Toys “R” Us files for Chapter 11 bankruptcy

From left: Toys “R” Us Chairman, Dave Brandon, Geoffrey the Giraffe and the Knickerbocker at 1466 Broadway

From TRD New York: Facing crushing debt and competition from online retailers, Toys “R” Us filed for Chapter 11 bankruptcy Monday.

The company has more than $5 billion in long-term debt, $400 million of which is coming due in 2018, the New York Times reported. Vornado Realty Trust, along with Kohlberg Kravis Roberts and Bain Capital, borrowed heavily to purchase the company in 2005 for $6 billion.

To help Toys “R” Us continue to pay suppliers and employees, JPMorgan Chase and a group of other lenders are providing the company with $3 billion in financing.

“Today marks the dawn of a new era at Toys “R” Us, where we expect that the financial constraints that have held us back will be addressed in a lasting and effective way,” Dave Brandon, Toys “R” Us chairman and chief executive, said in a statement.

The troubled toy company closed its massive, 110,000-square-foot Times Square flagship at 1514 Broadway in late 2015.

In August, the toy store announced that it would open a temporary, 35,000-square-foot store at the Knickerbocker Building at 1466 Broadway for the winter holidays.

As of December 2016, there were 13 Toys “R” Us locations across the city, according to a report by the Center for an Urban Future. The company indicated that its 1,600 Toys “R” Us and Babies “R” Us stores would continue to operate.

Other retailers, including Payless and Gymboree, also filed for bankruptcy this year. Retailers in the city and across the country have struggled to compete, due to the popularity of online shopping and increasing rents. [NYT] — Kathryn Brenzel

Source: The Real Deal South Florida

Early Wynwood broker Larry Mizrach dies

Larry Mizrach

Early Wynwood investor and broker Larry Mizrach of Mizrach Realty Associates died at 85.

Mizrach sold the Goldman family more than 20 properties in the early 2000s, which then led to the neighborhood’s revival and transformation into the trendy Wynwood Arts District. His clients also included the Rubell family, according to his former business partner, Danny Zelonker.

Mizrach got his start in real estate working for Audrey Ross, Zelonker said. He later opened his eponymous commercial real estate firm in 2000, according to an obituary published in the Miami Herald.

He closed his company’s Wynwood office last year, and died in his sleep earlier this month.

Source: The Real Deal South Florida

FIU closes Biscayne Bay dorm due to water damage left by Hurricane Irma

Bayview at Florida International University’s Biscayne Bay Campus

Students at Florida International University returned to their classes this week along with public school students in Miami-Dade, Broward and Palm Beach counties, but some didn’t make it to their dormitory.

FIU closed its Bayview dorm at the university’s Biscayne Bay Campus for repairs after Hurricane Irma’s gusts blew water in through some of its windows, according to NBC Miami.

On Monday, more than 380 students were displaced from the nine-story building at 3000 Northeast 151st Street in North Miami. Students were given the option to either stay at a shelter on campus or bunker down with family or friends.

The building meets or exceeds all the current building codes, FIU representatives said. Work crews have reportedly been on site removing baseboards and using wetvacs and fans to try to prevent mold from growing.

Bayview sits adjacent to the bay, making it more susceptible to storm damage. It features 410 rooms with refrigerators, stoves and internet and cable access, according to its website.

The university said it will not be letting students back inside Bayview until moisture meters confirm the building is all dry, according to NBC Miami. It’s aiming to open the building by the end of the week.  [NBC Miami]Amanda Rabines 

Source: The Real Deal South Florida

Here’s how agents do showings safely

Jack Nicholson in “The Shining”

From TRD New York: Lorei Velazco knew she wasn’t supposed to be the first one to enter a building when meeting new potential clients. In 2011, however, when she was looking to list a unit in downtown New Rochelle, the seller insisted she check out the apartment with him.

”We went back and forth a few times, and finally I said, ‘Fine, I’ll just go on up,’” Velazco, an agent at J. Phillip Real Estate, recalled.

As they were walking up the stairs, the man, according to Velazco, said: “When I get you to my empty unit, I want to bite you and tie you up.”

