One of these is not like the others: Homeowners are still struggling to meet their monthly mortgage bills, the coronavirus is on the rise, the economy is scuffling and foreclosures filings are way down.
November foreclosures filings dropped to 10,042, a 14 percent dip from October and an 80 percent drop from the roughly 50,000 filings in November 2019, according to Attom Data Solutions’ latest figures released today.
But homeowners are not suddenly more financially secure.
Homeowners with federally-backed mortgages from Fannie Mae and Freddie Mac still cannot be evicted or foreclosed on, an action that has lasted from the early days of the pandemic. Last week, the Federal Housing Finance Agency again extended that moratorium through January, from the previous Dec. 31 expiration. It could be extended again. Additionally, many states and cities still have foreclosure and eviction bans of their own in place.
Experts say once those temporary measures end, a wave of foreclosures could crash down. In New York City they are already slowly ticking up.
New York had the most foreclosure filings in November with 454, followed by St. Louis with 208, Chicago with 207 and Miami with 151, according to the report. Los Angeles had 147 foreclosure filings.
The overall foreclosure rate, which includes both foreclosure starts and completed actions, was highest in St. Louis, where that affected 1 in every 4,454 housing units. Cleveland was next, at 1 in every 5,368 housing units and Jacksonville, Florida, had the third highest, with 1 in every 5,877 housing units.
Bank repossessions are also down and for similar reasons, according to Attom.
Lenders foreclosed on a total of 2,010 U.S. properties in November. That was a 22 percent drop from October and 86 percent fall year-over-year.
Analysts predict that more than $3.7 trillion of mortgages will be extended by the end of the year. (iStock)
American homeowners are taking out mortgages at a near record rate.
Banks issued $2.8 trillion in mortgage debt in the first nine months of the year, the Wall Street Journal reported, citing data from Inside Mortgage Finance.
With low interest rates leading homeowners to refinance, experts predict that originations could exceed $3.7 trillion — the prior record set in 2003 — by the end of the year.
“2003 was a record that nobody thought would ever be achieved again,” said Guy Cecala, Inside Mortgage Finance’s chief executive.
The trend is mainly coming from refinancing activity, which allows buyers to get lower rates on their mortgages.
Refinanced mortgages made up 65 percent of all originations in the first three quarters of 2020, according to the Journal.
According to the Mortgage Bankers Association’s most recent report, home loan applications dropped in the first week of December after several weeks of steady gains. The average size of purchase loan applications also fell to $366,100 from a record high of $375,200 the prior week. [WSJ] — Sylvia Varnham O’Regan
Sean Burton and a rendering of the project (Cityview, Humphreys & Partners Architects, Google Maps)
Developer Cityview has secured funding from Opportunity Zone investors for a 296-unit mixed-use project near the University of Southern California. The complex will target college faculty and staff.
The Century City-based firm plans to break ground this month and wrap construction by early 2023.
The complex is slated for 2528 South Grand Avenue and dubbed Adams & Grand for the intersection there. The site is about a half mile from the USC campus.
Humphreys & Partners Architects designed the project. The complex is seven stories with 5,000 square feet of retail space and two rooftop decks.
The units are a mix of 125 studios, 87 one-bedroom units and 84 two-bedroom units. Some units will have balconies. The developer has set aside 28 units at below market-rate prices.
The units are catered “to college faculty and staff, other professionals and students,” said Cityview CEO Sean Burton. Amenities include a club room, gym, pool, pet run and wash station, and an outdoor lounge.
Cityview puts new projects in the pipeline at a regular pace and last December sold three of its ground-up projects — a 174-unit multifamily building in Warner Center, a 346-unit Koreatown complex, and a 240-unit complex in Costa Mesa.
Opportunity Zone investors are able to defer capital gains taxes through 2026. Investors will receive reductions on those taxes if they keep their money in an OZ project for longer than that. The program has been criticized for failing to meet its goal of helping the nation’s poorer communities through investment. Some have called the program nothing more than a tax break for developers.
