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.
The property management platform Guesty has raised $35 million in its latest funding round.
The Series C round brings the total funding for the firm to $60 million.
The company’s software is aimed at helping property managers who operate short-term rentals and vacation rentals run their listings more effectively. The firm says it can streamline different listings channels, create personal websites and handle guest questions and comments.
Viola Growth investment fund led the round, with contributions from Vertex Ventures, Journey Ventures and Kingfisher Investment Advisors among others.
Guesty will use the latest round of funding to open new offices, enhance its software and introduce artificial intelligence into the platform. The firm was founded in 2013 by twin brothers Amiad and Koby Soto.
The company’s expansion comes at a time when home-sharing platforms like Airbnb are battling with cities across the country. In December, the L.A. City Council approved a new set of rules that would open the door for short-term rentals, with restrictions. And this month, a federal appeals court in California ruled that Airbnb and other platforms were liable for listings that violate Santa Monica’s ordinance.
Report: ‘Shift’ as US home sales decline, inventory grows
U.S. home sales continued to fall in February, dropping 4.2 percent, even as inventory grew by 5.8 percent, according to a new report from Re/Max. The decrease in home sales marked the seventh consecutive month of declines year-over-year, although the increase in inventory was the fifth month in a row of growth, the report said. Trends that last five months or more “often indicate significant shifts,” said a statement from Re/Max CEO Adam Contos. “Year-over-year trends in declining sales and rising inventory have both reached that length now,” he added. Homes in San Francisco and Omaha, Nebraska, were on the market for the least amount of time at 37 and 34 days, respectively, according to the report. [TRD]
JLL buys HFF for $2B in effort to ‘accelerate growth’
Chicago-based JLL announced this week a $2 billion cash-and-stock deal to acquire Dallas-based HFF. The proposed combination, which could usher in a period of poaching as rival commercial brokerages seek to attract individuals displaced by the union, values HFF at $49.16 per share based on its March 18 market closing price. The merger, which should be finalized in the third quarter of this year, still requires HFF shareholder approval, but already has the assent of both companies’ boards. “The combination with HFF provides a unique opportunity to accelerate growth and establish JLL as a leading capital markets intermediary, with outstanding capabilities,” said a statement from JLL global CEO Christian Ulbrich. JLL and HFF are both in the top 10 in The Real Deal‘s recent ranking of investment sales firms. [TRD]
Opendoor valuation hits $3.8B after funding round
San Francisco-based startup Opendoor, which has sought to make a name for itself in the iBuyer space, has raised $300 million in a funding round led by General Atlantic, Fifth Wall Ventures, GGV Capital, Hawk Equity and Japan’s SoftBank Group, according to TechCrunch. The outlet noted the move brings Opendoor’s valuation to $3.8 billion. Founded in 2014, Opendoor has since raised $1.3 billion in equity, with another $3 billion in debt financing to purchase properties. The company, which received a $400 million investment from SoftBank late last year, plans to use its latest round of funding on product development and expansion. Opendoor co-founder Eric Wu told TechCrunch that his company intends to remain focused on the private home buying market, rather than cars, commercial real estate or loans. [TRD]
Facebook settles lawsuits, revamps housing ad policy
Online housing advertisements will no longer target Facebook users by ZIP code, the Wall Street Journal reported. A new policy enacted by the social media giant will also set a 15-mile minimum radius for geographic ads and restrict housing, job and lending ads from targeting users by age and gender. Facebook is making the changes to settle five discrimination lawsuits filed by plaintiffs, including the National Fair Housing Alliance. “There is a long history of discrimination in the areas of housing, employment and credit, and this harmful behavior should not happen through Facebook ads,” company COO Sheryl Sandberg wrote in a blog post. [TRD]
Fed holds interest rates, indicates no raises this year
The Federal Reserve isn’t raising interest rates right now, and will most likely hold them steady for the rest of the year due to concerns about an economic slowdown. In 2018, the Fed raised rates four times. In minutes this week, officials indicated that 2020 will only see one rate raise. The decision reflects a relatively recent change of mind on behalf of top Fed officials. At the end of last year, only two two officials said they thought the Fed would keep interest rates unchanged in 2019, as opposed to 11 out of 17 right now. The Fed also plans to scale back its plan to downsize its portfolio of government-backed securities. Low interest rates have been a boon to real estate investment trusts and could lead to more demand for mortgages from Freddie Mac, a government-sponsored entity that the Trump administration is considering privatizing. This week Freddie Mac promoted president David Brickman to CEO. [TRD]
