🗞️ The political battles shaping real estate this year | Inside the January 2024 Issue

Inside the latest issue of The Real Deal Jan 02, 2024 [View in Browser]( [Share](   [Magazine Cover Image]( Congratulations. If you’re reading this, you’ve made it to 2024 — and considering the chaotic year real estate had in 2023, that’s no small feat. I’d like to tell you for sure that there’s smoother sailing ahead. That rates will settle just above zero, that more [inventory]( will appear on the market and that all your deals will close on time. Who knows? The Fed has signaled [rate cuts]( this year. Here in New York, the city [unveiled a program]( that it hopes will jumpstart rental construction. And the YIMBY call has gotten a little louder — in some places more than others. Our cover story digs into this. I would love to give you good news. But if I’ve learned anything about this industry, it’s the danger of making promises you can’t keep. Wherever there’s real estate, there’s always something unexpected right around the corner. This tension is at the heart of every good story — whether it’s a rags-to-riches quest or a [fall from grace](, a comedy or a tragedy. We’ve seen stories of every kind play out in the past year over the nearly 10,000 articles we wrote (9,832 when I counted on one of the last mornings of the year). I really can’t tell you what 2024 has in store, but I can remind you where we’re coming from. Reading through our top-performing stories from 2023, a few clear threads emerge. First, everyone had their eyes on the Tides — multifamily player [Tides Equities](, that is. Our profiles of Tides and of some similar [syndicators]( were among the most-read articles of the year. These firms picked up steam in the past few years, under the notion that everybody needs a place to live (true) so they could always make money in multifamily (not). Their favorite lender, MF1, was the subject of our [August cover story](, and we continued tracking the troubled industry all year as operators struggled to stay afloat amid rising interest rates. Do you see the theme yet? It’s trouble. And it wasn’t only smaller operators or fast-growing upstarts that found it. Big dog Blackstone saw its Manhattan multifamily portfolio get [downgraded]( by Moody’s, as chronicled in another one of our popular pieces. Moody’s cited cash flow that wouldn’t cover the debt service. Blackstone can handle the turbulence, but it’s telling that even the biggest fish in the pond felt the rough waters — and that you wanted to read about it. The struggle was common across just about every market we cover. Even Texas wasn’t immune. In Chicago, multifamily giant [CA Ventures]( faced a [liquidity crunch](, eviction from its headquarters and lawsuits from lenders in a series of highly read stories. But CEO Tom Scott wasn’t ready to back down when he spoke to our reporter for the December magazine. “I’m actually pretty invigorated by the challenge of fixing stuff,” he said. This is classic real estate. Get knocked down, get back up. Get [banned from selling condos]( in New York, move to Florida. It’s not easy, though. See: Nightingale’s [Elie Schwartz]( who, after his firm was accused of misappropriating funds raised via crowdfunding platform CrowdStreet in one of the most dramatic stories of the year, settled with plans to repay his lenders and make good. Nightingale will have to sell parts of its languishing portfolio to pay investors $4 million every quarter for the next three years. Plenty of 2023 drama is still unresolved. There are open questions at Ralph Herzka’s Meridian Capital, for example, after Freddie Mac announced that the firm was [under investigation]( and suspended from working on Freddie deals, and a former Freddie CEO who’d been working at Meridian [distanced himself]( from the popular commercial brokerage. Here in the first issue of the new year, we’re looking both backward and forward. Senior reporter Katie Brenzel tracked the fast rise and 20-year fall of Brooklyn’s [Atlantic Yards megaproject](. Joe Lovinger watched Texas developer [Ari Rastegar]( race to bring his first ground-up projects past completion and toward infinity. And Katherine Kallergis met up with South Florida developer [David Martin](, whose sleek plans and supercool office don’t quite cover up the fact that he’s juggling on a tightrope, with five projects in the immediate pipeline and another six in planning stages. There’s more like this to come in 2024. How do I know? Because real estate will always have high stakes. It’s the adrenaline and the opportunity that keep us coming back. Happy New Year, and happy reading. (Oh, and if you were worried, don’t be: Editor-in-chief Stuart Elliott is enjoying a well-deserved vacation, but he’ll be back next issue.) Editor's Note Hannah Kramer Director of News Operations & Content Strategy   If you’re interested in receiving future magazine issues in print, sign up for our [annual subscription](. Save $50 OFF all our subscriptions with promo code: REAL50 [SUBSCRIBE NOW](   [To build or not to build: The political battles shaping real estate this year]( For a while early in 2023, elected officials seemed to commit to the kinds of policies that planning nerds