The battle over broker commissions; inside Soloviev’s empire ... and more

The best national real estate stories from The Real Deal. Nov 04, 2023 [View in Browser]( | [$1 for 1 Month]( [The Real Deal Logo](   [The National Logo](   In today’s newsletter, we look at the ongoing [battle over broker commissions]( and the fallout over a recent court decision on the topic. Plus, Florida lawmakers [whiff on a new HOA law](, a big-time developer [eclipses $600 million in delinquent debt](, and TRD dives into the [industry’s favorite billionaire heir’s real estate empire](. These and more stories below.   [The battle over broker commissions is just getting started]( On Tuesday, a jury in Kansas City found the National Association of Realtors, Keller Williams and HomeServices of America [guilty of colluding over commission rates](. The jury also ordered the defendants to pay $1.78 billion in damages. The jury’s decision still needs to be finalized by the judge presiding over the landmark Sitzer/Burnett trial. But that didn’t stop the verdict from sending shockwaves through the real estate industry, raising questions about the future of buyer's agents and the traditional broker compensation model. The ruling caused a [free fall in the stock prices]( for a handful of public firms, including Compass, Elliman, Redfin and Zillow, though the latter two recovered most of their losses. One analyst summed up investors’ fears: “There could be an instance … where there’s a lot of transactions that have no buyer agent at all.” That could mean fewer agents and lower revenues for firms. But the implications of the verdict reach [far beyond immediate financial consequences](. The future of buyers’ agents, instrumental in guiding clients through complex transactions, hangs in the balance. If the verdict stands, it could lead to significant changes in the industry, potentially transitioning toward a "pay-to-play" model, akin to international real estate markets. Minutes after the ruling, the plaintiff’s attorneys filed [another class-action lawsuit](, again related to buyers’ agent commissions. The complaint names NAR, Compass, Douglas Elliman, eXp, Redfin, Weichert Realtors, United Real Estate and Howard Hanna Real Estate Services as defendants. Amidst the turmoil, Anywhere Real Estate and RE/MAX emerged relatively unscathed, having settled before the trial. Meanwhile, NAR responded by [shaking up its leadership team](, with Nykia Wright becoming interim CEO starting Nov. 20 while the trade group looks for a permanent replacement for Bob Goldberg. Meanwhile, the defendants are expected to appeal the decision, setting the stage for prolonged legal battles. The judge still has to render a final verdict, which could include triple damages of up to $5 billion, and several similar lawsuits loom on the horizon, with one set to go to trial in Chicago early next year. But the industry is on the brink of such a disruption, and the decision could pave the way for a new era in residential real estate.   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]( [Inside billionaire heir Soloviev's empire]( Stefan Soloviev isn’t a typical real estate scion. But, that reputation goes beyond the tattoo sleeves and tattered T-shirts he sports, extending into his business interests. The industry heir’s obsession with U.S. agriculture has been well documented. He’s also the owner of Manhattan’s undeveloped site, which, Soloviev hopes, could host a massive complex (including, hopefully, a casino). However interesting Soloviev might be, his right-hand man, Michael Hershman, could be even more so. The 78-year-old executive might look like a man who was born and raised in the boardroom. But, his life story is [more fitting of a Tom Clancy novel](. [I'm an image]( [Make that $600M: Charles Cohen’s delinquencies mount]( Charles Cohen has long put on an optimistic face with regard to his office holdings. But the landlord’s troubled debt has only mounted in recent months, reaching as high as $635 million after falling behind on payments on at least five properties. [I'm an image]( [“Running amok”: Florida lawmakers fall short with HOA, condo law]( Residents in Florida's housing associations have long complained about authoritarian practices by their boards and property managers. One year after a major scandal, lawmakers attempted to pass legislation offering protections for these communities. But the result was a watered-down law that left many residents dissatisfied.   Advertisement   [I'm an image]( [Brand Studio Christie’s International Real Estate Group Positions to Become Power Player in New York Market]( [I'm an image]( [TA Partners defaulted on $200M in construction loans. Who are they?]( TA Partners claims to have $2 billion in LA-area real estate assets and 2,700 units on the way. But the firm was all but anonymous until it defaulted on $200 million in debt last week. [I'm an image]( [Buzzer beaters: Why brokers take distressed listings before foreclosure]( Chicago’s commercial brokers have shown a willingness to take on major office listings despite looming foreclosure proceedings and slim chances of selling. So, why take the time? Those brokers say it's about strengthening relationships with clients. But it also could put the broker in a position to benefit in the case of a foreclosure. [I'm an image]( Ranking the top brokers in [Miami]( and [Chicago]( It’s been an odd year in Miami real estate, as the region saw a mix of slow demand and record-setting prices. That led to a major drop off in total sales. But, the top broker team still did [almost $1 billion in business](. Meanwhile, in Chicago, the city’s top broker is a [familiar name to those in the industry](. [I'm an image]( [Brand Studio Add One Step to Your CRE Closing to Boost Year-1 NOI]( [I'm an image]( [Who’s Afraid of San Francisco Office?]( The recent conversation around San Francisco office has not been too optimistic. But, for a class of buyers, there’s room for great optimism, thanks to 60+ percent discounts on the city’s office towers. Those buyers think the city has finally found its price floor. [I'm an image]( [Texas booms in the Cloud and on the ground]( Finding space in data centers has become almost impossible in recent years, thanks in part to the recent surge in artificial intelligence investment. With that demand has come an onslaught of new data center projects, many of which have found a home in Texas, sometimes well off the beaten path.     [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](