So They Walk Away And They Say, We’re Done, See You Later, Goodbye And Good Luck Suing Me

A report from Community Impact in Texas. “As the national real estate market shows signs of slowing, Unlock MLS data shows homes are generally spending more time on the market and home prices are coming back down in the Northwest Austin area on average. For homeowners looking to sell, however, this has created a new trend in Austin, with more sellers turning to leasing as they wait for the market to bounce back, Dochen Realty Group Realtor Katie Dochen said. ‘We have a lot of what we’re calling ‘accidental landlords;’ people who have this minimum price they could possibly take and they can’t get that price,’ Katie Dochen said. ‘… If you can’t sell for less than that and you don’t want to get rid of the house, then you’re going to have to rent it out. If you don’t sell your house in the first week or two, it’s pretty much a sure thing that you’re probably not going to get the full price that you put on there.'”

“For people who bought homes when the local market was at an all-time high in 2021, many homebuyers were offering more than the original listing price to secure homes, Unlock MLS data shows. As the housing market has cooled off, homeowners are struggling to earn their money back, said Renee Livsey, Northwest Austin Sales & Leasing manager for JBGoodwin Realtors. ‘Anyone that bought in 2021-22 and that are trying to sell now, I’ve seen people losing money on it,’ Livsey said.”

From CBS News. “Sidhartha ‘Sammy’ Mukherjee and his wife Sunita lit up stages across North Texas with their voices — and lit up social circles with their charm. But federal investigators allege that behind the curtain of applause was a different kind of performance — one that, according to the FBI’s review of the Mukherjees’ bank records, may have left more than 100 people defrauded. ‘They will make you believe that they are very successful businesspeople,’ said Terry Parvaga, an alleged fraud victim. ‘But they will take every single penny you have.’ The alleged victims said they were lured into investing in what they believed were legitimate real estate deals. The Mukherjees allegedly promised high returns, but suspicion set in when dividend checks started to bounce.”

“Multiple investors accuse the Mukherjees of providing what appeared to be remodeling contracts and invoices from the Dallas Housing Authority. They said the documents convinced them to invest in what they believed were lucrative remodeling projects. After both posted a $500,000 bond, Sammy Mukherjee was taken into custody by U.S. Immigration and Customs Enforcement at his Plano home. He is currently being held at an ICE detention facility south of Fort Worth. Euless Police Detective Brian Brennan, a veteran white-collar crime investigator, agreed to take on the case when he was approached by a couple claiming they had lost $325,000 in an alleged investment scheme. Euless Police Detective Brian Brennan, a veteran white-collar crime investigator, agreed to take on the case when he was approached by a couple claiming they had lost $325,000 in an alleged investment scheme. ‘I think it’s gone,’ Brennan told the I-Team. ‘I think they’ve spent it on cars, their house, and in just living expenses.'”

Futurism on Michigan. “Detroit is a city that’s used to fighting. Now, Outlier reports, the city is doing battle against a $93 million crypto real estate scheme. The city recently announced a massive lawsuit filed against RealToken, a cryptocurrency business that’s snapping up hundreds of subsidized housing units to ‘tokenize’ on the blockchain. Once purchased by RealToken, the property is sold to international crypto speculators in tiny increments, a scheme known as ‘fractional ownership.’ A tenant’s rent is then split among the property’s investors based on how many tokens they own of a given unit. The exploitative scheme was first uncovered by Outlier, which reported that RealToken properties are plagued by squalid conditions, unresponsive property managers, and arbitrary evictions. Operating through 165 shell companies, the crypto firm reportedly owes the city more than $3 million in unpaid fines and commercial property taxes. ‘This is not innovation,’ Detroit councilmember Angela Whitfield Calloway told Outlier. ‘This is exploitation.'”

International Fire and Safety Journal. “Cindy Ambuehl, agent at Christie’s International Real Estate Southern California, said that buyer interest in hillside and canyon homes has declined. Ambuehl said: ‘We’re seeing a clear decline in demand for properties perched high in the hills or deep in the canyons, largely due to heightened concerns over fire risk and rising insurance costs.’ Ambuehl cited active listings data from the Pacific Palisades area, noting 202 land listings, including 63 new entries and only 16 currently in escrow as of late June. She said: ‘Since the fires, just 75 lots have sold, indicating that inventory is coming to market much faster than it’s being absorbed. At the current rate, we project the number of available lots could exceed 500 by year’s end.'”

Bisnow on California. “As San Francisco moves beyond the postpandemic malaise of high office vacancies and low foot traffic in the surrounding neighborhoods, local developers are counting on mixed-use projects to drive momentum. San Francisco’s mixed-use-heavy SoMa has 31% office vacancy, versus 34% in the city writ large, according to CBRE. To mitigate the gentrification concerns attendant in every large-scale development, Associate Capital included a 100% workforce housing component aimed at middle-income households making between 50% and 110% of the area median income. ‘That is part of the middle class that is rapidly fleeing San Francisco and that we’re trying desperately to keep here in order to keep our city running,’ Associate Capital partner Tina Chang said.”

Hotel Investment Today on California. “With several notable defaults, sales and foreclosures in the Bay Area over the past year, hotel investors are asking when values will bottom out and what kind of hold time will dealmaking require? News came last week of the most recent default in the area, the 500-key Oakland Marriott City Center, which is the largest hotel in the city’s downtown. The owners, Los Angeles-based Gaw Capital USA, defaulted on their $100 million loan from Invesco CMI Investments, putting the property at the risk of foreclosure. News first broke in February of Gaw Capital USA, a division of Hong Kong-based Gaw Capital Partners, skipping payments on the loan for the property it first bought in 2017. Late last year, New York City-based Highgate handed back the keys to the lender for the 686-key Hyatt Regency San Francisco Downtown SoMa.”