put in white papers. A surge of optimism followed among housing advocates that New York would adopt pro-development policies, including some — like builder’s remedy, a penalty that allows certain projects to override local zoning in cities that fail to pass a state-approved housing plan — being tested out elsewhere in the country. Those hopes were deflated as 2023 wound down, because of opposition from New York suburbs, a lack of action by the state legislature and the specter of upcoming statewide elections. The mayor and the governor are using what authority they have to increase housing stock incrementally, but whether the legislature will enact broader change is up in the air. A similar story is playing out in other cities. While political will to support housing construction grows on some fronts, resistance to significant policy change persists. [READ MORE](   [Image]( [Can a nonprofit clean up Signature’s “toxic” debt?]( Roll the clock back 50 years. New York City’s housing stock was collapsing. Tenants vacated units by the tens of thousands. Landlords abandoned buildings or burned them for the insurance money. The city teetered on the brink of bankruptcy. Enter: Community Preservation Corporation, a nonprofit founded by six of the city’s largest banks to pick up the pieces. Rehabilitating rent-stabilized buildings quickly became its bread and butter. Half a century later, CPC has again been cast as a potential savior in a story of multifamily distress. [Image]( [How appraisers and property owners find a price that’s right for their project]( Donald Trump’s 11-week civil fraud trial showed off the underbelly of the real estate business, where shady valuators — deal enablers, “friendly” appraisers, people who “know how to play ball” — bend the facts to match their clients’ wishes. Some do it because of a moral culture where the appraisers who go with the flow are the ones rewarded with more assignments. Others engage because they work at large, multidisciplinary firms where valuation work is a foot in the door for bigger leasing and management fees. Their calculations have real impact. [Image]( [How David Martin plans to deliver the biggest project of his career]( During an interview with The Real Deal, Developer David Martin took a conference call from Douglas Elliman Florida CEO Jay Parker and four others. Elliman needed to have its commissions paid before the end of the year. “Get that processed fast,” Martin urged an employee. Moments later, Martin’s assistant Bailey appeared. Someone was waiting upstairs to meet with Martin, who had told him to come at that time. “Sorry,” he said. Martin is good at a lot of things. Time management, however, is something he’s still working on, especially since he has become one of the biggest and most in-demand developers in South Florida. [Image]( [With office deals scarce, picky LA investors and lenders choose just the right project]( Invitations were sent out to the biggest players, but no one came to the party. The party was an auction, and JMB Realty was the host. The Chicago-based investment firm was looking for new debt last summer on its under-construction tower at 1950 Avenue of the Stars in Century City, and the guest list should have been filled with eager lenders. But in 2023, many institutional lenders and investors put the entire office asset class in a black box, not to be touched — even offices with star potential. [Image]( [Yair Levy’s failed heist of Miami’s jewelry district crown]( After 50 years in the same spot inside the Seybold Building, the premier gemstone retail center in downtown Miami, jeweler Howard Steinlauf was ready to venture into a new space. Yair Levy, a developer banned for life from selling condos and co-ops in New York, was also looking for a fresh start. In 2018, he rechristened Metro Mall as the Time Century Jewelry Center in a nod to his New York-based firm and offered to make Steinlauf’s business, Freddy’s Certified Diamonds & Fine Jewelry, Time Century’s showcase tenant. Three years later, the Time Century Jewelry Center is an abandoned construction site.   [The Closing: Kumara Wilcoxon]( INTERVIEWS WITH REAL ESTATE TITANS   [Image]( Austin’s top luxury agent talks growing up barefoot in Malibu, her winding path to the top and everything tech can — and can’t — replace. Tarrytown is the heart of Austin’s luxury real estate market, a hilly Eden of tree-lined cul-de-sacs just minutes from Lake Austin. If you’re lucky enough to own a home there, there’s a good chance you bought it from Kumara Wilcoxon. Wilcoxon, a top agent with Kuper Sotheby’s International Realty, has sold more than $1.6 billion of homes throughout her career and has been the city’s top-selling agent for the past three years. In 2022, she topped the Austin Business Journal’s annual list, recording $359 million in sales across 77 closings. She is also a member of Austin’s Elite 25, a club of the city’s leading 0.25 percent of agents who meet monthly to swap tips over lunch. [Read full story here →]( [FULL ISSUE HERE]( [More Newsletters]( | [Unsubscribe]( | [Privacy Policy]( | [Subscribe]( The Real Deal 450 West 31st Street, New York, NY 10001 ©2023 TheRealDeal. All rights reserved. [View Online](