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National Cheat Sheet: Fed holds interest rates steady, Compass halts expansion spree, Newseum sells for $373M … & more

Clockwise from top left: Federal Reserve keeps interest rates flat and vows to be ‘patient’ when it makes future rate decisions, resolution asks Google to address ‘diversity crisis’ and real estate-driven gentrification, Compass to slow down expansion after last year’s growth surge and Ginnie Mae asks some nonbank lenders to improve their metrics before it approves them.

Federal Reserve holds interest rates, vows to be ‘patient’ when it makes decisions
Ending a string of increases, the Federal Reserve decided not to raise interest rates this week, which means the benchmark rate will for now remain between 2.25 and 2.5 percent. The Fed said in a statement that it would be “patient” when it comes to deciding on rate increases in the future, which could mean that the nation’s central bank will only raise rates once or twice this year and might not raise them at all in March, noted some analysts. Interest rates have gone up nine times since December 2015, and the recent increases have garnered criticism from President Donald Trump, who has blamed them for hurting the stock market. [TRD]

Compass CEO says brokerage to slow down its acquisition frenzy
After expanding rapidly across the country, Compass is now taking a break. CEO Robert Reffkin said at an Inman conference this week in Manhattan that told the SoftBank Group-backed brokerage doesn’t plan to expand to any new markets in 2019, and will instead focus on its existing locales. Reffkin said he was happy with Compass’ recent launch in Dallas, but said openings in other cities didn’t go as smoothly, though he wouldn’t provide specifics. “For us, this year, we don’t want to spread ourselves thin,” Reffkin said. “Last year we did a bit.” He noted that Compass, which in recent months has sought to expand in the commercial space, also will not spend as much on acquisitions as it did in 2018. Compass expanded earlier this month in Colorado, a move that came on the heels of growth in California, Chicago and Seattle. [TRD]

Google resolution seeks to address ‘diversity crisis,’ real estate-driven gentrification
Shareholders and employees at Google have asked the internet search giant to address its “diversity crisis” and change the way it buys real estate, BNN Bloomberg reported. In a resolution sent to the board of Alphabet Inc., Google’s parent company, the two groups said Google needs to implement reforms, some of which are tied to executive bonuses, as a result of real estate purchases that often end up displacing poorer residents. The resolution also maintained that Alphabet hasn’t “responded adequately to key demands” workers made when they staged a walkout this past fall. One employee told BNN Bloomberg that she was only staying with Google in an attempt to make a “positive difference” regarding the issues mentioned in the resolution. [TRD]

Ginnie Mae asks some nonbank lenders to improve metrics prior to approval
The Government National Mortgage Association, better known as Ginnie Mae, is cracking down on nonbank lenders amid concerns that they may not be able to meet their financial obligations. The agency is asking a number of lenders to “improve certain financial metrics” before it lets them dole out mortgage bonds it has backed, new acting head Maren Kasper told the Wall Street Journal. Federal Reserve economists raised concerns about nonbank lenders in a paper last year, with one author, Karen Pence, asking “whether it is wise to concentrate so much risk in a sector of the economy that has little capacity to bear it and has a history, at least during the financial crisis, of going out of business.” Ginnie Mae’s move comes as shares in Fannie Mae and Freddie Mac are trading up as hedge funds speculate that the federal government’s decade-long conservatorship could finally end. [TRD]


Miami-Dade County developers set their sights on Opportunity Zones
Opportunity Zones in Miami-Dade County saw $942 million in property sales between April and September of last year — a 25 percent jump from the same period in 2017, according to an analysis by The Real Deal. That statistic underscores an increased interest in the zones, which are part of a relatively new federal program that offers incentives to developers who invest in low-income areas. The U.S. government, emerging from a record-long shutdown, still hasn’t released all of its guidelines for the program, which may have led some investors and developers to hold off. “We are starting to run, but the gun hasn’t fired yet,” said Philip Rosen, chair of the real estate practice at the Becker law firm in Fort Lauderdale. [TRD]

