A year of cost-cutting for two top brokerages; WeWork downgraded ... and more

The best national real estate stories from The Real Deal. Oct 14, 2023 [View in Browser]( | [$1 for 1 Month]( [The Real Deal Logo](   [The National Logo](   In today’s newsletter, we look at two resi giants and their ongoing efforts to [cut costs without sacrificing revenues](. Plus, a tech billionaire grows his [collection of waterfront mansions](, SL Green is poised to get [a new president](, and a credit agency warns the world about [WeWork’s ability to pay off its debts](. These and more stories below.   [Here’s where Compass, Anywhere stand after year of cost-cutting]( Both Compass and Anywhere Real Estate have been in cost-cutting mode for the last year. Now, it’s time for a progress report. The challenges facing these firms — and the rest of the residential industry — are clear. Sales are falling thanks to rising interest rates and high home prices. Fewer transactions means less money coming in, which means shrinking budgets, and Compass and Anywhere had a lot of cutting to do. Cutting costs is a balancing act. Trim too much fat and you leave agents unsupported, and some may look to jump ship. Fewer agents equals even fewer sales. So, how well did the two giants balance on the cost-cutting tight rope? The results have been mixed, according to industry analyst Mike DelPrete. Compass reduced expenses by nearly a quarter, while Anywhere trimmed them by 22 percent. Both firms cut staff while actually adding agents throughout the year. Anywhere’s agent count is up by a whopping 10,000. Compass’ fell earlier in the year, but recovered thanks in part to a few recent acquisitions. But, while cutting agents is a surefire way to lose sales, adding staff isn’t always enough to overcome a lagging market. Both companies have seen their total transactions plummet, but Anywhere has had a particularly tough time. Only one brokerage, HomeServices of America, saw their transaction volume fall further. With transactions down, low-fee brokerages like eXp and Real narrowed the revenue gap with larger competitors, thanks to the lower cost of their labor. For Compass, getting through the cost-cutting “bloodbath” was just part of the challenge. The firm achieved its first-ever cash-flow positive quarter earlier this year. Overcoming its next hurdle – profitability – may require a little bit of help from the market.   Together with Opendoor Keep your clients moving with speed and certainty [Opendoor for Agents]( Refer or represent your clients and get additional bonuses and commissions when you use Opendoor for Agents. [Get started](   [I'm an image]( [WeWork downgraded after skipping $95M in payments]( Fitch Ratings quickly downgraded WeWork’s credit rating following news that the coworking firm skipped $95 million in debt payments, taking its rating from CC to C. The rating reflects the likelihood that WeWork will repay its $1.4 billion in debt. [I'm an image]( [SL Green president Mathias steps down after 25 years]( Andrew Mathias’s 25 year run as president of SL Green, New York’s biggest office landlord, will end this year. The move comes as the firm struggles to get its balance sheet in order amid struggles in the commercial market. [I'm an image]( [Tech billionaire Eric Schmidt is buying up waterfront homes in Miami Beach]( Former Google CEO Eric Schmidt has an expensive hobby: buying waterfront homes in Miami Beach. Last month, Schmidt purchased two adjacent homes on Sunset Island II for a combined $63 million. But Schmidt isn’t new to the island – he already owned three homes there.   Advertisement   [I'm an image]( [Brand Studio ARCTRUST is a relationship-driven partner]( [I'm an image]( [Extell unloads Midtown development site at apparent loss]( Gary Barnett’s Extell sold a Midtown dev site for $173 million, just six years after purchasing the property for $268 million. Riu Hotels and Resorts bought the site, with plans to build a 54-story, 673-unit hotel with Extell. [I'm an image]( [How Century City became “the best office market in the country”]( While most of the country's office market heads downward, LA’s Century City has emerged, as one broker called it, as “the best office market in the country.” The secret to its success? Low crime and close proximity to the kind of luxury housing favored by executives. [I'm an image]( [Chinese investors want bankrupt Chicago developers held in contempt]( A group of investors is suing Chicago-based Symmetry Property Development after the firm and its affiliates failed to pay a $28 million settlement. The investors raised funds for a Symmetry project through the federal EB-5 visa program. [I'm an image]( [Texas wants to slash permit delays]( Texas passed House Bill 14 in June to combat building permit delays, mandating local authorities to decide on permits within two weeks. Developers can get approval from other municipalities or licensed engineers if deadlines aren't met. But the law’s impact has been limited due to implementation challenges. [I'm an image]( [Westfield Centre lenders file suit to put SF mall in receivership and for sale]( Lenders have moved to foreclose on the Westfield Centre mall in San Francisco, claiming the operators have failed to make payments on a $550 million debt package. But the lenders aren’t going for a standard foreclosure.     [The Real Deal Logo]( [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](