Syncopated Real Estate offers an integrated approach to property acquisition and asset disposition. As a South Florida brokerage we facilitate the buying, selling, and leasing of real estate in both residential and commercial markets. A strategic coordination with real estate professionals and funding services allows for innovative solutions. The boutique brokerage approach caters to the individual goals of buyers and sellers. This is accomplished through listening to market rhythms and having the dedication to discover value. The ability to connect with resources such as family offices, legal services, accounting professionals, and private funding groups, facilitates smooth transactions. This method achieves success while developing long term business relationships.
Marcus & Millichap plans to lay off 20 percent of its workforce as the publicly traded commercial real estate brokerage goes through a restructuring.
The company, which is headquartered in Calabasas and has a market cap of $1.12 billion, revealed its pandemic response plan in a May 11 public filing. Part of the plan was “a reduction of the company’s employee workforce by 20 percent,” which comes to about 175 of an 877-person workforce.
The layoffs affect salaried staff. They would not impact brokers, who are independent contractors that earn their keep from sales, debt and leasing commissions.
The company has reported 53 of these layoffs to the California Employment Development Department over the past two weeks.
The affected employees mentioned in state filings are scattered across California. The head office in Calabasas saw the most pink slips, at 19. The layoffs are listed as temporary, but a return date for the workers is not provided.
Marcus & Millichap’s announcement comes as commercial brokerages nationwide face an economic disaster that has thrown into question the demand for office, retail, and pretty much any non-residential space. Eastdil Secured and JLL each announced layoffs of more than 30 employees earlier this month.
A Marcus & Millichap representative responded to questions by pointing back to the company’s public reports, and stating, “Despite unprecedented challenges that COVID-19 presents for the country and business in nearly every sector, we remain focused on the health and well-being of our team and clients, and our continued delivery of industry leading services.”
The Securities and Exchange Commission filing, part of the company’s quarterly earnings report, does not say what positions will be eliminated or how the layoffs will be carried out. CEO Hessam Nadji did not mention the layoffs during the earnings call, and no one asked a question about them, according to a call transcript.
The filing does note that in “response to this period of business disruption,” we “instituted various controllable expense reduction initiatives” including base salary reductions for senior executives, management and key personnel, furloughs and layoffs “to preserve our balance sheet and financial position.”
These reductions include a 25 percent base salary cut for Nadji, and a 20 percent cut for other executive officers.
Marcus & Millichap went public in 2013.
The reopening of the New York Stock Exchange trading floor Tuesday accompanied a burst of optimism in the stock market as the Dow rallied more than 500 points, or 2.2 percent. And real estate stocks helped power the increase.
The FTSE Nareit All REITs index rose by 3.68 percent on Tuesday, outpacing the broader markets. The index had previously risen by 6.9 percent over the past week, with all REIT sectors — from data centers to malls — seeing gains, according to a new report from Nareit. It was the strongest weekly return in six weeks.
Tech-related sectors such as data centers and infrastructure “have been little affected by the Covid-19 crisis, and last week’s gains added to their positive returns year-to-date,” the report notes. But “at the other end of the spectrum are several sectors that had a double-digit rebound from declines earlier this year,” such as hotels.
Since the start of 2020, data center and infrastructure REITs have seen returns of 14 percent and 11 percent, respectively, according to the latest data from Nareit. Meanwhile, retail is down 42 percent, lodging is down 45 percent and mortgage REITs are down 44 percent.
Retail’s struggles have been driven by massive shortfalls in rent collection. A Nareit rent collection survey from mid-May found that shopping centers in particular had collected less than half of all rent due in April and May, while free-standing retail properties have done a bit better, collecting about 70 percent.
“The prevalence of essential businesses such as grocery and drug stores among the tenant base for many shopping-center and free-standing REITs is a stabilizing factor for these types of retail properties,” Nareit’s report on the survey says.
Regional malls have struggled greatly, with Macerich collecting just 26 percent of its rent for April and 18 percent for May as of May 8, according to S&P. A seven-property regional mall portfolio owned by Starwood Capital — now facing multiple restructuring bids — has collected only about 20 percent of rent.
