A report from the Real Deal on Florida. “The real estate wing of New York investment firm Axonic Capital paid $37.3 million in a bulk purchase of 170 units of a 310-unit fractured Doral condo complex. As a fractured condo project, only some of the individual units were sold by the initial developer. A Lennar affiliate had paid $67.9 million for the complex in 2006. In 2014, TIM paid Lennar $45 million for 204 units of the complex. In 2016, Cushman & Wakefield marketed the units and said it could sell them for more than $50 million.”
The New York Post. “Musician Azealia Banks is leaving California for Miami. It was revealed that the modest 2,348-square-foot house in Woodland Hills, California, sold in a non-judicial foreclosure for $845,000 to an unknown buyer in November, according to the ‘bankruptcy sale’ listing posted on Realtor.com, which describes the home as a ‘fixer-upper.’ Banks bought the home in March 2016 for $850,000, but didn’t appear to be happy with her purchase — she listed the house only one month later.”
The Los Altos Town Crier in California. “In January 2019, Ahmad Javid received an email from an escrow officer asking him to reconvey, or release, Dutchints Development LLC from a $2.7 million loan Javid had made toward the development of a home in Los Altos Hills. The reason, the escrow officer explained, was that Dutchints’ managing director, Vahe Tashjian, was refinancing and securing a new lender. The officer promised to put Javid’s deed of trust, containing the $2.7 million owed, back on the property afterward so that his money would still be secured.”
“The partnership, which began in 2017, was going well. The houses were being flipped. The Javids were being paid back. They even convinced their daughter, Dr. Roya Javid, to join in – she loaned Dutchints $1.8 million toward the development of a Los Altos home in November 2018. A few months prior, Tashjian had made his biggest splash yet, purchasing a 77,000-square-foot property at 5150 El Camino Real for $48 million with a dream of turning it into a high-density, residential development.”
“‘Between lenders stopping loans, investors stopping investments and tenants unable to pay rents, our capital sources dried up immediately, jeopardizing our projects,’ Tashjian said. ‘As a result, we did have some hiccups in payments early on, and have been working with parties to make good.’ Some investors claim they are in the dark, despite repeatedly raising concerns directly to Tashjian and asking for financial records, worried that they are racking up large losses.”
“The property next door that Dutchints was supposed to turn into a public park – one of the city’s conditions for the development – was put under a Notice of Trustee Sale last October and one investor said in recent weeks that it was in ‘serious foreclosure.’ Tashjian admitted that Dutchints took losses on ‘almost every project we sold’ after the pandemic began. Many tenants couldn’t afford rent, he added, and investors who were ‘fearful of the unknown’ speared an exit of ‘viable projects.’”
The Mercury News in California. “A loan default has jolted a portion of a Santa Clara project developed by Sanjeev Acharya and Silicon Sage Builders, a fresh complication for the real estate executive who is accused of fraud by U.S. regulators. The commercial component of Madison Park, a mixed-use development on El Camino Real, faces a mortgage default, foreclosure, and seizure by the property’s lender, according to Santa Clara County public records filed on Jan. 11.”
“The SEC has accused Silicon Sage Builders and Acharya of a series of fraudulent actions over a period of roughly four years beginning in 2016, according to a complaint that the regulators filed on Dec. 21. The SEC claimed that the fraud might have impacted an estimated 250 people who invested a combined $119.2 million in the company’s projects.”
“In a Dec. 28 court filing, Silicon Sage stated that coronavirus-linked woes have spawned a cash squeeze for Bay Area properties that Silicon Sage owns. ‘Defendants currently face a liquidity crisis caused in part and worsened by a global pandemic,’ Silicon Sage and Acharya said in the court papers.”
The Aspen Times in Colorado. “The fate of a 75-unit low-income housing project proposed in the mid-Roaring Fork Valley is in doubt because of litigation filed by neighboring property owners. The housing arm of the Denver Catholic Archdiocese proposed the project on an unbuilt portion of a midvalley subdivision called Willits Bend. The review by Eagle County abruptly stopped last fall and last month the development application was withdrawn.”
“In essence, the 11 owners of Willits Bend units contend Robert Tobias, representing Willits Bend LLC, is pulling a bait-and-switch: he sold them property under a specific premise and now he’s trying to alter the development approvals to allow for the low-income housing. Tobias said he is simply responding to market forces. The approvals were granted 13 years ago by Eagle County, he said. But after the 2008 recession, demand fell flat for the type of development that Willits Bend offered. ‘Things change,’ he said. And in his view, the low-income housing project was the perfect adaptation.”
From Seattle PI in Washington. “The citywide Seattle condo median sales prices dipped to $466,500 in December reflecting a one-month and year-over-year decrease of 6.7% and 4.3% respectively. We had 72% more Seattle condo listings for sale than we had last December. Contemplating the already completed (but not listed units) and pre-sale opportunities from a number of new construction condo buildings, the true inventory is considerably higher. With those in mind, Seattle should technically be in a buyer’s market.”
“Condo dense areas such as downtown, Belltown and Capitol Hill exhibited a softer market environment with abundant inventory, slower sales and in quite a few cases, reduced prices.”
The Globe and Mail in Canada. “Robert Hogue, senior economist at Royal Bank of Canada, estimates that active listings in the GTA condo market soared 159 per cent in December from December, 2019. In the central 416 area code, that figure is closer to 172 per cent, he says. Mr. Hogue points out that the downturn in the rental market has prompted many condo investors to sell. The swollen inventory gives buyers more bargaining power.”
