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.
In March, Charles Cohen, the billionaire head of Cohen Brothers Realty, complained that it was “ridiculous how the news was portraying the pandemic.” Instead of allowing employees to work from home, he allegedly told one of his executive assistants “we have to be a soldier and soldier on.”
Two days later, he and his family took a private plane to Palm Beach, and later boarded a private yacht in the Caribbean, according to a lawsuit filed by three of Cohen’s furloughed employees. The wide-ranging suit alleges that the firm’s cavalier response to the pandemic culminated from a toxic work environment where employees were berated, belittled and in some instances, sexually harassed by other executives.
An attorney representing Cohen Brothers, Ivan Smith, declined to discuss specific allegations but called the lawsuit’s claims “totally baseless.”
One plaintiff, Evelyn Julia, a senior showroom leasing administrator, alleges that she was repeatedly subjected to unwelcome comments about her appearance from her direct supervisor, Stephen Fredericks, head of national leasing at Cohen Brothers. Fredericks would allegedly recount his sexual encounters to Julia and ask about her love life. According to the lawsuit, Julia would respond that such discussions were inappropriate.
She also alleges that he would touch her in “inappropriate and unwelcome ways,” including quickly kissing her on the cheek before he went on trips, leaving her no time to react.
The lawsuit notes that another former employee either filed a sexual harassment complaint against Fredericks or threatened to do so. The claims were settled, after which Cohen Brothers told employees that they needed to complete sexual harassment training — which Fredericks never did, according to the lawsuit.
Fredericks did not return an email or call seeking comment.
The lawsuit alleges that CEO Charles Cohen — whose firm’s portfolio spans 12 million square feet across New York, South Florida and Southern California — had a “a longstanding reputation for verbally abusing, screaming at, berating, belittling, and humiliating employees.”
Roseann Hylemon, who served as an executive assistant to Cohen and then to COO Steven Cherniak, claims that Cohen repeatedly said “I’m going to kill you” when she did something that displeased him. The reasons for his yelling varied, according to the lawsuit, but included when she ordered a hamburger for him that included cheese.
Another of Cohen’s executive assistants, Corinne Arazi, alleges that she was also berated and told that she was not permitted to leave her desk without permission — even to use the bathroom. Cohen did not respond to email requests for comment.
When the pandemic hit New York City in March, executives mocked and retaliated against the employees for expressing concern for their safety, according to the complaint.
No shutdown was in effect at the time, but the following week the company allegedly ignored Gov. Andrew Cuomo’s March 19 order to reduce in-office non-essential employees by 50 percent. The office remained open when the governor ordered all non-essential employees to stay home starting March 22, according to the lawsuit.
The firm’s human resources office emailed employees that day, saying that the governor’s order was ambiguous as to what qualified as essential, the complaint recounts. The email said the office would stay open, but employees could decide for themselves “whether or not to come to work being guided by the time off policies.”
There was considerable confusion over whether the real estate industry was “essential” under the state’s orders. Initial guidance and comments from the governor seemed to indicate that while some construction was essential, real estate was not. On April 9, however, the state clarified that real estate services were essential but that in-person activity was allowed only if “legally necessary.”
After an employee tested positive for Covid-19, the company allegedly failed to notify Julia, Arazi or Hylemon, who worked in close proximity to the employee. They only learned of his status from a text message he sent Arazi two weeks later, the complaint claims.
According to the lawsuit, the three women emailed company executives in April to say that after exhausting their paid time off, they planned to abide by the state’s stay-at-home mandate. They have been on unpaid furlough since and have not been told if they can return to work, according to their attorney.
In addition to damages to be determined by the court, the women are seeking compensation for unpaid overtime, according to the complaint.
An attorney for the women, Michael Grenert, said the claims share a common thread.
“You have a very wealthy company, and my clients were relatively low-level employees,” he said. “You have a kind of culture that looks at the lower level of the company, women in particular, as expendable.”
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Coney Island was eerily quiet this summer. The Cyclone did not clickety-clack, no screams pierced the salty air and tourists who normally roam the boardwalk were nowhere to be found.
The seasonal destination missed its season. Now businesses, like squirrels who failed to stash acorns for winter, are wondering how they will survive it.
“I didn’t do this year what I would do in a summer week,” said Jimmy Kokotas, the owner of Tom’s Restaurant. He is now over $300,000 in debt, largely because of rent.
