?? Why a Q1 loss is a win for Compass, rent control aims for the Supreme Court … and more

?? Why a Q1 loss is a win for Compass, rent control aims for the Supreme Court … and more

THE RUNDOWN:

?? Usually losing $150M in a quarter is a bad thing. But in Compass’ case, executives sold the number as a sign of better things to come . Wall Street seemed to agree, and the stock shot up 35 percent on Wednesday. Plus, WeWork , Zillow , and Anywhere reported earnings this week.?

?? The dramatic battle over?New York’s rent stabilization law could have national implications, as landlords try to take their challenge to the Supreme Court .

??2023 looked like a quieter year for investors and developers in South Florida. Then, a group of investors — led by Terra’s David Martin — bought a Miami dev site for $1.2B . The deal could set the region’s market on fire.

?? First Republic was known for offering cut-rate mortgages to homebuyers. No longer. JPMorgan Chase, the dead bank’s acquirer, is likely to end that program.

?? Los Angeles’s transfer tax came into effect in April, and we can already see the impact. There were only two sales of homes over $5M last month, down from 109 in March.

?? Fred Latsko thought he hit the jackpot when he signed popular Parisian leather goods brand Goyard to a ten-year retail lease for his Gold Coast property. Now, the Chicago landlord is suing the bagmaker, putting the lease in jeopardy.


THE DETAILS:

?? Compass loses $150M, beats expectations

Who says a loss is always a bad thing? Compass executives positioned the firm’s $150 million loss as a reason for optimism this week, and they aren’t exactly wrong. The quarterly numbers outperformed Wall Street’s projections and brought Compass one step closer to its goal of being cash-flow positive. They may even get there by the end of the second quarter. The company was rewarded with a hefty stock bump on Wednesday.

Zillow and Anywhere also posted losses, of $22 million and $138 million, respectively.

In the commercial space, WeWork has continued to move the goalpost by delaying its profitability forecast . CEO Sandeep Mathrani said WeWork will be cash-flow positive sometime in the second half of 2024. It’s a dramatic shift for Mathrani, who had projected his firm would be profitable by this December.?


?? Landlords take rent law challenge to Supreme Court

The fate of NYC’s rent law is in the Supreme Court’s hands–at least, that's what a group of New York landlords are hoping for as they take their rent stabilization challenge to the nation’s highest court. The legal battle began in 2019 in retaliation to New York State’s rent reforms . A Supreme Court ruling would up the ante , though, potentially altering the viability of rent control throughout the country. Advocates for renter protections claim the law is safe, but the battle could come down to the beliefs of a conservative majority who have historically shown more resistance to such laws.


?? David Martin’s $1.2B downtown Miami buy could rally the market

Markets can be a lot like people: sometimes they need a little nudge to get going. That’s what South Florida real estate professionals are hoping for in downtown Miami. The nudge could be David Martin and Co.’s $1.2 billion purchase of a waterfront dev site from Genting Group. It comes as developers and investors are waiting for market headwinds to subside. “It’s not just interest rates. It’s insurance. It’s construction costs. It’s everything at one time,” said one South Florida commercial broker.?


?? First Republic’s cut-rate mortgage program likely dead

First Republic’s buyer, JPMorgan Chase, will likely cut the failed bank’s Eagle Community Home Loan Program. The program was built around First Republic’s specialty — low-rate mortgages —? but with a twist. Eagle loans were only available up to $1.4 million and at one- to four-unit, owner-occupied properties. About 55 percent of the $4.6 billion of Eagle loans went to non-white borrowers. Now, it seems that JPMorgan is cutting the program, as many pre-approved home buyers have been told to reapply for new mortgages.


?? Luxury home sales in LA plummet after ULA tax start date

Calling LA’s new transfer tax a “mansion tax” isn’t entirely accurate. The tax — 4 percent on deals between $5 million and $10 million and 5.5 percent on deals above $10 million — applies to commercial and residential properties. Still, it’s having an impact on mansion sales already; they plummeted by 98 percent from March to April. That number doesn’t tell the whole story, though.


?? Latsko sues Goyard in Oak Street dispute

Quiet luxury brand Goyard has been pulled into the limelight after allegedly dragging its feet on a new lease agreement. Fred Latsko signed the handbag maker to a ten-year lease at his Gold Coast property. But Latsko claims Goyard has held up the deal for over a year by failing to approve an interior design. The lawsuit has thrown the lease into question at a time when some retail landlords are dying for tenants, so Latsko could be left holding the bag.?


THE CLOSE:

Real estate earnings season wraps up next week. That means the next series of reports is just about two months away. Will Compass finally hit its profitability targets? Will WeWork avoid delisting? Keep reading TheRealDeal.com to find out.?

CHESTER SWANSON SR.

Next Trend Realty LLC./wwwHar.com/Chester-Swanson/agent_cbswan

1 年

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