MAJOR MARKET HIGHLIGHTS
Manhattan’s Hudson Yards development officially opens
A star-studded extravaganza of business moguls, celebrities, developers, elected officials and even Big Bird turned out last week to celebrate the grand opening of Hudson Yards on Manhattan’s West Side — first at an invite-only evening soiree on March 14 and again at a ceremony the next morning. New York Sen. Chuck Schumer called Related Companies chairman Stephen Ross the “only person in the universe” who could have brought the decade-long development to fruition. Ross, meanwhile, said he was “still awed” to see the project become a reality. Since the opening, critics have raised concerns about Related’s use of surveillance in the neighborhood, as well as its controversial policy regarding photos taken from a 15-story climbable sculpture known as “The Vessel.” [TRD]
Boston, LA touted as top cities to endure economic downturn
Among the cities that could remain among the most resilient amid the country’s economic slowdown is Boston, one of several places that investors have set their sights on that are less likely to feel the effects of a downturn, Bloomberg reported. Boston is considered a less riskier investment because it has a traditional financial services base, as well as a biotechnology and life sciences sector, according to the outlet. Los Angeles is another city that’s drawing in investors due to its media and technology industries. Cities such as Austin, Texas, which rely predominantly on a single industry or company, are considered riskier places to invest. [TRD]
ISG founders reach ‘amicable resolution’ in partnership dispute
Two founders of Miami-based luxury brokerage International Sales Group have officially parted ways after settling dueling lawsuits last month. Philip Spiegelman had accused Craig Studnicky of mismanaging “large amounts of cash,” while Studnicky had claimed Spiegelman pushed out a third founding partner of ISG and alienated clients with his “overbearing narcissism and obnoxious personality.” The litigation initially left the future of the brokerage up in the air, but Studnicky’s lawyer Robert Stok said the two have “reached an amicable resolution.” Stok’s client will take over ISG, while Spiegelman will get development rights to a mixed-use project in New Orleans. [TRD]
Michigan nonprofit moves into OZs in Florida
The Troy, Michigan-based Kresge Foundation is the latest entrant in the race to reap the benefits from federal Opportunity Zones. The philanthropic group, a registered nonprofit, has partnered with Boston-based Arctaris Impact and Fort Lauderdale-based Community Capital Management to launch an OZ-focused fund. Kresge has provided a combined $22 million to both funds, which have agreed to adhere to certain investment guidelines, such as deploying capital to create jobs and help low-income communities. OZs allow investors to defer paying capital gains taxes if they invest in specially designated geographic areas. U.S. Housing and Urban Development Secretary Ben Carson told The Real Deal earlier this month that he would give preferential treatment to OZ developers and investors that build affordable housing. [TRD]
PMG to bring another co-living complex to Chicago
Property Markets Group plans to open another co-living rental complex in Chicago, principal Noah Gottlieb told The Real Deal. The New York-based developer, which started its co-living unit in 2017, has already opened two “X Social Communities” complexes in the Windy City and one complex in Miami. New apartment buildings are in the works in Denver, Oakland, Phoenix and several cities in Florida, and the group is eyeing Atlanta, Houston and Minneapolis for future projects, Gottlieb said. Beds start at $995 per month in PMG’s “X Chicago” building in the University Village neighborhood. [TRD]
Santa Monica’s Clock Tower Building sells for $58M
Sorgente Group of America has sold the historic Clock Tower Building in Santa Monica to Rockwood Capital for $58 million. The 53,500-square-foot Art Deco tower, which opened in 1930, was the tallest building in the beachfront city for four decades. It’s considered Santa Monica’s first skyscraper and is also still one of the tallest buildings in the vicinity due to height restrictions. The building, which has a four-story clock tower, is currently home to Chinese digital media company Hylink, investment firm Bold Capital Partners and H Code media, among other tenants. Italy’s Sorgente Group, whose other properties include the Flatiron Building in Manhattan, bought the Clock Tower Building in 2013 for around $34 million. [TRD]
Across South Florida, home sales fell again in February, mimicking a nationwide trend.