“The former Four Seasons at 155 Yorkville Ave allowed short-term rentals, which were popular with out-of-town visitors. But owners face intense competition now: currently, there are 55 units listed for lease in the building and 24 for sale. Only nine sales have taken place in the high-rise since July, says Andre Kutyan, a real estate agent. ‘There is 16 months of inventory in that building,’ at the recent pace of sales, he says.”
“Mr. Kutyan points to another studio apartment in the King Edward Private Residences at 22 Leader Lane, which he took on after it was listed with an asking price of $579,000 by another agent in August. After a couple of price reductions failed to find a buyer, the seller brought in Mr. Kutyan, who suggested an asking price below $400,000. The owner resisted, so Mr. Kutyan set an asking price of $429,000. After about one month, the owner agreed to cut the price to $399,000. After 36 days at that price, the buyer struck a deal for $395,000 just before Christmas. The price of $850-per-square-foot is approximately 32-per-cent below the amounts above $1,200 per-square-foot that the same units were fetching in the first quarter of 2020, he says.”
“‘All of a sudden, we got a ton of interest,’ he says. ‘They were all investors. They think that we’ve hit the bottom already.’”
From Letting Agent Today on the UK. “A rental market snapshot says the UK-wide lettings picture is dragged down by Greater London’s excess of supply, and by the exodus of renters. It insists this national picture is ‘dragged down by an exodus-induced average rent drop of 16.9 per cent in Greater London.’ ‘Greater London continues to indicate an oversupply in properties available to rent (up 37 per cent year-on-year). This worrying situation is already weighing heavy on the capital’s buy to let sales market and is likely to be exacerbated by the latest national lockdown,’ warns Home.”
“Doug Shephard, director of Home, says: ‘Oversupply is more acute in the London lettings market. Consequently, rents are collapsing in the more central London boroughs, slashed by landlords desperate to avoid painful void periods. This situation is undermining the fundamentals of the central London sales market, since ultimately it is the yield on property that underpins its capital value. Landlords in prime locations such as Westminster, Hammersmith & Fulham, Kensington & Chelsea and Islington have dropped asking rents by 34, 29, 28 and 25 per cent respectively. These are unprecedented falls and, judging by the continuing rate of decline, rents in central London are unlikely to stabilise anytime soon.”
From Kenyans. “Tenants living in Kileleshwa are currently enjoying the upper hand in negotiations as landlords have been forced to lower rent due to low occupancy. Speaking to Kenyans.co.ke, a tenant residing in the area revealed that she was able to negotiate her rent down by Ksh20,000.”
“‘I used to pay Ksh75,000 for my 2-bedroomed apartment but we came to an understanding with my landlord who agreed to bring it down to Ksh55,000. Last year, almost 50% of my neighbors moved out due to the pandemic and tough economic constraints that followed. With most of the houses vacant for months, I saw this as an opportunity to renegotiate,’ she explained.”
“Around Kileleshwa as one makes their way towards Yaya Center, it is impossible not to notice a staggering number of vacant apartments. Kenyans online went on to accuse landlords in the area of creating an illusion of occupancy by having curtains set up in empty apartments.”
From ABC News in Australia. “Sydney and Melbourne were the worst cities to be a landlord in 2020, according to the latest rental market figures. In the week ending January 4, the average weekly rent for a Melbourne apartment had plunged (-8.7pc) to $376.90 compared to where it was the year before. Weekly house rents in Melbourne also fell sharply (-4.8pc) to $511.70 over the past year. ‘It’s clear Sydney and Melbourne apartment investors were the losers of 2020, with rents and prices falling,’ SQM managing director Louis Christopher said.”
The Khmer Times in Cambodia. “The Kingdom’s construction and property sectors have been on a slump for most of 2020. The usual foreign clientele, looking to develop and/or buy luxury properties for more attractive costs, have dwindled in the past year causing high-end projects to stall, drop prices, and even rethink marketing strategies. Cambodia’s property sector is still not out of the woods almost a year later. According to Realestate.com.kh’s Market Trends, median sale prices for residential properties in Phnom Penh ended the year with up to 30% lower median sale prices.”
From Bloomberg. “In just five years, Hong Kong property tycoon Pan Sutong has gone from ranking among Asia’s wealthiest people to having his company’s flagship skyscraper seized by creditors chasing more than US$1 billion (S$1.3 billion) of debt.”
“It is a swift fall from grace for Mr Pan, 57, who was Asia’s fourth-richest man in 2015 with a net worth of US$27 billion, according to the Bloomberg Billionaires Index. But after shares of his Goldin Financial Holdings plunged and with most of his properties locked up as collateral for loans, he has fallen off the list of the world’s 500 wealthiest people.”
“He transitioned to property investing in 2008, a few years into a red-hot boom that would mint numerous fortunes in Hong Kong and make it one of the world’s most expensive real estate markets. Mr Pan now joins other investors in the city who over-extended themselves during the boom. Mr Tang Shing-bor, a veteran investor known as the ‘Shop King’ for his vast holdings of retail properties, is seeking to sell billions of dollars of real estate. A group of investors who paid US$5.2 billion for The Center in the world’s most-expensive office deal, have been unable to flip floors as the market ground to a halt last year.”
“Mr Pan moved from manufacturing consumer electronics such as mobile phones and MP3 players to property in 2008, when he renamed his electronics firm Goldin Properties Holding and purchased a listed company, christening it Goldin Financial. In late 2019, Goldin Financial failed to raise a loan partly to fund development of the site, the people said. The firm later sold the plot for about HK$3.5 billion, less than half what it had paid in 2018.”