“I turned around and looked at him like, is he serious?” she recalled. “And I could tell in his eyes that he was.”

On the way up, Velazco started knocking on other apartment doors until a woman answered one and pulled her in. She waited to make sure the man was no longer outside and ran out of the building.

Meeting strangers and being alone with them is central to working as a real estate agent. While threats and attacks against realtors are rare, they do happen, and agents told The Real Deal that personal safety is a major factor in how they conduct business. Safety has become a far greater industry-wide priority since the 2014 murder of Arkansas agent Beverly Carter, who was kidnapped and killed by a couple masquerading as buyers. Agents often carry weapons for self-defense, use safety apps on smartphones, and meet clients only in neutral locations to mitigate dangers, industry experts said.

The National Association of Realtors has also stepped up its efforts on safety awareness. It named September agent safety month and is working to gather solid data on the types of dangers that brokers face.

”People used to think that crimes committed against real estate agents were crimes of opportunity, but in fact, they’re predatory crimes,” said Dave Legaz, a former New York Police Department sergeant who is now a broker with Keller Williams. Legaz, who teaches agent safety classes, believes that agents are often reluctant to report crimes out of embarrassment.

“Agents don’t want to come forward and say that they were sexually assaulted or brushed up against in a weird, awkward way or something like that,” he said.

Gut check

NAR’s most recent survey, which was released late last month and included more than 3,200 agents, found that while just 4 percent reported actually being the victims of a crime, 38 percent of respondents said they felt unsafe in the last year.

“I tell [newer agents] to do all their showings before dark.”

It often comes down to instinct. “There are multiple times where you are standing there and someone is intimidating,” said Justine Bray, a broker with Brown Harris Stevens, who said she meets her clients in the lobby of a building and always keeps the door open when doing an apartment showing.

“Waiting in the lobby, you can get the impression if that person might be unsafe,” she said, “so you can say you can’t find a key, or the landlord has canceled the showing.”

Bray, who once felt so uncomfortable showing an apartment on East 72nd Street that she requested the building’s super send someone to the unit until the man left, said she will sometimes check the phone numbers people leave on sign-in sheets to make sure they are legitimate.

Joan Kagan, a sales manager at Triplemint, said “there is a perception that real estate agents have tons of money.”

“That makes us more vulnerable,” she added. “I’ve instructed my agents that there is no deal that is worth sacrificing their own safety.”

However, agents still have to strike a balance between protecting themselves but not being too nervous to chase down a lead. Early-career agents are more likely to push aside misgivings while they are trying to get ahead, brokers said.

“I tell [newer agents] to do all their showings before dark,” said Citi Habitats’ Ronnie Shumake.

And while brokers told TRD safety is a concern for both sexes, it’s something female agents need to especially consider. While just 25 percent of male agents in the NAR survey reported feeling unsafe, the number was at 44 percent for female agents.

”You just always, always, have to have eyes in the back of your head….being a woman going into a house as well, especially at night on a vacant property,” said Laura Copersino, a Douglas Elliman broker who focuses on Queens.

Others said they have strict rules about meeting strangers. “We meet [clients] in the office first — that’s been a practice for me since day one,” said Citi Habitats’ Natalia Padilla, who said if she really feels comfortable enough with someone she will meet them in a public place like a coffee shop rather than the office. “I am a girl and I’m only 5’2” … they prey on women more, obviously.”

“You really have to screen — don’t just take anyone out,” said Michelle Sedlitz, also of Citi Habitats. Sedlitz recalled being approached by a man outside her office early on in her career. The man first flirted with her and then set up an appointment with her to look at homes.

“It was a little uncomfortable,” she said. “I think his interest was me, more than an apartment.”

Getting practical

Several agents and companies said they’ve developed their own ways of handling safety concerns. According to the NAR survey, 44 percent of real estate offices have standard procedures for agent safety, while 52 percent of men and 57 percent of women carry self-defense weapons ranging from pepper spray to Tasers to noisemakers.