Raj Kanodia and 908 Bel Air Rd (Williams & WIlliams Estates Group, Getty)
Developer and plastic surgeon to the stars, Dr. Raj Kanodia, cut deeply into the price on his Bel Air spec mansion. But it’s still one of the priciest homes on the Los Angeles market.
The 34,000-square-foot home, which Kanodia developed nearly in step with Bruce Makowsky’s neighboring megamansion, is now asking $99 million, according to the Wall Street Journal. That’s almost half its $180 million asking price.
Makowsky’s neighboring property sold for $94 million in October 2019. Makowsky originally asked $250 million for that behemoth, and later cut the price to $188 million. Kanodia last year said he’d entertain offers for as low as $120 million.
Kanodia’s mansion has nine bedrooms and ultra-luxury amenities like a massive wine cellar, infinity pool and a floating staircase. The exterior façade is made out of Portuguese limestone.
The doctor-developer told the Journal that the original price tag was an answer to Makowsky’s own listing. The latest price cut also reflects the Mackowsky property closing price.
Still, Kanodia contends his property is “equal… if not better” than Makowsky’s, according to the report. “My house is higher, bigger and has an enormous amount of landscaping, which his does not,” he said.
Kanodia said the pandemic also motivated a price cut. Fewer ultra-rich potential buyers are traveling to L.A. from abroad. Nor are they visiting for his famous rhinoplasties.
“I’m not getting international patients to come in for noses…I’m missing on my Dubai, Abu Dhabi, Saudi Arabia, Qatar, Kuwait, London and Moscow patients,” he told the Journal.
From left: Airbnb founders Nathan Blecharczyk, Brian Chesky and Joe Gebbia (Airbnb, iStock)
UPDATED, Dec. 10 2020, 5:50 p.m.: Airbnb’s stock shot up on the short-term rental company’s first day of trading, pushing its market valuation past $100 billion.
Going into its IPO, the company had set its price at $68 per share, at a valuation of $47 billion. However the stock price more than doubled at the start of trading Thursday, beginning at $146 and hovering around $145 by mid-afternoon. It remained at around $145 through the closing bell.
Initially, the company was aiming for a valuation of around $33 billion. It revised that earlier this week to $42 billion, and then bumped it again to $47 billion.
The blockbuster Nasdaq debut follows a year of volatility for the company, which laid off almost 25 percent of its staff and shelved plans for an earlier IPO after the pandemic shattered the global travel industry and caused Airbnb to lose $1 billion in bookings.
Capitalizing on interest in rural accommodations, the company successfully managed to pull itself out of the crisis after securing a $2 billion lifeline this spring. It filed to go public in August, revealing in an S-1 prospectus that it had lost $696.6 million during the first nine months of 2020 — more than twice the $322.8 million it lost during the same period in 2019. Still, the company had a profitable third quarter, after cutting costs and laying off staff.
Airbnb co-founder and CEO Brian Chesky spoke about the surreal timing in an opening address recorded from his home in San Francisco this morning.
“2020 has been an incredibly different year for so many people,” he said, “and we are so grateful and humbled to be here today.”
This is a developing story. Please check back in for updates.
Background photo: Hanukkah reception in 2019, Getty; President Donald Trump via gdizzle99/Instagram, inset
Most real estate holiday parties may be canceled in 2020, but the developer-in-chief held a Hanukkah bash Wednesday evening, inviting some of his friends in the industry to the White House.
A crowd of attendees shouting “four more years,” greeted President Trump, as seen in a video posted online. Trump falsely told the mostly maskless crowd if “certain people have wisdom and courage, we’re going to win this election.”
“This is the one that everyone wants tickets to,” he said, referring to the party. Top Douglas Elliman brokers Oren and Tal Alexander, and South Florida developer Gil Dezer were among those in attendance at the 7 p.m. cocktail soiree.
The New York and Miami-based Alexander brothers brought their parents, as well as Oren’s twin brother, Alon, and his wife, model Shani Alexander.