The city and state did not let rides open this spring, fearing spread of the coronavirus. Yet amusement parks have had to continue paying rent and for maintenance of the park.
Coney Island restaurants, attractions and retailers depend on revenue from their busiest months to pay rent year-round. For amusements, the season begins in April and ends around Halloween.
That wasn’t supposed to be the case. In the 2000s, Mayor Mike Bloomberg planned to revitalize Coney Island and make it a year-round destination. So did Joe Sitt, a Coney Island landowner who had grown up nearby and made a fortune in real estate.
“Times will get good again, and times will get bad again, but I think it’s important to get Coney Island built to accommodate people who can’t afford the long vacation. And to get ready for the next cycle,” Sitt told The Real Deal in 2009.
But the two men had starkly different visions for the peninsula. While Bloomberg aimed to restore the kitschy, often edgy amusement area to its former glory, Sitt proposed Vegas-style hotels, apartments and shops. But he needed the mayor’s cooperation to make that happen.
In the end, Bloomberg won, and the city’s Economic Development Corporation bought 6.9 acres from Sitt’s firm, Thor Equities, for $95.6 million. The city rezoned the area in 2009 and some $400 million in public and private investment poured in.
That filled in many of Coney Island’s cavities. “We had blocks and blocks of empty lots,” said Alexandra Silversmith, the executive director of the Alliance for Coney Island. “It truly was a great place for rats to live.”
Some 35 new businesses have opened and the amusement district has been expanded and preserved. Apartment projects sprung up, including Ocean Dreams, John Catsimatidis’ pair of 21-story towers at 3514 Surf Avenue; Rubin Schron’s 40-story building at 532 Neptune Avenue; and 1709 Surf Avenue, a three-block development by Don Capoccia’s BFC Partners, Ron Moelis’ L+M Development Partners and Taconic Investment Partners.
There’s still work to be done, but talk of activating the area in the cold-weather months has receded.
“Coney Island hasn’t been for 120 years, and likely will not be for another 120 years, a 12-month destination,” said Michael Sorrell, co-owner of Ruby’s Bar & Grill, a restaurant that has been on the boardwalk since 1934.
The seaside neighborhood took a hit when Superstorm Sandy triggered heavy flooding in October 2009, but recovered. The pandemic has delivered an even more severe blow.
“Coney Island is still synonymous with summer,” Silversmith said. “What we were calling the Renaissance was really starting to finally take hold. And that has really just thrown everyone off.”
Landlords have raised rents — some observers say in anticipation of new residents who have yet to move in. But it remains a low-income community with a heavy concentration of public housing. Median gross rent in Coney Island increased from $880 in 2006 to $1,140 in 2018, according to the Furman Center. In 2018, nearly 31 percent of renter households in Coney Island were severely rent-burdened, meaning they spent more than 50 percent of household income on rent.
Silversmith also said that the neighborhood is missing healthful food options and other non-tourist amenities.
“The new influx of new residents isn’t happening on a very large scale, which I agree is not making it more of a year-round destination,” said Melissa Leifer, a real estate agent with Keller Williams.
At Luna Park, a local amusement park, a $20 million expansion was in the works when the pandemic hit, literally stopping the effort in its tracks. The expansion included plans for winter attractions. Now, the park is negotiating with the city for a lease extension through 2040, which it believes would help it endure, if not become a year-round attraction.
“There’s been investing and then, in this moment when we really need a lifeline, that’s [why] the public institutions are there,” said Alessandro Zamperla, president of Central Amusement International, which operates Luna Park. “[We can’t] go backwards because, if we go backwards, we will fall so fast and collapse.”
While his company leases three parcels of land from the city, it also acts as the landlord for many local businesses, including Tom’s and Ruby’s.
But many businesses fear they are already losing ground, which threatens the authenticity of Coney Island.
Kokotas fears that without relief, his debt will result in his business being replaced by one that hasn’t faced the same struggles, nor has stood with the area since 2012, when Tom’s opened.
“You lose people that have been involved in the community and care, and you don’t know if you’re just going to get pushed out for a franchise or what’s gonna happen. And it’s a shame,” Kokotas said.
Things might not be as bad as they seem. The vacancies could spark a much-needed drop in rents and attract new businesses and residents. The result might not be what Bloomberg or Sitt expected, but it could be a mix of both, according to Leifer.
“It’ll change and adapt just as the entire city has since its inception,” Leifer said. “Is that a good thing or is that a bad thing? I don’t really think that it’s my right to judge that.”
