?? WeWork bankrupt, ditching leases; antitrust suits drag on earnings season … and more
THE RUNDOWN:??
?? WeWork finally declared bankruptcy this week after months of speculation. The firm is looking to ditch dozens of leases in the process, including at least 35 in New York and another handful in both the Bay Area and Los Angeles.?
?? Compass, Redfin, Douglas Elliman, and OpenDoor all had earnings calls within recent weeks. The potential impact of antitrust lawsuits is top of mind for all.
?? Meridian Capital Group, one of the nation’s largest commercial mortgage brokerage, is under investigation by Freddie Mac over a deal between the two. Along with the investigation, Meridian is temporarily banned from brokering for Freddie Mac lenders.
?? Barely a month ago, Tides Equities’ executives preached the firm’s strength, claiming it was working out all of its troubled debt to its multifamily portfolio. But, in the weeks since, the firm has fallen behind on another $150 million in debt.
?? Two of the busiest names in South Florida real estate, Harry Macklowe and the Pérez family’s Related Group, have partnered to purchase, and eventually redevelop, a waterfront co-op community in North Bay Village, a small island town just outside Miami.?
?? Developer Magellan is looking to offload 20 condos at its Chicago St. Regis property. But, its listings have been undercut by current residents looking to get out of the building.?
THE DETAILS:
WeWork declared bankruptcy this week about a month after it skipped $95 million in debt payments. The move will give the firm some leeway to exit their leases without being liable for paying them down. As part of the restructuring, the firm is seeking to ditch up to 65 leases completely, including 35 in New York, seven in the Bay Area, and six in the LA area. The majority of the rejected leases are at buildings owned by mid-sized or institutional landlords, including Kushner and RFR’s Dumbo office building, and Vanbarton’s Midtown tower. The co-working firm has already vacated the offices where it is looking to break its lease.?
In the midst of earnings season, the residential industry is abuzz with discussions surrounding antitrust lawsuits, including the landmark Sitzer/Burnett verdict. Brokerage heads have mostly lamented the potential harm the ruling, and the attached $1.8 billion in fines, could cause the sector.?
领英推荐
But it’s not all bad news. Compass extended its winning streak, reporting positive cash flow for the second straight quarter. OpenDoor lost money, but execs sold the potential positives of the commissions lawsuits, and its stock price received a hefty bump. Meanwhile, Redfin and Douglas Elliman had a harder time spinning the positives.?
Major commercial mortgage broker Meridian Capital Group, led by Ralph Herzka, is under investigation by Freddie Mac. Throughout the investigation, Meridian will be unable to broker deals with the company’s affiliated lenders. This blacklist designation is a significant setback for Meridian, as Freddie Mac is a crucial source of loans for the multifamily industry. The probe, which arose in response to a deal between the two companies, comes as Freddie Mac has loudly redoubled its efforts to combat mortgage fraud. In a strange twist to the tale, Meridian’s executive chairman David Brickman resigned this week in an effort to distance himself from the firm. Brickman’s previous role? CEO of Freddie Mac.
Despite its best efforts, Tides Equities hasn’t quite solved its mounting debt issues. Servicers have flagged two separate loans worth about $150 million, claiming Tides is late on payments. A few months back, the firm was able to rework hundreds of million in loans from its biggest lender, MF1 Capital. But these loans were not provided by MF1. Executives claimed it had reworked “effectively all” of its distressed debt. But that might be the case. The red flags do not necessarily mean the associated properties — in Fort Worth and Las Vegas — are doomed. But, it certainly shows that Tides hasn’t solved all of its debt issues.
Developer Harry Macklowe and the Pérez family’s Related Group are partnering to acquire a North Bay Village waterfront co-op community for $47.7 million. The partners plan to build luxury units on the 3-acre site. Macklowe’s firm has been in contract to purchase three separate properties that make up the site, but the purchase has been held up by a web of lawsuits. Macklowe, a mainstay in New York, ventured down to Florida last year, and has been active in the state ever since.?
At Magellan's St. Regis Chicago property, a unique situation is unfolding. While the developer, Magellan Realty, seeks to offload condos, current residents are taking matters into their own hands. Some residents are undercutting the developer's prices, loudly advertising their units for less. For instance, on the 16th floor, a three-bedroom, 1,600-square-foot unit is listed by the developer for $2.9 million. Just one floor up, a resident listed a similar apartment for $2.4 million. The agent representing the seller isn’t shy about the discount: The listing is advertised as “below developer pricing.”?
THE CLOSE:?
What’s next in the battle for broker commissions? Keep reading TheRealDeal.com to find out.