The declines follow a slow start to the year in South Florida. In January, total home sales decreased throughout the tri-county region, with Palm Beach County reporting the biggest percentage drop: down 21.1 percent.
Prices, meanwhile, continued climbing upward in Miami-Dade, Broward and Palm Beach counties – with the exception of single-family homes in Palm Beach County.
Home sales in Miami-Dade fell 3.6 percent in February, year-over-year, to 1,739, according to the Miami Association of Realtors. Condo sales took the biggest hit, falling 5.1 percent to 934 closings, while single-family home sales decreased 1.8 percent to 805.
The total sales volume decreased only 0.1 percent to $863.2 million.
Home prices, meanwhile, kept rising. The median single-family home price increased 3.8 percent to $345,000, and the median condo price rose 8.7 percent to $250,000.
Total residential sales dropped nearly 10 percent year-over-year in February, down to 2,051. Single-family home sales decreased 8.6 percent to 938, and condo sales totaled 1,113, an 11.1 percent decline from the previous year.
The total sales volume in Broward fell by 9.3 percent to nearly $658 million.
The median price for a single-family home increased 4.5 percent to $350,000, and the median price for condos rose slightly, up 1.3 percent to $160,000.
Overall residential sales decreased 7.8 percent to 2,000 closings in February. Sales of single-family homes decreased 9.8 percent to 1,098, and condo sales declined by 5.4 percent to 902.
In February, the total residential sales volume fell to $846.5 million, a 12.6 percent drop compared to the same period last year.
Unlike in Broward and Miami-Dade, the median price for single-family homes actually went down in Palm Beach County, dropping by 1.4 percent to $340,000. Condo prices rose 7.6 percent to $183,000.
A company led by former Major League Baseball All-Star Mo Vaughn sold an affordable housing building in the Miami River District for $6.8 million.
An affiliate of Vaughn’s Omni New York sold the 61-unit Temple Court Apartments at 431 Northwest Third Street for $111,475 per unit. The buyer is an affiliate of the Atlantic Housing Foundation, a Dallas-based affordable housing company.
The development totals nearly 36,000 square feet and sits on a half-acre lot. The building, which dates back to 1920, was last purchased for $2.2 million in 2004, records show.
Omni New York was founded in 2004 by Vaughn and Eugene Schneur. It has acquired or rehabilitated more than 7,800 units of affordable housing in New York state, according to its website. Vaughn started the company after he retired from baseball.
Vaughn, whose nickname was “The Hit Dog,” played first baseman for the Boston Red Sox, the Anaheim Angels and the New York Mets. He won the American League’s Most Valuable Player award in 1995.
South Florida suffers from a lack of affordable housing and consistently ranks as one of the most expensive places to live in the United States. Housing and Urban Development Secretary Ben Carson recently told The Real Deal that the agency will give developers preference for building affordable housing in designated Opportunity Zones.
Chicago developer Taher Kameli scored a victory in court when a judge threw out a federal lawsuit over alleged fraud in EB-5 projects, but his legal troubles aren’t over.
The Securities and Exchange Commission in 2017 sued Kameli, claiming he defrauded more than 200 foreign investors who put up $89 million to build eight assisted-living projects in the Chicago suburbs and Florida, according to Crain’s. The suit alleged Kameli charged undisclosed fees, commingled funds and used the money for unauthorized purposes.
A federal judge dismissed the suit last week for procedural reasons, but gave regulators until April 11 to refile it. Kameli, an immigration attorney, still faces other lawsuits over the assisted-living projects, only one of which ever was completed.
Kameli was able to regain control of that property, the 60-unit Bright Oaks of Aurora in the west suburb, with a $12.7 million bid in a bankruptcy auction last month, Crain’s reported.
