Month: July 2019

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Co-working finally feels the crunch of…

Written by The Real Deal

(Credit: iStock) Earlier this year, a San Francisco coder set out to create an outdoor co-working space that charged $2.25 an hour. The catch? It was comprised of a table and chair, set up on an empty parking lot. While the cost of co-working has yet to reach the levels of WePark, as the operation was named, it has been becoming more affordable as of late, Bisnow reported. Amid a , average desk prices fell by 5 percent in the 18 largest cities for flexible office space in 2018, according to a new report by Instant Group. The drop in price was most pronounced in Chicago, where prices fell by 17 percent. In San Francisco and Los Angeles, prices dropped by 12 and 11 percent, respectively. In New York, where the average price of a desk circles around $1,060 per year, prices only shrunk 4 percent. Co-working spaces have been in almost every city. New York posted the largest growth with a 21 percent spike in supply, followed by San Francisco and London. In L.A., the growth was more constrained at 10 percent. Still, co-working companies in have been largely leading office leasing in the region. In the first quarter, WeWork alone signed leases spanning 319,000 square feet. That pushed its overall L.A. footprint to 2 million square feet. Last year, WeWork became the largest office tenant in , and as of May of this year, it was on track to do the same in . [] — Natalie Hoberman

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Views from 1,100 feet: A tour…

Written by The Real Deal

 Related Companies is celebrating the grand opening of on March 15, 2019. But the megadevelopment’s observation deck, resting 1,100 feet above Manhattan’s West Side, doesn’t open to the public until 2020. The Real Deal got a sneak peek at the future tourist attraction, dubbed “the edge.” The deck spans 7,500 square feet and stretches 65 feet out from the 101st floor of the Kohn Pedersen Fox-designed . Its height makes it the tallest outdoor deck in the Western Hemisphere and the fifth tallest in the world. And it boasts expansive views of New York City and New Jersey. Related will be with observatory decks at One Vanderbilt, One World Trade, the Empire State building and Rockefeller Center. Prices haven’t been set for the deck at 30 Hudson Yards. Check out the video above to see the insane views from “the edge.”

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New pastime for the rich and…

Written by The Real Deal

Glamping is becoming increasingly popular among wealthy homeowners (Credit: iStock) Wealthy homeowners are increasingly turning to a new form of getaway, and it doesn’t require them to leave their property. Glamping — or glamorous camping — is becoming more and more popular among America’s wealthy, according to the Wall Street Journal. The high-end tents, which can sell for up to $30,000, even make a great guest home on some estates, homeowners told the Journal. The increasing popularity of luxury camping has spawned a whole industry. Glamping Hub, an Airbnb-like service, has 21,000 hosts offering luxury camping on their properties. Luxury camping resorts are popping up in the West, and there’s a company, Under Canvas, that manages luxury campsites in eight national parks. In New York, Terra Glamping this year is bringing an , and another developer has raised funds to bring a . Glamorous camping is not necessarily a new concept, even if the word “glamping” only made it into the dictionary in 2016. In 1520, King Henry VIII of Britain and King Francis I of France set up in regal camps for a countryside jousting tournament. Ottoman Empire sultans were also known to bring “richly embroidered” tents to some excursions, including military campaigns, according to the Journal. [] — Joe Ward

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New York is among the worst…

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Memphis earns the top spot as the best city for saving (Credit: iStock) Experts say you should squirrel away six months’ worth of expenses as a contingency for losing a job or a medical emergency. But in New York, it would take someone half a lifetime to save that much, according to a new study. The average New Yorker would have to save for 521 months – or more than 43 years – to save up a roughly $30,000 six-month emergency fund, according to the personal finance site Bankrate. That puts the Big Apple among the worst cities for those looking to save. ranked U.S. cities by the amount of time required to save a six-month emergency fund, based on housing costs and other expenses including groceries, medical care, utilities and transportation. The best city for saving is Memphis, where a six-month emergency fund would require 11.6 months of saving, followed by Cincinnati (12.6 months), Cleveland (12.8 months), Pittsburgh (13.1 months) and Detroit (13.3 months). In four California cities – Los Angeles, San Diego, San Francisco and San Jose – the time required to build a six-month emergency fund is immeasurable. Bankrate used data from , the Cost of Living Index compiled by the Council for Community and Economic Research and the U.S. Census Bureau. [] – Mike Seemuth