Development and brokerage firms typically pull out all the stops for their annual holiday parties, but most in New York have opted against hosting large gatherings, which are prohibited due to the pandemic.
Since Trump lost the election to President-elect Joe Biden in November, the Trump and Kushner families have been picking up real estate in South Florida and preparing their other homes for arrival in January.
In the exclusive Indian Creek Village, Ivanka Trump and Jared Kushner are reportedly set to close on a waterfront lot for $30 million. The couple is also expanding their home near the Trump National Golf Club in Bedminster.
People magazine recently 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, where the staff is renovating and expanding the first family’s 2,000-square-foot residence.
President Donald Trump, Deutsche Bank CEO of Americas Christiana Riley and Manhattan District Attorney Cy Vance (Getty)
A New York investigation into President Donald Trump’s business has trained its sights on Deutsche Bank.
When Manhattan District Attorney Cy Vance launched the investigation into Trump’s finances, the focus was hush money paid out to women. Now the spotlight is on Deutsche Bank, the president’s longtime lender, and his insurance brokerage, Aon, the New York Times reported, citing sources with knowledge of the probe.
Investigators questioned two Deutsche Bank employees on the bank’s underwriting process, although the employees were not involved with the Trump Organization specifically. The Manhattan district attorney’s office first subpoenaed Deutsche Bank last year as part of a criminal investigation into Trump’s business practices.
Deutsche Bank signaled before the election that it was considering cutting ties with Trump because of the ongoing investigations. One senior executive called those probes into Trump’s business “serious collateral damage” for the bank, according to Reuters.
The bank has been Trump’s primary lender since the 1990s, and holds $340 million in outstanding loans from the president. The loans are personally guaranteed by Trump.
It’s unclear if the investigation will result in charges, but Trump has said that he has the “absolute right” to pardon himself should he face federal charges relating to his business practices. However, a federal pardon would not protect Trump from state or local-level criminal charges.
Bob Champion and a rendering of the Hollywood tower (Champion, Togawa Smith Martin via Urbanize)
Champion Real Estate Company’s plans for a 30-story tower in Hollywood have been approved after a review that lasted six years and went through several iterations in response to strong opposition.
The 269-unit tower at 6220 Yucca Street has undergone numerous design changes over the years. It was approved on Tuesday when the Los Angeles City Council rejected three appeals of the project, according to Urbanize.
Champion’s first design was a 21-story building. It upsized to a 32-story tower, then downsized to a 20-story building with a hotel, in 2017. Champion added more hotel rooms to the mix the following year, but that was ultimately cut and the height increased.
There will be 7,700 square feet of ground-floor commercial space and a 414-space parking garage.
Togawa Smith Martin is designing the tower. It’s a podium-style building with an amenity deck on the top of the podium. The tower itself has numerous balconies.
The project faced numerous appeals from local housing activists, including the Los Angeles Tenants Union. The group was concerned about the fate of residents living at an apartment complex that will be razed to build the tower.
The tenants union successfully won a condition that those residents will be given the right to take a rent-stabilized unit at the new building, at the same rent they pay today. Champion also has to cover the difference in rent those residents will pay while they build the tower.
A total of 252 units in the development will be subject to the rent stabilization ordinance, which limits rent hikes for the remainder of that tenant’s time in the building.
The other 17 apartments will be deed-restricted affordable housing, rented at levels considered affordable for households with incomes at 50 percent of area median income. Those units remain “affordable” in perpetuity. [Urbanize] — Dennis Lynch
To say 2020 has been a tough year for retailers would be an understatement.
In June, it was projected that 25,000 would shutter this year. Some had been hit hard by the retail apocalypse, while others were decimated solely by the coronavirus.
But amid the ashes, many retailers have announced expansions or are going full speed ahead with previous plans, according to a report by Stan Johnson Co.
“You’re surprised to see people are expanding. Then, when you peel the onion back, it starts to make a little more sense as to what their long-term strategy is,” said Ryan Butler, managing director and partner at Stan Johnson.
