thehousingbubble@gmail.com
Blog

People Who Purchased As Investors Are Really Disappointed With What They Paid

A report from ABC Action News. “Just over a month after Hurricane Debby hit Florida, new data shows nearly 60% of all Hurricane Debby claims are closed — and more than half of those were listed as ‘closed without payment.’ ‘I was denied,’ said Sarasota homeowner Allison Cavallaro. ‘They wouldn’t cover it, of course, because it’s flood.’ Cavallaro didn’t think she needed flood insurance because her home is outside a FEMA flood zone, in flood zone X. Without flood insurance, Lisa Miller, former Florida deputy insurance commissioner said the options are not ideal. ‘One, of course, is take out a personal loan or if they’ve got equity in their home, you know borrow with that. Secondly, see what FEMA has to offer, it might not be much, but it could help. And third, is a lot of people are just selling their homes and walking away.'”

Golfweek on Florida. “Owners at Hunters Run may soon have to give up the equity or refund they were promised when they initially bought at the golf course community. At stake is $49 million worth of equity that older owners were supposed to get back when they eventually sold. Some of the refunds are as much as $32,000. The Hunters Run board argues that it needs the $49 million to pay for capital improvements. The alternative, it say, is a special assessment that would be close to $30,000 per household. The result has been a glut of sellers trying to sell to meet the deadline, especially with condominiums. Ten two-bedroom condominiums are currently listed for sale for less than $5,000. One is for sale for $1,000 with a credit of $10,000 to a buyer who can close by Oct. 1. Prices of condo units have been repeatedly slashed to attract buyers.”

“David Greenblatt, a Realtor who also lives at Hunters Run, represents clients who have listed their condos at $1,000. ‘There is some pain being felt right now,’ Greenblatt said, ‘but once we get past this, the community will be much better than it is right now. This is a good way to ensure that the needed improvements are undertaken.'”

New York Focus. “If you’ve scrolled through social media lately, there’s a good chance you’ve seen an ad for rooftop solar. Claver Campbell, a 76-year-old homeowner in Queens, called the listed number and connected with a solar company she’d never heard of, called SUNco. Two days later, a salesperson named Mitchell Sims sat at her dining table. By the end of the day, there was a contract in her email inbox for a 25-year project loan. But she noticed a problem: That contract put her on the hook for $160,000 over the course of the loan, with monthly payments nearly three times higher than Sims said she’d have to pay. Campbell maintains she never signed the contract, but it bore her e-signature. She wrote back to cancel the agreement.”

“Less than a week later, she was emailed a nearly identical contract, with only the date changed. It again had her signature on it, though she said she didn’t sign that one, either. Not long after, she had a new roof and solar panels. And she was still on the hook for just as much money. Now, Campbell is suing SUNco and its lending partner, Solar Mosaic, with the help of the Legal Aid Society. ‘I go through so much depression over this, I don’t know how I survive,’ she said, tearing up. ‘I couldn’t eat, I couldn’t sleep. … I just hope nobody else goes through this.'”

From WGBH. “About a dozen Massachusetts homeowners who did business with Blue Hub Capital say the non-profit failed to adequately disclose its terms for shared-appreciation mortgages, which they say reduce their ability to refinance and stuck them with high monthly payments. Representatives for the homeowners claim they thought they were being rescued from foreclosure when Blue Hub bought their houses from their original mortgage holder, then sold them back with a more affordable mortgage. In the process, however, the homeowners say they unknowingly signed up for a separate, second mortgage known as a shared- appreciation mortgage – a home loan where a lender offers a homeowner a lower interest rate and lower monthly payments in exchange for a share of the homes’ future, appreciated value.”

“Jeffrey P. Wiesner, an attorney representing the homeowners, argued that Blue Hub’s disclosure practices for shared appreciation mortgages misrepresent the financial picture for borrowers by telling them there’s no balloon payment — a one-time, larger than usual payment typically due at the end of a loan — and there’s no negative amortization — interest that accrues in a way that increases the loan balance. That, he said, violates the federal Truth In Lending Act and the Massachusetts Consumer Credit Cost Disclosure Act. ‘The fact that there was a shared appreciation mortgage as part of the overall package meant that those statements are false,’ he told GBH News after court Tuesday.”

Summit Daily. “Property rights violations. Foreclosures. Sky-high fees. Coloradans say they’ve reached a boiling point with their homeowners associations. A newly formed group of property owners plans to take their message to the Capitol with a rally on Saturday, Sept. 14 to share personal stories and urge lawmakers to pass reforms for homeowners associations. ‘The infrastructure that the government has put around how HOAs are dealt with allows for bad characters to infiltrate HOAs,’ said event organizer Holly Crystal. ‘There’s no consumer protections, there’s no government oversight. Homeowners from the High Country to the Front Range have raised concern over the surging fees they pay their associations primarily due to an increase in insurance premiums. In some cases, HOA members have seen their monthly dues more than double within the last two years.”

“Crystal said she was driven to advocacy after a years-long legal battle with her HOA that cost her around $400,000 in attorney fees, according to financial documents she provided to the Summit Daily News. ‘All of it has been a nightmare that in my wildest dreams I couldn’t have imagined,’ she said. ‘I’m not an individual who would fund a $400,000 lawsuit. I fell into this. If I didn’t fund the lawsuit, I could have lost my private property, and that outrages me. Laws are being passed. But if you’re just passing laws and have no oversight … it’s like throwing me a wooden sword when I am going out on the battlefield.'”

Fox 5 on Nevada. “A group of neighbors in one part of the Las Vegas Valley want homeless camps cleared, and created a small petition to call for NDOT to take action. NDOT says crews are returning Thursday to the stretch of the U.S. 95 that runs along Rosewood Drive, where camps intermittently set up on the sides of the highway. Crews recently paid a visit August 28. ‘They set up a little Taj Mahal,’ said decades-long resident June Maes, who is concerned about the camps. Homeless individuals cut through fences to set up tents. There is debris or shopping carts left on sides of the road, and other people end up camping on public streets near homes. ‘It’s a horrible situation when you have homeowners that want to have a nice community and take care of the property, and then you have this happening, and we feel helpless,’ Maes said.”

Fox News on Washington. “The Seattle City Council’s Public Safety Committee has moved on a proposal to reinstate a law that makes prostitution loitering a misdemeanor as the city attempts to crack down on sex trafficking, violence and drug dealing despite strong opposition from the public. Prostitution, violence and drug deals are common along Seattle’s Aurora Avenue, which has become the focal point in the metro’s ongoing debate over public safety. Seattle City Councilmember Cathy Moore is proposing legislation to establish policies that govern arrests involving prostitution and loitering and to create ‘Stay Out of Areas of Prostitution’ (SOAP) zones that, if violated, could result in charges.”

“Supporters, the station reported, have argued that Aurora has become an ‘open-air drug market’ and a dangerous area where violence is a common occurrence. ‘It’s like a war zone in your city,’ one resident from 102nd Street testified during the City Council’s Public Safety Committee meeting on Tuesday. ‘When I go home, I’m in it, and it is just the most dehumanizing thing I’ve ever experienced.'”

Orange County Register. “The pace of Californians filing for bankruptcy is at a four-year high. New personal bankruptcies in California are being filed at a rate of 40 per 1,000 people – that’s the fastest pace since 2020’s second quarter, just as the pandemic walloped the economy. This pace is up 25% in a quarter and 38% higher in a year. Now, the uptick in this yardstick of extreme monetary distress parallels another consumer warning sign: more new foreclosures. In the second quarter, there were 12 Californians entering foreclosure per 1,000 people, up 20% in a quarter and 50% higher in a year. It’s the highest share since 2020’s first quarter. Californians have long juggled huge debts, largely due to giant mortgages. At $86,310 per capita in the second quarter, California consumer borrowings are 40% higher than the nation’s $61,853.”

The Real Deal on California. “Embattled Indian liquor magnate Vijay Mallya has sold his panoramic Sausalito home for $14.4 million, just inching past a $14 million trade in Ross to become the most expensive sale in Marin County so far this year. When the 11,000-square-foot home at 6 Bulkley Avenue first came to market in 2021, it was listed at $22.5 million. That price dropped to $20 million the following summer. It was most recently listed at $16.85 million, according to a marketing site from Mill Valley-based Coldwell Banker agent Farnoosh Hariri. Hariri confirmed that she was still the listing agent on the home, which has been in and out of foreclosure since 2019, when it sold. Hariri declined to comment on the sale.”

“Mallya has sold off many of his homes and other assets over the last few years as his bet on starting Kingfisher Airlines in 2005 failed to pay off. In 2016, he had to flee India to avoid arrest on money laundering and fraud charges, with more than $1 billion owed to more than a dozen banks. Records from the Aug. 20 close show Mallya’s daughter Leana as the seller of the property, though a substitution of trustee filing from earlier that month still put Wilmington Trust as the beneficiary.”

CBC News in Canada. “Starlight Investments is also part of a growing trend across Canada: the ‘financialized landlord,’ whose business model allows outside investors to share in the profit of rental housing. According to Martine August, a housing expert at the University of Waterloo, financialized landlords purchased 90 per cent of all rental stock that came up for sale in Toronto in 2020. ‘Financial firms are raising rents higher than other types of landlords. On average, after a financial firm acquires a building, they increase the eviction-filing rate by three,’ August said. ‘They triple it.’ Starlight’s own literature for shareholders describes a model where they seek out ‘older stock’ and in some cases have seen rents rise ‘up to $411 per unit.'”

