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Commuter Return is a Wildcard for Downtown Real Estate

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Downtown offices are as empty as the clothing stores next door, but property investors prefer the former. Part of the trend may be due to new and misunderstood challenges the office is facing.

The hearts of big cities like London and New York have turned into ghost towns when workers stopped commuting during the pandemic. According to local landowner Shaftesbury, one of the UK’s busiest boroughs, the West End, now has a normal return of 40%...

As planned, activity is expected to rebound if all UK government lockdown restrictions are lifted on June 21st. According to Kastle Systems’ return-to-work barometer, office use in New York prior to the crisis was 16.8% on May 19. Facebook and JP Morgan recently announced that they will be returning their employees to the office from July.

Offices are more optimistic than shops in the city, despite the prospect of more traffic in the city center. Last week, Shaftsbury was worth a retail store in central London. Another London-focused real estate investment trust, Said Great Portland Estates, is down 18% in the six months to March.,

It was recently announced that the value of stores has declined 27% over the past fiscal year. Their offices fell by an average of 3%.

Stock investors are particularly bearish. According to real estate research firm Green Street, a significant discount to book value traded by REITs in the UK means a drop in property value of around 15%.

The value of offices has declined more than London, but there is also a gap between office and business valuations in New York. According to Korean sources, 16.1% of US office space is now rentable, more than during the 2009 financial crisis.

Urban retailers are likely to face more severe setbacks. Major shopping areas like London’s Fifth Avenue and Regent Street rely on foreign visitors for most of their sales. Even in the most optimistic scenario, the United Nations World Tourism Organization expects global tourists to fall 55% below pre-pandemic levels in 2021.

The deserted streets mean that the flagship stores in these malls once lost the marketing power to justify high rents. Out of town stores have proven convenient for roadside pickup and shipping as they respond to the surge in online orders in the event of a crisis. This reversed the pre-trend of the new coronavirus that was benefiting downtown businesses.

Even so, the reputation of the resilient offices in London looks optimistic. Prices are currently supported by low interest rates and overseas buyers. Investors can achieve higher rental returns in percentage points in their offices in downtown London compared to other major European cities such as Paris. However, because of the long average commute time, London is vulnerable to the transition to remote work. Green Street estimates that this trend could reduce demand for office space by 15% in Berlin, but by 5% in Berlin.

Office pricing is currently difficult. Evaluators try to understand how the teleworking trend is developing and how the so-called gray area flood (oversupply of existing tenants sublet) affects rent. The growing preference of corporate tenants for green buildings also means that older offices either require costly, environmentally friendly overhauls or are not available for rent.

It’s difficult to allay downtown business concerns among property buyers who are relatively optimistic about their offices. Discounts on real estate stocks offer investors a very necessary margin of safety.

Facebook doubled its physical office space in New York and signed a major contract during a pandemic. This makes Facebook one of the largest corporate tenants in New York.

Write to Carol Ryan, carol.ryan@wsj.com

Copyright © 2020 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8

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Real estate license fees are expected to increase | News, Sports, Jobs

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Real estate agents and real estate agents are likely to face increased license fees.

Earlier this week, the state assembly passed A.5363 by 113-35 votes, with Reps Andrew Goodell, R-Jamestown, and Joe Giglio, R-Gowanda, voting against the measure. The state Senate passed an accompanying bill in February, S.2133, by 45-17 votes, with Senator George Borrello, R-Gowanda, voting against. Real estate agent fees increase by $ 30 while real estate agent fees increase by $ 10. The increased money will be used for fair apartment tests across the state.

“It reminds me of the motto of our state -“Wood wool“- which, as you all know, always means upwards.” said Goodell. “It seems that this is the motto we have when it comes to fees and expenses, and I’m a little different than when that motto was first chosen when we talked about economic opportunity and moving up . It may be a small amount, but it is another fee and increase that we are putting on this troubled industry and for that reason I will be protesting against it and recommending the same to my colleagues. “

MP Kimberly Jean-Pierre, D-Lindenhurst and sponsor of the assembly’s draft law, said paired tests are a tool to detect and eliminate discrimination in housing. She said mechanisms such as coded language, guidance, unequal service provision and higher financial demands on minorities would be used to maintain housing segregation. The introduction of a surcharge on broker and agent license fees would provide funding for nationwide efforts to ensure fair home testing, including, but not limited to, the couples testing practice.