Los Angeles property overlooking luxury hotel seeks $150M
A 10.6-acre swath of land in Los Angeles has hit the market for $150 million — more than anyone has ever paid for a residential parcel in the city, Bloomberg reported. The property overlooks the Hotel Bel Air and includes three lots. A buyer could potentially build a home on each of them, according to the outlet. Domvs London and Junius Real Estate Partners bought the property back in 2014, spending “tens of millions” to improve it, Domvs president Barry Watts told the outlet, adding that the land is “shovel ready.” The property is being marketed by Douglas Elliman and London-based partner Knight Frank. [TRD]

NYC Council Speaker mulls mayoral run, won’t accept developers’ donations
A little more than a year after New York City’s last mayoral election, the speaker of the New York City Council is considering a run for mayor — but he won’t accept contributions from real estate developers, lobbyists and their ilk if he does. Corey Johnson said this week that he was “thinking about” running in 2021, a race that could also include Bronx borough president Ruben Diaz Jr. — who has already officially declared he’ll run — and city comptroller Scott Stringer, who is expected to run. Johnson also said he won’t accept donations of more than $250 during his campaign. He recently expressed outrage over hedge fund billionaire Ken Griffin’s record-setting penthouse purchase. Johnson, of course, isn’t the first politician to swear off accepting real estate industry cash. [TRD]

Property taxes have millionaires fleeing New York, New Jersey
The Empire State and the Garden State are hemorrhaging high net worth individuals due to a combination of volatile financial markets and capped deductions for state at local taxes, including property taxes, at $10,000, according to the Bergen Record. The newspaper, citing a new report from financial research firm Wealth-X, reported that New York City, Jersey City and Newark lost more than 5,700 individuals with liquid assets of $1 million to $30 million in the last year. Even middle-class New Jerseyans are mulling their options elsewhere, finding their money goes farther in places like Florida and Texas, according to the outlet. [TRD]

Newseum owner selling DC building to Johns Hopkins University
The media industry might be struggling, and now a building erected to celebrate the First Amendment and freedom of speech is trading hands. Johns Hopkins University will buy the Newseum in Washington, D.C., for $372.5 million, according to the New York Post. The Freedom Forum, a nonprofit group based in the nation’s capital, reportedly decided to sell the museum to the school after a strategic review found that its operating costs were “unsustainable.” The Newseum, which has posted annual deficits for a decade, will continue to operate through the end of this year. After that, it remains unclear what will happen to the facility. Johns Hopkins plans to move its Washington-based programs into the 632,000-square-foot building. Freedom Forum chairwoman and CEO Jan Neuharth called the sale “a difficult decision, but… the responsible one.” [TRD]

In new ad, Tony Hawk makes dire prediction about traditional real estate agents
A San Diego-based company that has a flat-free brokerage model has enlisted skateboarding star Tony Hawk to hawk its services, Inman reported. In the latest in a series of advertisements, Hawk and fellow skater Mike McGill talk about how Home Bay, which charges sellers a fee of between $2,000 to $7,500, saved McGill money when he was buying a house. After McGill claims Home Bay “makes the traditional real estate agent obsolete,” Hawk agrees. “Traditional real estate agents are going to go extinct when they hear about Home Bay,” the skater says. Home Bay CEO Ken Potashner has said the company plans to expand to 20 new states by the end of 2019. [TRD]

Chicago mayor says building inspectors can fix heating systems without landlord permission
A deep freeze may have descended on Chicago, but the city’s outgoing mayor isn’t waiting for landlords to fix heating systems in rental buildings as bitterly cold temperatures move through the Midwest. Mayor Rahm Emanuel said this week that building inspectors would be allowed “to restore heat in buildings where landlords are failing to do their jobs,” without permission from the landlords themselves. Landlords are supposed to keep temperatures at 68 degrees or higher during the day and at least 66 degrees at night, but hundreds of tenant complaints indicate that hasn’t been the case during a frigid January. [TRD]

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