The president of the Real Estate Board of New York, John Banks, said he urges brokers to remain aware of their surroundings, and to take “precautionary measures such as actively communicating their whereabouts to their colleagues and any building staff when showing homes, and establishing procedures for emergency situations.”

Greg Harden, co-founder of Oxford Property Group, said his company will do virtual open house tours with Facebook Live and virtual apartment showings on YouTube to avoid having agents constantly open up the homes. At high-end apartments where security is a particularly strong concern, multiple agents will show up for an open house.

“The more eyes you have in the room at the same time, the better,” he said.

Sierra Residential’s Adam Frisch said his company has a broker in the lobby and apartment during showings and said it is important to do open houses by appointment only. He also stressed the importance of screening buyers or tenants before they come to the property. “This will weed out many potentially shady individuals,” he said. BHS recommends against agents holding open houses alone; Triplemint managers have access to all brokers’ calendars; and Mirador Real Estate said it plans to start running safety courses.

At Legaz’s safety classes, he instructs agents to try making the homes themselves safer by removing prescription drugs from the medicine cabinet and removing knives from the kitchen.

“The most dangerous spot in the house during a family dispute is in the kitchen,” he said, “because of those knives.”

Vincent Ferrante of Keller Williams NYC Bronx emphasized the need for agents to understand when someone is just angry versus when they are actually a threat.

“The business is emotional anyway, even if you’re not talking about, like, criminal acts,” he said. “You’re selling someone’s house. Sometimes people are going through divorces, so you’ve got to let people vent sometimes while understanding it’s not personal.”

Source: The Real Deal South Florida

Need a new roof? State agencies suspend certain rules to hasten post-Irma recovery

Hurricane Irma damages home in Sugarloaf Key (Photo by Joe Raedle/Getty Images)

Gov. Rick Scott authorized state agencies to suspend certain construction permit requirements and other regulations to quicken repairs at property damaged last week by Hurricane Irma.

The Florida Department of Business and Professional Regulation issued an emergency order to “suspend certain regulations and fees that may prevent, hinder or delay” recovery from Irma, including roof repairs and installations.

“I think that’s a great move. It has been done in the past” after major hurricanes, said Peter Dyga, president of the Associated Builders and Contractors, Florida East Coast Chapter. “It obviously will provide a little relief on the pressure that’s going to be there for the No. 1 repair, the most important thing: roofs.”

In its emergency order, DBPR cited the governor’s authorization of each state agency to suspend regulations “if strict compliance … would in any way” slow the post-storm recovery.

Similarly, the Florida Department of Environmental Protection has issued its own emergency order to allow a variety of storm-damage repairs without obtaining prior permits.

Howard E. Nelson, a Miami-based partner of law firm Bilzin Sumberg, said the DEP order applies to many types of property repairs by individuals, businesses and governmental entities.

For example, “if you’ve got a storage tank, and you want to make repairs to the tank, you don’t have to wait for a permit,” Nelson said. DEP may require a field authorization for such work, “but they’ve got an expedited process for a field authorization.”

Emergency debris-collection sites may require field authorizations, but they “don’t need to be permitted like a normal solid waste facility,” Nelson said. “Normally, that would require a solid waste management permit, and that would take six to nine months to get.”

However, the emergency DEP order is set to expire October 4, and it may not apply to all 67 counties in Florida.

Miami-Dade County and several other Florida counties have local permitting authority independent of state authority. “Miami-Dade doesn’t believe it’s covered by this emergency [DEP] order,” Nelson said. “Miami-Dade’s wetland permitting and dock permitting aren’t a delegated state program. They’ve got their own independent, code-based provisions.”

However, Broward County to the north has “more of a delegated state program than Miami-Dade,” he said.

Just one week after Hurricane Irma’s rampage through Florida, storm-related insurance claims filed already reach an estimated $2 billion in losses, according to Florida’s Office of Insurance Regulation.

Overall, Hurricane Irma may have caused up to $40 billion worth of insured industry losses in the United States, according to an estimate from catastrophe modeling firm AIR Worldwide.