“Interested investors are a mix of existing and new players, Alan Reay, president of Newport Beach, California-based Atlas Hospitality Group said. With values bottoming out, investors are seeing phenomenal opportunities. ‘We’re seeing values tumbling… 60% to 80% from where they traded before. That, in itself, is a huge buying opportunity. I think it’s fallen too far, too fast,’ he said. ‘Oakland is a different story. From our standpoint, we have a lot of investors looking at San Francisco. We don’t have anyone looking to buy into Oakland. If you’re saying three to five years for San Francisco, Oakland is probably minimum seven to 10 years.'”

The Globe and Mail in Canada. “Metro Vancouver’s real estate market continues to hurt as buyers walk away from presale purchases, and lenders increasingly foreclose on a wider variety of properties. ‘There’s more, and they are getting bigger,’ said Hart Buck, Colliers’ senior vice-president, referring to the foreclosures. And buyers are choosing to walk away from presale purchases that have dropped in value, said Mr. Buck. Developers are doing their best to keep their names out of the headlines, which means they are reluctant to sue when a presale buyer of a luxury condo walks away from their deposit. ‘These developers that have presold at $2,000 a [square foot], you know, I think everybody would be shocked to see any of those deals close,’ said Mr. Buck. ‘So, they walk away, and they say, ‘We’re done. See you later. Goodbye and good luck suing me. … Keep my deposit. The guys that are in that predicament, the last thing they want to see is their name all over the front page of the paper, because everyone’s walking away from presales on their tower.'”

“Many of the troubled projects are held by offshore developers, or newer entrants to the Metro Vancouver market, who bid too high for properties at the peak of the market. But there are local developers who got burnt by their dependency on offshore buyers. ‘Other than what you’ve already seen in the press, there are a couple of Vancouver shops that have sold a couple of properties, but they were very ambitious and, you know, locally based groups that had close connections with the offshore market. They relied on selling into China, and now those presales aren’t as solid as everybody hoped they were going to be,’ said Mr. Buck.”

Cyprus Property News. “The law governing property acquisition by foreigners in Cyprus, Chapter 109 of the ‘Acquisition of Immovable Property (Aliens) Law’, is so outdated it’s practically a relic. It’s barely more than a page and a half long. It was originally drafted to control the flow of non-Cypriots buying property on the island, limiting ownership to a single home, a secondary residence, and a plot of land under specific conditions. But in practice, this limit is being ignored. Foreign nationals are easily bypassing restrictions by forming Cypriot-registered companies, often with the help of local legal firms, allowing them to purchase unlimited property under the guise of being a ‘local entity.’ That’s not a loophole, it’s a revolving door! Entire apartment blocks are being bought. Agricultural land is changing hands. Long-term rentals are disappearing as homes are snapped up for private use or short-term lets. The state requires foreign nationals to apply for permission to buy, but approvals are almost automatic. No criminal background check. No financial due diligence. No consideration of national security, even in sensitive areas.”

The Tirana Times. “Just 300 meters from the office of Albania’s Prime Minister, a 40-story tower rises over Tirana’s skyline. It’s one of dozens of new high-rises reshaping the capital. But behind the glass and steel façade lies a darker truth that experts say reflects Albania’s deepening entanglement between organized crime, political power, and the country’s booming construction sector. Local residents know the tower belongs to ‘him’—a notorious underworld figure, currently wanted on international warrants. Officially, his name is nowhere to be found in documents, replaced by proxies and shell companies. Yet his ownership is an open secret. This is no isolated case.”

“According to international anti-crime watchdogs, a significant portion of Tirana’s construction surge—particularly projects exceeding 10 floors—is believed to be backed by criminal syndicates using illicit drug profits to launder money. In one instance, a construction firm established just a year ago began erecting a 20-story tower in one of the city’s most elite neighborhoods. One of the company’s co-founders had previously been arrested in an EU country for drug trafficking while in possession of a diplomatic passport. A local investigative journalist told Tirana Times that several developers behind such high-end projects have links to Albania’s most powerful criminal groups—some of whom allegedly enjoy diplomatic status, shielding them from prosecution.”

“Despite a glut of unsold luxury apartments in Tirana, real estate prices continue to skyrocket, rivaling markets like Rome or Paris—an economic contradiction in a country facing accelerating emigration and a declining workforce. With tens of thousands of units sitting empty, the city is increasingly populated by migrant workers from the Philippines, Indonesia, and India, while young Albanian professionals continue to leave. ‘There’s a paradox,’ says one economist from the Center for Economic Studies. ‘Organized crime is investing in construction to launder money, but when thousands of luxury apartments remain unsold and untaxed, the process of laundering itself fails. It’s the dumbest mafia economy in the world.'”

“Some economists are now proposing urgent fiscal reforms, including a progressive tax on second and third homes to compel owners to sell idle properties, thereby normalizing prices and deflating the real estate bubble. A growing number of Albanian drug lords have been arrested and extradited from Dubai, which for years served as a safe haven for wanted Balkan crime bosses. Western governments—including Italy, France, Germany, and Finland—have tightened the noose, pushing Albanian authorities to cooperate in the seizure of criminal assets. As a result, several construction projects in Tirana, including towers with approved permits, have stalled or slowed down. Others are now under scrutiny. The once-seemingly endless pipeline of drug and corruption money appears to be drying up.”