How much capacity is too much?
For Amazon, the limit doesn’t exist. At least not yet.
The e-commerce giant — which has been adding warehouses at a dizzying clip across the nation — is on track to expand its fulfillment and transportation capacity by 50 percent, it said. The company has already spent $4.7 billion on property and equipment.
The Jeff Bezos-led behemoth reported another massive quarter on Thursday. Third quarter net income grew to $6.3 billion, tripling the $2.1 billion year-over-year. That bested the $5.2 billion second quarter net income, which itself broke a record.
Net sales similarly increased 37 percent to $96.1 billion in the third quarter, compared with $70 billion in Q3 2019 and $88.9 billion in the second quarter.
The company’s growth in fulfillment centers and delivery was originally planned for 2021, but was moved forward to satisfy demand prompted by Covid-19, the company said. Beyond the pandemic, the warehouse, logistics and last-mile center space is necessary to meet goals of one-day shipping. In the third quarter, the company opened 100 new “operations buildings” across North America, hired 100,000 permanent employees and is hiring another 100,000 seasonal employees.
“The logistics team is really good on, in one way, locking up long-term commitments on space and buildings,” CFO Brian Olsavsky said during Thursday’s earnings call. He added the team was also adept at being able to adjust the timeline in or out to match capacity and demand. We are erring on the side of having too much capacity.”
Amazon has signed a flurry of leases in the past month in New York alone. It inked three leases for delivery stations in Westchester County, along with the Bronx and Brooklyn. Earlier this month, it signed a giant lease for a 975,000-square-foot warehouse in Staten Island this week.
In India, Amazon is expanding its operations with 10 new fulfillment centers, five new sortation centers, and nearly 200 delivery stations.
In addition to acquiring more fulfillment centers, Amazon is building new wind and solar farms to produce a clean energy equivalent of the electricity used by all of its Echo devices. Its first wind farm is in Bäckhammar, Sweden.
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CBRE’s income fell nearly 10 percent during the third quarter as the pandemic forced large office tenants to put their leasing decisions on hold.
Income for the world’s largest real estate services firm fell 9.2 percent from July through September compared to the same time last year to $245 million, the company reported Wednesday.
CEO Bob Sulentic said revenue was being pushed down as large corporate occupiers kicked the can down the road on major leases.
“Those decisions just aren’t being made,” he said on the company’s earnings call Thursday afternoon.
Company executives said CBRE has been able to blunt the impact of the pandemic with more stable revenue streams from lines of business such as property management, and by cutting expenses, including through staff reductions.
Sulentic noted that CBRE has ample liquidity, including $1.4 billion in cash, and that the company is in a position to do mergers and acquisitions if the right opportunity comes up.
“We’re really focused on some areas of the business that are going to have nice, secular tailwinds,” he said.
CBRE is reportedly moving its corporate headquarters from Los Angeles to Dallas, although it did not confirm or mention the move on Thursday’s call.
Sulentic, who headed the Dallas-based developer Trammell Crow Co. when it was acquired by CBRE in 2006, already has an office in the Texas city and splits his time between there and L.A.
CBRE isn’t expected, however, to move a significant number of jobs from L.A. to Dallas. The company employs around 100,000 people in more than 530 offices worldwide.
A Miami commercial broker is suing his former firm, alleging the company illegally accessed his email account and list of contacts.
Stefano Santoro filed the lawsuit in Miami-Dade Circuit Court earlier this month against Miami-based Apex Capital Realty, Miguel Pinto and Martin Bravo, alleging “the theft of trade secrets” and intellectual property. Santoro was recently hired by Current Real Estate Advisors to lead its Miami office as managing partner.
Both Santoro and Pinto declined to comment.
Santoro, previously an independent contractor working for Apex, is seeking damages in excess of $30,000. He’s alleging that Apex’s use of his email contact list equates to the firm and its principals using trade secrets. He joined Apex in June 2019 and left in July of this year.
As part of his agreement with Apex, Santoro, through his company Meatball LLC, collected 75 percent of the commissions he made, while Apex kept 25 percent, according to the documents attached to the suit. For any listing or sales referrals made by the broker, the broker would collect a 50 percent referral fee before the commission split.