Butler noted that for some users of retail space, revenues are up.
“They’re taking advantage of lower lease rates, vacancies, cheaper land values, so that they can continue their expansion, and in some cases, probably accelerate what might have been a two-year plan,” Butler added.
Here are the retailers planning the 10 biggest expansions, ranked by the number of locations being added.
1. 7-Eleven
The convenience store giant will add more than 3,900 locations after acquiring Speedway, bringing 7-Eleven’s store count to 14,000.
That is part of a long-range plan to double in size, noted the CEO of Marathon Petroleum, Speedway’s current owner.
“We plan to work hand-in-hand with 7-Eleven as they grow out their portfolio,” Michael Hennigan said during this year’s second-quarter earnings call. “They have a stated goal to expand to about 20,000 stores.”
2. Dollar General
The low-cost merchandise chain already has 17,000 stores and plans to add 1,000 in its current fiscal year, which ends Jan. 31. Some will feature a new store concept aimed at higher-income shoppers.
The plans are on track. In the first half of this year, Dollar General opened 500 stores and remodeled 973.
Dollar stores have seen a surge of customers during the pandemic as consumers look to save money. Dollar General saw net income rise to $574 million in the third quarter, up from $366 million a year earlier.
Sonic’s car-centric model has paid off during the pandemic, with even more Americans than usual opting to eat in their cars and homes.
The drive-in chain, which already has over 3,000 locations across 46 states, aims to open 1,000 more in the next 10 years.
4. Starbucks
After paring back plans to open 600 stores this year, the coffee giant has still seen a net growth of 288 in the past 12 months.
Some 850 new stores are planned next year across the Americas. However, that will be offset by roughly 800 store closures during the year, for a net growth of only 50 locations.
Still, the closed stores are to be replaced with new convenience store models, according to Starbucks’ fourth-quarter earnings call.
Internationally, the retailer expects to open approximately 1,300 stores in its fiscal year 2021 and close approximately 250.
5. Dollar Tree/Family Dollar
Similar to Dollar General, Dollar Tree and Family Dollar plan massive expansions in the coming year.
In the first half of 2020, Dollar Tree opened 167 stores and Family Dollar opened 63. The second half of the fiscal year calls for 500 new stores — 325 Dollar Tree and 175 Family Dollar locations.
6. Bank of America
Banks have remained one of the most reliable tenants, paying their rent 98 percent of the time, according to Datex Property Solutions’ November rent report.
Bank of America is on track with its plan announced in 2018 to open 500 branches through 2022. It now operates over 4,300.
7. Aldi
Grocery stores have fared similarly well, being determined essential while many restaurants were restricted or closed. Aldi in particular has seen greater success as it offers groceries at low cost.
The chain, with more than 2,000 locations across 37 states, plans to reach 2,500 by 2022. On its website, Aldi lists over 80 stores coming soon.
8. At Home
As people spend more time in their abodes and acquire bigger homes to fill, home furnishings have been hot.
Building materials and garden equipment suppliers saw sales grow 19.5 percent year-over-year in October, according to Census data.
At Home, which only has 219 stores, plans to open nearly 400 more.
9. Chase Bank
Like, Bank of America, JPMorgan Chase also has big expansion plans.
The bank has nearly 5,000 locations across 38 states and Washington, D.C. By 2023, Chase plans to open 400 more branches and receive approval to expand into 10 additional states.
10. Casey’s General Store
Primarily located in the Midwest, Casey’s General Store announced plans to add 350 stores by 2023, beginning in October 2020.
In the second quarter the convenience store closed two locations and opened nine.
Sam Nazarian with 8815 Arvida Drive (Getty, REWS Miami – David Hernandez)
SBE founder Sam Nazarian closed on a waterfront mansion in Coral Gables for $14 million, with plans to relocate from Los Angeles, The Real Deal has learned.