“According to research done by Steve Pomeroy, a professor and special advisor to the Canadian Housing Evidence Collaborative at McMaster University in Hamilton, between 2011 and 2021, Canada lost more than 550,000 affordable rental units. Where did they go? ‘They are still there, for the most part, but they are no longer affordable. The rents have just gone up beyond that affordability threshold,’ Pomeroy said.”

The Globe and Mail in Canada. “Just as some of the headwinds facing the Toronto-area real estate market were losing strength, the outlook became slightly more tempestuous. In the $1-million to $2-million tranche, attractive houses on prime streets still pull multiple offers, Rochelle DeClute, broker at Union Realty says, but buyer psychology has changed. During the market’s high-octane run, first-time buyers just wanted in, Ms. DeClute says. In today’s landscape, buyers don’t want to talk themselves into a house – especially in frenzied competition. ‘They say, ‘that’s fine – let it go to another party. There’s lots to choose from.’ If a property has some shortfalls, buyers are unlikely to jump on it.”

“The one part of the market where her firm is seeing trouble is in the condo segment. Even in as traditional neighbourhood as the Beaches, many of the sellers today are unloading a recently completed unit that they paid rich prices for several years ago in the preconstruction phase. ‘People who purchased as investors are really disappointed with what they paid,’ she says. Her firm has been advising sellers to slash prices for some listings.”

The Age in Australia. “Older homeowners would get a one-off stamp duty reprieve on their final home purchase under a property industry pitch to free up tens of thousands of under-utilised family homes across Melbourne. Richard Temlett, director of research and strategy at property consulting firm Charter Keck Cramer, said in the current climate it often did not make financial sense for people to downsize, with a combination of stamp duty and the high cost of new townhouses and apartments offsetting any potential gains. ‘It is locking up the market,’ Temlett said. ‘It is preventing people from rightsizing into the right type of space to suit their needs. As it stands right now we’ve got a huge ageing baby-boomer segment of the market that is asset-rich and cash flow-poor. They can’t move.'”

From Reuters. “Zhongzhi Enterprise Group, a former leader of China’s shadow banking sector that declared insolvency last year, used aggressive and potentially illegal sales practices to sustain its operations as it lurched toward collapse, according to records reviewed by Reuters and eight people with direct knowledge of the matter. China’s years-long property boom had propelled Beijing-headquartered Zhongzhi to the top of the country’s $18 trillion asset-management industry and made it a key player in a shadow banking sector the size of the French economy. Asset managers such as Zhongzhi sell wealth-management products to investors. The proceeds are then channeled by licensed trust firms like its Zhongrong unit to developers and other companies that cannot tap bank funding directly because of poor creditworthiness or other reasons.”

“Previously unreported details show that about a year before its financial troubles burst into the open, Zhongzhi units were paying returns to existing investors in wealth-management products by using funds from new investors, and promising individual investors lucrative returns that belied the group’s exposure to a deepening property crisis. The liquidity crisis at Zhongzhi became public when trust unit Zhongrong missed payments on dozens of products in the third quarter of 2023, fueling investor protests and worries that China’s property meltdown was spilling over into its $66 trillion financial industry.”

“Eventually, Zhongzhi told investors in November 2023 that it was insolvent with up to $64 billion in liabilities. The group filed for bankruptcy liquidation in January, while Beijing police probed its business practices. In March, Beijing police said on WeChat that wealth-management firms under Zhongzhi should cooperate with police and return any illegal income. In August, Beijing prosecutors said they had charged 49 suspects related to Zhongzhi on suspicion of illegally absorbing public deposits, without providing details.”

Related Posts
This Post Has 121 Comments

  1. The golf article is on Boynton Beach, Florida.

    ‘The board voted this year to take away the equity rights of members, but petitions were submitted opposing the decision, forcing a referendum. The votes will be tallied on Monday, Sept. 23. The board’s lawyer submitted an opinion saying the board could legally change the bylaws to permit the use of equity funds for capital improvements. Current owners have until Oct. 1 to sell their units and recover part of their initiation fee.’

    1. “David Greenblatt, a Realtor who also lives at Hunters Run, represents clients who have listed their condos at $1,000. ‘There is some pain being felt right now,’ Greenblatt said, ‘but once we get past this, the community will be much better than it is right now.”

      ‘The beatings will continue until morale improves’

  2. ‘About a dozen Massachusetts homeowners who did business with Blue Hub Capital say the non-profit failed to adequately disclose its terms for shared-appreciation mortgages, which they say reduce their ability to refinance and stuck them with high monthly payments’

    Right in yer own back yard senator running deer. How embarrassing for you!

  3. ‘Now, Campbell is suing SUNco and its lending partner, Solar Mosaic, with the help of the Legal Aid Society. ‘I go through so much depression over this, I don’t know how I survive,’ she said, tearing up. ‘I couldn’t eat, I couldn’t sleep. … I just hope nobody else goes through this’

    This is a well written article. Some sleaze out there.

    2. “Has anyone seen my cat?”

      Maybe this was a part of Kamala’s plan that Trump was talking about the other night.

      See the Haitian immigrant.

      See Spot.

      Run Spot run.

    3. I’m glad he brought up the cats on the national stage. At the very least, some people will look into it. Even if the cats are safe (they aren’t), I would bet that NOBODY knew that Special K is importing tens of thousands of leeches directly into small towns and giving them thousands of dollars in bennies. That alone is a pretty big eye-opener.

  5. Ooops

    Kirby: ‘No use in responding’ to a ‘handful of vets’ on Biden’s botched Afghan withdrawal

    By Emma Colton Fox News
    Published September 11, 2024 4:43pm EDT

    On the anniversary of 9/11, White House National Security Council communications adviser John Kirby dismissed the concerns of military veterans critical of the botched withdrawal from Afghanistan, writing in response to a Fox News Digital press inquiry that there’s “no use” weighing in on the veterans’ views.

    “Obviously no use in responding. A ‘handful’ of vets indeed and all of one stripe,” Kirby said in a “reply all” email chain Wednesday afternoon that appeared to be intended for White House staffers, but which also included Fox News Digital.

    Kirby’s message was sent in error, with him following up with a Fox News Digital reporter, “Clearly, I didn’t realize you were on the chain.” Kirby sent the email while traveling with President Biden on the anniversary of 9/11.

    https://www.foxnews.com/politics/kirby-no-use-responding-handful-vets-bidens-botched-afghan-withdrawal

  6. and more than half of those were listed as ‘closed without payment.’ ‘I was denied,’ said Sarasota homeowner Allison Cavallaro. ‘They wouldn’t cover it, of course, because it’s flood.’

    Are these people fu.cking dumb. Why even make a claim. If its flood and you don’t have flood you get nothing. Did they actually think this would work?

  7. “…Cavallaro didn’t think she needed flood insurance because her home is outside a FEMA flood zone, in flood zone X…”

    Next up: Ms. Cavallaro didn’t think she needed medical insurance because everyone in her family lived to over 100 years old….

    Next up: Ms. Cavallaro didn’t think see needed auto liability insurance because she has be driving for years and never had an accident….

    2. the logic is incorrect

      SHE LIVED OUTSIDE THE FLOOD ZONE.

      flood insurance isn’t cheap. It seems like a very low risk to spend a lot of money. it’s a reasonable decision. Once in a while though, you get screwed, low risk isn’t zero and you should keep back emergency money for crazy things that happen.

      1. flood insurance isn’t cheap
        It is heavily subsidized. Obviously cheap is relative, but anyone in FL near any body of water, should get it. in my humble opinion.

  8. At stake is $49 million worth of equity that older owners were supposed to get back when they eventually sold. Some of the refunds are as much as $32,000. The Hunters Run board argues that it needs the $49 million to pay for capital improvements. The alternative, it say, is a special assessment that would be close to $30,000 per household.

    Florida is finished

  9. Weatherman Suffered Case of TDS After Trump Flag Passes Behind Him While Live-on-Air

    by Sean Miller
    September 12th, 2024 9:10 AM

    While Hurricane Francine was barreling down on the southern Louisiana coast Wednesday evening, a Fox News weather reporter suffered a case of Trump Derangement Syndrome (TDS) after being trigged by a man in the background running by with a Trump flag.

    When made aware of the political statement briefly passing behind him, the reporter appeared to begin crying before covering the camera with his hand.

    End Wokeness
    @EndWokeness

    HAHAHAHA. Weatherman covers the camera as Trump flag is waved in the background.

    8:06 PM · Sep 11, 2024

    https://x.com/EndWokeness/status/1834020773125665231

    1. Post-debate polling isn’t out yet, but DJT’s “mixed” debate performance doesn’t seem to have moved the needles much. A few observations:

      1. During the debate, Fox News had one of those crowd-o-meter things which recorded positive/negative reactions to what was said. Red, Blue, and Yellow for independents. Surprisingly, the whenever the debate asked any kind of policy question, the yellow line tracked almost exactly with the red line; i.e. independents are breaking for DJT. Possibly the RFKJr crowd.

      2. Special K might be winning the MSM battle, but she’s losing the online war on X, tik tok, and possibly Youtube. DJT’s tiktoks are far more viewed and liked, and I really think his podcasts with Theo and Adin and Lex Fridman helped with the younger voters.