The complaint states that Pinto and Bravo downloaded Santoro’s 6,000-plus contact list without Santoro’s consent after he left the brokerage. It alleges that Pinto and Bravo, through what the complaint states is their “alter ego,” Apex, have been sending out publicity emails to his contact list to “solicit his customers’ real estate business for themselves.”
At Apex, Santoro worked on deals that included the $40 million sale of an oceanfront Miami Beach development site, as well as a Wynwood assemblage that L&L Holding Company and Carpe Real Estate Partners are under contract to purchase. He worked on four deals over the course of the year while he hung his license at Apex, the lawsuit alleges.
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Some mortgage companies are getting skittish about recent market volatility and have delayed plans to go public.
Caliber Home Loans said it was delaying its IPO, which was originally set for Wednesday. AmeriHome is also planning to hold off on its IPO, Bloomberg reported, citing sources familiar with the matter. The two companies were scheduled to price their offerings on Wednesday after the market closed.
Caliber planned to sell 23 million shares for $14 to $16 each in the hopes of raising up to $368 million, according to Bloomberg. AmeriHome, meanwhile, filed to sell 14.7 million shares for $16 to $18 apiece, which would have allowed it to raise up to $265 million.
Just a few months ago, mortgage companies were attempting to hop onto a booming IPO bandwagon. Dan Gilbert’s Detroit-based Rocket Companies, which operates Quicken Loans and Rocket Mortgage, raised $2.07 billion for its public offering. In September, United Wholesale Mortgage announced plans to go public through a reverse merger with a SPAC led by Alec Gores.
But the stock and futures market have faced a wave of volatility amid fears of an uptick in coronavirus cases in Europe and the U.S. The Chicago Board Options Exchange Volatility Index jumped to over 40 on Wednesday, the index’s highest level since mid-June, according to Bloomberg.
Demand for mortgages has surged since the onset of the pandemic as mortgage rates fell to record lows and more people are searching for new homes.
[Bloomberg] — Keith Larsen
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Zillow has cut 80 jobs from its home buying and selling business, despite its big bet on the burgeoning sector.
The real estate giant doesn’t disclose how many of its 5,300 employees work for Zillow Offers. But a spokesperson told GeekWire the cuts would allow the company to invest in iBuying by “realigning our resources and staffing levels.”
iBuying has been one of the biggest trends in residential real estate in the past five years, but skeptics question whether the business model pencils out. For Zillow, cutting iBuying overhead could be a path to profitability.
Opendoor, the market leader that is going public in a $4.8 billion deal with a blank-check company, has lost nearly $1 billion since it launched in 2013.
Zillow lost more than $300 million on iBuying last year. On average, it lost around $6,960 per home during the second quarter, according to the company’s financials.
Last month, it launched an in-house brokerage and said it would employ salaried agents in order to cut down on iBuying expenses. Previously, Zillow paid broker fees on both sides of the transaction. Now, it will just pay fees when selling the home.
[GeekWire] — E.B. Solomont
Kris Jenner sold her Hidden Hills mansion earlier this year, but she isn’t leaving the area.
The Kardashian family matriarch and her daughter Khloe Kardashian have each just purchased neighboring mansions in the tony San Fernando Valley neighborhood, according to Variety.
At one point, the Ponzi scheme-linked development firm Woodbridge Group of Companies owned the property. It later sold the site to a developer who built the mansions, according to the report.
Jenner’s and Kardashian’s purchases are said to be in the eight figures, and each mansion spans more than 10,000 square feet. They were built by the same developer and completed this year, Variety reported. Details are scant, but one home is said to be 16,500 square feet with 8 bedrooms and 9.5 bathrooms.
They each sit on an acre and a half of land that was once one three-acre parcel owned by the father of “Million Dollar Listing” star Tracy Tutor.
Kim Kardashian and Kanye West also live in the neighborhood.
Kylie Jenner also bought a property in the neighborhood this year. She paid $15 million in May for a vacant five-acre site, also once owned by Woodbridge. The firm developed a mansion there, but the subsequent owner and developer demolished it.
Khloe Kardashian is also looking to sell a mansion she owns in Calabasas. She paid Justin Bieber $7.2 million for the home in 2014, and now wants $19 million for the house. [Variety] — Dennis Lynch
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Baseball player Yonder Alonso, who is now with the San Diego Padres, sold his Coral Gables home for $3 million, The Real Deal has learned.
Alonso sold the house at 7263 Southwest 53rd Court to an undisclosed buyer, according to a release. Alonso bought the home for $2.6 million in 2017, the same year it was built, records show.