Another sector facing unique challenges from the pandemic is senior housing: Fitch expects monthly occupancy declines of 2 percent to 4 percent, which has led to ratings downgrades and higher leverage. Senior housing REIT Ventas announced Tuesday that it would eliminate over 25 percent of its corporate staff and cut executive salaries.
These uniquely affected sectors aside, analysts see reason for optimism regarding real estate stocks as a whole.
“Overall, the REIT sector entered this crisis with strong balance sheets and ample sources of liquidity,” Nareit senior vice president for research & economic analysis Calvin Schnure wrote last week, noting that REIT leverage ratios at the end of 2019 were near the lowest point in two decades.
“Having a strong financial condition at the start of any crisis improves the REIT sector’s ability to manage the challenges posed by the Covid-19 crisis.”
The reopening of the New York Stock Exchange trading floor — at 25 percent capacity, with legal waivers and a ban on public transportation — was largely symbolic, as the vast majority of buying and selling is done electronically and executed by computers.
Virgin Trains is proposing a major expansion of the commuter rail service, funded mostly by Miami-Dade County.
Virgin Trains USA is seeking $350 million from the county to build up to five train platforms between downtown Miami and Aventura, as well as related infrastructure that would be required, according to a county memo. The proposed stations would be in Wynwood/Midtown, the Miami Design District, Upper Eastside/El Portal, North Miami and Florida International University/Biscayne Boulevard corridor.
Brightline, as the train service that runs from Miami to Fort Lauderdale and West Palm Beach is currently called, shut down in late March due to the coronavirus pandemic and laid off at least 250 employees. The company is a subsidiary of Florida East Coast Industries, which is backed by the private equity firm Fortress Investment Group.
A resolution on the June 2 agenda for the Miami-Dade County Commission shows the county is in talks with Virgin Trains to extend the commuter rail service in the northeast corridor of Miami-Dade County, as first reported by the Miami Herald. Virgin Trains would design and build the platforms, determine whether it needs to acquire or lease land for parking, determine the design and build of a maintenance facility, and maintain the stations.
The expansion would be part of the county’s Strategic Miami Area Rapid Transit (SMART) transportation plan.
Virgin Trains would fund about $75 million, and the county would provide or source about $350 million in funding. Virgin Trains is proposing to receive a 4 percent development fee related to the design and construction of the maintenance facility, rail infrastructure, enhancements to the stations and the acquisition of rolling stock. Rolling stock refers to the trains or other vehicles used on a railroad.
The proposed agreement calls for an initial 30-year term with three 20-year renewal options for a maximum of 90 years, according to the county memo. Virgin Trains would also charge the county $29 million a year in rent that would increase every three years. Rent collection would begin once the rail service is operational at all five stops.
At the end of 2018, Brightline announced that Virgin Group made a minority investment in the company and would be providing rights to rename the system Virgin Trains USA. The rebranding from Brightline to Virgin Trains is ongoing, with completion expected by mid-2020.
Brightline has spurred major office, retail and residential development near its stations, but has struggled with ridership. The rail service is planning to expand to Orlando, as well as make additional stops in Aventura and Boca Raton. In March, the company said that the suspension of service has not affected construction of its planned Orlando rail line.
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Chicago-based indie brokerage @properties has acquired a significant stake in Virginia-based firm Nest Realty, giving it a foothold in five additional states in the South amid an expansion push.
Terms of the deal were not disclosed, but Nest Realty’s leaders Jonathan Kauffmann, Keith David and Jim Duncan will retain an ownership stake in Nest and continue to oversee day-to-day operations, the brokerages said in a joint statement. Nest will also continue to maintain its brand identity in its markets, which include Charlottesville, Louisville and the Triangle region of North Carolina.
The companies pointed to @properties’ tech platform as a launching pad for franchising opportunities, which they said will be a major driver of revenue growth in the upcoming years. Nest, founded in 2008, has 15 offices across the south.