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Massive Ohio pension fund steps up…

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Ohio SERS is moving money from real estate to infrastructure (Credit: iStock) Ohio’s school cafeteria workers, principals, and school bus drivers are bullish on infrastructure investment. Real estate, not so much. The Columbus-based School Employees Retirement System of Ohio pension fund pans to invest $100 million in the 2019-2020 fiscal year and all of that will go toward infrastructure, according to IPE Real Assets. Over the next 12 months the $14.3 billion pension fund plans to increase the share of infrastructure investments in its real assets portfolio from 17 to 21 percent. The rest of that portfolio is made up of real estate investments. Ohio SERS membership is open to people working in education apart from teachers, including school administrators, teaching assistants, and bus drivers. The fund has over 239,000 members. Ohio SERS has been moving capital from real estate to infrastructure over the last three years. A recent report by the pension fund’s board says it expects infrastructure investments to generate 8 to 10 percent returns. Pension funds are constantly tweaking their portfolios. In April, the Los Angeles County Employees Retirement Association announced it would shed in real estate as part of a restructuring of its portfolio. The pension fund will maintain its current mix of real estate investments, which is heavier on industrial and specialty types like student and senior housing and light on office and retail, according to IPE. [] – Dennis Lynch 

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Jeffrey Epstein’s attorneys want him on…

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Jeffrey Epstein Financier Jeffrey Epstein’s lawyers want him on house arrest in Manhattan as he waits to go on trial over charges of federal sex trafficking. The vilified billionaire posted a bond that places a $77 million value on his Upper East Side mansion, which the federal Justice Department wants to seize following his arrest Saturday. Epstein’s attorneys have argued that he is not a serious flight risk and proposed a bail package that includes electronic monitoring, waiving his extradition rights and letting authorities have full access to his home in Manhattan, according to the Wall Street Journal. 9 East 71st Street (Credit: Google Maps) A federal judge will determine Epstein’s arrangements for pretrial detention next Monday, and federal prosecutors have said they will respond to his attorneys’ bail request by week’s end. He has been held at a detention center in Manhattan since getting arrested. Epstein would only be allowed to leave his mansion on the Upper East Side for medical appointments under his lawyers’ house-arrest proposal, and there would be severe restrictions on visitors. An appointed trustee and security cameras would watch over the home. The wealthy financier has been hit with two counts of sex trafficking and could face a 45-year prison sentence. The government said in a Monday court filing that Epstein’s wealth, international contacts and private planes made him a flight risk but declined to comment to the Journal on the specifics of his attorneys’ house arrest proposal. “Our response submission to the Court will speak for itself,” a spokesman for the Manhattan U.S. attorney’s office said. at 9 East 71st Street is among the largest private residences in New York City, spanning 21,000 square feet. [] — Eddie Small

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Blackstone is the latest investor in…

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Jonathan Gray and the Courtyard by Marriott Downtown/River North The Blackstone Group is getting in on Chicago’s hot hotel market, with the purchase of a 337-room River North Marriott. The New York-based private equity giant paid $40.9 million for the Courtyard by Marriott Downtown/River North, at 30 East Hubbard Street, Cook County property records show. The hotel also has 5,000 square feet of conference space. Maryland-based Host Hotels & Resorts was the seller. It is seeking to offload a number of other Chicago-area Mariotts. This spring, it the 256-key Marriott Suites O’Hare and the 254-key Chicago Marriott Suites Downers Grove. The hotels were put on the market as part of a portfolio sale that included four other properties in Arizona, California and Georgia. The Chicago-area hotels do not appear to have been sold. Blackstone is investing in a . Record tourism helped the hotel industry increase revenue in 2018 by 10 percent, to about $2.7 billion. Despite 3,000 new deliveries last year, average daily room rate jumped by 5 percent, to $210.54. The strong performance of Downtown hotels has lured plenty of investors. In May, Spanish billionaire Amancio Ortega spent for the 216-key Dana Hotel and Spa in River North. Representatives for both Blackstone and Host Hotels did not immediately return a request for comment. Last year, Blackstone sold its majority stake in the Hilton hotel chain for $1.3 billion, ending an 11-year ownership that netted Blackstone in profit. In 2012, the firm paid $1.9 billion for the Motel 6 chain. Blackstone is also looking to offload its Oakbrook Terrace office complex, for the 320,000-square-foot property.