Jeffrey Miller with Brown Harris Stevens represented Alonso, while Diana Gutierrez of Mocca Realty represented the buyer. Miller declined to provide information on the buyer, and Gutierrez could not be reached for comment.
The 4,529-square-foot home has five bathrooms and four-and-a-half bathrooms. The outdoor area includes a covered living area, a pool and a mini-golf area.
According to Realtor.com, the house was listed in August for $3.4 million.
Alonso, a native of Cuba, attended Coral Gables High school and the University of Miami. He was drafted by the Cincinnati Reds in 2008 and has played for seven teams during his major league career. Early this year he signed a one-year, minor league contract with the Atlanta Braves.
He was traded to the San Diego Padres in August. Alonso is the brother-in-law of Padres infielder Manny Machado, who recently bought a home in Coral Gables for $7.2 million.
This sale is among many others in Coral Gables, https://therealdeal.com/miami/tag/coral-gables/ including the estate of the late founder of Pasteur Medical selling his Tahiti Beach Island estate for $10.1 million https://therealdeal.com/miami/2020/10/02/ambulance-and-transportation-ceo-buys-tahiti-beach-mansion-for-10m/ and the head of Columbus Capital Lending selling his waterfront Gables Estates home for $33 million.
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Essex Property Trust, one of the largest apartment owners on the West Coast, reported double-digit declines in funds from operation in the third quarter, including a substantial amount that came from concessions the company provided to renters. The company has been one of the main financial supporters behind a campaign to defeat a California ballot measure that would seek to expand rent control.
At its earnings call on Thursday, the San Mateo, California-based real estate investment trust reported $194 million in funds from operations and $315 million in same-property revenue from July through September. That compared to $239 million in FFO and $338 million in same-property revenue in Q3 2019.
The REIT, which owns 60,000 apartments, said occupancy remained steady at 96 percent, but attributed a bulk of the income drop to $17 million it provided tenants in concessions. It was not clear whether those involved Covid-related negotiations, new leases or a combination.
One analyst called the company’s Q3 performance “less bad,” which he said is all the market can hope for amid increasing Covid-19 cases and a scattershot government response.
A report prepared by Piper Sandler noted that Essex benefited from most of its holdings being in suburban markets — just 10 percent of its portfolio is in urban areas.
The work-from-home revolution has seen movement of people and companies to less densely populated areas. In San Francisco, Essex reported a drop in occupancy of 2.2 percent and in Los Angeles, occupancy declined 1.6 percent compared to the same period in 2019. But in suburban areas like Contra Costa County, occupancy grew 2.1 percent, in San Mateo County it ticked up 1.6 percent, and Orange County saw a 1.4 percent rise.
Essex president Michael Schall said during the call that “as long as those employees remain in major metros, we’re in good shape. We may not get the rent growth in San Francisco, but we’ll get it in the suburbs — and we’ll continue to do pretty well.”
Essex shares were down 43 percent year-over-year, but lifted 7.2 percent to $199.94 following the earnings release.
The company’s executives sought to allay investor concerns over the work-from-home world, pointing out that many industries — hotels, film, bars and restaurants — all require a physical presence. As for other industries whose work-from-home policies may be more permanent — such as the technology sector — Schall said that as the country emerges from the pandemic, many firms will adopt a “hybrid model.” That model will offer work from home as a lifestyle choice for employees, he said, while incentivizing others to return to the office.
Schall also said Essex remains committed to California but added the REIT is open to investing outside of the West Coast.
One question brought up on the call was how the outcome of the latest California ballot measure that seeks to expand rent control could affect the REIT’s ability to raise rents. The measure is on the Nov. 3 ballot.
Essex touted its campaign to oppose that measure, Proposition 21, which is being led by the company’s executive vice president, John Eudy. Last October, the California legislature passed sweeping rent reform, which the governor signed and took effect Jan. 1. Housing advocates say it doesn’t go far enough.
This election cycle, Essex is the top spender to defeat Prop 21. It has shelled out $11.8 million, according to contribution records. Other real estate companies opposing the measure include Equity Residential and AvalonBay Communities, two REITs with massive residential holdings in California that have spent $11 million and $8 million, respectively.
Its biggest proponent has been the AIDS Healthcare Foundation, which gathered the signature to put Prop 21 on the ballot, and which has spent $30.6 million in support of the measure.
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