Source: The Real Deal South Florida

South Florida homeowners are getting an insurance break post-Hurricane Irma

Aerial view of homes in Broward County Rick Scott

In the wake of Hurricane Irma, Gov. Rick Scott signed an emergency order that will give homeowners more time to update their insurance policies. The order provides homeowner’s insurance policy holders an additional 90 days to supply required information to their insurance companies.

The extension was placed in mind of the hundreds of thousands of Floridians who were asked to evacuate their homes before the storm struck, according to WLRN. Extensions prevent policies from canceling and allow any displaced residents some extra time to update their information and file damage claims, Florida’s former Insurance Commissioner Lisa Miller said.

The extension also helps the renewal process, so homeowners will have a grace period to renew or find a new policy.

Some of the most impacted areas in Florida were in the Keys. About 25 percent of homes in the Florida Keys were destroyed after Hurricane Irma barreled through the islands, according to estimates by the Federal Emergency Management Agency. [WLRN]Amanda Rabines 

Source: The Real Deal South Florida

What you missed at The Real Deal’s first LA forum

The Real Deal Los Angeles Showcase (all photos by Adam Southard)

From TRD LA: What do $350 million homes, reality TV, Chinese capital controls and affordable-housing challenges have in common?

They were among the hot topics at The Real Deal’s first-ever Los Angeles real estate showcase and forum, which drew over 400 residential and commercial professionals to Downtown L.A. on Thursday

Kicking things off was a star-studded residential panel, featuring Jade Mills, Aaron Kirman, Mauricio Umansky, Kofi Nartey, Ben Bacal and Michael Nourmand. The brokers discussed the impact of sales such as the $100 million Playboy Mansion deal have on the market, and how to deal with buyer’s pricing expectations, which have continued to inch skyward since that record transaction.

Nourmand said he’d rather lose a listing in the short term than “credibility” in the long term by refusing to list a house for an unreasonable price. Kirman offered a counterpoint, saying listings like the $350 million Chartwell estate, which are quick to make national headlines, have given L.A. agents greater exposure to the world’s wealthiest.

“One of the reasons [L.A. is] the preeminent luxury market is because we [priced high],” he said. “We have a lot of cocky developers and a lot of cocky agents. Media now really follows the L.A. marketplace.”

Next up was a status update on L.A.’s commercial market, featuring Carl Muhlstein, Beatrice Hsu, Chris Rising and Stephen Silk.

Hsu said that amenities that were formerly considered a “luxury” are now expected in all multifamily developments.

“There’s a higher expectation to the level of finish,” she said.

Rising said the same is true for office tenants.

“Gone are the days when you buy something and someone is going to come along and take it as is,” he said.

“God, I miss those days,” Muhlstein said.

Silk addressed China’s recent clampdown on institutional capital flowing overseas, something he said might be eased after China’s upcoming elections.

This wouldn’t be a real estate event without the schmoozing, of course, which took place everywhere: in the aisles, in the buffet line, even as panelist exited onto a street bustling with Downtown construction.

Source: The Real Deal South Florida

Bridge Investment Group pays $77M for senior living complex in Lantana

Carlisle Palm Beach and Robert Morse, chairman of Bridge Investment Group

Bridge Investment Group paid $77.2 million for the Carlisle Palm Beach, a luxury senior living community in Lantana.

Property records show SHI Carlisle Palm Beach LLC, a joint venture between Chicago-based Senior Lifestyle and Boston-based AEW Capital Management, sold the 310-unit complex at 450 East Ocean Drive to an affiliate of Bridge Investment Group, a real estate investment and property management firm. It traded for $249,000 per unit.

Bridge Investment Group financed the deal with a $55 million mortgage from Wells Fargo.

The Carlisle offers independent living, assisted living units and memory care units with rents starting at nearly $4,000, according to its website. The six-story, 235,000-square-foot community sits on 7.15 acres a block away from the ocean. It was built in 1998 and renovated in 2005, according to data from Real Capital Analytics.

Senior Lifestle and AEW paid $53 million for the property in 2011, which means it just traded hands for roughly 45 percent more than its previous sale six years ago.

Bridge Investment Group manages $7.8 billion in multifamily, affordable housing, senior housing and medical properties, office and debt strategies, according to its website. Executives at the firm were not immediately available for comment.