“Over the past 12 years, they have shown they can grow a brand both organically and through effective delivery of franchise services,” said @properties co-founder Mike Golden in a statement. “There’s also a great culture match between our firms.”
Apart from gaining access to @properties’ end-to-end tech platform, which includes a CRM as well as consumer-facing tools, Nest Realty will also be able to utilize @properties’ marketing system as well as training and coaching programs.
In 2019, Nest Realty claims its franchises tallied $1.4 billion in sales across about 350 agents. The acquisition will surely boost the bottom line of @properties, which stands toe-to-toe with Compass and Realogy franchises in several markets and has grown into the 10th biggest brokerage in America by sales volume, according to RealTrends.
With a wave of consolidation having hit residential brokerage over the last decade, @properties has looked to diversify its product offerings and appeal to independent brokerages across the south and midwest. In 2019, the 2,800-agent brokerage acquired a stake in Ansley Atlanta Real Estate, one of the top brokerages in Georgia. It also struck up a partnership with Guaranteed Rate to launch a mortgage lending arm and acquired a title insurance provider.
In a statement, @properties co-founder Thad Wong signaled more acquisitions to come. “Now is the time to grow,” he said. “Now is the time to focus on relationships and putting the best technology, training and resources into the hands of agents.”
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Greystar, one of the largest multifamily property owners in the country, is accused of gathering extensive financial and personal information on several prospective tenants without their knowledge or consent.
Eight tenants at Greystar-owned apartment buildings in Los Angeles have filed suit, saying the giant landlord broke California’s Investigative Consumer Reporting Agencies Act by concealing “the nature and type of investigative consumer reports they would procure from the plaintiffs.”
Greystar was sued last August for violating state consumer protection law, according to the lawsuit filed Friday in L.A. County Superior Court. But despite “being on notice that its conduct was unlawful, defendant Greystar California committed the above violations anyway,” according to the suit.
The complaint also names as a defendant RealPage, a Texas-based company that provides property management software for the rental housing industry. The firm is accused of furnishing Greystar with the investigative reports on the tenants.
The lawsuit focuses on five apartment buildings at which the alleged dossiers were collected. At each of the properties, Greystar procured “certain information on each plaintiff’s character, general reputation, personal characteristics, and/or mode of living, criminal, employment, and rental history.”
Greystar allegedly violated state law by not providing the prospective tenants with a copy of the report, did not tell the tenants when the report would be finished and did not disclose to the tenants that RealPage was involved — each a violation of state law. The suit also notes that Greystar used the tenants’ application fees to finance the probes.
The eight named plaintiffs are seeking $240,000 each in damages, $160,000 from Greystar and $80,000 paid by RealPage. The plaintiffs are also seeking damages for Greystar’s alleged “gross negligence” in violating the law after being accused before of breaking the consumer protection statute.
Messages left with plaintiffs’ lawyer Joseph Ollinger were not returned.
Greystar declined comment, saying it does not discuss pending litigation. The company owns 400,000 housing units worldwide; the National Multifamily Housing Council has called it the largest multifamily property owner in the U.S. Greystar also has $14 billion under development and $36 billion in assets under management, which includes a multibillion-dollar property portfolio in L.A. County.
Messages left RealPage were not returned. It was in the news earlier this year after hackers reportedly stole $10.5 million from it and transferred the funds to a Nigerian bank account.
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Jeffrey Soffer’s Fontainebleau Development and its partner are launching sales of a new oceanfront luxury condo development in Jupiter Island, marking one of the first such projects on the ritzy island.
SeaGlass Jupiter Island, a 10-story, 21-unit project at 1500 Beach Road, is being developed by Fontainebleau Development and Perko Development Partners. It is on 170 linear feet of Atlantic Ocean beach and Intracoastal frontage and is near Blowing Rocks Preserve.
The developers want to attract wealthy homeowners from the area’s high-end single-family neighborhoods as well as buyers from the Northeast and from other parts of South Florida, according Jim Cohen, Fontainebleau Development’s president of Residential. Cohen said Fontainebleau Development will handle sales in-house.