Nazarian, who recently sold his remaining 50-percent stake in SBE Entertainment’s hotel brands, acquired the six-bedroom, eight-and-a-half-bathroom estate at 8815 Arvida Drive in Coral Gables, according to sources. Nazarian declined to comment.
The 9,694-square-foot Palladian-style home, with a home theater, master suite, covered terraces and cabana, sits on a 1.2-acre lot in the gated Gables Estates community. The property features a four-car garage, summer kitchen and pool, according to the listing.
Audrey Ross
Compass broker Audrey Ross represented the seller. Brett Harris of Douglas Elliman and Jorge Uribe of One Sotheby’s International Realty represented the buyer. Ross and Uribe declined to comment.
Harris said Nazarian had looked at properties for years, from Palm Beach to Coral Gables, and that he plans to relocate from L.A.
“Ultimately, the privacy and security of Gables Estates resonated with the family, in addition to being in close proximity to the best schools in Miami,” Harris said.
Jorge Uribe
Property records show the seller is Steven C. Marks, who has the same name as a prominent personal injury attorney. Marks paid $4.5 million for the property in 2014, and the mansion was completed in 2017. It hit the market three years ago for $15.9 million.
Nazarian sold his remaining stake in his company’s hotel brands to the French hospitality company Accor, telling TRD that he was increasing his ownership of SBE’s restaurant and virtual kitchens. The deal valued all the lines of the business at $850 million. In South Florida, that gave Accor full ownership of the Delano South Beach. It then sold the Delano real estate to Greenwich, Connecticut-based Eldridge, for an undisclosed amount.
Brett Harris
Since Pharrell paid $30 million for his Gables Estates home in March, a number of closings have followed. Most recently, longtime cruise line executive Howard Frank sold his Gables Estates mansion at 500 Arvida Parkway for $20 million. The head of Columbus Capital Lending also sold his waterfront home at 150 Arvida Parkway for $33 million.
Clockwise from left: Blackstone Group’s Jonathan Gray, KKR’s Henry Kravis and Cerberus Capital Management’s Stephen Feinberg (Photos via Getty; iStock; Cerberus)
Investors can’t get enough of warehouses and logistics spaces these days, but there are some signs that a bubble could be forming.
Asset management firms including Blackstone Group, Cerberus Capital Management and KKR have doubled down on logistics centers, and prices for warehouses have surged, Bloomberg News reported. According to real estate research firm Real Capital Analytics, values for industrial properties rose 8.5 percent in the past year, while retail real estate values fell 5.2 percent and offices stayed steady.
The intense interest in the niche sector has led some, including Jonathan Needell, CIO of Kairos Investment Management, to wonder whether logistics space is headed for a bubble.
“You’re getting people chasing industrial, in particular, to prices that are unsustainable,” said Needell. His firm controls $1 billion in commercial real estate.
Investment in warehouses has ticked up outside of the United States, too. According to research firm CBRE, investments in the sector made up 20 percent of global commercial real estate spending this year, compared with just 15 percent of the total in 2015.
CBRE also projects that logistics’ upward trajectory will continue for at least a decade. According to its analysis, logistics prices will rise 68 percent by 2030.
Still, some lenders are wary — especially as demand for new construction of logistics space surges to 1 billion square feet by 2025, according to JLL.
“There’s a huge amount of industrial space being built now,” Andrea Balkan, managing partner in Brookfield Asset Management’s real estate finance group, told Bloomberg. “We are always cautious on lending in markets or on property types which everyone else is rushing into.”
Movie theater chain AMC Entertainment Holdings needs a cash infusion of at least $750 million, otherwise it might have to file for bankruptcy.
AMC said in a filing on Friday that without additional financing, the company will run out of cash by next month, Bloomberg News reported. In order to raise funds, the company is planning to sell more shares and possibly get financing from European sources. It is also making deals with its debt holders, including Mudrick Capital Management.
The company wants to avoid bankruptcy since that would wipe out current stockholders’ positions.
