Brookfield’s struggles continue, PPP fraud in Florida... and other top stories from the week

The best national real estate stories from The Real Deal. Apr 30, 2023 [View in Browser]( | [$1 for 1 Month](     In today’s newsletter, we examine two major distress cases in Los Angeles and New York. Plus, a Miami residential agent [pleads guilty to PPP fraud charges](, things go from bad to worse for [First Republic](, and a luxury Chicago condo finds itself with [too many sellers](. These and more stories below.   Distress in Droves: [Brookfield’s DTLA struggles continue](, while [L&L, Mitsubishi default in NY]( Distress is the theme in commercial real estate this year. And it’s come for many of the industry's most prominent players, from Blackstone and Columbia Property Trust to Steve Roth’s Vornado and Ben Ashkenazy. It’s a tale we’ve heard countless times in recent months: debt payments on commercial real estate rose with interest rates. Income did not. The latest victim, once again, is Brookfield. A core piece of Brookfield’s DTLA fund has been [placed into receivership after the firm defaulted]( on $350 million worth of debt on the Gas Company Tower in February. The move was initiated by the 52-story office skyscraper’s lenders — Citi Real Estate Funding and Morgan Stanley — as an alternative to bankruptcy. The receiver’s job will be to “market, advertise, promote and negotiate the sale of the property” and make the creditors whole. The building is 73 percent leased, with a monthly income of about $2.3 million. Its monthly debt service was $2.7 million in December, nearly twice what it was before the interest rate hikes. It’s the latest in a series of Downtown LA struggles for Brookfield. The investment management firm [defaulted on the loan in February](, the same month it also defaulted on a $243 million loan for another of its trophy towers in the neighborhood. Brookfield also [wrote down the value of its Wells Fargo Center tower]( by about $110 million earlier this month, blaming the city’s new transfer tax for the sharp drop from $421 million to $311 million. To make matters worse, the company was [forced to delist its DTLA fund]( from the New York Stock Exchange. The asset has fallen almost 98 percent in the last five years, placing it beneath the exchange’s listing threshold of $1 per share. Of course, Brookfield can take some comfort in the fact that many of its peers have faced similar struggles this year. In New York, L&L Holding and Mitsubishi Corporation [defaulted on a $92.5 million mortgage]( on the Metropolitan Tower in New York’s Plaza District. It’s the most significant distress case to hit the neighborhood since the financial crisis. Aareal Capital Corporation, the lender, plans to sell the loan. The buyer could renegotiate the debt or foreclose (or place it in receivership like the Brookfield tower). Either way, New York’s commercial industry will watch the loan sale closely as it awaits the continuing wave of distress.   Together with Capital Funding Group Meet CFG: One Lender, Endless Possibilities With programs available through HUD’s Federal Housing Administration (FHA) Office of Multifamily Housing Programs, Capital Funding Group [offers FHA/HUD multifamily loans](, both affordable and market rate, as financing options for borrowers seeking high leverage allowances, with fixed rates and longer terms. HUD loans are non-recourse and fully assumable with HUD/FHA approval. Through CFG’s[partnership with HUD](, they support several HUD loan programs, including new construction or substantial rehabilitation of new or existing apartments; acquisition or refinancing of existing multifamily properties; and the refinancing of existing FHA-insured loans or grants. CFG’s experienced MAP (Multifamily Accelerated Processing) team expedites the underwriting, processing and closing of HUD/FHA-insured multifamily loans for both for-profit and non-profit borrowers. After your loan is executed, your partnership doesn’t end; CFG continues servicing [your HUD loan](, for the life of the loan.   [I'm an image]( SOUTH FLORIDA [Miami agent pleads guilty in PPP fraud case]( The luxury residential agent Daniela Rendon pleaded guilty to one count of wire fraud after federal prosecutors accused her of misusing pandemic relief funds. Rendon allegedly spent the money on a Bentley lease and a decadent apartment, among other personal expenses. [I'm an image]( SAN FRANCISCO [First Republic’s terrible, horrible, very bad quarter]( The banking crisis may have settled, but waters are still rough for First Republic Bank. The lender lost $102 billion worth of deposits in the first quarter. The company will also [cut its San Francisco HQ](. [I'm an image]( CHICAGO [Palmolive pullout: High-end condo sees crowd of sellers]( One of Chicago’s premier pads is seeing a sudden uptick in listings. That’s bad news for sellers, who have cut as much as $2.75 million from their asks as competition increases.   Advertisement   [I'm an image]( [Brand Studio Jonathan Gheller Cuts the Gordian Knot Tying Down Multifamily Data]( [I'm an image]( TEXAS [“On the fence like scared cats”: An uncertain buying season in Texas]( Springtime is buying season in Texas. But some agents are worried that high rates and economic uncertainty could scare off buyers. One market that may prove resilient? Houston. The city’s top sellers have remained optimistic (and busy) this year. [I'm an image]( NEW YORK [Eli Karp’s Flatbush investors want their money back]( Eli Karp is back in bankruptcy court, this time over a long-troubled Brooklyn condo project. Foreclosure proceedings began in 2021 when Karp failed to pay off a mortgage. Now, Karp faces an involuntary bankruptcy petition as investors seek to auction off the property. [I'm an image]( SOUTH FLORIDA [Terra-led group buys massive Miami dev site]( David Martin’s Terra led a group of investors who are paying $1.2 billion for an assemblage in downtown Miami. The purchase could be the most expensive urban land sale in the city’s history. [I'm an image]( [Brand Studio Stefan Soloviev of Soloviev Group: A Q&A Session]( [I'm an image]( NEW YORK [Top Queens broker beats New York’s biggest brands]( Maureen Ramsbottom was the queen of Queens in 2022 — or at least the queen of its residential market, as head of the top-selling brokerage in the borough. Speaking of big sellers, we crowned Sotheby’s broker Serena Boardman as the [queen of New York City co-op Sales](. [I'm an image]( SOUTH FLORIDA [$170M purchase sets Palm Beach record]( Palm Beach is home to some of South Florida’s stateliest estates. Rush Limbaugh’s widow sold her Palm Beach compound for $155 million in March — a local record that stood for barely a month. This week, coffee mogul Bob Stiller one-upped it by selling his 10-bedroom waterfront home to luxury car dealer Michael Cantanucci for $170 million, setting a new high for the ritzy town.   [Facebook]( [Twitter]( [Instagram]( [LinkedIn]( [YouTube]( [Manage Newsletters]( | [Unsubscribe]( | [Privacy Policy]( | [Subscribe]( | [Advertise]( The Real Deal 450 West 31st Street, New York, NY 10001 ©2023 TheRealDeal. All rights reserved. [View Online](