A report from the Real Deal on New York. “Ladder Capital intends to foreclose on four Harlem rental properties owned by Isaac Kassirer’s Emerald Equity, after the firm defaulted on a $32 million loan. In April, Isaac Kassirer extended the maturity date for the loan from April 6 to Oct. 6, and personally guaranteed the note. By Nov. 6, the nearly $32 million in principal, interest and fees was unpaid. A source with direct knowledge of the matter but not authorized to discuss it said Emerald overpaid for the buildings, and because it did not have enough money to close, sought expensive bridge financing.”
“There were many vacancies in the building at the time, the person said, and Emerald planned to raise rents after doing improvements in those units. That plan was spoiled a month later, when changes to state law made that impossible. Emerald Equity was one of the most aggressive multifamily players in New York City before changes to state law dramatically altered the investment landscape, by limiting the cost property owners could pass on to tenants for improvements.”
“Those East Harlem properties, known as the Dawnay Day portfolio, were not included in Ladder Capital’s foreclosure suit. Sources have said that portfolio is overleveraged, and earlier this year Kassirer said his firm was weighing ‘all options’ to save it. Tenants in those buildings are still refusing to pay rent, according to the Wall Street Journal, and organizers say apartment conditions have worsened during the pandemic.”
The Mercury News in California. “A lender has seized ownership of a Milpitas townhouse development site through the foreclosure of a loan for the mixed-use project. The property that suffered a foreclosure is where a project of townhomes and retail had been proposed at 808 S. Main St. in Milpitas, Santa Clara County documents show. Greenlake Real Estate Fund, which in 2019 provided $17.85 million in financing for the property, wound up owning the site as a result of the foreclosure proceeding, public records filed on Nov, 17 show.”
“A growing number of Bay Area properties, including some big hotels, are being haunted by the specters of mortgage delinquencies and foreclosure amid coronavirus-linked economic uncertainties and business shutdowns. The project’s developer, Eighty-Eight Homes, filed for bankruptcy in August 2020, an attempt to keep ownership of the property and ward off the foreclosure attempt, court records show.”
“‘The debtor pre-sold several condominium units and if the property is foreclosed, the debtor will not be able to provide the promised units,’ developer Eighty-Eight Homes told the bankruptcy court in a document filed on Aug. 16. Ultimately, the bankruptcy court dismissed the case after the developer failed to meet some court-ordered deadlines. At the time of the foreclosure, the unpaid debt on the original loan was $16.3 million. The lender, GreenLake Real Estate Fund, took back the development site in a foreclosure that placed a value on the property of $11.75 million.”
From Bisnow on Florida. “Nitin Motwani, who is now developing the $3B Miami Worldcenter, grew up helping his parents run independent hotels on Fort Lauderdale Beach. He suggested that people with market expertise will be able to pick and choose lucrative deals. Motwani said he has partnered with Driftwood Hospitality to raise three private equity funds. ‘There’s a lot of great sponsors who may have just finished a project but ran out of cash, and no one wants to lend to hotels in uncertain times,’ Motwani said.”
The Gainesville Sun in Florida. “Enabled by welcoming city policies, multistory apartment complexes catering to University of Florida students are scraping away existing buildings to rise near campus. But the party may be over, or at least nearing midnight. Nathan Collier for decades has been Gainesville’s master of off-campus housing since helping redevelop College Park from the ramshackle ‘student ghetto’ into tidy apartments.”
“Collier described the current developers of massive complexes as ‘lemmings rushing off the cliff’ and predicted the brakes will be slammed. ‘Yes, we’re overbuilt — no doubt about that,’ Collier said. ‘I love capitalism but it has its excesses and we are seeing one now.’”
“Most student apartments have individual bedrooms and bathrooms — usually four to six. Renters in each apartment have individual leases. Luxury and amenities are a selling point in addition to campus proximity. Rents are not cheap but David Coffey, a land-use attorney, and others say that since many UF students receive scholarships, and the state has held tuition low, their parents can splurge on the higher rents.”
“Collier, meanwhile, said investors have had an abundance of money to spend on apartment complexes. ‘There’s too much capital and too few (good) deals,’ Collier said.”
“Michael Orsak, Campus Advantage senior vice president of investments, said it typically takes three years to develop a project. During that time, developers may not know the progress of projects by other developers. For example, Campus Advantage estimated that 1,800 new beds would be ‘delivered’ this year but it was closer to 3,000 beds.”
“‘Oftentimes there’s not transparency to who’s working on what deals in the marketplace until shovels start moving or someone applies for a permit,’ Orsak said. ‘I think there were a few of us who were surprised by the total number of projects going on at the same time, to be quite honest with you.’”
