The value of residential real estate across the Golden State has reached more than $10 trillion.

Six of the top 20 cities for valuable housing in June are in California, including San Francisco and San Jose, the San Francisco Chronicle reported, citing a report from Zillow.

The $10.18 trillion value of California homes make up nearly a fifth of the U.S. total $51.9 trillion.

Florida trails at nearly $4 trillion. While California has 77 percent more people than the No. 2 state, California real estate is 150 percent more valuable than Florida’s.

New York came in at $3.6 trillion, now third for the first time, followed by Texas at $3.3 trillion and New Jersey at $1.8 trillion.

California, the most populous state, has the most homes. And they are pricey, with only homes in Hawaii having a higher average value.

“That combination of lots of homes and those homes being very expensive is the reason California’s housing market is the most valuable of any state by far,” a Zillow spokesperson told the Chronicle.

California’s housing market value has dropped 3.3 percent since June of last year, along with home values in some of its largest cities.

Los Angeles, the second most valuable market in the country at $3.7 trillion, stayed roughly the same year-over-year, increasing by 0.1 percent in June. San Francisco, the third most valuable market, was valued at $1.8 trillion, a drop of 8.8 percent.

San Diego was ninth at $994 billion, an increase of 1 percent. San Jose was 11th at $909 billion, which fell 5 percent. Riverside was 14th at $785 billion, down 3 percent. Sacramento was 19th at $482 billion, down 5 percent.

New York City, the most valuable housing market in the nation at $4.2 trillion, saw an increase of 4.2 percent.

The California real estate market, especially in costly cities such as San Francisco, was slammed  by rising mortgage rates, which priced out potential buyers and caused potential sellers to stay in their homes, pushing inventory levels to their lowest in 20 years, according to the Chronicle.

The slow market, combined with a shift to remote work, contributed to price declines in upscale markets such as San Francisco and San Jose.

— Dana Bartholomew

Read more

The post California’s residential real estate market totals to $10T appeared first on The Real Deal.

After their attempts to refinance a Dumbo office campus fell flat, owners RFR and Kushner Companies defaulted this month on the portfolio’s $180 million loan.

The firms, who failed to pay off the debt at maturity, are pushing for a five-year extension, service commentary shows, in a means of kicking the can and avoiding the near-term risk of foreclosure. The debt is collateralized 117 Adams Street, 55 Prospect Street, 81 Prospect Street and 77 Sands Street, Trepp shows.

The botched refi signals how challenging the financing market has become for office landlords, after the valuations of many office buildings slipped below their debt balances, according to JLL.

Lenders are also requiring sponsors to refinance at a lower loan-to-value ratio, a recent CBRE report found. The combination of falling valuations and larger equity commitments has created a sizable financing gap — CBRE forecasted it would hit $73 billion within the next two years and could leave some landlords out in the cold.

It’s unclear where the valuation of the Dumbo Heights portfolio now stands. RFR did not comment, Kushner Companies did not respond to a request for comment and Morningstar has yet to list a current appraisal value. 

But financials that have been updated by Morningstar signal the portfolio is struggling. Cash flow at the properties was barely covering debt service in March and occupancy had slipped to 73 percent from 94 percent in 2018 when the loans were made, according to servicer commentary.

It’s possible WeWork is to blame for that jump in vacancy. The coworking firm was the second-largest tenant when the loans were made with a lease totalling 21 percent of the portfolio’s total rentable area.

WeWork appeared to have leased space at 81 Prospect and 77 Sands Street, which is still listed for rent on WeWork’s website. The Wayback Machine shows 81 Prospect disappeared from the firm’s site sometime between 2020 and 2021. 

In April 2020, WeWork temporarily shuttered its 81 Prospect space after an employee tested positive for the coronavirus. 

This summer, the coworking firm told investors it would try to renegotiate nearly all of its leases as rumors swirled about a possible bankruptcy. 

Ahead of that announcement, the firm had already quit paying rent and run out on leases at a number of New York office buildings, driving at least one landlord into foreclosure. 

The firm declined to comment on whether it had renegotiated its Dumbo Heights lease.  

Read more

The post Kushner, RFR default on Dumbo office portfolio appeared first on The Real Deal.

The National Association of Realtors received a memo raising concerns about the behavior of members of its leadership team more than a year before former President Kenny Parcell resigned in August in the wake of a New York Times report detailing sexual harassment allegations. 
The leaked memo obtained by Inman claims that organizational leadership knew about a “hostile, toxic work environment” as far back as early 2022, before Parcell officially transitioned into the presidency. It accuses members of the seven-person leadership team of racist and abusive behavior, per The Real Deal.

Artificial intelligence may help policymakers understand inflation and regulate big lenders, the central bank said.

The Business Journal’s CRE Leadership vaults from in Seattle’s Pike/Pine corridor to the University District to rejuvenate historic properties.

Along with a go-ahead for a New York civil case against former U.S. President Donald Trump, New York State Supreme Court Judge Arthur Engoron also delivered a decision that could mean the end of the road for the Trump Organization’s real estate businesses.
In addition to allowing state Attorney General Letitia James’ case against Trump to proceed, Engoron’s decision Tuesday revoked licenses that the Trump Organization and other companies owned by his children used to do business in the state. The judge ordered a receiver to be appointed to oversee the dissolution of some of those businesses, the Wall Street Journal reported.
The decision amounts to “New York’s corporate…

The huge income gap between rich and poor in Manhattan is the latest sign that the economic recovery from the pandemic has been lopsided in New York City.

Leaked internal messages detail efforts by the Chinese tech giant to court Greek officials and fight an American-led effort against its technology.

A lapse in funding would delay data on unemployment and inflation as policymakers try to avoid a recession.

The government’s antitrust lawsuit leaves out some allegations from a legal condemnation of Amazon that Khan wrote in law school.