Nearby in Lake Worth, the developers of Villages of Windsor in Lake Worth are completing construction of a 320-unit senior housing complex, the Villages of Windsor, which will have 188 independent-living units, 80 assisted-living units and 54 memory-care units.

Source: The Real Deal South Florida

Double tap: Here’s a look at The Real Deal’s favorite photos on Instagram this past week

From TRD New York: A lot went down in the world of real estate this past week — and Instagram was there to document it all.

Here’s a look at some of the best uploads from around New York, Miami and Los Angeles.

1. Photographer Evan Joseph commemorated the 16th anniversary of the Sept. 11 attacks with this sky-high snap of One World Trade Center.


A post shared by Evan Joseph (@evanjosephphoto) on Sep 11, 2017 at 4:35am PDT

2. Douglas Elliman broker Maxwell S. Cohen captured the opening of Oculus’ 355-foot-long skylight, which happens just once a year on 9/11.

3. Some real estate players decided to ride out Hurricane Irma in South Florida, like Brown Harris Stevens Miami exec Mark Zilbert. This video shows the impact of the storm’s winds on his 35th-floor apartment.

4. Hurricane Irma toppled two cranes in Miami, and another in Fort Lauderdale. After the skies cleared and the wind subsided, Cranespotters captured the carnage — though industry players say the city weathered the storm pretty well.

Spotting Damaged Cranes In Greater Downtown Miami. This Is The Related Group’s Paraiso Condo Development

A post shared by (@cranespotters) on Sep 11, 2017 at 5:58am PDT

5. You can just make out the tippy tops of the two tallest residential towers in New York City in this pic from architectural photographer Pavel Bendov.

View looking through 57th Street

A post shared by Pavel Bendov (@archexplorer) on Sep 11, 2017 at 11:43am PDT

6. HEADS UP! Snapped by L.A.-based photographer Hunter Kerhart, a plane approaches LAX directly above the future site of Inglewood Stadium.

Inglewood Stadium, right under the LAX approach path.

A post shared by Hunter Kerhart ( on Sep 12, 2017 at 2:13pm PDT

7. Cornell Tech’s Roosevelt Island campus made its debut earlier this week. The high-tech university, which emphasizes sustainable design, is home to the world’s tallest passive house.

8. It’s official: This week, the city of Los Angeles was officially awarded the 2028 Olympic Games (Paris will host in 2024). It’s the third time L.A. will play host to the world’s ultimate sporting event.

9. Instagram user @momannymopena snapped this photo of the Thomas Heatherwick-designed statue known as the Vessel (left) rising alongside the Culture Shed, a multi-use event space.

10. The Real Deal Los Angeles hosted its debut Southern California Real Estate Showcase and Forum this past Thursday, and was joined by the top industry players from around the city. That’s one good lookin’ residential panel!

Catch these photos and more by following The Real Deal on Instagram. Be sure to also check out The Real Deal South Florida and The Real Deal Los Angeles.

Source: The Real Deal South Florida

Cushman’s new head of retail has a lot to learn. And he doesn’t have much time

David Gorelick

From TRD New York: David Gorelick’s office at Cushman & Wakefield’s headquarters on Sixth Avenue remains pretty stark two months after he took the job as head of the brokerage’s retail division in July.

Aside from a few family photos and mementos of earlier deals, there’s a reminder of his first job in retail: a poster of Sam’s Loans pawn shop in Detroit, where he worked as a 15-year-old.

“It was kind of crazy,” he told The Real Deal during a meeting at his office in late August. “Ever since then, after selling guns and jewelry and lawnmowers, I had a natural affinity for retail.”

The poster sits on the floor and not up on the wall, in part, because Gorelick has mostly been on the road since he joined Cushman, where he is in charge of growing the firm’s retail presence across the country and navigating the choppy waters of a sector some have described as “fucked.”

Gorelick comes with more than 15 years experience in the business, working on the real estate side for companies like the defunct retailer Buckler and Ralph Lauren, where he focused on bringing the Polo and Club Monaco brands to Europe. Most recently he worked at the mall giant Simon Property Group, heading up client accounts for the company’s 31 million-square-foot portfolio.

