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Real Estate Roundup 7.29.20

Real Estate Roundup:

Manhattan luxury market update

  • Fifteen contracts were signed last week at $4 million and above, a nice bounce from the previous week’s paltry total of 4. The performance came as a welcome relief and a glimmer of resilience as the Manhattan luxury market tries to shake off the effects of the pandemic. One of the biggest deals was a five-bedroom unit at 641 Fifth Avenue, which was listed in 2016 for $33 million and went into contract asking $17 million. (TRD+OlshanRealty)

Senior Housing 

  • Senior housing and medical office REIT Ventas has renegotiated leases for a firm that operates 121 of its senior living facilities across the country. Under the agreement, Brookdale’s annual combined rent dropped to $100 million from $182 million a year, according to company filings. But the deal doesn’t come cheap for Brookdale, which agreed to pay Ventas $235 million in cash and hand over 16.3 million shares of its common stock. It also must pay the real estate investment trust a $45 million note that’s due in 2025. As part of the agreement, Brookdale also transferred ownership of five senior living facilities representing 471 units to Ventas. (SeniorHousingNews)

Hospitality 

  • Hotelier André Balazs, whose stylish boutique properties have long attracted film stars, media moguls and fashion models, is looking to get out of the traditional hotel business. Balazs — who operates the historic Chateau Marmont in Los Angeles, the chic Mercer in lower Manhattan and London’s exclusive Chiltern Firehouse hotel — plans to convert at least the first of those hotels into a private residential club and then expand in new cities by creating more members-only properties with annual membership dues. He said he is also exploring the idea of selling ownership stakes in his properties to guests who become club members and who would own part of multiple residences in his hotel portfolio. (WSJ)

Politics 

  • The Industry City rezoning proposal for the waterfront complex in Sunset Park is on shaky ground once again. The owners of the complex — a partnership between Jamestown, Belvedere Capital, Cammeby’s International and Angelo, Gordon & Co. — are having serious doubts about whether to move forward with the city’s land use review process and have discussed the prospect of scrapping the proposal before it comes up for a City Planning Commission vote later this summer. Local Council Member Carlos Menchaca wields significant power under the Council’s traditional land use practices and has the power to make or break the proposal. He said in an video on Tuesday that he “strongly opposes” the rezoning (Politico+TRD

Tech 

  • Since the beginning of July, at least four landlords have sued Knotel alleging the company owes a total of $1.6 million in unpaid rent. The barrage of claims has accelerated in the past week, as the company has reportedly ceased paying rent at a number of locations. The largest rent bill due among the legal claims is at GFP Real Estate’s 40 Exchange Place where Knotel owes more than $740,000, and hasn’t paid rent since April. (TRD)
  • Density, a startup that anonymously tracks how people move through buildings, has raised a $51 million Series C round led by Kleiner Perkins. The idea behind the company is that if businesses and organizations know how many people are in the building and how the space is being used, they can be more efficient with it and not waste space. (Crunchbase)

Other news 

  • Alex Sapir and Rotem Rosen’s yearslong battle escalated with Sapir’s $100 million lawsuit against his former business partner and brother-in-law. Rosen fired back with a $60 million suit of his own. (TRD)
  • Mack-Cali Realty said MaryAnne Gilmartin was appointed interim chief executive officer, effective immediately, succeeding Michael DeMarco who in June committed to resigning during talks with activist investor Bow Street. The Mack-Cali board has formed a committee to oversee the search for a permanent CEO. Gilmartin was one of four board directors who had criticized Mack-Cali’s leadership in May, amid the REIT’s proxy fight with Bow Street. Gilmartin — along with three other board directors backed by the activist investor — said other members of the board put a “rubber stamp” on decisions favored by ousted CEO DeMarco. Bow Street, which owns a 4.9 percent stake in Mack-Cali, ultimately won eight of the nine board of director seats last month. Gilmartin was named chair. (NJBiz+TRD+SEC)

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