Compass’s unpaid commissions rise; SL Green boots Ashkenazy ... and more

The best national real estate stories from The Real Deal. Aug 19, 2023 [View in Browser]( | [$1 for 1 Month](     In today’s newsletter, we look at how unpaid commissions helped [Compass to become cash-flow positive](. Plus, SL Green finally [kicks Ben Ashkenazy out of a Manhattan asset](, South Florida’s luxe market [finds itself in a strange paradox](, and a Sikh resi agent in Texas is pushed to the back burner [in favor of a former Dallas Cowboys cheerleader](. These and more stories below.   [Unpaid commissions helped Compass get cash-flow positive]( Compass reported earlier this month that it was cash-flow positive for the first time since going public in 2021. The firm brought in $51 million more than it spent in the second quarter. It was big news for CEO Robert Reffkin and Co. Reffkin proclaimed last year that the firm would achieve the feat sometime in 2023, and he declared victory. “We said we would be free cash-flow positive in Q2,” Reffkin said during the call. “We did it. We are very strong.” The earnings call also raised questions. Like, “How did they do it?” One part of the answer: unpaid commissions, which rose to $98 million last quarter. The story caught the attention of Compass agents, who [flocked to social media to defend their firm](. Up to 99 percent of commissions are paid within 24 hours, they said. And they’re probably right. But unpaid commissions still skyrocketed for the firm in the last few months. Commissions payable is an item in the company’s financial reporting. That number is counted as positive cash flow in the earnings statement, thanks to a totally standard but confusing accounting rule. The $91 million figure is a $41 million increase from last quarter, and it’s comparable with the $96 million figure from a year ago. The company is not yet profitable — it posted a $48 million net loss in the quarter. Still, the loss is a huge improvement from the same period last year, when the firm lost $101 million. Compass didn’t do anything wrong. But the declaration that they are cash-flow positive isn’t the overwhelming sign of strength that Reffkin is painting it as. Rather, it’s a step in the right direction.   Together with the City of Miami Beach Make a Bold Move to Miami Beach We offer financial incentives and free assistance to companies and entrepreneurs interested in moving or expanding to Miami Beach. Our Business Concierge program provides first-class customer service and functions as a one-stop shop for any business-related services. Miami Beach is an innovative and growth-focused business community with tangible and meaningful resources for businesses large and small. Learn more about the program and our incentives today at [MBBiz.com](.   [I'm an image]( [How SL Green wrested 625 Madison Avenue from Ben Ashkenazy]( SL Green [bought Ben Ashkenazy’s stake at 625 Madison Ave.](, a property the two have battled over for a decade. The move could mark the end of the dramatic saga, but it could also be the start of a new, equally contentious chapter. [I'm an image]( [Elliman paired Sikh agent with white former cheerleader to sell house]( Andy Anand was an Elliman agent looking to break into a ritzy Dallas suburb. Anand is also a turban-wearing Sikh. So, his boss made a white ex-cheerleader the frontwoman for his business. The move may have violated several legal and ethical standards. [I'm an image]( [South Florida paradox: Luxe resi market faces record sales, low volume]( Prices in the South Florida luxury market are defying gravity. As deal volume falls, thanks in large part to high-interest rates, prices have skyrocketed, setting records across the region.   Advertisement   [I'm an image]( [Brand Studio Unveiling the Artistry: Sicis’ Fearless Expansion from Mosaics to Exquisite Home Furnishings]( [I'm an image]( [This Icon portfolio barely breaks even. Why?]( The latest victim of mounting multifamily distress may be Icon Realty. A chunk of debt tied to the firm’s $145 million NY portfolio was watchlisted recently. Meanwhile, multifamily investors in [Texas may finally see trouble on the horizon](. [I'm an image]( [Fortress buys $1B of Capital One loans]( Fortress Investment Group purchased $1 billion in Capital One loans, many of which are tied to NYC offices. The investment is a huge vote of confidence on office properties at a time when many are looking to get away from the troubled sector. [I'm an image]( [Westfield Century City close to securing $925M refinancing]( Unibail-Rodamco-Westfield is nearing one of the biggest CMBS loans of the year, as it approaches a deal to refinance a $925M loan for the Westfield Century City mall in Los Angeles. [I'm an image]( [Warren Buffett bets big on homebuilders]( An investment from Warren Buffett is the ultimate vote of confidence, so home builders should be riding high. Berkshire Hathaway disclosed an $814 million investment into three industry players this week. [I'm an image]( [Analysis connects crime and CRE distress in San Francisco]( A first-of-its-kind report by Trepp has exposed a correlation between crime and real estate distress in San Francisco. The news comes as prominent retailers like Whole Foods and Nordstrom have announced their withdrawals from the Bay Area city.   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](