A report from Banker and Tradesman in Massachusetts. “Single-family buyers could be in store for a reprieve from the frenzied pace of price appreciation in recent years, as the number of homes for sale slid upwards slightly, to 5,518 statewide. That was in part thanks to 6,340 new single-family listings that came online in July, according to MAR. It’s a continuation of a trend that began last month, when for the first time in many years the number of new listings in June exceeded the number in May, typically when the largest number of listings hit.”
“‘With fewer buyers in the market over the past six to eight weeks, the volume and frequency of multiple offers is down as is the number of bidding wars, and that’s helped relieve some of the upward pressure on prices,’ Greater Boston Association of Realtors President Dino Confalone said. ‘It remains a seller’s market, but we are starting to see more price adjustments and some inventory is starting to sit on the market a bit longer, especially if it’s not priced properly to comparable properties currently listed or recently sold. Properties should be fairly priced, in excellent condition and have a desirable location to sell quickly, even in this hot market.’”
From Bisnow. “Simon Property Group has moved two malls to the ‘other properties’ portion of its portfolio in financial documents, a designation it has given over a dozen malls in the past year that were then surrendered to lenders. Two other malls seem to be heading in similar directions, though they remain listed within Simon’s core portfolio. The two malls now listed as Simon’s ‘other properties’ are Ingram Park Mall in San Antonio and Solomon Pond Mall in the far Boston suburb of Marlborough, Massachusetts, Commercial Real Estate Direct reports.”
“Two of Simon’s malls in suburban Pennsylvania towns similarly distant to Philadelphia also have loans that are either in distress or worse. The Oxford Valley Mall in the Bucks County township of Middletown saw its appraised value drop from $255M to $39M from its loan’s issuance in 2011 to its maturation in December 2020.”
The Crimson White in Alabama. “The Tuscaloosa City Council unanimously extended a ban on the construction of student housing developments with more than 200 beds until May 1, 2022. The ban, which prevents the construction of large student housing complexes, was originally adopted in June 2020 and has been extended multiple times. ‘It’s very concerning when you have that many large complexes. They can go bad, you know,’ City Council President Kip Tyner said. ‘I think we need to put the brakes on, for a while, anyway.’”
From Berkeley Side in California. “The 2020 census data also includes several numbers related to Berkeley housing trends. Berkeley now has about 52,300 housing units up nearly 6% since 2010. About 4,700 of them — just over 9% — were vacant as of the 2020 census. This number was higher than the 6% vacancy rate reported in Oakland, and the 5% vacancy rate in Alameda County, as of 2020.”
From Fox 5 New York. “Commercial real estate in New York City is deader than ever. After sitting empty for almost two years, Barneys will be brought back to life–well, kind of–as the space will become a Spirit Halloween. While Saks Fifth Avenue will put in double-time–as the retailer will start offering office space to WeWork, in a partnership known as ‘SaksWorks.’ ‘The Spirit Halloween stores are a great idea because they pop-up and they’re there for two or three months–and then they’re gone,’ says Barbara Denham, a Senior Economist with Oxford Economics. ‘But I know to the neighborhood… they’re somewhat, you know, not quite the cachet that Barneys is.’”
From Bisnow New York. “A Midtown Manhattan skyscraper controlled by The Chetrit Group is expected to be auctioned off next month after the holder of a mezzanine loan on the building initiated a UCC foreclosure sale. Chetrit’s 850 Third Ave. is heading to the block after the proceeding was instigated by Harbor Group International, which owns the $25M junior mezzanine loan on the 21-story tower backed by a Chetrit entity.”
“Jacob Chetrit and his sons, Michael and Simon, acquired the building from Chinese conglomerate HNA Group back in 2019 for $422M. MHP Real Estate Services and ATCO Properties & Management, both minority owners, also sold their stake at the time. HNA, which was then in the process of shedding its U.S. holdings, took a loss on the sale, having paid $463M for the property back in 2016.”
“Multiple properties in the city have faced foreclosure auctions in the past 18 months. Mack Real Estate snapped up seven distressed hotels in Manhattan — with the sellers taking a big loss at a UCC foreclosure auction — back in March. Meanwhile, a UCC foreclosure sale of a Brooklyn apartment building at 1580 Nostrand Ave. is set for early next month.”
From The Real Deal. “It’s lender versus landlord in a new lawsuit between two notorious players in New York real estate.On Friday, hardball lender Maverick Real Estate Partners sued Steve Croman, an ex-con who has bedeviled tenants and lenders alike, to foreclose on his four contiguous Kips Bay apartment buildings. The distressed-debt firm, which filed the suit just a day after acquiring the mortgage, demands Croman pay the outstanding balance of his $25 million mortgage, including 24% interest for the time left on the loan. It also aims to force a sale of the 85-unit assemblage at 208-214 East 25th Street, which Croman acquired in 2001, public records show.”
