Blackstone backs off office; Top resi firms in Miami, LA, and SF... and other top stories from the week

The best national real estate stories from The Real Deal. Jun 03, 2023 [View in Browser]( | [$1 for 1 Month](     In today’s newsletter, we look at how Blackstone got ahead of the curve by [offloading office assets years ago](. Plus, a look at the top residential brokers in three major markets, [Sam Zell’s dealmaking legacy](, and a push to [boost so-called “mansion taxes](.” These and more stories below.   [How Blackstone shrunk its office holdings]( Blackstone was once a giant in the office world. Now, the asset is a sliver of the firm’s real estate portfolio. That shift didn’t happen overnight, though. In 2007, Blackstone paid $39 billion for Sam Zell’s office portfolio. It was an overpay. Another office giant, Vornado, had driven up the price with a competing bid. So, Blackstone offloaded some of the buildings to make up for the additional costs. “Our global real estate office portfolio — which had been 60 percent of our holdings — now it’s 2 percent,” said one Blackstone executive. It was a prescient move, but Blackstone’s early exit was as much a stroke of luck as a stroke of genius. Few, if any, could have predicted the precipitous collapse of the office market. Rather, Blackstone wanted to get into other, more lucrative assets. The firm purchased data centers, life sciences and logistics properties. Logistics comprises 40 percent of the portfolio today, up from zero in 2007. That didn’t spare the company from all of the pain in the market. Blackstone limited investor withdrawals from its real estate fund, BREIT, following a dip in distributable income. But, as Blackstone suffers some discomfort, office landlords are fighting for their lives. Office buildings across the country sit empty with 50 percent occupancy the standard in many cities; commercial landlords are throwing concessions at potential tenants. Investors are struggling to sell buildings, and some CRE brokers have been forced to take up side hustles [while they wait for the investment sales market to thaw](. But that’s not Blackstone’s problem.   Together with Hilco Redevelopment Partners How a Former Power Plant is Becoming a Sustainable Community In the shadows of our nation’s monuments is an abandoned coal-fired power plant that once powered the country’s capitol for over 60 years. Hilco Redevelopment Partners (HRP) is transforming this relic of the past on the shores of the Potomac River into a modern, state-of-the-art hub for the community. Previously closed off from the public, HRP welcomed the Alexandria, Virginia community to tour the site and learn about the history of the former power plant and the future plans for a vibrant, mixed-use destination that will deliver: • Residential units, commercial and artistic spaces • Up to 16% affordable housing • 14 acres of publicly accessible green space • Environmental remediation of the site • Aggressive sustainability targets This is just the first step in bringing the community back into this space. [See how HRP is working to benefit]( Alexandrians and transforming blight in communities across the country into models of sustainable and inclusive development.   [I'm an image]( The top residential brokerages in [Miami](, [Los Angeles](, and [San Francisco]( No two residential markets are alike. But, one firm has managed to dominate sales volume in almost all of the nation’s largest cities. Still, some scrappy upstarts and bold boutiques made the top 10 lists in [Miami](, [LA](, and [San Francisco](. [I'm an image]( [Zell’s angels: How the brash tycoon changed the real estate game forever]( Sam Zell, who died in May aged 81, left his mark on the real estate industry. Some titans made more money than Zell. Others left a bigger impact on their local skylines, or amassed more political power. But no one had more fun. [I'm an image]( [“I live in the Flatiron Building”: Residential dreams at an iconic NYC address]( Now that the auction drama is done, the Flatiron Building seems primed for a residential conversion. Architects suggest the building could fit about 80 units. Or, one buyer (Bezos? Arnault?) could buy it all and build an urban compound.   Advertisement   [I'm an image]( [Inside the progressive push to pump transfer taxes]( Chicago Mayor Brandon Johnson has said he hopes to more than triple the transfer tax on sales over $1 million. Chicagoans can look to LA and NY as they consider the tax’s potential impact. [I'm an image]( [Harry Macklowe secretly behind move to acquire Midtown office building]( Real estate maverick Harry Macklowe has been dealing behind closed doors as he looks to acquire an empty Midtown office building. Macklowe has long coveted the site, where he once hoped to build one of the city’s tallest buildings. [I'm an image]( [Brookfield gives up on DTLA office after defaulting on $1.1B in debt]( Brookfield made a $7 billion bet on Downtown Los Angeles, and it couldn’t have gone worse. The company started the year with seven DTLA trophy towers. Now, it’s lost two to receivership and the firm has defaulted on $1.1 billion in loans. [I'm an image]( [Alexander brothers sell waterfront Miami Beach mansion for $27.5M]( One of Miami’s top residential agents, Oren Alexander, has sold his Miami Beach mansion for $27.5 million. Alexander launched his own brokerage firm last year with his brother, Tal, who also owned the waterfront home. [I'm an image]( [Houston REIT turning entire 7M sf portfolio into self-storage]( Silver Star Properties will be converting its entire portfolio of office, retail and industrial properties into self-storage. It’s a sign of the times, as the commercial assets have struggled. But it’s also a sign of the REIT’s desperation, as a $259 million loan approaches maturity.   [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](