      3. Rasmussin (right-leaning?) pollster has shown DJT consistenly winning voters in both the 40-604 and 64+ age demographics. Those ages are more likely to watch the MSM, and yet they are still siding with DJT. Older voters are more likely to turn out too. Since 2016, DJT has been consistenly gaining with the black and Hispanic vote too. Every percentage point makes a difference.

  10. WATCH: Drunk Illegal Driving Against Highway Traffic Crashes Head-On Into Florida Deputy

    by Dan Lyman
    September 12th, 2024 10:02 AM

    An illegal alien is facing a slew of charges after he slammed head-on into a Florida sheriff’s deputy while driving heavily intoxicated in the wrong direction, authorities say.

    The incident unfolded at around 12:45 a.m. on Sunday morning in Brevard County.

    The Brevard County Sheriff’s Office (BCSO) was notified about a vehicle running other motorists off the road and traveling the wrong way on US 1 near Palm Shores.

    Dashcam footage shows Deputy Anthony Nunez responding to the area and almost immediately encountering the driver barreling towards him.

    Maceij Turek, 35, was arrested and charged with driving under the influence (DUI), three counts of DUI with damage to property or another person, and driving without a license.

    Additionally, Immigration and Customs Enforcement has lodged a detainer against Turek, as he is illegally present in the U.S. after overstaying a work visa that expired long ago.

    “How many more times do we as a nation, or as a community, have to see our citizens victimized by someone who is in our country illegally and has already demonstrated that they can’t obey our laws as a nation? Enough is enough, and it has to stop,” Brevard County Sheriff Wayne Ivey asserted in a video statement.

    https://www.infowars.com/posts/watch-heroic-cop-blocks-drunk-illegal-alien-barreling-wrong-way-down-florida-highway

    3. Its easy to go the wrong way….. lots of highway entrances and exits are right next to each other. and there is always poor lighting so its easy to make a left turn in the wrong direction……too cheap to have bright street lights on all night. a friend lives down the street but intersections like this are all over America, https://www.google.com/maps/@41.4563267,-73.233121,3a,75y,290.58h,91.41t/data=!3m7!1e1!3m5!1spkoZkSMJ2imGlbT1o8apWA!2e0!6shttps:%2F%2Fstreetviewpixels-pa.googleapis.com%2Fv1%2Fthumbnail%3Fpanoid%3DpkoZkSMJ2imGlbT1o8apWA%26cb_client%3Dmaps_sv.tactile.gps%26w%3D203%26h%3D100%26yaw%3D221.69919%26pitch%3D0%26thumbfov%3D100!7i13312!8i6656

      1. Utah has this issue with people entering highways on the wrong side, mostly because the state is too cheap for things like signs, painted road lines, and lights.

        1. because the state is too cheap for things like signs, painted road lines, and lights.
          I guess they could double State Taxes or maybe car tags….

  11. Hate to say it but abortion and government bribery they are going to pay for child care is not the greatest issues of the day.

    The greatest issues are invasion of our borders, inflation, censorship of free speech and taking of guns, mandated fake vaccines and escalation of World Wars, and transgender attack on minors.
    The new world order Big Pharmacy is rendering people sterile anyway with fake vaccines , which is a form of genocide.No need for abortion and child care because you won’t be able to conceive to begin with.

    1. Abortion is no longer a federal issue. Fear-mongering a federal ban, which Trump has said he will not do, is the only thing Democrats have.

      1. It might be all that they have but its working. Unborn baby murdering is on the ballot in 9 states this November and it will drive turnout.

        1. The only state where the ballot measure will make a difference in Florida. Floridians have known about this since April and it doesn’t seem to be moving the polls. Also I think you’re going to get a lot of split ticket on this. Trump and abortion both.

  12. Right, Red Pill.

    Biden/ Harris was talking about adding Justices to High Court to restore Federal right to abortions, I thought.

    Its all theater the get the female vote.

  13. From Twitter / X in Springfield, Ohio:

    “Traffic accidents involving Haitian drivers has skyrocketed – property damage, hit and runs, and more. One kid was killed when a driver slammed into a school bus filled with kids.

    Petty crime is out of control. Stores are locking down merchandise due to rampant theft. Driving without a license is ubiquitous.

    The schools are chaotic. The local district has had to spend north of $300k on translators. I spoke with a teacher who said there is not nearly enough room in the existing buildings.

    The real estate market is also crazy. A friend of mine in real estate said that most of the Haitian families have banks cards from somewhere with $20k ear-marked for buying homes. The market was already tight, but now the prices are soaring.”

    https://x.com/thisisfoster/status/1833628621254119574

    $20k bank cards, did you say?

    You are being replaced.

    1. Haitian families have banks cards from somewhere with $20k ear-marked for buying homes

      If DJT doesn’t debate again, then JD needs to HAMMER those points in his debate with Tampon Timmy. These aren’t just migrants walking in. They getting MONEY, and lots of it. And here we were all grateful for the $1400 stimmie checks. But they are getting $20K for homes, $10 EBT cards, free hotels, cash to buy cars (which they promptly total), and free voodoo supplies. 🐷🦢🐱🦊

      DJT is notoriously bad in debates. JD will bring down the house.

      1. Law students participate in moot court competitions that mimic arguments before an appellate court. The ones I participated in had a panel of three judges. I wouldn’t expect DJT to know how to handle that kind of situation. Add in 8 years of vicious personal and legal attacks, an assassination attempt, and not wanting the optics of attacking a woman of color.

  14. A reader sent these in:

    Really enjoying Toronto real estate these days.

    Especially the part where the insufferable douches went from telling people that condos are the best investment last year, to now claiming they warned people not to invest in them.

    https://x.com/StephenPunwasi/status/1833492169723695433

    Toronto is not a serious place

    https://x.com/mendezzda/status/1832873854785536076

    The tech migration is now in reverse, and with it the CA/NY salaries that fueled the bubble in Austin.

    Austin ranks 5th among U.S. cities people are leaving, reports PODS survey

    https://x.com/Brioneja/status/1831037865004024071

    Fun fact: Next week the Fed will cut rates for the first time this cycle on September 18. It was the same day, September 18, the Fed first cut rates in 2007.

    https://x.com/NorthmanTrader/status/1833489743432065442

    BMW cut its guidance for the year, saying a faulty braking system from a supplier prompted the recall of 1.5mln vehicles. BMW’s shares fell as much as 7.1%, the biggest intraday decline since March 2022.

    https://x.com/Schuldensuehner/status/1833468072075657688

    China’s economy-wide prices are now in the longest decline since 1999

    https://x.com/Lvieweconomics/status/1833165776372502917

    BurgerFi, a fast food chain serving 120 markets, has filed for Chapter 11 bankruptcy with up to $500mm in liabilities

    https://x.com/MacroEdgeRes/status/1833867834075513036

    If one asked AI to create a chart of consumer confidence after real estate epic bubble burst, it would probably look like this one.

    https://x.com/MichaelAArouet/status/1833769855540936847

    Shelter CPI increased 5.2% over the last year. That’s the 29th consecutive month above 5%, the longest period of elevated housing inflation since the early 1980s.

    https://x.com/charliebilello/status/1833858390658781197

    So far, not much momentum for mortgage purchase apps despite the recent rate drop

    https://x.com/NewsLambert/status/1833912189587218437

    When the Bank of Canada cuts rates 3 times in a row and your neighbour sells his house 25% below the current list price of ur home, which ur selling that is already 450K below peak 2022.

    Welcome 2 Canada. 🇨🇦

    https://x.com/ManyBeenRinsed/status/1833832277085745328

    Seen houses sell for 40% less than list in Guelph.

    https://x.com/Sammychip/status/1833906951895621851

    Austin leading the Country in inventory growth.

    200%+ more homes for sale than 3 years ago.

    https://x.com/atxREpodcast/status/1833887858823659924

    Sobering satellite imagery of the wildfire outbreak rapidly escalating across Southern California.

    https://x.com/US_Stormwatch/status/1833629952622923825

    Condo owners in Florida continue through the waking nightmare

    https://x.com/GayBearRes/status/1833487117907059028

    Barry Sternlicht’s Starwood has surrendered a 1.3M sq ft El Segundo office complex to lenders after falling behind on ~$500M in debt, per TRD

    This is the 2nd complex in El Segundo they’ve surrendered this year after losing a building next door

    Starwood also recently surrendered 3 buildings in Oakland in addition to the El Segundo buildings

    Many of the greatest RE investors/operators like Barry Sternlicht are being impacted from this office meltdown.

    https://x.com/TripleNetInvest/status/1833862112772542568

    The most absurd number in CPI?