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The TRD weekly global digest

Written by The Real Deal

From left: London, Shanghai and Paris Every week, The Real Deal rounds up the biggest real estate news from around the globe. United Kingdom The falling pound, which hit its lowest level in two years, could make property in the U.K. more attractive to foreign buyers. The currency has shed about 2 percent of its value since Prime Minister Theresa May announced her resignation, and now, currency markets anticipate the Bank of England will lower interest rates to boost the sluggish British economy. Boris Johnson, the front-runner in the race to replace her, may support a no-deal , a move that could also see ripple effects in the economy and beyond. A once owned by Artemis Onassis, sister of billionaire Aristotle Onassis, hit the market for the first time in nearly 30 years, according to Mansion Global. The asking price is £25 million, or $31.2 million, for the five-bedroom property on Grosvenor Square in the upscale Mayfair area of London. Wetherell is the listing broker for the property, which hit the market last month. It is believed that Onassis owned the flat in the 1960s and ‘70s. While Brexit hangs over the British housing market, rents in the United Kingdom are rising at their fastest pace in two years, PropertyWire reported, citing data from private banking firm Kent Reliance. In London, rents are at their highest since 2015. The value of the private rented sector in the UK rose by £6 billion, or $7.5 billion, in the last 12 months as rental inventory growth slowed and home prices fell. China Two leading commercial banks in Hong Kong reduced their valuation of pre-owned homes in several areas by as much as 3.6 percent. That could leave some homeowners underwater, with mortgage loan balances that exceed their property value, according to the South China Morning Post. and Bank of China reduced used-home valuations in New Territories and Kowloon after massive street protests over a controversial extradition measure erupted there last month. JLL on Tuesday published a forecast that the median home price in Hong Kong will decline by 5 percent in the second half. Knight Frank issued a similar forecast in May. This comes a greater slowdown in Chinese firms investing overseas. The pullback by Chinese investors in the U.S. and European markets followed imposed by the Chinese government.  Chinese millionaires — once one of the largest foreign investment groups in U.S. real estate through residential and commercial purchases and the EB-5 cash-for-visa program — are disappearing. The number of Chinese millionaires fell 5 percent to 1.2 million last year and the value of their financial assets declined by $500 billion, Paris-based consulting firm Capgemini SE reported. The report is a sign that the slowest economic growth in 25 years is pinching the wealthiest segments of Chinese society. That financial setback for was a major factor in a $2 trillion drop in personal asset value last year among the richest people in the world. Trust companies in China’s shadow-banking industry that finance apartment, factory and highway construction are seeing more than 280 billion yuan —$40.7 billion — at risk of default, the Wall Street Journal reported, citing Moody’s. Though that accounts for only a fraction of the sector’s total assets, it’s a 90 percent increase from a year ago. Clients are facing difficulties refinancing because of a restriction on nonbank lenders. in the U.S., meanwhile, are boosting their mortgage lending, using credit lines from some of the country’s biggest financial institutions. Singapore British billionaire James Dyson bought the highest-priced apartment in Singapore, where his company plans to manufacture electric cars, Reuters reported. He is among the more than 2,500 worldwide as of last year, including more than 700 in the U.S. and 100 in New York City. Dyson reportedly paid S$73.8 million, or $54.2 million, for the three-story, five-bedroom penthouse with a 600-bottle wine room atop the tallest building in Singapore. Dyson, the 72-year-old inventor of the bagless vacuum cleaner, has attained permanent resident status in Singapore, according to media reports. A Brexit supporter, Dyson in January announced a relocation plan that would move the headquarters of his company from Britain to Singapore. Portugal The parliament of passed a new law that provides citizens a legal right to housing. The progressive action has no equivalent in the U.S. For the Democratic presidential candidates’ last month, housing policies , but no one was pushing for a similar concept. Under the Basic Housing Law, the Portuguese government serves as “the guarantor of the right to housing.” The law requires the government to present its inaugural national housing policy to the parliament next year and to include special protections for the old, the young, people with disabilities, and families with young children. The new law is a legislative response to a lack of affordable housing in Lisbon, the capital, and in other parts of the country. Brazil Traffic congestion and rising rents are creating new opportunities in large Latin American cities to build tiny, centrally located apartments as small as 10 square meters – about the size of a vehicle parking space. So-called mico-apartments are also gaining popularity in the U.S., though its version of micro is substantially larger. In Chicago, developer advertises studios measuring less than 300 square feet each. In Brazil, architects are designing micro-apartment buildings with expansive common areas for socializing. Tenants “sleep in their apartments, but the rest of the building is part of their house, too,” The Brazilian project is legally required to have units that measure at least 11 square meters. Similar projects are under way in middle-income and upscale neighborhoods in Buenos Aires.