The Star Tribune in Minnesota. “Buyers have outnumbered sellers in much of the Twin Cities this year with a pair of notable outliers: downtown Minneapolis and St. Paul, where there are now more condos and townhouses for sale than buyers. In a metro market with a dearth of homes for sale, downtown Minneapolis has seen a 5% increase in condo and townhouse listings during the first 10 months of the year as closed sales have dropped 34%, according to new data from the Minneapolis Area Realtors (MAR).”
“Agents say that after years of premarket sales and bidding wars, downtown has become, at least for now, a buyer’s market. ‘It’s their ballgame,’ said Isaac Kuehn, a sales agent based in the North Loop. ‘Sellers used to hold all the marbles.’”
“Though this shift has sellers on edge, real estate agents say the situation is unlikely to be a repeat of the housing crash during the Great Recession. ‘I sense most residents downtown are optimistic, but realistic in that things won’t bounce back overnight,’ said Cynthia Froid, a sales agent with an office in the Mill District. Last year Froid and others often sold condos before they hit the market. On average, it’s taking 47 days to sell a listing in downtown Minneapolis.”
“For now, sellers are adjusting their expectations. And price reductions are becoming more common. ‘Someone is going to get a deal from us,’ said DeBora Bernick, who is among a large contingent of downtown condo owners who split their time between multiple homes. Bernick, who spends summers in Duluth and winters in La Quinta, Calif., bought a two-bedroom condo on the 23rd floor of a downtown high-rise two years ago.”
“She took a year to complete a top-to-bottom renovation, but ended up visiting far less than she expected, so late last year she listed the 1,200 square-foot condo for $550,000. She acknowledges that she was initially trying to recoup her renovation costs and so it was priced higher than other similar floor plans in the buildings. They’ve had several showings, but no offers, so she’s discounted the price nearly $80,000.”
“‘I felt like we bought it at a good price so I could sell it for what I had into it,’ she said. ‘But I’m not sure given what’s happening downtown.”‘
From Capitol Hill Seattle in Washington. “In a new study, Seattle-based real estate service Redfin really gets to the heart of the matter of the summer’s Capitol Hill occupied protest zone — condo prices: ‘Seattle’s condo market has really struggled in general during the pandemic, but the units that are closest to the CHOP have typically been selling even more slowly than other condos in Capitol Hill,’ said local Redfin real estate agent Forrest Moody. ‘I had one listing that was a block away from the CHOP and across the street from a Ferrari dealership that had its windows smashed,’ Moody goes on to say. ‘The condo actually sold within five days, but that’s likely because we listed it for $25,000 less than we had planned to back in February.’”
“Those insights are part of the findings the company broadcasted this week in a view into the impact of nationwide protests on the country’s real estate markets –. ‘Survey: 30% of Americans Want to Live Somewhere Else Due to Protests.’ ‘Just under a third (30%) of Americans said that protests in major cities have made them want to move away from where they currently live, or have changed where they want to move to, according to an October Redfin survey of more than 3,000 U.S. residents,’ Redfin reports.”
From The Oregonian. “Sales of turnkey condominiums with concierge services and killer views have stalled due to the coronavirus pandemic, say real estate agents. Low condo sales, which had been lagging before stay-at-home orders were issued in late March, have owners motivated to make a deal, says Sean Z. Becker of Portland-based Sean Z Becker Real Estate. The uncertainty of the coronavirus and ‘headlines of civil unrest’ have some home shoppers steering clear of dense urban housing, says Becker, who has been selling real estate for 16 years.”
“The condo at 20 N.W. 16th Ave. #3 in Portland’s Northwest District is listed at $105,000. The studio in the 1927 Empress Condominiums building has one bathroom and 304 square feet of living space. Homeowners association fees are $338 a month. The price was $120,000 on Oct. 1, then it dropped to $110,000 Oct. 12 then $105,000 on Nov. 19.”
“A penthouse at 3601 S. River Parkway #2805 in the 2006 John Ross tower in the South Waterfront is listed at $1,195,100. The contemporary-style, high-end home has two bedrooms, 2.5 bathrooms and 2,698 square feet of living space. Homeowners association fees are $1,300 a month and include round-the-clock concierge service, a gym and garden courtyard. The price was $1,295,100 on Jan. 16, then it dropped to $1,195,100 on March 30.”
The Jewish Voice. “Real Estate billionaire Ziel Feldman is part of an ever-growing list of moguls who are putting their real estate up for sale as the pandemic, increased crime and New York tax laws have caused them to flee. Feldman also sold his Englewood New Jersey estate last month for $7 million-a significant price reduction from a home that had been asking $19.5 million; especially considering they renovated it for $13 million.”