The company had about $320 million in cash on hand as of November, down from $418 million in September. AMC was spending an average of about $125 million per month in October and November.
The pandemic has pummeled AMC’s business: Attendance at the chain’s U.S. locations fell 92 percent in the fourth quarter from the same time period a year ago. The company closed some of its theaters, and in cities like New York and Los Angeles, those cinemas have not been able to reopen.
To help keep it afloat, the company signed a commitment letter with Mudrick Capital that would allow the investment firm to buy $100 million of new AMC-issued bonds. Mudrick would then receive a commitment fee equal to more than 8 million shares in the company.
AMC is also negotiating rent relief with its landlords, since it has over $400 million of deferred rent coming due in 2021, according to Bloomberg.
As fewer people have traveled — and thus, booked hotel rooms — because of the pandemic, the hotel industry is facing a staggering statistic: almost 1 billion empty hotel rooms for the year.
As of last week, more than 962 million room nights have gone unsold, Bloomberg News reported, citing data from lodging information firm STR. That’s about 46 percent more than all of last year. The industry is projected to surpass 1 billion unsold rooms by Christmas.
Last year, more than 650 million room nights went unsold, despite occupancy rates in 2019 hitting 66 percent, nearly a record high.
But this year is anything but normal. It’s estimated that hotel owners have seen about $46 billion in lost revenue, and many owners expect to close without federal aid.
“If there’s no relief before the holidays, I don’t know how many hotels will continue into 2021,” Bijal Patel, chairman of the California Hotel & Lodging Association, told Bloomberg. “Many of us are going to be on the brink of shutting down.”
Even with a vaccine, hotels face a slow recovery. In 2021, occupancy is projected to be 52 percent. Levels are expected to return to last year’s normal until 2024.
Nile Niami and the Hollywood Hills mansion (Getty, The MLS)
Nile Niami has sold off one of his own homes in the Hollywood Hills, as the once high-flying spec developer now faces a lawsuit and recently threw a West Hollywood mansion into bankruptcy.
Niami unloaded the Hollywood Hills home for $9.58 million, which he bought five years ago from talent manager Scooter Braun, according to the Los Angeles Times.
Niami paid $9.5 million for the 6,000-square-foot mansion, but renovated it, so the sale likely figures out for a loss, according to the Times. He first relisted the property in 2017, asking $19.9 million. The home has three bedrooms total and six bathrooms. The lower level has a movie theater, billiards room, wine cellar, and a bar. The property totals about a quarter of an acre, with a large back patio area centered around the pool.
Earlier this week, news broke that Niami filed for bankruptcy protection for a 14,000-square-foot West Hollywood spec mansion he listed last year. A Niami spokesperson said a creditor “misrepresented facts,” which led to the filing. An investor filed a notice of default on the property in April.
Last month, one of Niami’s most well-known spec projects sold to an investor out of the San Gabriel Valley, but that was after Niami lender Joseph Englanoff took control of the property.
Niami is also dealing with a lawsuit from Compass Concierge over a 2019 loan on a Bel Air mansion.
Niami’s most ambitious spec project yet could hit the market soon. Construction is wrapping on the 100,000-square-foot “The One” property in Bel Air and agents are reportedly picked for listing.
HomeLister CEO and Co-Founder Lindsay McLean (LinkedIn)
HomeLister, the Santa Monica-based property-selling platform that says it replaces the agent, has raised $4.5 million in seed funding.
Venture capital firms Metaprop and Homebrew led the round, which was announced this week, according to the Los Angeles Business Journal.
HomeLister says it will guide users through the process, from listing a property, to showing to closing a sale, according to its website.
HomeLister charges users a flat fee between $599 and $2,699 depending on the number of services the user chooses.
The money raised will go toward a redesign of the HomeLister website and marketing. The company was founded in 2015, and operates in 13 states — including New York, Florida and California — and Washington, D.C.
