman of the Council’s planning and land use management committee. Huizar allegedly solicited roughly $1.5 million in bribes from developers who sought to build projects in Huizar’s downtown district.

Huizar allegedly used some of the payoff to settle a sexual harassment lawsuit, and received Katy Perry concert tickets, according to federal prosecutors.

Besides Shenzhen New World and 940 Hill, developers implicated in the case include Shenzhen Hazens and San Francisco-based Carmel Partners. China-based Shenzhen Hazens admitted wrongdoing in October, and agreed to pay a $1 million fine to avoid prosecution. Carmel Partners has not been charged.

Chan, meanwhile, is accused of funneling bribe money from Shenzhen New World to Huizar to help the developer’s planned 77-story DTLA tower project get passed.

Lee, a Bel Air-based developer, and the LLC he incorporated, allegedly provided Huizar $500,000 in order to quell labor opposition to a 20-story tower he wanted to develop in Huizar’s district.

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More and more Compass agents are wondering what’s in store for them as telltale signs that the brokerage is planning an initial public offering pile up.

And for the first time, Compass CEO Robert Reffkin acknowledged the brokerage’s looming IPO plans in a message to its agents, a copy of which was obtained by The Real Deal.

“Many of you have asked what the benefits are to Compass agents of being a public company,” Reffkin wrote. “Being public will allow Compass to raise capital that we can invest in more tools and more support to help you.”

His memo touched on four main points on how the IPO would help Compass and its agents, including greater brand recognition, public trust, more technology and employees. He also made a sweeping promise to pour funds into “anything” that serves its agents’ businesses.

“We will be able to invest more in building towards the Compass Northstar: Anything an agent needs, Compass provides,” Reffkin wrote.

Reffkin emphasized that he could not comment on the timing of the IPO. Compass declined to comment.

Compass has been quietly preparing to go public for months, bringing on new board members and executives, and tapping Goldman Sachs and Morgan Stanley as underwriters just before Thanksgiving.

The brokerage has raised $1.5 billion since 2012 from investors including Fidelity, Dragoneer and SoftBank. The involvement of the latter, famous for driving private-market valuations to stunning heights, has prompted venture capitalists and Compass’ competitors to scrutinize similarities to SoftBank’s infamous unicorn, WeWork, which nearly imploded in the aftermath of its IPO attempt last fall. Compass denied any parallels both internally and externally at the time.

Regardless, the idea of Compass’ IPO — and the public filings the process requires — is generating intense interest from critics and fans alike. And Reffkin appears enthusiastic to move forward.

“I am more excited than ever before about the future,” the CEO wrote in his sign off.

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Ivanka Trump and Jared Kushner have set their post-White House sights on Miami.

The couple is spending $30 million to purchase a waterfront lot on Indian Creek Island in a deal that’s set to close Dec. 17, according to the New York Post.

Famed singer Julio Iglesias sold the 1.8-acre property, which the Post reported is Lot 4. Iglesias listed the land earlier this year for $31.8 million. It has about 200 feet of water frontage.

On the exclusive guarded and gated island north of Miami Beach, their new neighbors include billionaire hedge funder Eddie Lampert, Hotels.com co-founder Bob Diener, Carl Icahn and Jeffrey Soffer.

Trump and Kushner reportedly eyed properties in the Miami and Palm Beach areas. They’ve been renting a house in the Kalorama neighborhood of Washington, D.C., for $15,000 a month.

The couple is also expanding their “cottage” by the Trump National Golf Club in Bedminster, to include four new pickleball courts, a relocated heliport, and a spa and yoga complex, according to the New York Times.

People magazine reported that President Trump and First Lady Melania Trump will be heading to his Mar-a-Lago Club in Palm Beach after he leaves office. There, the staff is renovating the first family’s 2,000-square-foot residence. Melania is also reportedly looking to place their son Barron in school in Florida.

In addition to President Trump’s properties in South Florida, Kushner Companies has a number of projects planned in Miami and Fort Lauderdale.

[NYP] – Katherine Kallergis

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Toll Brothers is having a banner year as demand for new homes skyrocketed during the pandemic.

The luxury homebuilder reported $2.6 billion in sales in the third quarter, a 7 percent uptick from last year, the Wall Street Journal reported. Revenue from home sales rose about 9 percent to $2.5 billion.

“We are currently experiencing the strongest housing market I have seen in my 30 years at Toll Brothers,” CEO Douglas Yearley said in a statement.

Contracts for new homes jumped 68 percent from last year, to 3,407 units. At the same time, contract values increased 63 percent to $2.74 billion in the quarter ending Oct. 31.

The developer is also seeing an uptick in finished homes: Its home-building deliveries jumped 10 percent from last year, to 2,940. It plans to deliver approximately 1,675 homes in the first quarter of 2021, with an average price between $780,000 and $800,000.

The housing market has performed remarkably well during the pandemic. Mortgage rates are at record lows and many people are looking for bigger homes in less crowded areas where they can work remotely. Homebuilder confidence has also rebounded — although the increase in demand has led to all-time lows in inventory and a jump in home prices.

In the most recent quarter, Toll Brothers reported a profit of $199.3 million, or $1.55 per share, compared to $202.3 million, or $1.41 per share, in the same period last year.

[WSJ] — Keith Larsen

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Investors in the $550 billion commercial mortgage-backed securities market could see hefty losses as real estate sectors will continue to struggle after a Covid vaccine becomes widely available.

Morgan Stanley is projecting that losses for CMBS deals backed by dozens of different loans could average about 5 to 8 percent, according to a Bloomberg report.