    According to the US Government, the cost of health insurance has declined 31% over the last 2 years and 10% over the last 5 years.

    https://x.com/charliebilello/status/1833997765795610848

    Food has never been so expensive, and prices are still rising faster than the average before Jan ’21:

    https://x.com/RealEJAntoni/status/1833861529638240389

    The monthly mortgage payment on a median price home has more than doubled since Jan ’21 but official gov’t data says the increase is less than 23% – inflation is much worse than you’re being told, but you knew that already.

    https://x.com/RealEJAntoni/status/1833860900630987111

    CRE delinquencies are rising and spreading beyond the office sector.

    https://x.com/PeterBerezinBCA/status/1833833725374706173

    “When people say the Fed is too late, I always ask – too late for what exactly? Over the last several decades of zero interest rate policy & QE – it’s as if we can no longer tolerate any business cycles. What is wrong with a recession? A recession is what actually cleanses out inefficiencies & corporate rot…” – Michael Kao

    https://x.com/RudyHavenstein/status/1833944153048440907

    “Inflation is the most regressive tax there is…it hurts 100% of the population. I get that it sounds a little bit callous to say that we need a recession…even if unemployment is at 5%, it means 95% of people are still employed, but when you do something that juices inflation back up, it affects 100% of the people.”

    https://x.com/RudyHavenstein/status/1833960771946250474

    Good thing inflation is cooling.

    https://x.com/RudyHavenstein/status/1834042972356440314

    “65% of our households are basically living on the edge” – Lacy Hunt

    https://x.com/RudyHavenstein/status/1829286688042238378

    Always anecdotal. My neighbor, an educated professional, asked me for a temporary construction job yesterday.

    He’s been laid off and can’t find anything .

    Also he bought his house early 2024.

    https://x.com/NtGmblng_Invstn/status/1834016981118582793

    2024 Vs. 2021

    https://x.com/ManyBeenRinsed/status/1834010828409835956

    Is the Midwest supposed to look like that?

    https://x.com/SquirtLagurski/status/1833853274568495501

    1. Condo owners in Florida continue through the waking nightmare
      Talking a minimum of $200K here. No one should buy a condo in FL for at least the next 1-2 years.

    2. When people say the Fed is too late, I always ask – too late for what exactly

      We have reached the point where without ZIRP and $2T deficits the economy would collapse. We are in the final stages of can kicking.

        1. The jump in debt service costs came as the U.S. budget deficit surged in August, edging closer to $2 trillion for the full year.”
          From CNBC article below

    3. “China’s economy-wide prices are now in the longest decline since 1999”

      I’m not on the ground in China, and I rarely leave the midwest, but it appears, from all available evidence while sitting at my computer, that China is in the very early stages of it’s own version of a Lost Decades or a Long Recession/Depression.

      Sure, exports are up slightly, and some of the other juked stats appear favorable, but upon closer inspection, there is terrible news: the steel industry has collapsed, the housing market has collapsed, banks have collapsed, the youth unemployment rate is so high the government stopped reporting it…

      1. don’t worry, as those poorly constructed never occupied buildings start (accelerate) to fall down they can pay people to demo them and haul the stuff away. Problem solved. (/sarc)

      2. The big difference in China is the cost of living is incredibly reasonable. Basic foodstuffs — rice, pork, vegetables, oil — are cheap, even on a low salary. Housing is subsidized for the low-income. It’s not great, but it’s shelter. There is no property tax, so while prices are high, once you own your holding costs are low.

        Public transit works and is cheap. You can take slow trains to save money for inter-city travel.

        And they aren’t scared to publicly humiliate and arrest their criminals or corporate titans who flaunt and cheat.

        But I totally agree — they are in the early stages of a great contraction.

        1. “And they aren’t scared to publicly humiliate and arrest their criminals or corporate titans who flaunt and cheat.”

          CEOs are forced to “perp-walk” in sandwich boards depicting their crimes before they’re executed by firing squad.

      3. “China’s economy-wide prices are now in the longest decline since 1999”

        Is that what is known as deflation, aka Central banker cryptonite?

        I am sure it’s different in China, but it seems like Japan experienced an entire decade of deflation in the 1990s.

        1. Heard on the Street
          China Is Risking a Deflationary Spiral
          Pressures are building amid excess capacity and insufficient stimulus from Beijing
          By Jacky Wong
          Sept. 13, 2024 6:19 am ET
          Lower consumer spending in China has pushed prices down.
          Photo: Bloomberg News

          As China sits on the precipice of deflation, Wall Street economists are calling for more fiscal stimulus in the country. But Beijing may still not act boldly enough.

          While much of the West has been combating inflation over the past couple of years, China is facing the opposite. Deflationary pressure is building up in the country. China’s consumer prices rose 0.6% from a year earlier in August, but that was largely driven by food prices, which were affected by extreme weather. Stripping out food and energy, China’s core CPI actually only rose 0.3%. Another way to look at this is the so-called GDP deflator, which is the difference between China’s nominal and real GDP growth, representing broad changes in prices. By that measure, China has already been in deflation for five straight quarters.
          …
          https://www.wsj.com/economy/china-is-risking-a-deflationary-spiral-75702b5b

    4. “Inflation is the most regressive tax there is…it hurts 100% of the population.

      It hurts the poor the most. For me, at least for the time being, it’s an irritant. For the poor it means choosing which necessity to cut back.

    5. Good thing inflation is cooling.

      Just wait until more people get their insurance renewal notices. More bologna sandwiches for dinner.

    6. He’s been laid off and can’t find anything .

      That’s unpossible! I am told by my betters that the economy is strong!

    7. “The monthly mortgage payment on a median price home has more than doubled since Jan ’21 but official gov’t data says the increase is less than 23% – inflation is much worse than you’re being told, but you knew that already”

      We’ve always been lied to, yet it’s never been more apparent than now. But still the masses are deluded by the lies. And I think that social media plays a huge part in that. If folks actually spent real time with other folks out there they’d realize everyone is hurting, not just themselves. I like the guy who said go out and do your own interviews. Dig up your own data…..and WAKE UP!

    8. This area (along with Marina Del Ray on the other side of LAX) were prime commercial real estate – especially for Asia based companies that needed a small (luxury) office. They must have f’ed up significantly on the financing to screw up this badly

      Barry Sternlicht’s Starwood has surrendered a 1.3M sq ft El Segundo office complex to lenders after falling behind on ~$500M in debt, per TRD

      This is the 2nd complex in El Segundo they’ve surrendered this year after losing a building next door

      Starwood also recently surrendered 3 buildings in Oakland in addition to the El Segundo buildings

      Many of the greatest RE investors/operators like Barry Sternlicht are being impacted from this office meltdown.

      1. ‘They must have f’ed up significantly on the financing to screw up this badly’

        My guess is they paid too much.

    1. Opinion
      Jonathan Levin, Columnist
      Powell’s Inertia Leaves the Fed in a Bind After CPI Surprise
      Policymakers missed a golden opportunity to cut rates in July. Now, they will be slowed down by bad inflation optics.
      September 11, 2024 at 9:00 AM PDT
      By Jonathan Levin
      Jonathan Levin is a columnist focused on US markets and economics. Previously, he worked as a Bloomberg journalist in the US, Brazil and Mexico. He is a CFA charterholder.
      …
      https://www.bloomberg.com/opinion/articles/2024-09-11/powell-s-inertia-leaves-the-fed-in-a-bind-after-cpi-surprise

  16. CNBC (9/12/2024):

    “The U.S. government for the first time has spent more than $1 trillion this year on interest payments for its $35.3 trillion national debt, the Treasury Department reported Thursday.

    With the Federal Reserve holding benchmark rates at their highest in 23 years, the government has laid out $1.049 trillion on debt service, up 30% from the same period a year ago and part of a projected $1.158 trillion in payments for the full year.

    The jump in debt service costs came as the U.S. budget deficit surged in August, edging closer to $2 trillion for the full year.”

    https://www.cnbc.com/2024/09/12/interest-payments-on-the-national-debt-top-1-trillion-as-deficit-swells.html

    “This sucker could go down” — George W. Bush

    1. The U.S. government for the first time has spent more than $1 trillion this year on interest payments for its $35.3 trillion national debt, the Treasury Department reported Thursday.

      That right there is half the deficit.

      1. Elon is going to have a field day cutting government functions. Wouldn’t surprise me if we’re spending a hundred billion just on flying in and paying for migrants.

        1. Wouldn’t surprise me if we’re spending a hundred billion just on flying in and paying for migrants.

          Well what do you expect when no one wants to work anymore! /sarc

        2. Please do not let the Leftist LameStreamMedia gaslight you with corruption of the English language. These are not “migrants”, they are “invaders”. Plain and simple. Really not much room for argument respecting this definition. Media engaging aggressively with insidious shifting of perceptions.
          –Geezer

  17. Most motorbike owners want to buy cars, but EV market remains small

    While electric vehicles (EVs) are developing at lightning speed in the world market, they remain unfamiliar to most Vietnamese.

    Moreover, it is difficult to find charging stations in Vietnam, and EVs are not accepted at many parking lots because of security fears. In some residential blocks and many parking lots, many EVs are rejected, mostly because of fear for insecurity. The number of Vietnamese car owners remains small (55 cars per 1,000 people) compared with Thailand and Indonesia.

    https://vietnamnet.vn/en/most-motorbike-owners-want-to-buy-cars-but-ev-market-remains-small-2321174.html

    1. EVs are not accepted at many parking lots because of security fears

      Security fear? Do they mean a fire hazard?

  18. When cloud adoption makes sense – and when it doesn’t

    The cloud has firmly established itself as ubiquitous – many businesses make use of it at least in some shape or form and it’s no longer seen as new or unknown. It’s often touted as the proverbial silver bullet for business challenges, promising an all-in-one solution that offers scalability, efficiency and innovation. Yet, as more businesses dive into this digital frontier, and as some of those who have already made the leap have discovered, the cloud (or their approach) isn’t always the one-size-fits-all answer they thought it might be.

