Clockwise from top left: Sotheby’s International CEO Phillip White, one of the 10 buildings at New York’s Essex Crossing megaproject, Frank Gehry has been tapped to design a performing arts center in Los Angeles, and Wynn Resorts secured a $800 million line of credit.
Seattle leads US crane count, as Western states dominate construction activity, survey says
There were a record number of construction cranes working in America in January, according to Rider Levett Bucknall’s biennial “Crane Index.” With 45 cranes in action, Seattle had the most activity, followed by Los Angeles, Chicago and Denver, with each having 36 cranes working. The survey found 53 total cranes working on the East Coast, with 27 active in Washington, D.C. and 18 in New York. All U.S. cities trailed Toronto, which had 88 active cranes. [TRD]
Posting strong profits in 2017, Zillow’s market cap passes $10B: report
Seattle-based Zillow Group’s market cap rose past $10 billion as its stock has climbed in March. The company’s listing sites, including StreetEasy, earned $1 billion in revenue last year. “They’re showing that the business model can be profitable,” real estate technology consultant Mike DelPrete told Inman about Zillow’s run. [TRD]
The decision on real estate brokers taking the pass-through tax deduction is … ¯_(ツ)_/¯
The pass-through deduction in the new federal tax law should benefit independent contractors, but the impact on real estate brokers and their firms is not clear yet. Brokers making less than $157,500 a year (or $315,000 if filing as a married couple) will automatically qualify for the 20 percent deduction. Those who earn more face two possible exemptions. First “specified service businesses,” which include the nebulous definitions like “brokerage services” and firms where the “business is the reputation or skill” of employees, are exempted from claiming the deduction. Second, the income determination is based on a formula primarily derived from W-2 wages, while many brokers file a 1099 as independent contractors. The Internal Revenue Service is expected to issue additional guidelines for the tax law in June. [TRD]
Sotheby’s sold a record $108B in luxury homes in 2017
With a record $108 billion in worldwide sales in 2017, Sotheby’s International Realty’s numbers grew 14 percent from the year before. U.S. sales accounted for $96 billion — up from $85 billion in 2016. The brokerage has seen its sales volume soar from $4 billion in 2005. Realogy bought the right to license the Sotheby’s name from the auction house in 2004, and there are now 950 franchise offices worldwide. [TRD]
Perchwell signing new clients in fight for control of the listings space
As it challenges established firms RealPlus and On-Line Residential in its offerings of listings, analytics and marketing, startup Perchwell is racking up new clients including Sotheby’s, Stribling and Berkshire Hathaway HomeServices. Founder Brendan Fairbanks says Perchwell isn’t competing with OLR and RealPlus because his goal is enhancing data and helping agents interact with clients. Perchwell has raised $4 million in seed funding so far. [TRD]
Wynn Resorts secures $800M line of credit to help pay $2.6B settlement with founder
An $800 million line of credit from Deutsche Bank will help Wynn Resorts pay a $2.6 billion settlement with Japanese pachinko magnate Kazuo Okada, who owned half the company before being pushed out. Wynn Resorts and Okada’s Aruze USA settled a lawsuit stemming from the forced redemption of Aruze’s Wynn stock after the FBI launched an investigation into his firm. The loan and settlement payments are unrelated to the sexual misconduct allegations against another founder, Steve Wynn, who resigned last month as chairman and chief executive. [TRD]
MAJOR MARKET HIGHLIGHTS
Charting the progress of NYC’s mixed-use Essex Crossing megaproject
With an expected footprint of 1.9 million square feet, the 10 buildings of the $1.5 billion Essex Crossing megaproject are already rising on the Lower East Side of Manhattan. Construction began in 2015, and the development team — comprised of Taconic Investment Partners, L+M Development Partners, BFC Partners, Goldman Sachs Urban Investment Group and the Prusik Group — is aiming for a 2024 completion. The project’s first market-rate rental apartments at 145 Clinton were listed this month, with several more buildings scheduled to open this year. [TRD]
Frank Gehry tapped to design performing arts center in Downtown LA
Another Frank Gehry-designed complex is on tap for Downtown Los Angeles. The 89-year old starchitect has been tapped to design a campus extension for the performing arts Colburn School on Grand Avenue, which will include an 1,100-seat concert hall and a 700-seat studio theater for dance and vocal performances. This will be the third Gehry-designed building within three block in Downtown LA. [TRD]
Colombians lead foreign buyers with interest in Miami real estate
More Colombians are looking for homes in the Miami area than any other group of potential international buyers, according to a report from the Miami Association of Realtors. In January, 12.6 percent of foreign nationals searching for South Florida homes on the group’s website were Colombian, followed by Venezuelans at 9.5 percent and Canadians at 7 percent. Of the $7.1 billion of foreign investment in Miami area residential real estate in 2017, Colombians and Canadians buyers each bought a 9 percent share, while Argentinians represented 15 percent of all foreign purchases. [TRD]
Detroit is looking for buyers and developers as it prepares to sell 24 vacant schools
The Detroit Public Schools Community District has listed 24 vacant properties for sale and is looking for developers to submit proposals for the properties. Ranging from .4-acres to 7.4-acres, the parcels feature the buildings were constructed between 1896 and 1969. The 321,00-square-foot former Cooley High School building, which is listed on the National Register of Historic Places, sits on the largest plot. The properties are listed on the school district’s real estate website. [Curbed]
Land at San Francisco’s massive shipyard redevelopment may still be radioactive: report
As city officials and developers work to build an entirely new neighborhood at the former Hunters Point Naval Shipyard in San Francisco, there is a chance that the EPA Superfund site is still contaminated with radioactive pollution despite reviews by federal, state and local regulators, Curbed reports. A U.S. Navy review found that Tetra Tech, the contractor it hired to clean up the site for before its redevelopment, may have faked nearly half of the $250-million-dollar work. Plans call for 12,000 housing units and millions of square feet of office and retail space to be built in the area. Developer FivePoint has already built about 300 units, which are not in the affected areas. Officials said the work being done on the land does not pose a risk to public health. [Curbed]
Boston hotel project would add 677 rooms in two hotels across the street from each other
Mark Development and Buckminster Annex Corp. are proposing a joint project that would see two neighboring hotels built on either side of Beacon Street on Boston’s Kenmore Square. A 24-story building would host a 382-room hotel where a Citizens Bank now stands, and a 19-story, 295-room hotel would be built next to the existing Buckminster Hotel, which is owned by one of the partners and would remain open. Called Crossroads at Kenmore, the project will also feature street-level retail space. [Bisnow]
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