Demand for malls, hotels and office space could drop even as vaccine distribution becomes widespread as experts believe that companies and consumers have changed their shopping and work habits for good.

Many notes rated in the BBB range could be forced to pay investors far below their face value, Bloomberg noted, citing Morgan Stanley’s commercial real estate research unit. And even some AA notes might see a valuation decline in several transactions.

Malls, in particular, are taking a hit during the crisis with property values falling and many loans heading back to special servicing. In August, Walden Galleria, a large mall near Buffalo, New York, was reappraised at a value of $216 million, a 64 percent drop from 2012. [Bloomberg]  — Keith Larsen

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Southern California’s residents and businesses remain under stay-at-home orders but three Central Coast counties want state approval to break away.

Leaders from the three counties — Ventura, Santa Barbara, and San Luis Obispo — said they will ask the state to consider them a separate region in order to avoid those Covid restrictions, according to the Los Angeles Times.

The current stay-at-home order is mandated at the regional level and takes effect when intensive care unit bed availability falls below 15 percent. ICU capacity in Southern California — which the state considers to stretch as far north as Mono County — is 10.9 percent as of Tuesday.

“A smaller regional approach is important for our community members and struggling businesses,” Ventura County CEO Mike Powers said in a statement.

The California order restricts many in-person retail businesses to 20 percent of indoor capacity — 35 percent for grocery stores — and requires businesses, including hair and nail salons, to shutter completely.

Some of those measures were already adopted at the county level in L.A. County, by far the most populous in the state, but were not in effect for less populated parts of what the state designates as Southern California.

Currently, San Joaquin Valley is also under the order. The other three regions — the Bay Area, Greater Sacramento and Northern California — are not subject to the order.

Leaders at city and county levels have fought restrictions on business activity throughout the pandemic.

Pasadena city officials decided to continue outdoor dining last month after L.A. County barred it for three weeks. On Monday, the city also closed outdoor dining because of the state order. [LAT] — Dennis Lynch 

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Nationstar Mortgage has been ordered to pay $73 million to roughly 40,000 homeowners in a settlement with the Consumer Financial Protection Bureau.

In a complaint filed by the bureau and 48 states, Nationstar Mortgage, which rebranded as Mr. Cooper in 2017, is accused of failing to provide basic services for the mortgages it serviced from 2012 to 2016, the Associated Press reported. Those include neglecting to tell homeowners if a mortgage was in a loan modification plan, and failing to pay out borrowers’ property taxes.

The company is also accused of deceiving homeowners by failing to tell them that they no longer needed to make mortgage payments and of neglecting to tell homeowners they no longer had private mortgage insurance.

In addition to paying customers for refunds and damages, Nationstar Mortgage will have to pay a $1.5 million fine to the bureau. The company is settling independently with the 48 states, Washington D.C., the U.S. Virgin Islands and Puerto Rico.

In a statement to the AP, the company said it previously knew about these issues and is “pleased to resolve this matter.”

[Associated Press] — Sasha Jones

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Actor Rob Lowe and his wife Sheryl Berkoff have purchased their third home of the year and their second in Montecito.

The couple paid $13 million for a 5,700-square-foot home in Montecito, according to Variety. The house, which has five bedrooms and six bathrooms, was built in 1925. The 6.7-acre property includes a couple of guest cottages. The sale was pegged at $2,246 a foot. The grounds include lawns and gardens with hedges and flowers, as well as both citrus trees and eucalyptus trees.

Timothy Walsh with Village Properties represented the seller, while Lowe and Berkoff were represented by Nancy Kogevinas with Berkshire Hathaway.

Lowe and Berkoff have cut three other deals — including one in Los Angeles — in the last two months.

In late September, they sold their massive estate in Montecito for $45 million. About a month later they bought a home in Beverly Hills for $3.75 million and last month they spent $5.2 million on another small home in Montecito.

Montecito has seen a flood of big-ticket deals this year.

News recently broke that luxury house flippers and investors Ellen DeGeneres and Portia de Rossi were the buyers of Dennis Miller’s estate, paying $49 million for the deal that closed in September. Another sprawling estate traded in October for $63 million.

And that month saw Orlando Bloom and Katy Perry paying $14.2 million for a Montecito home. Prince Harry and Meghan Markle also moved to Santa Barbara in July. [Variety] — Dennis Lynch 

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New details released for Millennium Partners’ Sunset + Wilcox office project planned for Hollywood shows a slightly larger complex.

A new rendering of the 15-story project, published by the City of Los Angeles, also provides a glimpse into the Gensler-designed mixed-use building, according to Urbanize.

The project would include 443,148 square feet of office space above 12,386 square feet of ground-floor retail. It would replace a Staples store at the intersection of Sunset Boulevard and Wilcox Avenue.

The firm’s local affiliate, MP Los Angeles, filed plans for the project in March. At that time it was 14 stories and was 10,000 square feet less than the current design.

Underground parking would be spread across three levels, and over two levels above-ground, in a podium-style. The top of the podium facing Sunset Boulevard is a park-like deck. Each floor above that level would step back and each floor would have its own terrace.

Separately, Millennium Partners is still working on its $1 billion Hollywood Center megaproject. The firm filed new plans for the project over the summer with a new mix of uses. The City of L.A. approved Hollywood Center in 2015 but a judge later halted it over concerns that its environmental review did not consider how it would affect the surrounding community. There are some concerns about its proximity to a fault line.

[Urbanize] — Dennis Lynch 

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