    While many organisations have seen impressive results from the cloud – achieving new levels of operational efficiency and flexibility – it hasn’t been a universal success. Werner de Jager, head of BBD’s Cloud Services team, highlights a crucial issue: “Forty percent of cloud initiatives fail to deliver the expected value, leading to a significant amount of buyer’s remorse in the market.”

    At BBD, we’ve invested heavily in exploring the transformative potential of cloud solutions and have compiled extensive findings and lessons learned (which you can read here). Despite our enthusiasm for the cloud’s benefits, we’re also observing a significant trend: the rise of “rehoming” or cloud repatriation, whereby companies are moving workloads out of the cloud, either to other providers or back on-premises. De Jager explains: “The migrations out of cloud are done for various reasons, but largely around cost or moving certain workloads to providers that offer more value.”

    https://www.itweb.co.za/article/when-cloud-adoption-makes-sense-and-when-it-doesnt/KWEBb7yL1lPvmRjO

    1. In the recent past, Microsoft updated Word to automatically save in the cloud if the log in account is linked to OneDrive. Even if you don’t want to save it to the cloud, it saves your document to the cloud, then after you close the document, it still doesn’t save to your computer locally. You have to change a buried setting to download all saved documents locally (and it gives you the “do you really want to do this” warning). Even after changing that setting, documents are stored in the cloud by default and then downloaded locally only after you close the document. The only way to save the document locally is to use “save as” and then manually locate the directory where you intend to save the file because the default is always the cloud. Which is the most ridiculous thing ever because when you try to access recently used files in Word, it gives you an error message about being unable to save the file because you’re really only opening up the temporary file that ‘saved’ to your computer before being uploaded to the cloud so it could be downloaded again back to the directory where you really wanted to save the file in the first place.

    2. observing a significant trend: the rise of “rehoming” or cloud repatriation, whereby companies are moving workloads out of the cloud, either to other providers or back on-premises

      The death of on prem was greatly exaggerated. Our on prem sales are rising, and we don’t sell generic servers for Linux. We sell stuff with 200+ cores. And the money isn’t just in selling the hardware, it’s in the support contracts.

      1. “…death of on prem was greatly exaggerated…”

        Ditto on this end.

        Despite what high pressure sales tells you: Just because a customer is running poorly architected, unsecure, undocumented systems doesn’t mean shoveling it all into ‘the cloud’ is going to solve anything.

        In fact, it creates additional problems, because now you have a 3rd party (ie AWS or AZURE) in between you and your apps/data.

        The cloud has many advantages for some applications. But it has to be architected correctly and fastidiously monitored.

        1. The original allure was that you could fire most of your IT staff
          and didn’t need a data center. The problem was that if you had any home brewed applications you would have to port them to work in whatever cloud you used, and that has proven to be much harder than most people thought.

          A lot of our customers built their apps to run on an old version of our OS (let’s call it version X, or VX). We allow them to run the old version of the OS in special virtual machines we provide which run under the newer version Y (VY). They do this even though we guarantee their old apps will run on our newest OS version. Why? Because they spent years debugging their apps on V10. So they buy a mega cluster with many cores that runs VY, then create dozens of VMs on it, all running VX. VX is about 20 years old.

          1. ‘fire most of your IT staff’

            Check

            ‘much harder’

            Check

            ‘VX is about 20 years old.’

            Check

            Most highly level management don’t have a clue of what they own or what it does.

            Was in a consult a few weeks ago in which customer was running (no kidding) 15-20 year old apps.

            When the subject came up to “let’s take a look at your source code’, the response was “What’s source code?”

            (Come to find out the original app creators left the company years ago, [probably in disgust].)

          2. “Most highly level management don’t have a clue of what they own or what it does.”

            Competent IT staff such as ArcGIS database management and geospatial cartography programmers are very expensive, and they’re frequently much smarter than management.

    3. The “cloud” has been around at least as far back as 1997, which is when I got my first online email account and starting emailing files to myself.

      1. When the subject came up to “let’s take a look at your source code’, the response was “What’s source code?”

        There are different varieties of “cloud”. Storing your data on it is the simplest form. The cloud has moved far beyond that, now with whole data centers virtualized.

  19. Lithium World Asks If Surprise Mine Shutdown Can Arrest Slump

    An unexpected shutdown at one of China’s biggest lithium mines has left the industry scrambling to judge if the move will be enough to end the battery material’s prolonged price slump.

    The share prices of lithium miners from Australia to South America spiked Wednesday after reports that Contemporary Amperex Technology Co. Ltd., the world’s biggest battery producer, was suspending a mine that accounts for about 5% to 6% of global supply. Citigroup Inc. boosted its price forecasts, while Chinese futures for the metal surged.

    Lithium spot prices have tumbled almost 90% since late 2022, forcing mine closures and project delays worldwide, but CATL’s shutdown in the southeastern Jiangxi province is one of the most notable to date.

    The project is important not just for its size, but because it’s owned by a battery producer, and was thought to be a less likely candidate for closure. It also produces lithium from lepidolite — a low-grade ore that emerged as a major source of the metal in recent years, fueling the glut.

    “There is a stronger signaling effect from CATL’s cut,” said Alice Yu, lead metals & mining research analyst at S&P Global Commodity Insights. “As the world’s largest battery producer, its mine-side suspension reinforces the expectation of a prolonged weakness in downstream demand.”

    https://finance.yahoo.com/news/lithium-world-asks-surprise-mine-062733939.html

  20. Labour’s green policies are costing jobs and “hollowing out working class communities,” the leader of the GMB union has warned.

    Gary Smith told the BBC the government had to stop “decarbonisation through deindustrialisation” and called for an “honest debate” about the government’s plans for British industry.

    The loss of jobs at Port Talbot steel works has highlighted wider concerns from some unions – in particular the GMB and Unite, two of the country’s largest – about Labour’s environmental policy, and the journey to net zero.

    The unions softened the blow in South Wales by arguing for improved redundancy terms and retraining for workers facing the loss of their jobs – an argument accepted by Tata Steel.

    An environmentally-friendly “electric arc” furnace at Port Talbot is to be built and government funding guaranteed so steelmaking will not be put on the scrapheap.

    Nonetheless, the second traditional coke-fuelled furnace will be closed soon and the company is in the process of shedding around 2,500 of the 4,000 jobs.

    And his concerns are not limited to the community in South Wales.

    He fears for the future of more of British manufacturing – including shipbuilding in Belfast, and the sole oil refinery in Scotland at Grangemouth.

    Gary Smith told me: “We’re not reducing our consumption of oil and gas, we’ll still need lots of steel, we’ll just be producing this stuff elsewhere and importing it.

    “We’re going to be producing more steel from countries like China who burn coal to produce it. This is bad for communities, not great for national security and it makes no sense in terms of the environment.”

    https://www.msn.com/en-us/money/markets/labours-net-zero-quest-will-cost-jobs-unions-fear/ar-AA1qoGti

  21. A man was being sought after the burglary of an occupied home in Palo Alto Tuesday evening, authorities said.

    The hot prowl burglary happened on the 3900 block of Laguna Avenue in the city’s Barron Park neighborhood. Palo Alto police said dispatchers received a call at about 9 p.m. from a resident of the home who said she was awakened by the sound of footsteps in her home. When she went to investigate, she saw an unknown person running out of the home, she told police.

    https://www.msn.com/en-us/news/crime/suspect-sought-after-burglary-of-occupied-home-in-palo-alto/ar-AA1qpqW4

  22. A Utah man was working full time, lifting heavy equipment as part of his job, when he reported to the Social Security Administration he hadn’t worked for more than a decade — and had trouble standing and walking, federal prosecutors said.

    He “deceitfully” received $130,901 in Social Security disability benefits he didn’t deserve, according to the U.S. Attorney’s Office for the District of Utah.

    The man was granted disability benefits in 2012 after he reported a back injury prevented him from working, according to prosecutors.

    But in March 2017, he didn’t disclose to the administration that he started working for a lawn care company, earning $4,400 a month, prosecutors said.

    In October and November 2023, SSA agents watched the man perform manual labor at work and caught him doing heavy lifting, prosecutors said.

    Several photos from surveillance footage were included in court documents, showing the man walking, placing a large lawn mower into a trailer, lifting a 70-pound steel ramp to his eye level and “bending over and twisting his back.”

    Prosecutors said he “came clean” after he was recorded by SSA agents, and after the agents interviewed his boss. He later pleaded guilty to theft of government property on July 1, according to officials.

    https://www.msn.com/en-us/news/crime/man-deceitfully-receiving-130000-in-disability-was-caught-heavy-lifting-feds-say/ar-AA1qpzbL

  23. Generation Z drives far-right support in Europe

    Support for far-right figures among young voters appears to be growing in several European countries. Much of the focus is on Germany, where the Alternative for Germany party (AfD) is hoping to secure another victory in the upcoming Brandenburg state election in the east of the country on September 22.

    AfD secured a resounding victory in the Thuringia state election earlier this month, winning 32.8% of the vote, well ahead of second-place Christian Democrats at 23.6%.

    It was the first time the far right had won a state election since the end of World War II in 1945.

    “More than a third of young people, almost 40% of 18- to 29-year-olds, [voted] for the AfD,” according to Ben Ansell, a professor at the University of Oxford and host of the podcast “What’s Wrong with Democracy?”

    In contrast, only 1 in 5 voters over 70 years of age chose AfD.

