Are developers playing "chicken" with the market?

David Goldsmith

All Powerful Moderator
Staff member
This week's New Development Report from Sotheby's Kevin Brown Team.

NB
Week of May 9 to May 15
Contracts signed 63, sales volume $246,930,769

Week of May 30 to June 5
Contracts signed 29, sales volume $76,051,970
 

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David Goldsmith

All Powerful Moderator
Staff member
Investor alleges HFZ diverted funds to save XI condo project
Arel Capital claims HFZ refused to provide complete and accurate accounting

As HFZ Capital began to run into trouble with its twisting XI condo project in Chelsea, an investor alleges the company fraudulently diverted funds from another deal to keep it afloat.

Arel Capital’s Richard G. Leibovitch
New York-based Arel Capital is suing HFZ Capital affiliates over a $7.3 million investment it made in four former HFZ Capital buildings in 2014. HFZ Capital was seeking to convert four pre-war rental properties into condos: at 88 Lexington Avenue; 90 Lexington; 301 West 53rd Street; and The Astor at 235 West 75th Street.

 

David Goldsmith

All Powerful Moderator
Staff member
Related Group’s condo kings expand their realm
Jorge Pérez on bold bets, lessons learned and a second go at national expansion

Getting burned twice in Las Vegas didn’t kill Related Group’s dream of national expansion. But it taught the megadeveloper the importance of boots on the ground.

Miami condo king Jorge Pérez and his son Jon Paul are expanding their Related Group with a $13 billion pipeline of projects throughout the Americas, their boldest move beyond Florida since their first Las Vegas venture in 2005, when they teamed up with George Clooney and Cindy Crawford’s husband, Rande Gerber, on a hotel, condo and casino development called Las Ramblas.

“We were selling like hotcakes. Then we got our construction costs back and realized, ‘I’m going to lose money for every condo that I sell.’ So we had to scratch that,” Pérez said. “Thank God somebody gave us a great offer for the land, and we left Las Vegas.”

Related is moving quickly to develop roughly 25,000 units in the United States and Latin America. By next year, markets outside Florida — including Georgia, Tennessee, the Carolinas, Virginia, Texas and the Rocky Mountain region — could account for more than half of its developments. In Latin America, it has condo developments in Mexico, Brazil and Argentina.
 
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