Sunday Summary: The Big Shuffle Continues
Over here at Commercial Observer since the beginning of the year (and maybe even before) we’ve noticed an ever greater number of personnel moves. This week was no exception.
“This is in many ways a long time coming,” Stacom told CO. “Many moons ago I said [to the CBRE brass], ‘You ought to be thinking about a successor.’ ”
The details of the new firm, called Stacom CRE, are not fully formed yet, but since the announcement hit on Tuesday Stacom’s phone has been ringing off the hook from colleagues and well-wishers eager to congratulate her, or possibly do business with her.
“Some of my longtime clients [called and said], ‘I would love to be your first client,’ ” Stacom said.
Speaking of Newmark, it also grabbed Jonathan Firestone from Eastdil Secured to head up its debt platform with Jordan Roeschlaub.
But there were non-Newmark hirings, too. Chris LaBianca, who had headed up lending at UBS for the last decade, told us on Friday that he was headed to Natixis to lead its CMBS originations.
And for one more major bombshell this week in hiring: Macerich announced that their new CEO will be former Spirit Realty Capital president and CEO Jackson Hsieh, who will be succeeding Thomas O’Hern starting March 1.
These people all had a much better week than Nir Meir
Another big name came out of the real estate headlines this week — but not in the way he would have wanted.
Nir Meir, who had been one of the main heavies of HFZ Capital Group, was arrested and indicted in Miami-Dade County (days after filing for bankruptcy) in an $86 million fraud case that will have him extradited back to New York.
Among the charges that HFZ and construction firm Omnibuild were indicted on include whoppers such as larceny, conspiracy, falsifying business records, tax fraud and money laundering regarding the construction and sale of HFZ’s far west Chelsea condominium The XI on 11th Avenue.
But the Manhattan DA singled out Meir specifically. “These indictments depict allegations of widespread fraud within the real estate industry primarily spearheaded by one man: Nir Meir,” Alvin Bragg said in a statement. “My office’s Rackets Bureau is laser-focused on fraud in the construction and real estate industries and will continue to root out people who steal from investors and corrupt the market.”
A blast from the past
Remember Neumann? (No, not that Newman.) Adam Neumann. The guy who founded WeWork? The guy who raised billions of dollars on the promise of coworking? The guy who rented millions of square feet becoming (for a little while) the biggest tenant in New York? The guy who hired Run-DMC to DJ WeWork parties and smuggled marijuana on a private plane? The guy who turned out a historically bad IPO, crashed as CEO, borrowed hundreds of millions against overpriced stock, and was played by Jared Leto in the television show?
Along with Dan Loeb’s Third Point, Neumann is attempting to buy the coworking firm out of bankruptcy — however, the left behinds at WeWork are none too happy about it. According to an article in Bloomberg, Neumann’s lawyer Alex Spiro at Quinn Emanuel Urquhart & Sullivan has been writing angry letters to WeWork to get financial information out of them.
“We write to express our dismay with WeWork’s lack of engagement even to provide information to my clients in what is intended to be a value-maximizing transaction for all stakeholders,” Spiro wrote.
Speaking of blasts from the past…
What would have been one of the biggest leases in all of Los Angeles last year — a 300,000-square-foot deal at the Gas Company Tower in Downtown L.A. for the city’s Housing Department — was quashed at the last minute when the CMBS bondholders at the 52-story building rejected it.
The rejection of the deal was doubly painful because the building needed a big tenant. It had gone into receivership in April of 2023 after its owner, Brookfield, defaulted on $748 million in debt.
After shopping around other properties, the L.A. Department of General Services came back and a deal is currently in the works to put five city departments in 310,000 square feet of space for the next 15 years.
Speaking of big leases…
No, there wasn’t quite a 310,000-square-footer on the East Coast, but there were a few biggies. Intercontinental Exchange (which owns the New York Stock Exchange) struck a deal with Fisher Bros. for 142,946 square feet at 1345 Avenue of the Americas. And the international law firm Dentons renewed 159,500 square feet at Rockefeller Group’s 1221 Avenue of the Americas. (Sixth keeps sizzling!)
There were even some meaty non-Avenue of the Americas leases, like Burlington Stores, the discount retail chain, which signed a 16-year expansion of its offices by 67,865 square feet at Empire State Realty Trust’s 1400 Broadway.
But we also saw a notable closing, or two.
Essex Crossing, the Lower East Side mixed-use complex, announced that it was shutting down its subterranean food court Market Line and clearing out all remaining vendors by April 1. Which shouldn’t have been the biggest surprise in the world. Veselka, Nom Wah Tea Parlor, Cafe Grumpy, Pho Grand, Slice Joint and Grand Delancey had already pulled up stakes.
Restaurants remain hard. And that’s true everywhere. We also learned that L.A. favorites Manzke and Bicyclette are closing shop.
It’s also true across retail.
“Demand for retail space has resulted in a mixed trend, leaning towards the positive side as excess retail space is gradually being worked out of the market,” a new NAI Capital report said. “Still, the retail market has a way to go to return vacancy to ‘normal’ levels.”
But things do return. And not only will that include retail, it might even include (shudder) office.
Some players are even preparing for such a return. Several distress funds are gearing up for the next phase of the real estate market, and their plan might make for some interesting Sunday reading.
See you next week!