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Chicago Cheat Sheet: Lake Geneva vacation…

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Black Point Manor in Lake Geneva lists for $8.5 million (Credit: Redfin) Lake Geneva vacation home lists for $8.5M A nearly 11,000-square-foot lakefront home in Lake Geneva has hit the market at $8.5 million, a reduction from previous listing prices of almost $2.3 million. The mansion sits on five acres and includes 10 bedrooms, nine fireplaces, a sauna, a pool, a beach and four boat slips. The owners built the home in 2002 on the same plot that housed 19th Century mansions owned by some Chicago luminaries. It’s tied for the second priciest listing in Lake Geneva, behind a home seeking $14 million. Haunted hotel hits the market A landmark — and supposedly haunted — Fox Lake hotel is back on the market at $5.5 million. The 135-year-old Mineola Hotel was closed in the 1960s and is being marketed as a redevelopment opportunity, including possible condos. Its owners sought to first sell the property via eBay auction in 2012, but no one bid the minimum $2 million. The hotel was known as a hangout for gangsters, including Al Capone, and is on the National Register of Historic Places. It’s now more known as a destination for ghost hunters. Architect selected for former AT&T campus redevelopment Somerset Development has selected local firm Wright & Company to help redesign the vacated AT&T headquarters in Hoffman Estates. Somerset is working to transform the campus into a mixed-use complex including office, co-working, retail and community space. The architecture firm will redesign the complex’s shell and will have a hand in designing greenspace and individual tenant spaces. Wright & Company principal Dirk Lohan designed the 1.6-million-square-foot campus built in 1990. Mid-century modern home sells, could face wrecking ball A Glencoe home designed in 1953 by modernist architects Keck & Keck has found a new owner, who is mum on plans for the house. The five-bedroom house is a staple of mid-century modernism, featuring sleek contours and an uncluttered interior. It listed on May 15 at $695,000 and was under contract in five days at $705,000. The buyer of the home is hidden behind a trust. Blue Island hospital faces closure MetroSouth Medical Center in Blue Island is seeking to close by the end of the year, saying it is unlikely to find a vendor to continue running the hospital. The hospital’s owner, Quorum Health, said patient volume has been declining for years. It is seeking a buyer, but any potential investor would not likely operate it as a hospital. The facility was founded in 1905 as St. Francis Hospital.

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Opendoor and Redfin want to ramp…

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Redfin CEO Glenn Kelman and Opendoor CEO Eric Wu (Credit: Redfin and Resolute Ventures) Opendoor, the SoftBank-backed instant home buyer, and its competitor Redfin Corp. are teaming up to gain an edge in the new home-selling segment. The new partnership means Opendoor can get a piece of Redfin’s web traffic — 31 million monthly visitors in just the first quarter, Bloomberg reported. Homeowners in Atlanta and Phoenix who visit Redfin’s site will be given the option of requesting a cash offer from Opendoor, which buys and flips homes after minor repairs, or get an opinion of what a home could go for on the open market. Opendoor will pay Redfin a referral fee. The move comes after RE/MAX and Redfin in March. Redfin, which already has its own iBuying division, would be willing to expand the Opendoor partnership into markets it’s already in, according to CEO Glenn Kelman. Opendoor has been with venture capital firms, raking in $1.3 billion in equity from such investors as SoftBank Group’s $100 billion Vision Fund. The partnership further establishes a business model that Opendoor pioneered in 2014 — as it expands into more than 20 markets and established real estate firms including firms Zillow and , the nation’s biggest franchise brokerage, follow suit. Earlier this month, it was reported that Opendoor was 50 of its roughly 1,300 employees, and asked between 200 and 300 employees to relocate to its base in Phoenix. It follows turnover in the startup’s C-suite.  — Georgia Kromrei