Jean-Pierre also quoted a 2019 story in Newsday entitled “Long Island Divided” who blamed the housing discrimination on explicit and implicit bias in the real estate industry. The newspaper series reported that some Long Island real estate agents directed customers to specific neighborhoods based on their perceived race or ethnicity. In response, the Nassau district appointed a special commissioner for housing, promised increased enforcement of open living laws, strengthened the Nassau district human rights commission and established an advisory board for fair housing. Suffolk County hired an outside agency to test for discrimination in housing, strengthened the county’s Human Rights Commission, and began raising awareness of fair housing laws.

“Two years ago, Newsday published worrying results from a three-year investigation that uncovered widespread segregation and unequal treatment of potential minority and minority homebuyers in Long Island.” said Jean-Pierre. “This research confirmed what many of us already know to be true – that there are certain bad actors in real estate agencies who discriminate against people of color and draw certain people into certain communities based on their skin color – a practice that has no place in our society. … When we look at how our communities and school districts are separated, it is one of the reasons that districts in low-income communities cannot get the resources they fairly deserve because we had brokers like this one, the people of life held in a community because of their skin color and financial history. This will allow us to allocate a certain fund – and not raise taxes – but it will allocate a certain fund through the attorney general to run fairer tests in our great state of New York so that people of color can live where they want and don’t have to worry that there will be bad actors. If there are any, they will be punished. “

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Real Estate License Fees To Increase | News, Sports, Jobs

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Real estate agents and real estate agents are likely to face increased license fees.

Earlier this week, the state assembly passed A.5363 by 113-35 votes, with Reps Andrew Goodell, R-Jamestown, and Joe Giglio, R-Gowanda, voting against the measure. The state Senate passed an accompanying bill in February, S.2133, by 45-17 votes, with Senator George Borrello, R-Gowanda, voting against. Real estate agent fees increase by $ 30 while real estate agent fees increase by $ 10. The increased money will be used for fair apartment tests across the state.

“It reminds me of the motto of our state -“Wood wool“- which, as you all know, always means upwards.” said Goodell. “It seems that this is the motto we have when it comes to fees and expenses, and I’m a little different than when that motto was first chosen when we talked about economic opportunity and moving up . It may be a small amount, but it is another fee and increase that we are putting on this troubled industry and for that reason I will be protesting against it and recommending the same to my colleagues. “

MP Kimberly Jean-Pierre, D-Lindenhurst and sponsor of the assembly’s draft law, said paired tests are a tool to detect and eliminate discrimination in housing. She said mechanisms such as coded language, guidance, unequal service provision and higher financial demands on minorities would be used to maintain housing segregation. The introduction of a surcharge on broker and agent license fees would provide funding for nationwide efforts to ensure fair home testing, including, but not limited to, the couples testing practice.

Jean-Pierre also quoted a 2019 story in Newsday entitled “Long Island Divided” who blamed the housing discrimination on explicit and implicit bias in the real estate industry. The newspaper series reported that some Long Island real estate agents directed customers to specific neighborhoods based on their perceived race or ethnicity. In response, the Nassau district appointed a special commissioner for housing, promised increased enforcement of open living laws, strengthened the Nassau district human rights commission and established an advisory board for fair housing.

Suffolk County hired an outside agency to test for discrimination in housing, strengthened the county’s Human Rights Commission, and began raising awareness of fair housing laws.

“Two years ago, Newsday published worrying results from a three-year investigation that uncovered widespread segregation and unequal treatment of potential minority and minority homebuyers in Long Island.” said Jean-Pierre. “This research confirmed what many of us already know to be true – that there are certain bad actors in real estate agencies who discriminate against people of color and draw certain people into certain communities based on their skin color – a practice that has no place in our society. … When we look at how our communities and school districts are separated, it is one of the reasons that districts in low-income communities cannot get the resources they fairly deserve because we had brokers like this one, the people of life held in a community because of their skin color and financial history. This will allow us to allocate a certain fund – and not raise taxes – but it will allocate a certain fund through the attorney general to run fairer tests in our great state of New York so that people of color can live where they want and don’t have to worry that there will be bad actors. If there are any, they will be punished. “

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Florida men, their Coral Springs FL firm, a $2 million fraud

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Two South Florida men agreed to pay likely millions of dollars after the Securities and Exchange Commission charged them with inventing a $ 2.4 million appetizer for South Florida white-collar crime: Ponzi-scheme real estate fraud.