But working on the brokerage side of the business is new for Gorelick, and he’s taking on the task at a time when both the retail sector and Cushman are going through significant changes. He has to figure out how Cushman can handle the pressures e-commerce are putting on retailers nationwide. And of course, there are the store closings and high retail vacancy rates, especially in essential markets like New York.

If that weren’t tough enough, Gorelick has to do so a time when competitors are gaining strength, and Cushman has been trimming staff as it faces increasing pressure to push profits before going public.

In short, Gorelick’s got to get up to speed, and fast.

“There’s a lot to be learned,” said Colliers International president Joe Harbert, who up until 2012 had been the chief operating officer at Cushman and poached two of brokerage’s top dealmakers when Brad Mendelson and David Green left for Colliers late last year.

It’s no small task running Cushman’s retail team, which ranked as the second most active retail brokerage in Manhattan last year behind CBRE, leasing 1.37 million square feet, according to an analysis by The Real Deal.

And he’ll be in charge of Cushman’s 90 retail markets, 200 brokers and 200-plus affiliates.

“It’s like herding cats,” Mendelson said of the task of working with so many dealmakers. “Most managers have not been brokers. This one hasn’t been a manager.”

A new job at 50,000 feet

Gorelick is 39 years old and talks about the job with the enthusiasm of someone who is on the right side of 40.

Having worked on the retail tenant of side of the negotiating table for Buckler and Ralph Lauren, he said he’s particularly interested in expanding beyond the traditional brokerages services.

That includes what Cushman calls “new commerce” – streamlining all the points in the retail process like warehousing and distribution.

“A lot of retailers may or may not have somebody internally doing that,” he said. “I worked for Ralph Lauren – a big operation. But imagine the guy that is a small mom-and-pop. They don’t have the capabilities and capacities to do what these big conglomerate retail companies do.”

Gorelick reports directly to Cushman’s chief operating officer in the New York City region, Todd Schwartz, and said that while he’s interested in deals, he probably won’t be sitting at the negotiating table on many leases.

“I’m at 50,000 feet in a lot of markets – I run a national platform – so I can’t get into the weeds on everything,” Gorelick said.

He takes over the job from veteran Cushman broker Gene Spiegelman, who stepped down earlier this year from the role he picked up in 2014. (The two have a bit of history together: One of Gorelick’s earlier deals in the city came in 2007 when Ralph Lauren leased space at 1055 Madison Avenue where Spiegelman represented the landlord.)

Spiegelman said that soon after he took the job, the Chicago-based CRE services firm DTZ announced it would buy Cushman. The job changed from hiring brokers and growing through mergers and acquisitions to combining the companies’ platforms. After two years, he decided it was time to get off the road and return to brokerage.

And when it came time to find a replacement, one of the requirements was to select someone who wasn’t a broker, he said.

“It’s not about brokerage. Retail services is bigger than brokerage,” Spiegelman said. “[Gorelick’s] perspective is really knowing on the ground how the clients are thinking.”

“He’s not looking for the transaction,” he said. “He’s looking for the business.”

The new retail boss will work on things like mergers and acquisitions, such as the deal Cushman recently did to merge with its joint venture partner Northmarq, which extended its reach in Minneapolis, Seattle, Salt Lake City and Las Vegas. And he said he doesn’t feel any extra pressure to cut costs ahead of the planned initial public offering.

“If you’re not doing that as a business leader, you’re not looking at your business strategically,” he said.

He’ll also be working with the real estate technology accelerator MetaProp, which teamed up with Cushman earlier this year to help the firm find new technology companies that could help boost its business.

Gorelick said there’s a lot he has to figure out about the new role, and he wants to spend the first few months getting the lay of the land. Then he can start putting together a game plan for where he wants to take the retail group, though acknowledged that it’s kind of like trying to hit a moving target considering how much retail is changing.

“As much as I do, retail’s going to change for the next two years,” he said.

Source: The Real Deal South Florida