    The party is hoping young voters will propel it to victory in the upcoming Brandenburg state election.

    “[Other parties] probably expected that the AfD is only a party for old people and that young people don’t vote for the AfD. That is exactly wrong,” said AfD chairman in Brandenburg Hans-Christoph Berndt at a recent campaign event.

    What’s driving the popularity of the far right among younger people? Immigration appears to be a key factor, said Ansell.

    “In eastern Germany, [AfD] are just really popular,” he said. “It’s a part of the country that is poorer than the other parts, that is less ethnically diverse and therefore reacts more to the new diversity than Berlin does, or other parts of Germany.”

    “Some people have argued that it’s concerns about the war in Ukraine,” Ansell added. “Other people have argued that it’s a response to COVID, or a response to the housing crisis … it’s getting on the housing ladder and things like that, having the same quality of life they thought their elders had.”

    The trend among young voters is not limited to Germany. In June’s European elections, France’s far-right National Rally was the most popular party among 18- to 34-year-olds, with 32% of the vote — much higher than over-65s.

    National Rally’s 28-year-old president, Jordan Bardella, has 1.6 million followers on TikTok, a social media platform popular among young people.

    “TikTok is short videos that aim to shock. The skill that populist parties have in making videos and finding political moments that are short, sharp and shocking — to get people excited about politics,” said Ansell.

    https://www.voanews.com/a/generation-z-drives-far-right-support-in-europe-/7780257.html

  24. European Investor Pays $30M For Vacant Boston Office Building

    A European investment firm acquired a vacant waterfront office property that was once home to law firm Goulston & Storrs.

    An affiliate of Luxembourg-based JAJ Investment Group acquired the 100K SF 400 Atlantic Ave. for $30M from UBS, according to public land records. That price tag was $20M less than what UBS paid for it in 2014.

    https://www.bisnow.com/boston/news/office/european-investment-firm-acquires-vacant-boston-office-building-125837

  25. The City of Pueblo and the mayor have received both support and pushback about the way they are trying to clean up the steel city. Last week, the city cleared out trash and homeless camps along Fountain Creek. “It was a really big mess,” Pueblo Mayor Heather Graham said.

    Mayor Graham said during the four-day clean up, the city removed 450 tons of trash and towed one trailer. She said Pueblo Police did not give anyone a camping ban ticket.

    During a crowded Pueblo city council meeting the following Monday night, Mayor Graham showed photos of the clean up. “This is illegal dumping, leftover homeless encampments,” Graham said.

    Some Pueblo residents gave the city their support regarding the Fountain Creek clean up. “Thank you for what you have done with the cleanup. Thank you. Thank you. Thank you again. A healthy society has to have order, has to have structure, has to have boundaries.”

    While other people wore purple to the Pueblo city council meeting to show solidarity with the people who were displaced. “Does that to somebody’s tent, someone’s shelter that they put blood, sweat, and tears into building themselves bother you so much from your client controlled upper middle class house.”

    “The mayor said that this displacement by bulldozer would be fine because there were less than five people living down there. Well, your account was off by probably 50 or more.”

    But Mayor Graham said the city did not track how many people were displaced.

    “If 50 people were displaced. I don’t know where they went because they had bed space available at the mission where they could’ve gone and received resources and had a warm nice place to spend the night and they didn’t choose to do that,” Graham said.

    Graham added the Pueblo Rescue Mission had nearly 40 beds available every night they were cleaning up the Fountain Creek area. “No unhoused individuals took these resources that have been offered time and time again by the pueblo rescue mission,” Graham said.

    The mayor argues there are resources and non-profits for unhoused people to get help. “I think when you talk about homeless individuals, it’s really about saying, hey, there’s resources. If you don’t want to accept them, then you need to move along to another city,” Graham said.

    https://www.koaa.com/advocates-of-accountability/aftermath-of-pueblos-homeless-encampment-and-trash-clear-out-a-week-later

    1. Guaranteed that not one of those people complaining about the city doing ti’s job (finally) have any homeless/illegals/whatever living in their house. Guaranteed.

  26. Developer of Riverhead apartment buildings mired in debt, records of lawsuits and liens show

    The developer of the first building going up in a special district created to revitalize the area around the Riverhead railroad station is mired in debt totaling more than $16 million, according to pending lawsuits, judgments and contractors’ liens.

    Work on the five-story, mixed-use building at 205 Osborn Avenue, at the corner of Court Street, has been stalled for months, catching the attention of passersby and people who work in the area. Since at least late spring, there’s been no sign of work at the construction site, where the building sits unfinished, a shell without exterior siding, its first-floor windows and doors boarded up with plywood.

    The developer, G2D Construction Corp., owes $1.87 million to several different contractors hired to work on the project, known as Station One, according to Suffolk County records of mechanics liens filed against the property. These include contractors hired to provide concrete foundation materials, roofing, HVAC and plumbing fixtures, doors and glass, and fire sprinklers, according to the lien documents. One contractor has filed a notice of pendency and foreclosure of lien action against the company.

    In addition, GD2 principal Gregory DeRosa of Oyster Bay is named as a defendant in seven additional lawsuits filed over the last few months in State Supreme Court in both Suffolk and Nassau counties, by lenders and a former business partner, claiming DeRosa defaulted on payment agreements.

    Three of the lawsuits involve “merchant cash advance” agreements, in which the borrower — the “merchant” — promises future income in exchange for often quick, very expensive funding to provide cash flow for its business.

    In two cash advance agreements, G2D and DeRosa promised income from multiple business entities — nearly all of which are real estate developments owned by limited liability companies owned by DeRosa, according to the documents — in exchange for nearly $1 million in funding provided to G2D Development Corp. and the various “merchant” entities listed in the agreements. These “merchant entities” include both 205 Osborn Avenue LLC, which owns the Station One site, and 331 East Main Street LLC, the name of the company that owns the mixed-use apartment building at that address, completed by G2D in 2022.

    The agreements, with Parkview Advance and Celtic Advance, carry estimated annual percentage rates (APRs) of 251.38% and 381.23% respectively, according to the documents. Each also required payment of tens of thousands of dollars in fees, which were deducted up front from the funding amounts. Each required daily payments — $7,248.04 to Parkview and $12,622.23 to Celtic — which were to be deducted from a designated bank account that G2D and DeRosa promised to keep open and into which they promised to have all income from the various businesses deposited, the documents state. DeRosa signed a personal guaranty for each agreement.

    Diverting the income from the designated bank account would constitute a default, according to the agreements. The lawsuits filed this month by Parkview and Celtic claim that G2D and DeRosa changed the designated bank account without authorization and stopped making the payments required by the agreements.

    A third cash advance agreement, with Blade Funding, also resulted in litigation alleging G2D’s default. G2D and DeRosa in July entered into a settlement with Blade, agreeing to pay Blade $1 million plus interest and attorneys’ fees. G2D and DeRosa then signed a confession of judgment — a document agreeing to the entry of judgment without trial — for the full amount of the settlement.

    DeRosa has signed three other confessions of judgment obligating him to pay roughly more than $8.7 million, plus interest, in three lawsuits filed by lenders, court records show.

    DeRosa is also being sued by a former partner in a Huntington development. DeRosa had agreed to pay the partner for his 49% stake in the development, Gateway Plaza, but defaulted on the agreement, according to documents filed in court. The former partner is suing DeRosa for the nearly $4.5 million he claims is owed, plus interest.

    G2D also has an outstanding $12.75 million mortgage loan secured by the 205 Osborn Avenue property. There is no indication in property records that the mortgage is in default.

    There is also a lien filed against G2D’s apartment building at 331 East Main Street. G2D owes $149,009 to a contractor, Shalbro Construction Group LLC, for scaffolding work on the building, known as The Shipyard.

    DeRosa did not return emails seeking comment for this article.

    The mechanics liens and lawsuits were all filed this year. These recent developments, coupled with work at the Osborn Avenue site apparently stopping, raises the question of when — or whether — Station One, a project meant to kick off revitalization of the long-blighted area, will be completed.

    Station One is being developed as a market-rate building with 37 “boutique” apartments. The building was scheduled to be finished and occupied in late 2023 or early 2024, according to the developer’s application to the Riverhead Industrial Development Agency for financial assistance.

    The Shipyard was the first of the downtown apartment buildings to offer market-rate apartments, as opposed to income- and rent-restricted housing. Town officials say market-rate apartments will attract tenants with greater disposable incomes who will be able to patronize businesses in the area. The Shipyard’s rentals are marketed as “luxury waterfront apartments;” six of those apartments are currently for lease at $2,850 to $4,250 per month, according to listings on Realtor.com.

    Both of G2D’s developments in Riverhead are considered central to revitalization efforts downtown. Riverhead Supervisor Tim Hubbard did not return multiple calls requesting comment for this article.

    https://riverheadlocal.com/2024/09/10/developer-of-riverhead-apartment-buildings-mired-in-debt-records-of-lawsuits-and-liens-show/

  27. Starwood Turns Over 1.6M SF El Segundo Office Campus To Lenders

    Starwood Capital and Artisan Ventures offloaded a 1.6M SF office campus in El Segundo.

    Beacon Capital Partners’ Fund 9, along with Arizona-based 3Edgewood Real Estate, acquired a majority of the existing debt on a property called PCT at 100, 200 and 222 N. Pacific Coast Highway. The Real Deal first reported the change in ownership.

