Understanding the Sitzer/Burnett commissions case; a Cushman exec testifies against Trump ... and more

The best national real estate stories from The Real Deal. Oct 21, 2023 [View in Browser]( | [$1 for 1 Month]( [The Real Deal Logo](   [The National Logo](   In today’s newsletter, we look at a (potentially) [monumental antitrust lawsuit]( about agent commissions. Plus, one of real estate’s favorite restaurant and hotel groups [goes global](, a top [industry influencer]( notches a win in court, and a Cushman exec [testifies against Trump](. These and more stories below.   [What you need to know about Sitzer/Burnett]( It’s been a tough couple of months for NAR. And now, in the midst of its [internal turmoil](, it faces not one but two antitrust lawsuits. Ouch. The first suit, known as Sitzer/Burnett, kicked off earlier this week. And it isn’t just NAR coming under fire – brokerages Keller Williams and HomeServices of America are also defendants as the plaintiffs seek $1.78 billion in damages. If you’re out of the loop, [the plaintiffs](, who are all homesellers, say they weren’t made aware that commission rates were negotiable, leading them to pay high rates to the agents they hired and then having to pay the buyers’ brokers who negotiated against them, too. They’re calling it collusion, saying brokerages conspired with NAR to drive up agent pay. This suit and the other (that one’s called Moehrl) center around NAR’s “[participation rule](.” In the past, the rule has been interpreted to mean that sellers’ brokers who listed properties on NAR-affiliated MLSs had to pay buyers’ brokers at the end of a deal. But earlier this month, NAR changed its tune, saying that the rule “requires participants to communicate an offer of compensation to other MLS participants and that offer can be any amount, including $0.” The bottom line is that this is a big deal for brokers. NAR says that this could create a “Wild West” for brokers, messing with important MLSs. And if buyers’ brokers could no longer rely on being paid by sellers’ brokers and the end of a deal, it shifts the balance of power between the two negotiating sides, and reshapes agents’ relationships with buyers. [RE/Max]( and [Anywhere Real Estate](, who were both initially named in the suits, already settled. Plus, they won’t require their agents to join NAR anymore. Meanwhile Redfin isn’t just allowing agents to drop NAR — it’s [requiring them to](. (Though that may be [easier said than done](.) There’s more drama yet to come. We’ll be watching the case closely until it closes in early November — so stay tuned.   Together with Capital Funding Group Capital Funding Group Does Things Differently [Capital Funding Group]( [Capital Funding Group (CFG)]( isn’t your typical lender. CFG is a leader in the multifamily financing industry, providing creative and holistic solutions for facilities nationwide. [Bringing a no-limits attitude to every deal](, CFG always goes the extra mile to get the funding you need to achieve your business goals. Through CFG’s partnership with HUD, [they support several HUD loan programs](, including new construction or substantial rehabilitation of new or existing apartments; acquisition or refinancing of existing multifamily properties; and the refinancing of existing FHA-insured loans or grants. CFG’s experienced MAP (Multifamily Accelerated Processing) team expedites the underwriting, processing and closing of HUD/FHA-insured multifamily loans for both for-profit and non-profit borrowers. After your loan is executed, your partnership doesn’t end; CFG continues servicing [your HUD loan](, for the life of the loan.   [I'm an image]( [Cipriani Starts Fundraising for $526 Million Global Expansion]( 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]( [Grant Cardone Class Action Lawsuit Gets Tossed Out]( 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]( [WeWork’s NYC Landlords Owe $2.6 Billion. Can They Repay It?]( 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 With Commercial Real Estate in Free Fall, Jacobs P.C. is Poised to be the New York Debtors’ Law Firm]( [I'm an image]( [Former Cushman Exec Testifies on Trump’s 40 Wall Street]( 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]( [Fred Daibes, Named in Menendez Indictment, Has Wild Past]( 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]( [Century-Old Building Sandwiched Between New Third Ave Towers]( 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]( [SF Apartment Complex Loses Nearly Half Its Value In 5 Years]( 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]( [REBNY Adopts New Buyer’s Agent Commission Rules]( 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](