🗞️ Nate Paul's judgment day, an $8B wall of maturities, and more | Inside the July 2023 Issue

Inside the latest issue of The Real Deal [Magazine Cover Image]( [THE EDITOR'S NOTE]( It’s been a tough time for our big cities. Pick a major metro — New York, Chicago or especially Los Angeles and San Francisco on the West Coast — and you’ll hear a lot of grumbling about how their downtowns are doing these days. Office buildings are emptier in the central business districts, and the general vibe is a lot more seedy. Miami has mostly been an outlier. Reaping the benefit of an influx of wealthy residents during Covid, its real estate market went gangbusters. There isn’t the same hesitancy about building new boutique office buildings in South Florida, and pessimism — about the political forces shaping development, about bureaucracy — is practically illegal. But as the residential market has cooled in the last year in South Florida, cracks are starting to appear, from weaker condo development to the hype surrounding tech leasing to shady politics, as we detail in a series of stories. As Katherine Kallergis writes, [condo developers are tweaking their plans]( to wait for a better lending environment and more manageable construction costs. Of the 46 condo buildings that have been announced in South Florida since the pandemic began, only a dozen are under construction. There’s been a lot of buzz about Miami becoming the next Big Tech mecca, with the idea that it would be a kind of Ellis Island for companies fed up with West Coast red tape and taxation. But some digging by Lidia Dinkova shows [much of the hype isn’t quite justified](: Pre-Covid in 2019, tech leases represented 7 percent of office deals in South Florida. But instead of a leap, that percentage was lower in 2021, and dropped even more last year. There is also the issue of side hustles. Recently revealed court documents show that [developer Rishi Kapoor was paying Miami Mayor Francis Suarez]( $10,000 a month as a consultant on one of his projects. The fact that the mayor is allowed to have outside employment is questionable in and of itself, but Suarez, a Republican making a run for the White House, did not disclose his side hustle on his annual financial statements, as required by Florida law. Meanwhile, another ex-mayor (in Plantation) and one current mayor (in North Miami Beach) [faced charges in unrelated cases last month](. We look at the political shenanigans as well as Kapoor’s troubles in a story by Francisco Alvarado. (Still, there are brighter spots for the Miami market, including [soccer great Lionel Messi’s arrival]( and developer [Damac’s plans for rebuilding on the Surfside collapse site](.) South Florida isn’t the only market seeing uncomfortable developer-politician entanglements. Our cover story this month looks at the saga of developer Nate Paul, the former wonder boy of Austin development, who is [facing an indictment and is at the heart of Texas’ biggest political scandal](. Joe Lovinger details how Paul, who amassed a portfolio of 9 million square feet in 16 states with the ambition of a national player — “he had the bombast of New York, the flair of Miami, the hustle of Hollywood and the self-assured persistence of a Texan,” Lovinger writes — found himself in a position to lose it all. Last month, a grand jury indicted Paul on eight counts of lying to financial institutions. And after emerging at the center of bribery allegations against Texas Attorney General Ken Paxton, Paul might get the most politically resilient state AG in the nation thrown out of office by his own party. Elsewhere in the issue, Isabella Farr examines those [big challenges facing Downtown Los Angeles](. We’ve also got Related honcho Jeff Blau’s take on what’s happening in the big cities ([“the demise of the cities is the progressive left”](), part of his comments during TRD’s inaugural Salon Series event. And we examine how the [real estate industry was trounced at the end of the legislative session]( in Albany last month. But developer hope springs eternal. Whatever the market challenges or political obstacles, new buildings are going to come out of the ground like green shoots (or weeds, I guess, if you don’t like real estate). Check out our [ranking of the most active developers in New York](. Enjoy the issue. Editor's Note Stuart Elliott Editor-in-Chief & CEO   If you’re interested in receiving future magazine issues in print, sign up for our [annual subscription](. Save $20 OFF your first year with promo code: MAG20 [SUBSCRIBE NOW](   [Judgment Day for Nate Paul]( People who know Nate Paul speak of him as a shrewd, occasionally sweaty dealmaker with a great eye for opportunity, a penchant for expensive cars and balls of steel. A son of Austin, Paul has always run his company, World Class Holdings, with the ambition of a national player — he had the bombast of New York, the flair of Miami, the hustle of Hollywood and the self-assured persistence of a Texan. He made it onto Forbes’ “30 Under 30” list, had the backing of bigwigs like private equity mogul Robert Smith and kept an office at New York’s GM Building. That was the rise. Equally spectacular was the fall. [READ MORE](   [Image]( [Red October: A multifamily maturity wall is coming]( A wall of multifamily loans is coming due this fall, putting smaller owners in a bind. While some will look to refinance at a higher rate, others won't be able to refinance at all. Can rescue capital save the day? [Image]( [Stefan Soloviev, real estate’s newest rock star]( Stefan Soloviev, the late Sheldon Solow's son, may see himself as an industry outsider. But don't tell that to the adoring fans he met at TRD's annual New York gathering in May. After years outside the public eye, Soloviev plans to expand his father's real estate empire. [Image]( [Here are the developers who shaped New York City the most in 2023]( New York City’s biggest builders have spent the past year shackled by rising interest rates, persistent supply-chain issues, a battered office market and a murky future for multifamily projects without the popular 421a tax break. Despite all of this, developers came out of the year predicting gains in a down market and a cheery outlook for the city’s resilience as it continues to recover from the pandemic. [Image]( [Profit squeeze pumps the brakes on Miami’s new dev condo market]( Luxury amenities and high-end finishes are on the chopping block in condo projects across South Florida as developers grapple with shrinking profit margins. That top-of-the-line Italian kitchen, those marble floors, even previous window choices could fall victim to historic inflation and the rising costs of construction, insurance and other line items. [Image]( [Doomsday for Downtown LA’s office market]( The qualities that once made top-tier office buildings in Downtown L.A. attractive to investors have been lost. About a third of the submarket’s office space is vacant, and more tenants are becoming commitment-phobes, averse to signing long-term leases. Meanwhile, landlords are struggling with higher debt payments due to rising interest rates.   [THE CLOSING: NIKKI FIELD]( INTERVIEWS WITH REAL ESTATE TITANTS   [Image]( [Star Sotheby's broker on foreign money, brand-building and her "Catch Me if You Can" days]( More often than not, Nikki Field has nailed the intricacies of catering to the global uber-wealthy: when to court, when to push, when to stay silent. She heads Sotheby’s perennially top team — 15 agents active across the tri-state area with feeder networks around the globe and dedicated desks in Asia, India, Canada and the Middle East — and rode the wave of Chinese money crashing over New York in the mid-2010s. About two-thirds of her business still comes from outside the U.S., a lucrative niche but one with a host of geopolitical wildcards: capital controls, uprisings, war. Field has to stay on top of it all and follow the money. [Read full story here →]( [FULL ISSUE HERE]( [More Newsletters]( | [Unsubscribe]( | [Privacy Policy]( | [Subscribe]( The Real Deal 450 West 31st Street, New York, NY 10001 ©2023 TheRealDeal. All rights reserved. [View Online](