    A deed-in-lieu-of-foreclosure was completed Aug. 26, after which the debt was converted to equity, according to a person with knowledge of the transaction.

    There was a $484.8M balance on the senior loan and an undisclosed amount of mezzanine debt on the property as well.

    The exact price that Beacon and 3Edgewood paid is unclear, but the property was acquired at “a significant discount to the loan balance,” the source told Bisnow.

    Starwood and Artisan bought the PCT in 2017 for just over $611M.

    In 2019, a joint venture of Starwood Capital and Artisan Realty refinanced the property with a senior mortgage from Morgan Stanley for about $500M. The details of the total debt package remain unclear, but Starwood was seeking five years of interest-only financing totaling $624.25M at the time.

    In 2023, PCT ownership was reportedly in talks with Morgan Stanley about the loan, as the value of the building had changed dramatically in the years since the loan was issued.

    The new owners of PCT plan to undertake a significant repositioning of the property, the source said.

    https://www.bisnow.com/los-angeles/news/office/starwood-turns-over-16m-sf-of-el-segundo-office-to-lenders-125840

    1. I mentioned the quoted above. Having been in a few of the Commercial A+ buildings both here and in MDR, there were super high end and lots of major Asian Corps. I can see messing up in say Cincinati or Houston – but here – you have to be stuck on stupid (or corrupt)

      This area (along with Marina Del Ray on the other side of LAX) were prime commercial real estate – especially for Asia based companies that needed a small (luxury) office. They must have f’ed up significantly on the financing to screw up this badly

  28. 1 Cal Plaza In Downtown LA Goes To Special Servicing

    A $300M CMBS loan backed by 1 Cal Plaza has moved to special servicing.

    The loan is set to mature in November, according to Morningstar, which reported the transition.

    Refinancing is still a challenge, especially for many large office properties, and it is not uncommon for office loans to move to special servicing to allow workout discussions to begin. The property totals just over 1M SF.

    The property at 300 S. Grand Ave. had been in special servicing in 2021 “for a cash management issue that was ultimately settled,” according to Morningstar. But the property has struggled since then, and Morningstar found that the 2023 net cash flow for the property was 37% below the underwritten amount.

    Occupancy is also facing issues. Law firm Skadden is set to vacate its roughly 100K SF space at the property this year after securing a space about half that size in Century City. Once Skadden is out, occupancy will drop to 63%, Morningstar reported.

    https://www.bisnow.com/los-angeles/news/office/report-one-california-plaza-moves-to-special-servicing-125858

  29. Larkspur rethinks housing authority after bond default

    A default on municipal bonds used to purchase an apartment building in Larkspur has caused the city to take a second look at its participation in the California Community Housing Authority.

    The city joined the fledgling authority, which issued the bonds, in 2019 to foster the creation of more middle-income housing. But the default might result in income level limits being raised at Serenity at Larkspur, a 342-apartment complex at 700 Lincoln Village Center, making them less affordable.

    That would be a bitter pill because Larkspur and other governmental entities, including the county and special taxing districts, initially sacrificed more than $2 million a year in property taxes when Serenity at Larkspur was purchased by the California Community Housing Authority, or CalCHA, in 2020.

    Larkspur resident Dennis Gilardi said he was serving on the board of the Ross Valley Paramedic Authority when Serenity was purchased.

    “The RVPA had to refund half a year of taxes, tens of thousands of dollars, to Serenity because they became tax exempt when the sale went through,” Gilardi said. “I said, this doesn’t smell right to me as a taxpayer.”

    Critics of the CalCHA model have asserted that the discount that tenants receive on their rents is too modest to justify the loss of property taxes to local governments.

    Larkspur resident Dennis Gilardi said he was serving on the board of the Ross Valley Paramedic Authority when Serenity was purchased. Gilardi maintains that the financial plan was flawed from the start. “Even when they did the deal in 2019,” he said, “it was never was going to have the cash flow to make the debt payments.”

    https://www.msn.com/en-us/money/realestate/larkspur-rethinks-housing-authority-after-bond-default/ar-AA1q93Vt

  30. With Gov. Gavin Newsom giving the green light for local governments to clear homeless sites, the mayor of Antioch wants his city to strengthen its no camping ordinance. The mayor’s proposed changes would help speed up the process to remove encampments.

    In Antioch, Marie has lived out of a tent with her longtime boyfriend on and off for more than two years. Their tent is currently set up along a trail on the southeastern edge of the city.

    Marie says she is in this position after losing to her house and job to a prescription drug addiction. “We’re getting kicked out every day and they’re not offering us a place to go. I don’t know,” Marie said. “I just don’t understand where they expect us to go.”

    “Eastern Contra Costa County is challenged with the fact that there is no congregate in east county like in other parts of the Bay Area or within Contra Costa County,” said Antioch Mayor Lamar Hernandez-Thorpe. “And, so, there is no place for any of these individuals to go.”

    Mayor Hernandez-Thorpe said he is taking his cue from Gov. Newsom who issued an executive order in July directing state agencies to urgently address encampments. The mayor says the city has requested $6 million in state funding to lease another motel in town to convert into housing for the unsheltered.

    “The last thing Antioch needs to do is to stand around looking like we’re not doing anything. We’re taking decisive action, and we need to change these laws so we can move a little faster,” Mayor Hernandez-Thorpe said.

    “It’s just a runaround, then, they take our — they kick us out of places, they take what little belongings that we have and then we have to start all over,” said Marie. “Then people have to go out and steal. I mean, it’s like an endless cycle and it’s just going to continue.”

    https://www.yahoo.com/news/antioch-mayor-suggests-stricter-anti-230157708.html

    2. “We’re getting kicked out every day and they’re not offering us a place to go.”

      Don’t pitch your tent within city limits.

  31. MONTREAL — Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.

    Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.

    Girouard is a well-known broker who previously appeared on a Quebec reality show that follows top real-estate agents in the province. She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.

    The two brokers were suspended in May 2023 after La Presse published an article about their practices, including a case in which a buyer ended up paying $40,000 more than his initial offer because of a fake bid.

    In February 2022, the buyer offered $410,000 on a house listed at $399,700 that Girouard was working to sell, according to the brokerage authority’s disciplinary committee. Girouard then asked Dauphinais-Fortin to come up with a second bid. Dauphinais-Fortin then convinced his then-girlfriend to sign an offer for $370,000, while assuring her that the bid would never be accepted.

    After learning that a second offer had been made, the buyer increased his bid to $450,000.

    In June 2022, Girouard and Dauphinais-Fortin attempted a similar scheme a second time, involving a bogus offer signed by one of Dauphinais-Fortin’s friends. That sale eventually fell through.

    Girouard was also found guilty of other offences, including lying to potential buyers in October 2021 about having received a higher offer. She is facing a second disciplinary hearing this fall for other alleged offences.

    In two separate decisions, members of the disciplinary committee explained that they decided not to suspend Girouard and Dauphinais-Fortin permanently, in part because they had no previous disciplinary files. Still, the committee found their offences were “very serious” and warranted heavy sanctions.

    On Instagram, Girouard lists herself as a “coach of successful real estate brokers.”

    https://www.msn.com/en-ca/news/canada/two-quebec-real-estate-brokers-suspended-for-using-fake-bids-to-drive-up-prices/ar-AA1qp9k1

    1. wow, a 10,000 dollar (loonie) fine, in a place where they probably were making 500k a year or more. Boy, that’s sure going to leave a mark
      not

      also something something Realtor’s Code of Ethics something something

  32. Big upsurge in Okanagan, Kamloops real estate listings, but prices stay stubborn

    Despite a huge surge in real estate listings compared to this time last year prices in the Central Okanagan only dropped a touch, and in some regions actually increased.

    New data from the Association of Interior Realtors shows there was a 41% increase in real estate listings last month compared to August 2023, but prices for single-family homes in the Central Okanagan only dropped 5%.

    The benchmark price for a single-family home in the Central Okanagan is now $1,018,100.

    Sales increased in the South Okanagan by 13%, but prices still went down, albeit by 8%. A single-family home in the South Okanagan will now set you back $719,700.

    The North Okanagan bucked the trend with 23% more single-family homes being sold in August than the same month last year. The price also increased, but just by 1%. The benchmark price for a single-family home in the North Okanagan is now $773,000.

    Numbers released by real estate firm the Rennie Advance said it was the slowest August for sales since 2011. In Kamloops, sales of single-family homes were down by 17% compared to August 2023 and inventory was up by 22%. However, prices didn’t budge much and only saw a drop of 1.6% bringing the benchmark price of a single-family home in the area to $664,300.

    Sales of townhouses in Kamloops were down almost 30%, but prices only dropped 2%, making the benchmark price for a townhouse $528,800. Prices of condos in Kamloops dropped by 3% but sales increased by 8%. There were 30% more condos on the market in August than the same month last year.

    The number of condos on the market increased significantly across the Okanagan and the Shuswap. The South Okanagan saw the biggest increase of condos for sale with 70% more inventory now on the market than in August 2023. The North Okanagan saw a 63% increase and the Central Okanagan 49. In Kamloops, there were 30% more condos on the market than in August 2023.