The federal EB-5 visa program received another short-term extension last month, but faces a number of pressing issues. One of the biggest is the weakened demand from Chinese visa seekers — who comprise a large share of the applicants. While it has been credited with creating hundreds of thousands of jobs and contributing billions of dollars to help finance large-scale projects, notable fraud cases involving EB-5 projects have also surfaced.
New York-based Symmetry Property Development is being sued by 60 Chinese investors who want the firm to return $50 million they invested in a failed tower project in Chicago’s River North neighborhood. [Crain’s] — John O’Brien
UPDATED, March 22, 3:10 p.m.: The developers of the Arbor Coconut Grove, a boutique luxury condo project, closed a nearly $21 million loan to complete construction.
Property records show 3034 Oak Park LLC closed on the $20.7 million in financing, which adds to a $2.3 million bridge loan from 2017. Trez Forman Capital is the lender. Trez Forman President and CEO Brett Forman arranged the financing, according to a press release.
Urban Atlantic Group, led by Nick Hamann, and Oak Ventures, led by Jeremy Waks, launched sales for the Arbor about two years ago with Douglas Elliman. The 48-unit building will be located behind CocoWalk.
The Arbor is being designed by Behar Font Architects and will include units ranging from 1,474 square feet to 2,257 square feet. The five-story building will have four penthouses with private balconies and two-story duplex units, in addition to condos. Amenities will range from a courtyard deck with a pool and grilling areas to a rooftop courtyard with yoga.
Units start at nearly $800,000.
Property records show 3034 Oak Park LLC paid $5.25 million for the 36,600-square-foot lot at 3034 Oak Avenue in May 2015.
Recently completed projects in the neighborhood include Terra’s Grove at Grand Bay and portions of Park Grove, which the Related Group is building with Terra. CocoWalk is also under construction, as is a new Mr. C hotel being developed by the Fort Brescia and Cipriani families.
Between now and the end of next year, urban neighborhoods from Brickell to Midtown Miami will see the completion of several signature mixed-use projects. Yet, as a result, Miami’s urban core is going to experience an oversupply and high vacancy rates in the retail, multifamily and office markets, according to a recent CoStar report.
The report, prepared for the Commercial Industrial Association of South Florida and presented at the trade group’s event earlier this week, shows the retail vacancy rate will rise from 4.6 percent in 2019 to 5.4 percent in 2020, when 700,000 square feet of new retail space is expected to be completed. By contrast, between 2015 and 2018, developers added about 600,000 square feet of retail space.
Office demand and supply are on equal footing in 2019 with 200,000 square feet of space built and leased. But the supply will skyrocket with 600,000 square feet of new space added by the end of 2020 even though the demand is for only 100,000 square feet next year, according to CoStar’s findings.
And despite South Florida’s booming population growth, the supply of multifamily units is outpacing demand in Miami’s urban core. The report shows roughly 1,100 apartments are being completed in 2019 when the demand is for 600 units. In 2020, 800 more units will be added when the demand is just below 400 units.
The trends will have a negative impact on vacancy rates and annual rent growth. For instance, the retail vacancy rate will rise from 4.6 percent in 2019 to 5.4 percent by the end of 2020, the report states. Annual retail rent growth peaked at 7.9 percent in 2014. In 2019, the rate will be 2.1 percent and 1.4 percent in 2020, according to CoStar.
Currently, the multifamily vacancy rate is about 6 percent, but will climb to nearly 8 percent next year, while annual rent growth is stagnating at 1 percent for 2019 and 2020. Annual rent growth for multifamily peaked at 2.9 percent in 2015. Office annual rent growth will dip from 2.8 percent this year to 1.7 percent in 2020. CoStar predicts the vacancy rate for office will go from 5 percent this year to 11 percent next year.
After the findings were presented at the trade group’s event, a panel of real estate experts offered bullish outlooks for retail, multifamily and office development in Miami’s urban core.
“A lot of brokers will acknowledge that fourth quarter 2018 was slow,” said Tony Arellano, managing partner of DWTWN Realty Advisors. “The first week of the year, I was a little concerned. By the second week, it just opened up. Everyone in this room will be surprised what the third and fourth quarters of this year will bring in terms of the number of transactions.”