Metaprop was one of the first proptech-focused VC funds to come on the scene and it is one of the most active funds in the space. The firm has been slow to attract investors to a $100 million fund started last year. As of July, it had only raised about half of that sum.
But proptech remains a focus of real estate investors. A number of industry firms backed by Softbank could be headed for initial public offerings in the near future.
Investors Joseph Beck and Thomas Hennessy are readying to take home-services startup Porch.com public through their first blank-check company and are already working on their second SPAC fund — a $175 million vehicle eyeing an established proptech firm.
The United Kingdom’s biggest real estate transaction of the year is in contract.
Singapore-based asset manager Sun Venture has agreed to pay Land Securities Group £552 million, or approximately $742 million, for the office complex at 1 and 2 New Ludgate in London, according to Mingtiandi.
Landsec, which developed the complex, announced the deal on Friday. It breaks down to around £1,416 (or $1,896) per square foot.
Japan’s Mizuho Bank signed a 20-year lease for 2 New Ludgate in 2014, while 1 New Ludgate is leased to law firm Ropes & Gray and the Commonwealth Bank of Australia.
The complex was valued at £546.4 million as of Mar. 31 and generates £23.7 million in rental income each year.
There is some concern about office oversupply in London in the coming years, as overbuilding was already an issue before the coronavirus pandemic killed demand for space.
It’s Sun Venture’s second deal this year in the UK. In July the firm purchased One New Oxford Street from Nuveen Real Estate for £174 million. That was its first deal outside Singapore.
CBRE represented Landsec in the deal, while JLL repped Sun Venture. [Mingtiandi] — Dennis Lynch
Blackstone is picking up a portfolio of commercial and residential properties in Japan for the equivalent of $1.06 billion.
It’s the New York-based private equity firm’s fourth major real estate acquisition in Japan this year and brings its total acquisitions in the country to $5.2 billion, according to Mingtiandi.
Hong Kong-based fund PAG is on the other side of the deal, which closed around a month ago.
The portfolio consists mostly of properties in Tokyo and Osaka that PAG acquired in a $1 billion deal in 2015.
That portfolio, PAG CEO Weijian Shan said, was “comprised of 26 high-quality properties” and was “predominantly office buildings in Tokyo.”
In March, Blackstone paid the equivalent of $2.7 billion for a portfolio of 220 rental properties, also concentrated between Tokyo and Osaka. It was a core-plus buy and Blackstone plans to increase rents and fill vacant units.
Then in July, the firm bought four warehouse properties from Daiwa House Industries. Around the same time the PAG deal closed, Blackstone agreed to buy the residential unit of Mitsukoshi Real Estate.
PAG recently allocated 840 billion yen for acquisitions in the country over the next four years, according to IPE Real Assets. [Mingtiandi] — Dennis Lynch
Nicky Jam and his Miami Beach home (Getty, Prestige Realty Group)
Nicky Jam is trying again to sell his Miami Beach home — and this time, he’s looking at taking a loss.
Jam paid $3.4 million for the 3,600-square-foot home in Palm Island two years ago, but is now asking just $3.3 million for the property, according to Variety.
He first tried selling the home last year with an asking price of $3.65 million. The ask was eventually dropped to $3.5 million. Eventually, it was taken off the market, then re-listed at its current price. Tony Rodriguez Tellaheche with Prestige Realty Group has the listing.
The home at 240 Palm Avenue was developed by Sabal Development, which paid $950,000 for the development site in 2016. The property was completed in 2016.
The five-bedrooms, five-bathroom home is modern both inside and out, with an open-concept living room and kitchen. Floor-to-ceiling glass windows lead to the backyard and patio, which has a pool. The second floor has a balcony running the length of the house.
The exteriors are mostly right angles with a mix of wood cladding and black-and-white painted stucco.
The lot is about a fifth of an acre and packs in an infinity pool and two-car garage. Residents of the gated community have access to shared tennis and basketball courts.
Businessman Joel Meyerson recently bought a home on Palm Island for $11 million.
