Speaker 1
Now, if your underlying collateral quality is not great, there's a problem with it. There's no amount of interest rate changes or magical thinking that's going to fix those things. And so that's where I think that there still probably are other shoes to drop down the road. And maybe that doesn't ultimately happen until the Fed starts cutting rates and some of the borrowers just give up that dream a little bit. But I think it will, in this instance, I think it's very asset dependent. Certainly more than has been the case, I think, in previous cycles for the office market where you've always had differences in quality and location, things like that. But this to me feels much more and acute than that and will really depend upon the collateral of the quality of the individual assets, I think more so than we've seen in the last 20, 30, 40 years of the office market. Good
Speaker 2
morning, this is Deconstruct, a podcast from The Real Deal. It's June 24th, and today I'm actually hosting Solo for the first time while Suzanne is on vacation. She actually did our interview today. That's with Bento Green Oak or BGO's chief economist, Ryan Severino. They chatted about interest rates, expectations around what the Fed will do next, and ultimately, how all of this impacts buyers and sellers of real estate. But first up, the news. For starters, our reporters have broken more news about the Alexanders following our episode last week. Tal Alexander, who co -founded official with Oren, has now also been accused of rape in a new lawsuit, which Katherine Clorigis and Sheridan Wohl, who we had on last week, uncovered. In the lawsuit, Angelica Parker alleged that Tal and Orin's twin, who has been named in other suits, attacked her in 2012. A spokesperson for Tal has denied the allegations, but said they were, quote, fully expected given the allegations against Tal's brothers. In other legal news, a real estate investor based in New Jersey, Aron Puretz, pleaded guilty for being involved in a $55 million mortgage scheme. Porets and Barak Jirlman, his alleged co -conspirator in the scheme, acquired a commercial property for 43 million but then lied to the lender and said the property was actually purchased for 70 million. And Jirlen pleaded guilty in December. The DOJ's fraud allegations are sprawling. Jirlman and Perrettes allegedly defrauded at least three lenders plus Freddie Mac and the fraud dates back to 2017. I'm sure we'll have a lot more coming out and our senior reporter Keith Larson has been all over it. I think that's all the legal news we have for today so I'm moving on to blockbuster deals. The owner of the Playboy bought an oceanfront Palm Beach estate for a hundred and forty eight million dollars. Across the country, Jim Jenard, the co -founder of Oakley, the sunglasses company, has reportedly offloaded a sprawling Malibu estate for two hundred and ten million dollars. And then we're jumping back to the East Coast here. But in New York, a Central Park Tower penthouse closed for $115 million. So the luxury residential market is still booming, showing once again it is completely separate from the rest of the housing market. And our last item for today, an effort that would have overturned the city of LA's tiered transfer taxes, has officially died. The California Supreme Court banned a measure from appearing on the November ballot, and that measure would have retroactively reversed, reverse the taxes known as ULA, along with many other local taxes. The court had basically agreed with Governor Gavin Newsom, who said it would disrupt revenue streams too much, because so many taxes would have been reversed or avoided. And just a reminder or to anyone who's unfamiliar with the taxes, they're known as Measure ULA. They add a 4% tax on all commercial and residential sales over $5 million and a 5 .5 % on sales over $10 million. And it's worth noting that it's a tax on the total sale price, not a tax on profit. And needless to say, it has really deterred a lot of investors from coming into the market here, given they either know that they're going to have to pay that tax on exit, or it's just prevented a lot of product from actually selling, so no buyer is able to come in. I will one caveat, opponents of ULA do still some options on the table. A federal appeals court is supposed to hear arguments over the taxes in October. Okay, short and sweet roundup today. Here's our interview with BGO's chief economist.