- Hedge Fund Losses Drive AIG Shift to Commercial Mortgages, Bonds “American International Group Inc. is expanding bets on property lending and safe fixed-income securities after hedge-fund investments soured. ‘We are reallocating roughly 50 percent of our hedge-fund portfolios,’ Sid Sankaran, who is taking over as the insurer’s next chief financial officer, said in a conference call Friday. The shift will be ‘primarily into investment-grade bonds and commercial-mortgage loans, which we believe will free up about $2 billion in additional capital.’” (Bloomberg)
- Big Banks Are Fleeing the Mortgage Market “When it comes to residential mortgages, big banks are waving the white flag. Banks originated 74% of all mortgages in 2007, but their share fell to 52% in 2014, the most recent data available from the Mortgage Bankers Association. And it could go even lower. But even at these levels, the big bank backtrack is reshaping a lending landscape that’s already undergone seismic shifts since the housing bubble burst.” (MarketWatch)
- Brooklyn’s ‘Once in a Lifetime Deal’ Said to Draw Top Investors “Vornado Realty Trust, one of the biggest owners of Manhattan office towers, and Silverstein Properties Inc. are among potential bidders for real estate offered by the Jehovah’s Witnesses in an area of Brooklyn that’s in high demand by developers. The companies have expressed interest in at least one of three properties for sale, including the Brooklyn Heights complex that’s been the religious movement’s headquarters for almost half a century, according to people with knowledge of the matter.” (Bloomberg)
- Report Says Airbnb Fudged Data to Hide Illegal Hosts “Airbnb is just a cool Internet place where regular people rent out their extra rooms to make some cash on the side, right? Well, a new report by an activist claims that lodging platform Airbnb manipulated the numbers it released about its New York City hosts to hide how the site is being exploited by commercial landlords acting as ‘illegal hosts.’ Last month, a report from the Penn State School of Hospitality Management also alleged that Airbnb has a large number of professional landlords who operate multiple and full-time listings on the site.” (CNBC)
- What New York City’s Cutthroat Commercial Real Estate Environment Taught Us about Failure “When we at TheSquareFoot ultimately pivoted our business model from from a subscription-based listings platform to a commission-driven real estate firm, I finally began to understand what my old boss meant when he said ‘this industry is cutthroat. You eat what you kill.’ We would call building agents (to try to set up property tours for our clients, for example) and often they wouldn’t even pick up the phone.” (Forbes)
- Israeli Bond Boom Continues “U.S. developers, seeking easy access to equity to finance projects, continue to turn to the Israeli bond market with its lower interest rates. At least 14 companies have borrowed over $2 billion since 2008, primarily Manhattan-based real estate firms. REIT Strawberry Fields, which owns Alzheimer care facilities in the Midwest, is the latest to turn to Israeli market for financing, borrowing 265 million shekels, or around $67.8 million.” (The Real Deal)
- Investor Puts His Posh Manhattan Properties on the Block “A low-key Irish investor with high-profile Manhattan properties has quietly embarked on a selling spree. Aidan Brooks, 47, the London-based founder of Tribeca Holdings Ltd., is in the process of unloading several glamorous retail buildings, sources tell Realty Check. Tribeca’s Manhattan portfolio includes the Rhinelander Mansion at 867 Madison Ave., the Ralph Lauren Polo flagship which Brooks and his Tribeca partner JP McManus bought in 2005 for about $80 million, and Bloomingdale’s Soho home at 504 Broadway.” (New York Post)
- How a Real Estate Exec and an Entrepreneur Will Change DC’s Co-Working Spaces “Startup companies' pressing need for office space has driven innovation in co-working spaces and incubators like never before. Yet commercial real estate often seems to be slow to respond to evolving needs of growing startups. But D.C.-based SwingSpace is eager to prove that commercial real estate's reputation for being behind the tech and startup curve doesn't always have to be true.” (DCInno)
- City Quadruples Fines for Serious Construction Violations Following Fatal Crane Collapse “Mayor Bill de Blasio and the city Department of Buildings Commissioner Rick Chandler announced stricter rules for construction sites Friday, including quadrupling fines for serious safety violations. Despite advances in technology and new laws, working on a New York City construction site has become more dangerous during the past decade. After a string of accidents over the past two years, including a fatal crane collapse last week, the de Blasio administration has come under increasing pressure to address the problems.” (Crain’s New York Business)
- How Crowdfunding Has Made Flipping Houses a Lot Easier “Although crowdfunding is closely associated with tech start-ups, the practice has found a niche in real estate and in house flipping in particular. Between September 2013, when equity crowdfunding was first permitted under new Security and Exchange Commission rules, and September of last year, investors pumped $870 million into crowdfunding platforms tracked by New York data provider Crowdnetic.” (Los Angeles Times)
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