“I’ve seen inquiries come up from Miami-Dade County, and there’s a trend of people wanting to move north,” Cohen said.
Jupiter Island is a secluded waterfront town and home to some of the wealthiest residents in southern Florida. In 2017, Grammy-winning singer-songwriter Céline Dion sold a 5.7-acre oceanfront estate on Jupiter Island for $28 million, after listing it for $72.5 million.
Seaglass is designed by Swedroe Architecture, which built the Jupiter Yacht Club and three beachfront Jupiter Island towers that are often referred to as the “Three Cs:” The Cliveden, The Claridge and The Carlyle. New York-based Champalimaud Design is the interior designer.
Among other recent projects, Swedroe also designed Soffer’s Turnberry Ocean Club in Sunny Isles Beach, which is nearing completion; and the Shoreline, twin towers at Solé Mia in North Miami. Partner Joseph Swedroe said that 30 years ago the firm introduced private entry elevators, which have become commonplace in luxury condo towers.
SeaGlass’ prices range from $5.9 million to over $10 million, according to a press release. It will have three- and four-bedroom units, ranging in size from 3,781 square feet to 5,323 square feet.
The project will feature private terraces with summer kitchens and private air-conditioned, two-car garages for every residence. Amenities will include an infinity-edge heated swimming pool with a heated relaxation spa, a poolside sandy beach, a beachside summer kitchen and outdoor viewing terrace. Seaglass also will feature weight training and cardio equipment, and a yoga and meditation lawn.
SeaGlass is expected to break ground in the fall, and construction will take about 18 months, Cohen said.
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Stephen Ross predicts the coronavirus pandemic will result in a “flood of cases going to the bankruptcy court.”
The chairman of Related Companies appeared on CNBC’s “Squawk Box” Tuesday to discuss the impact of the virus, and said he’s especially concerned about the effect on retailers and small businesses.
“Many of them probably don’t have the wherewithal to reopen,” he told CNBC.
Neiman Marcus, which anchors Hudson Yards, is one of Related’s most high profile tenants to declare bankruptcy. The retailer had said it was the pandemic that triggered the filing.
Ross said he doesn’t view the wave of bankruptcies as “induced by bad practices.”
“It’s really all driven by the pandemic,” he said on the TV segment.
Related CEO Jeff Blau previously told CNBC that the company had collected 35 percent of its overall retail rents as of mid-April. However, at its enclosed shopping centers, Related collected 20 percent of rents. It’s unclear how collections fared by the end of the month.
Blau has previously said that tenants who are able to pay rent should not take advantage of the current climate. “It’s a whole ecosystem. The people that can pay need to pay,” he said in April. “Landlords need to help out those that can’t.”
[CNBC] — Erin Hudson
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As Miami Dolphins owner Stephen Ross forges ahead with plans to host fans for the upcoming NFL season, he’s also planning to offer open-air and drive-in theaters at Hard Rock Stadium.
The drive-in theater will play Miami Dolphins footage and games, classic movies and will host commencement ceremonies and other events, all viewable from the comfort of your car. The drive-in events will be held inside the stadium and fit up to 230 cars, while the open-air theater can host small groups on the complex’s south plaza, according to a press release.
Ross, Related Companies’ founder and chairman, embarked on a $500 million renovation of the Miami Gardens stadium in 2015. It hosted Super Bowl LIV in February, and has hosted other events such as the Miami Open tennis tournament.
Earlier this month, the NFL franchise announced it is ready to have fans attend games for the upcoming season with cleaning and socially distant measures in place and reduced capacity, though the NFL hasn’t made a decision yet. Ross recently told CNBC that he thinks “there definitely will be a football season this year.”
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Starwood Capital’s seven-property regional mall portfolio, already beset by high vacancy rates and in deep trouble with Israeli investors, has hit a new low as the coronavirus has sunk rent collection to around 20 percent.
Now, with bondholders poised to accelerate payments and a senior lender threatening to foreclose, six competing proposals to restructure the assets have emerged, according to documents recently filed on the Tel Aviv Stock Exchange.
