Brookfield makes $2B in defaults disappear; Multifamily’s house of cards ... and more

The best national real estate stories from The Real Deal. Aug 05, 2023 [View in Browser]( | [$1 for 1 Month](     In today’s newsletter, we look at Brookfield, the investment giant that seems to have [erased a $2 billion problem](. Plus, the [multifamily industry’s favorite lender teeters on the brink](, Steve [Roth like malls again](, and Barry [Sternlicht is desperate to spend money](. These and more stories below.   [How Brookfield made $2B in defaults disappear]( From the outside looking in, it seems like Brookfield has had a terrible year. The Toronto-based firm has defaulted on over $1 billion in loans tied to properties in Downtown Los Angeles. Another $750 million in defaults seem to be just around the corner. But the firm’s CEO, an accountant named Bruce Flatt, is not worried. “It’s small and not relevant to the overall business,” Flatt said in February. The strange thing is, he might be right. Brookfield holds over $825 billion in highly-diversified assets, with $270 billion of that in real estate, according to the firm’s website. Its holdings include London’s Canary Wharf and NYC’s Manhattan West, the kinds of Class-A trophy properties that have thrived while much of the world’s aging office stock sits empty. Flatt claims that much of Brookfield’s real estate portfolio is made up of such properties. But it's difficult to know just how true that statement is. Brookfield’s corporate structure is a masterclass in opacity. The firm went private in 2021, allowing it to obscure the details of its restructuring. As industry observers question the company’s financial health, Flatt has hinted that Brookfield could hand the buildings over to lenders with little consequences. In the latest earnings report, the company’s troubled DTLA portfolio was nowhere to be found. It seemed, almost, that the firm had made a $2 billion problem disappear. TRD looked into Brookfield’s 60-year history and found that the roots of complexity and, thus, concealment, run deep.   Together with SignMore How much time do you spend on the phone every day? In a 24/7 world, your clients expect exceptional service no matter when they reach out. And the main contact channel of choice? The phone call. Research found that 60% of real estate professionals spend over 3hrs answering the phone every day.* Being available for phone calls is great, but what happens when you’re in meetings, showing homes, closing deals or with an important client? Or after hours when you’re sleeping? 72% of real estate professionals agree that the phone helps to build rapport and their customers want to speak to a real person*. So if you’re not available by phone 24/7, you’re missing opportunities. And as hard as you try – you can’t duplicate yourself! That’s where [SignMore]( comes in. Day or night, SignMore’s 5-star property receptionists are here to handle your calls, schedule your appointments, qualify your leads and manage your chats. Learn more at [signmore.com]( -------------------------------- *Quantitative interviews conducted by Independent Market Research agency, Arlington Research (2020).   [I'm an image]( [When the Tides go out: the multifamily market’s house of cards]( MF1 Capital was the go-to lender for multifamily syndicators, doling out over $7 billion in debt between 2020 and 2021. Now, with rates on the rise, almost half of the lender’s debt is either watchlisted or delinquent. [I'm an image]( [Roth says offices are like malls. Is that good?]( Vornado boss Steve Roth confused the masses recently by favorably comparing offices to malls. He said malls are “booming,” which is not entirely true. But the comparison might unveil apt insight beneath the surface. [I'm an image]( [Starwood “foaming at the mouth” to deploy capital]( Barry Sternlicht’s Starwood has been conservative for much of the year, a move driven in part by many property owners’ hesitation to sell. But the firm has plenty of dry powder, and it can’t wait to spend it, Sternlicht said.   Advertisement   [I'm an image]( [Brokerage bosses take fat pay cuts]( In some industries executive pay is unshakeable, even in the worst of times. That’s not the case for residential brokerages. Executives at the biggest firms saw pay cuts in the tens of millions last year. Don’t worry — they’ll survive. [I'm an image]( [Fraudster indicted for stealing Harlem brownstones]( How does one steal a building? Ask Joseph Makhani. The Long Island man was indicted this week for allegedly stealing two Harlem brownstones. As Makhani fought to hide his alleged crimes, his victim ended up in a homeless shelter. [I'm an image]( [Condo buyout deals in South Florida under pressure]( It’s a tough time for condo buyouts, but that hasn’t stopped Mast Capital, Terra, and other South Florida firms from trying. But recently deals have fallen apart, been put on hold, or ended up in messy legal fights. [I'm an image]( [Inside a developer’s botched murder-for-hire scheme]( Developer Arthur Aslanian was recently found guilty of, among other things, a murder-for-hire scheme. As he awaits sentencing, TRD dove deep into Aslanian’s story, uncovering a colorful, harrowing cast of characters. [I'm an image]( [Cushman & Wakefield, JLL profits slide by more than 90%]( Two Chicago-based commercial giants had a rough second quarter, as both Cushman and JLL watched profits dwindle. Both firms have signaled continued cost-cutting.   SUBSCRIPTION SUMMER SALE [CLAIM OFFER](   [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](