Jon Paul Perez, vice president of Related Group and a panelist at the event, noted that some neighborhoods, like Wynwood, where his company is building micro-unit apartment buildings, are not competing with the other submarkets in Miami’s urban core.
“Wynwood is its own submarket and it won’t be affected by what goes on in other submarkets,” he said, adding that the combined number of apartments and commercial spaces under development in the neighborhood is still relatively modest.
“You are talking about a total of about 400,000 square feet of new office and 400 new [apartment units] in Wynwood,” Perez said.
Joe Furst, managing principal of Place Projects, noted that the fact real estate investors like Sterling Bay and JPMorgan Chase are building projects in Wynwood is a sign the market is getting stronger. “To be able to attract that type of quality, blue-chip investor is where this is going,” Furst said.
After the Federal Reserve’s most recent announcement, mortgages rates tumbled — and they may keep falling.
The Fed said that it would get back into bond buying, causing rates to fall, CNBC reported. The average rate on the 30-year fixed dropped to 4.34 percent from 4.40 percent — the lowest point in more than a year. In November, the rate soared over 5 percent, which led home sales to fall in the following months.
The decline followed Chairman Jerome Powell’s remarks that the central bank would stop the runoff of bonds from its balance sheet sooner than expected. That led the 10-year Treasury to slide.
“This is about as big of a change as anyone expected. It means the Fed will be buying more bonds more quickly,” said Matthew Graham, chief operating officer of Mortgage News Daily. “And bond buying results in lower rates, all other things being equal.”
Home sales are affected by even small movements in rates, the report said, especially since buyers are dealing with affordability issues. For example, for a 30-year fixed rate on a $300,000 mortgage, every 25 basis point drop entails a savings of $50 a month. The rate has fallen 75 basis points since November — which comes out to $150 of savings per month.
Despite the savings, the broader outlook for the economy may be concerning. The Fed is holding off on raising rates due to the economic landscape.
“While a plus for homebuyers, if concerns about the economic outlook rattle consumer and homebuyer confidence, it could offset the benefit of lower mortgage rates,” said Danielle Hale, chief economist at realtor.com. [CNBC] — Meenal Vamburkar
TGM Associates bought the Broadstone Harbor Beach apartment complex in Fort Lauderdale for $136 million, marking South Florida’s largest multifamily deal so far this year.
The New York-based real estate firm purchased the 394-unit waterfront building at 1721 17th Street for $345,177 per unit, records show. TGM bought the property from Alliance Residential and Invesco Real Estate.
The deal shows the strength of Fort Lauderdale’s Class A multifamily market. While lenders and industry analysts remain concerned about the supply of luxury apartments delivered in Miami, investors appear to remain bullish on new multifamily development in Fort Lauderdale.
Cushman & Wakefield’s Robert Given, Zachary Sackley, Troy Ballard and Neal Victor were the listing agents.
The 359,000-square-foot property was first listed in September 2018. At the time, Given said the property could sell for $160 million to $170 million.
Each unit averages 912 square feet, with rents ranging between $2,000 to $3,000 a month. They include studios, one-bedrooms and two-bedrooms. Amenities include a fitness center, boxing and yoga studio, movie theater, pool with cabanas, dog park and massage room.
Property records show Alliance Residential and Invesco Real Estate developed the project on the 3.8-acre site. The partnership paid $22.1 million for the property, just off the 17th Street Causeway, in 2015. The site used to house Ocean World, a marine park that closed in 1994 after nearly 30 years of operation.
The property is next to the Broward Convention Center, which is in the midst of a $900 million renovation and expansion that includes adding an 800-room hotel and another 350,000 square feet of meeting space.
TGM owns seven other apartment complexes in Florida, including the TGM Oceana in Boca Raton. The company has acquired 132 multifamily properties worth more than $2.7 billion in 28 states. according to its website. It is led by John Gochberg, Michael Frazzetta, Zachary Goldman and Steven Macy, who cofounded the firm along with Thomas Gochberg in 1991.
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