The first batch, submitted May 17, came from Global Fund Investments, Namdar Realty Group and Kohan Retail Investment Group. Starwood presented its own proposal a week later jointly with Mission Peak Capital, followed by Washington Prime Group and a joint venture of Pacific Retail Capital and Golden East Investors.
Starwood has seen its Israeli bonds downgraded three consecutive months, to C-, a rating low enough that bondholders can demand immediate repayment. Meanwhile, the firm has also defaulted on a $549 million CMBS loan that covers five of the properties, according to disclosures.
The bonds, which traded around a dismal 30 cents on the dollar for most of 2019, have fallen to around 15 cents during the coronavirus pandemic.
Washington’s letter of intent outlines a plan to buy a 75 percent ownership interest in the properties, with Starwood retaining the rest. Washington would assume management of the properties, including leasing, and would provide Starwood with $45 million.
Mission’s letter expresses support for a plan Starwood outlined in a May 24 term sheet, which would involve Mission injecting $5 million of new capital into Starwood to support its retail assets and start a restructuring agreement with its senior lenders.
Under this agreement, Mission would receive 30 percent of profits moving forward, and Starwood, which would stay on as the property manager, would be released from all liability and garner 20 percent of profits. The company’s bondholders would get the remaining half of profits along with $19 million in the trustee account.
Mission first approached Starwood Retail Partners in mid-May to discuss restructuring the company. Its letter lists the reasons it prefers Starwood’s plan: It offers the most cash to the company’s bondholders; it would allow the companies to act quickly on troubled properties; and firms making competing bids “suffer from a lack of credibility” and are more interested in paying themselves through fees instead of helping bondholders.
“The properties are in a dire financial situation where rent collections hover around 20% due to Covid-19 related closures,” its letter states. It adds that changing the property manager “would signal a sinking ship to tenants and embolden attempts to seek rent reductions and holidays,” and make foreclosures at the retail properties more likely.
Pacific Retail and Golden East Investors would distribute 65 percent of Starwood’s unrestricted cash balance for its bondholders and use the rest to support the company’s ongoing operations. Its proposal would entitle it to multiple management fees.
The letter says Pacific Retail has “unparalleled knowledge” of the seven mall properties it aims to manage, as it had run them before Westfield sold them to Starwood in 2013 for $1.6 billion. Contrary to Mission’s letter, it claims that special servicers do not see Starwood as the ideal manager for its mall properties and that Starwood has a “lack of conviction in its ability to create value from the properties.”
Starwood and Washington declined to comment. Representatives for Mission, Pacific Retail, Golden East Investors and Kohan did not respond to requests for comment. Global and Namdar could not immediately be reached.
In a recent interview with The Real Deal, Starwood Capital Group CEO Barry Sternlicht said the pandemic was “a dagger to the chest” for the retail industry but that the firm’s retail outfits were “not really significant investments.”
The queen of Latin pop and her music producer husband picked up a new home in South Florida.
Mexican singer and actress Thalía, whose real name is Ariadna S. Miranda, and Tommy Mottola paid $8 million for unit 307 in the south tower of the Four Seasons Residences at The Surf Club in Surfside, property records show. Mottola, a former chairman and CEO of Sony Music Entertainment, is chairman of Mottola Media Group. The couple purchased the unit via TNT Miami LLC.
The four-bedroom, five-bathroom condo at 9001 Collins Avenue spans 3,948 square feet. It sold for $2,026 per square foot.
Thalía and Mottola, who was previously married to Mariah Carey, have been married since 2000. Thalía has sold more than 25 million records worldwide, according to ¡Hola! magazine. Mottola has worked with artists who include Carly Simon, John Mellencamp, Mariah Carey, Celine Dion, Gloria Estefan, Ricky Martin, Shakira, Jennifer Lopez and Marc Anthony.
The Surf Club features 150 condo units, a 72-room Four Seasons hotel, Le Sirenuse restaurant and a Thomas Keller restaurant. The oceanfront project was designed by New York architect Richard Meier along with Miami-based architect Kobi Karp.
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