    The Shuswap Revelstoke area saw a 120% increase in condos for sale but has a fraction of the number listed elsewhere. As the inventory of condos listed grew substantially, prices dipped between 3% and 5% across the region.

    https://infotel.ca/inhome/big-upsurge-in-okanagan-kamloops-real-estate-listings-but-prices-stay-stubborn/it106422

  35. ‘I’m not an individual who would fund a $400,000 lawsuit. I fell into this. If I didn’t fund the lawsuit, I could have lost my private property, and that outrages me. Laws are being passed. But if you’re just passing laws and have no oversight … it’s like throwing me a wooden sword when I am going out on the battlefield’

    Yer right Holly. Yer paying people to assist you and they fook you instead. It’s the commie urban/suburban living, joined at the hip financially rolling disaster.

  36. ‘In the second quarter, there were 12 Californians entering foreclosure per 1,000 people, up 20% in a quarter and 50% higher in a year. It’s the highest share since 2020’s first quarter’

    That was when guberment said everybody stop paying for everything.

    1. I told my daughter to keep paying rent during the pandemic, even when the government said it was OK to stiff your landlord. Now she rents the same place, at a below-market rental rate.

  37. ‘Financial firms are raising rents higher than other types of landlords. On average, after a financial firm acquires a building, they increase the eviction-filing rate by three,’ August said. ‘They triple it.’ Starlight’s own literature for shareholders describes a model where they seek out ‘older stock’ and in some cases have seen rents rise ‘up to $411 per unit’…According to research done by Steve Pomeroy, a professor and special advisor to the Canadian Housing Evidence Collaborative at McMaster University in Hamilton, between 2011 and 2021, Canada lost more than 550,000 affordable rental units. Where did they go? ‘They are still there, for the most part, but they are no longer affordable. The rents have just gone up beyond that affordability threshold’

    Housing manias make you poor and then they pop.

  38. ‘buyers don’t want to talk themselves into a house – especially in frenzied competition. ‘They say, ‘that’s fine – let it go to another party. There’s lots to choose from.’ If a property has some shortfalls, buyers are unlikely to jump on it’

    That’s the spirit!

  39. ‘It is locking up the market,’ Temlett said. ‘It is preventing people from rightsizing into the right type of space to suit their needs. As it stands right now we’ve got a huge ageing baby-boomer segment of the market that is asset-rich and cash flow-poor. They can’t move’

    The good news Dick is that you have a yuuge number of younger people who happen to be asset-poor yet cash-rich in Australia.

  40. ‘Previously unreported details show that about a year before its financial troubles burst into the open, Zhongzhi units were paying returns to existing investors in wealth-management products by using funds from new investors, and promising individual investors lucrative returns that belied the group’s exposure to a deepening property crisis’

    No!

  42. Rep. Thomas Massie: Treaties Don’t Override Our Constitution 9/11/2024

    RepThomasMassie

    8 hours ago

    The House adopted my amendment protecting Americans from unconstitutional World Health Organization (WHO) agreements and treaties.

    Treaties don’t override the Constitution. Laws that seek to bind Americans in the United States must first pass both the House and Senate.

    https://www.youtube.com/watch?v=uix7uocoY4U

    5:29.

  43. This Home Is Useless To Me Now (York Region Real Estate Market Update)

    Team Sessa Real Estate

    27 minutes ago VAUGHAN

    In this episode we take a look at the current Vaughan Home Prices, Richmond Hill Home Prices & Markham Home Prices and real estate market trends for week ending Sept 4, 2024. We also discuss a problem that arose when a buyer purchased one of our listings but did not do any due diligence with respect to future plans they wanted to achieve.

    https://www.youtube.com/watch?v=458LSF9W4FY

    12:19. These months of inventory are getting out of hand.

  45. Are rents falling in your area?

    If so, do you plan to request a rent reduction when your lease comes up for renewal?

    1. Paradise at a Price
      New report shows average rents across San Diego County on the decline
      According to Zumper, despite the drop, San Diego ranks 9th nationwide with the highest rent prices.
      Author: Shannon Handy
      Published: 6:27 PM PDT September 11, 2024
      Updated: 6:27 PM PDT September 11, 2024
      SAN DIEGO — A new report shows on average, rental prices throughout San Diego are on the decline.

      The report, by rental website Zumper, also found where you’ll find the cheapest and most expensive rents.

      Out of 11 cities in San Diego County, Encinitas ranked number one as having the highest rent, where one bedroom units can cost an average of $2,680.

      The city with the lowest average rent is El Cajon – where a one bedroom is $900 less at $1,780.

      “Our rental data that we look at every month includes new construction, but excludes listings that are no longer available or are currently occupied,” said Crystal Chen, a spokesperson for Zumper.

      Chen told CBS8, nationally, San Diego ranks 9th in rent prices, behind places like Los Angeles, Miami, San Francisco and New York, where one bedroom rents average $4500.

      The good news – Chen says their study found in most places county wide, rents have gone down since last year, dropping from .6 percent in El Cajon to nearly eight percent in La Mesa.

      “There’s been a ton of new supply hitting the market. More than 4,000 new apartments are becoming available across San Diego county this year. So that’s helping, you know, push prices down, or at the very least, slow down any increases. The U.S. Census Bureau also showed that, I think 31,000 more people moved out of the county than last year than moved in. So, you know, that probably resulted in a slight dip in the San Diego population overall, and that has probably lessened some of the rental demand as well,” said Chen.

      Chen says those factors can give renters more negotiating powers when signing a new lease.

      Moving forward, she expects rents will stay at this level if not drop a bit more, saying it’s a relief given what’s happened in the San Diego market since 2020.

      “If you compare where one beds in San Diego are now versus, you know, pre pandemic, like February, March of 2020, rents are up 30% in the last, you know, four years. So, this is why I feel like this report is good news for San Diego renters, because rents seem like they’re they finally are coming down from those crazy peaks like two years ago.”
      …
      https://www.cbs8.com/article/news/local/paradise-at-a-price/average-rents-san-diego-county-decline/509-66de6bea-996b-48d5-8ccc-e61f2b69cc22

      1. Finance·Real estate
        People can’t afford to move out West, and top analysts are explaining why
        BY Alena Botros
        August 9, 2024 at 1:38 PM PDT
        Gloomy days in the West.
        Getty Images

        Americans are all out of love for the West.

        For the first time in a century, the share of Americans living in the West is declining, mostly in Pacific Coast cities like Los Angeles, Portland, San Francisco, and Seattle. The primary driver? Housing costs: sky-high home prices and rents. People are flocking to more affordable places like the Sunbelt, bolstering a trend of people migrating southward.

        In a research note, Bank of America analysts wrote: “Post-pandemic, the share of the U.S. population in the South has been climbing—continuing a decades-old phenomenon. It is really the decline in the share of the population of the West that is new.” For the first time in a century, the share of Americans living in the West had fallen.

        “The West was increasing as a share throughout most, or virtually all, of the last 100 years,” said David Tinsley, a senior economist at the Bank of America institute, who contributed to the report. “It was slowing a bit going into the pandemic, that increase—but the West is the outlying story of the pandemic in that its population started to shrink as a share of the U.S. population, which it really hadn’t ever done before, at least, for 100 years.”

        The population declines were concentrated in Los Angeles, San Francisco, Seattle, Portland, and San Diego, so three California cities. It hasn’t changed much. More recently, in early August, another note from Bank of America found San Francisco, Los Angeles, Seattle and Portland all saw significant year over year declines. It’s why Tinsely calls this “mainly a Pacific story. So when we talk about the West in the census region terms, it’s really the Pacific West,” he said. So what’s behind the exodus? Mostly housing woes. Home prices and rents are excessive in western cities. People can’t afford it, so they look to the Sunbelt.
        …
        https://fortune.com/2024/08/09/population-decline-share-of-americans-living-in-the-west-decline-pandemic/

  46. “Californians have long juggled huge debts, largely due to giant mortgages. At $86,310 per capita in the second quarter, California consumer borrowings are 40% higher than the nation’s $61,853.”

    Our number is $0, not counting credit card debt we pay off monthly. Rich Dad would say we are missing the boat…oh well.

    1. Real Estate
      ‘I own 15,000 houses’: Robert Kiyosaki says there’s ‘nothing wrong’ with buying a house — except he uses debt to buy it and ‘pay no taxes’
      Robert Kiyosaki seen in a podcast studio holding a dollar bill up.
      Finance With Sharan/YouTube
      Jing Pan
      Updated May 16, 2024

      With elevated home prices these days, buying a house can be a significant challenge. But for “Rich Dad Poor Dad” author Robert Kiyosaki, it’s a breeze.

      During an interview with personal finance YouTuber Sharan Hegde, Kiyosaki revealed a staggering fact about his real estate portfolio.

      “I own 15,000 houses,” he stated.

      Hegde asked if Kiyosaki rents out these houses to collect income, to which Kiyosaki simply responded, “Yeah.”

      The famed author elaborated on the topic of purchasing a house, explaining, “Nothing wrong with buying a house. The difference is, I use debt to buy it, and I pay no taxes. It’s not the house, it’s not the stock, it’s not the bond, it’s not the ETF. It’s your brains. So I would rather use debt and pay no taxes.”
      …
      https://moneywise.com/real-estate/kiyosaki-says-nothing-wrong-with-buying-a-house

      1. “Nothing wrong with buying a house. The difference is, I use debt to buy it, and I pay no taxes.”

        This is why the fed stokes asset inflation, and will avoid deflation no matter the amount of money printing required.

Comments are closed.