Sylvester Stallone, Jennifer Flavin and North Lake Way (Getty, Google Maps)
Sylvester Stallone is the buyer of a Palm Beach estate.
The Oscar-nominated star and his wife, Jennifer Flavin, purchased the mansion at 1480 North Lake Way for $35.4 million, according to the Palm Beach Daily News.
Records show Stallone bought the home in the name of Southpaw Trust — a clever nod to one of his most memorable films, “Rocky.” The sellers are Cindy L. and Ronald G. McMackin, who own the engineering subcontracting firm Pan-Pacific Mechanical, which has offices in California and Hawaii. Cindy is the president of the company and Ronald is the chairman and CEO.
The Southpaw Trust, with Lester J. Knispel listed as trustee, took out a $15 million mortgage from CIBC Bank USA, records show.
The property hit the market in June with an asking price of $37.8 million, according to Realtor.com. Moens represented the McMackins in the deal, and Christian Angle of Christian Angle Real Estate represented Stallone.
Built in 2014, the estate includes three separate structures: the main house, a guest house and a guest pavilion, according to the listing. Property records show the lot spans more than an acre.
In total, the property has seven bedrooms and 10 bathrooms. The house has views of the water and more than 250 feet of sandy beachfront.
Stallone adds to celebrities who have lived in the Palm Beach area. This month, Jimmy Buffett sold his Palm Beach home for $7 million, and Springsteen drummer Max Weinberg sold his home in Delray Beach for $5 million. In July, Bon Jovi bought an oceanfront Palm Beach estate for $43 million.
Instead of spending on restaurants and movies, Americans’ funds went toward initial home purchases and upgrading to better homes.
That is among the reasons Lennar Executive Chairman Stuart Miller attributed to the Miami-based homebuilder’s strong fourth quarter and fiscal year results, during an earnings call Thursday.
“The home used to be just shelter,” he said. “Now it is the hub of our entire lives.”
Lennar reported fourth quarter and fiscal year earnings of $882.8 million, up 31 percent year- over-year; and $2.5 billion, up 40 percent year-over-year, respectively. The company’s stock rose to $79.68 at 3:36 p.m. Thursday, up 7.2 percent from its closing price on Wednesday.
In fiscal 2020, Lennar delivered 53,000 homes, a 3 percent annual increase. It received 56,000 new home orders, up 9 percent, year-over-year, according to the company.
In the fourth quarter, the company delivered 16,000 homes, down 2 percent, year-over-year, and saw 15,000 new home orders, a 16 percent annual jump. The orders totaled $6.3 billion, up 22 percent, year-over-year.
For next quarter guidance, Lennar expects new orders of 14,500 to 14,800, deliveries of 12,200 to 12,500, and a gross margin on home sales of 23.5 percent to 23.75 percent. It expects the average sales price of homes to be $390,000.
For the 2021 fiscal year, the company expects new orders of 62,000 to 64,000, and a 23.75 percent to 24 percent gross margin on home sales. Lennar expects an average sales price of between $386,000 and $388,000.
Among the factors Miller cited for making him bullish on Lennar’s future performance include retaining homebuyers, as customers upgrade to a new home with nicer kitchens and larger yards. And the company should see a windfall from its relationship with Opendoor, expected to go public in the near future, Miller said.
He said past worries about millennials starting families later in life than their parents — thus becoming homeowners later — are dissipating. And the new use of home offices, home gyms and homes as daycare will keep demand strong into the new year.
And even once discretionary spending on movies and restaurants returns after Covid-19 vaccines reach the masses, a strong economy will lead to continued appetite for homes, Miller said.
Nationwide, the number of housing units under construction grew for the third month in a row, as housing continues to drive the construction industry. The last time single-family homes were built at this pace was 13 years ago, just before the housing bubble burst.
Lennar is continuing to build homes in South Florida. It recently paid $13.7 million for land at Arden, a planned community in western Palm Beach County. It also purchased a former mobile home park in Homestead for $29 million, with plans to build a new housing community.