Legally, neither Larry Brodman of Coral Springs nor Anthony Nicolosi of Lake Worth admit any of the allegations in the SEC complaint filed against them in federal court in Fort Lauderdale. The fact that they quickly agreed to pay a “skimming off of illegally acquired profits” as well as interest and a civil penalty speaks for itself.

The SEC said Brodman used unregistered securities offerings to raise $ 9.06 million for real estate investors, and the company would use that money to buy residential properties and convert them into rental properties.

“In reality, Brodman embezzled approximately $ 1.12 million in investor funds that were diverted to his personal account,” according to the SEC complaint. “Brodman, PII and the Property Entities also misused approximately $ 1.2 million in investor funds by paying sales commissions to sales agents, including Nicolosi, despite the fact that the listing materials stated that commissions would only be paid to licensed brokers.

“Some of the” profits “distributed to investors were actually payments funded by other investors, and there was extensive commingling of investor money.”

Property Income Investments, Brodman and Anthony Two-Names

According to state records, Brodman founded Property Income Investors (PII) in March 2016.

PII marketed itself as a “real estate investment company based in South Florida with a focus on turnkey apartment buildings”.

For each property purchased, Brodman created a separate company and named it Property Income Investors and added a number. The eight-part Coral Springs building at 3050 Coral Springs Dr. was bought by Property Income Investors 304, for example. In its complaint, the SEC referred to the 10 companies collectively as “the ownership units”.

According to the SEC, Nicolosi, who was once known as Anthony Peluso, was the top-selling agent for PII and the property entities. He was a registered agent with 18 SEC-registered broker-dealers from 1994 to 2000.

The SEC complaint states that Anthony Peluso legally changed his name to “Anthony Nicolosi” to cover his tracks after the National Association of Securities Dealers permanently banned him from associating with a member for lying to customers and sales tactics were under high pressure. He received a cease and desist order from the Alabama Securities Commission in 2010, in part for failing to notify clients of his name change and NASD action.

Where did the money come from and where the money went

The SEC complaint said Property Income Investors raised $ 9.06 million from 156 investors in 26 states from January 2016 to September 2020. Investors were told Brodman and investors would have a 30-70 percent split on rental income and 50-50 percent on property sales.

About $ 4.1 million went towards the purchase of 12 properties, which range from $ 265,000 to $ 1.25 million, according to the SEC. According to Broward County records, the aforementioned 3050 Coral Springs Dr. building was sold for $ 1.25 million on August 29, 2019. Another $ 752,000 was spent on renovating and maintaining the property.

PII and Property Entities sold three of the properties and took about $ 1.04 million in rent for the other.

“The companies have not distributed any profits from property sales to investors,” says the complaint. “Based on the information in the Offer Document, Brodman was entitled to a maximum total of approximately $ 312,000 as his share of the Company’s profits.

“But even after settling that $ 312,000, Brodman embezzled approximately $ 1.12 million in investor funds that were diverted to his personal account.”

Investors have been advised that licensed brokers may receive “up to 10% of proceeds” in commissions, the SEC said. However, the agency indicated that none of the brokers were licensed by PII and the $ 1.2 million spent on commissions exceeded 10% of the $ 9.06 million raised.

In addition, “at least $ 124,000” flowed back to some investors as profits, according to the SEC, in fact payments from later investors. The same was claimed by two 2020 investors for “a substantial portion of $ 460,000.”

“In total, PII, Property Entities and Brodman misused and misused about $ 2.44 million of the proceeds from the issue,” said the SEC.

Since 1989, David J. Neal’s domain at the Miami Herald has expanded to include writing about panthers (NHL and FIU), dolphins, old school animation, food safety, fraud, naughty lawyers, bad doctors, and all kinds of breaking news. He drinks coladas whole. He doesn’t work on Indianapolis 500 Race Day.

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