“Maverick bought the mortgage from BankUnited, a Miami-based lender, just a day before suing in New York Supreme Court. It alleges Croman defaulted on his loan twice, failing to move enough money into his BankUnited account in time for his July and August payments.”
From Hospitality Net. “Hotel owners who thought they were experienced and poised to make the most out of a crisis following the Great Recession had to learn the hard way just how bad things could get. Rick Takach, CEO of Vesta Hospitality, said he understands why the previous year and a half could scare investors away. ‘2020 hit, and obviously the 2009-2010 numbers are gone. They’re out the window,’ he said. ‘Anybody who would look at 2020 might not ever want to invest in the hospitality industry again. However, I think it’s an asset class that’s here to stay.‘”
The Daily Herald in Illinois. “Nearly 80% of all commercial property owners in Cook County received higher property tax bills this year, while 50% of homeowners saw their taxes increase. A representative of building owners said the gap isn’t fair. But a spokesman said the Cook County assessor’s office is correcting for widespread underassessment of commercial property in the past. ‘It just doesn’t make any sense,’ said Farzin Parang, executive director of the Building Owners and Managers Association of Chicago. ‘This shows to us how the assessor is putting his thumb on the scale and not on market data.’”
“According to a new report by the property tax research unit of Cook County Treasurer Maria Pappas’ office, property owners in Cook are paying $534 million more in property taxes this year combined over last year, a 3.4% increase. The report also shows that 50.5% of residential properties in the county received higher tax bills, while 78.5% of the county’s commercial property owners were charged more this year.”
“Pappas said the data is alarming because the total increase in property taxes, which largely goes to fund school districts in Chicago and the suburbs, is outpacing the rate of inflation. Her office is in charge of mailing property tax bills and processing payments. ‘I hear the complaints from everybody,’ she said. ‘But it’s certainly a hard time raising taxes on commercial property owners with everything that’s going on.’”
The Twin Cities Business Journal on Minnesota. “Veteran developer Kelly Doran finds himself at odds with his former company in a lien foreclosure action filed Thursday in Hennepin County District Court. In the lawsuit filed by Doran Construction Co., the company Doran founded and used to own claims it is still owed $2 million for work on The Expo in Minneapolis, a 25-story luxury apartment tower it delivered in October.”
“Doran said the lawsuit means the end of an ongoing business relationship between his old company and a new enterprise that he launched earlier this year. ‘We do not take litigation lightly. But in this instance, it’s a necessary step to ensure that the subcontractors who contributed to this project get paid,’ said Anne Behrendt, who succeeded Doran as both CEO and majority owner of Doran Cos. ‘… It’s a beautiful building that we designed and built, and we deserve to be paid for the work we did.’”
The Phoenix Business Journal in Arizona. “With 137 apartment projects under construction and another 99 planned in metro Phoenix, some are beginning to wonder if the market is in danger of being overbuilt. Not yet, analysts say. ‘At this point, with the shortage of housing, the continued strong net migration and the very low vacancy, the short-term answer is no,’ said Jim Kasten, associate broker for Commercial West USA in Scottsdale. ‘Having said that, with more than 12,000 units forecast to be completed in the last half of this year, we expect an increase in vacancy rates and probably some pressure on rental rates for the higher-end apartments.’”
“During the first half of this year, there were 5,094 units totaling 26 projects completed and 12,469 units totaling 61 projects forecast for completion in the next six months, according to Commercial West USA’s second quarter market update. ‘This would bring the total for 2021 to 17,563 units (among) 89 projects — almost double the amount completed annually for the past three years,’ according to the report. ‘The final total is typically less than forecast, but still expect many to meet the anticipated year-end time frame.’”
“Adam Couch, market analyst for RealPage, said metro Phoenix is experiencing strong capital flow into the apartment sector. ‘Current construction levels are nearly three times the volume seen right before the Great Financial Crisis in 2008,’ Couch said.”
From The Age in Australia. “Five hundred homes worth of timber destined for Melbourne has been abandoned at a Shanghai dock because a shipping company accepted a lucrative offer to divert course to Los Angeles. The Master Builders Association of Victoria (MBAV) said 50 containers carrying timber had been dumped in China and warned the incident could worsen Australia’s timber shortage and lead to unfinished homes. MBAV chief executive Rebecca Casson said the dumped timber could inflame the domestic shortages and drive up costs for Victorian builders, who are going broke in record numbers.”
“‘This has the potential to push things over the edge … Basically we’ll have unfinished homes,’ she said. Victoria accounted for 40 per cent of all building and construction industry insolvencies in Australia and its share of all Victorian insolvencies is at a record high. In the first four months of 2021, there were 145 industry insolvencies in Victoria – up 34.3 per cent on the same time last year.”