The Treasury Secretary makes and rescinds demands, Playboy moves its headquarters out of Los Angeles, and New York City’s worst hotel closes. From the wild and wooly world of real estate, here are our Hits and Misses for the week of Aug. 11-15.
Miss: Foot in Mouth Disease. On Wednesday, Treasury Secretary Scott Bessent used a Bloomberg Television interview to bluntly declare the Federal Reserve was keeping its benchmark rate at least 1.5 percentage points too high. “I think we could go into a series of rate cuts here, starting with a 50 basis point rate cut in September,” Bessent said, adding that “we should probably be 150, 175 basis points lower” than the current range of 4.25% to 4.5%. The next day, Bessent went on Fox Business to insist he wasn’t giving orders to the central bank. “I didn’t tell the Fed what to do,” he claimed. “What I said was that to get to a neutral rate on interest, that would be an approximately 150 basis point cut. I did not call for them to get there.” Maybe Bessent should focus on his job at the Treasury rather than find fault with other agencies that are not under his authority? And speaking of the Fed…
Miss: Foot in Mouth Disease, Part 2. President Trump appears to be running out of ideas when it comes to applying pressure on Fed Chairman Jerome Powell to do his bidding. This week, Trump announced on Truth Social that he was considering “a major lawsuit against Powell to proceed because of the horrible, and grossly incompetent, job he has done in managing the construction of the Fed Buildings. Three Billion Dollars for a job that should have been a $50 Million Dollar fix up. Not good!” Oh, who’s kidding who? By this point, it is painfully obvious that Trump will not fire Powell and Powell will not quit prematurely. The president needs to face reality and admit this is one fight that he is not going to win. But on the other hand, our next entry is a major victory for the administration…
Hit: Tear It Down. The US Court of Appeals for the District of Columbia Circuit voted 2-1 today to overturn a lower court’s blocking of the Trump administration’s plan to dismantle the Consumer Financial Protection Bureau (CFPB). The Hill reports the court rejected litigation by employee unions and groups that use CFPB services, stating that they had no right to bring their challenge in federal court. With this action, the administration’s effort to layoff at least 80% of the agency’s remaining workforce can proceed, along with the termination of CFPB contracts signed in the Biden years. Not surprisingly, the two judges voting in favor of the administration were Trump appointees and the lone dissenter was an Obama judge.
Hit: Bunny Hopping Away. The lifestyle brand Playboy Inc. gave a dramatic slam to Gov. Gavin Newsom’s California by declaring it was leaving its Los Angeles headquarters after a half-century and moving to Miami Beach, which the company described as “one of the nation’s most dynamic, culturally relevant, and business-friendly cities.” The company that Hugh Hefner built will be creating a new Playboy Club and building new production facilities. And while Playboy may not have the same level of cultural resonance as it did back when Hef was dating Barbi Benton, the company’s exodus to Florida is another reminder that Newsom’s administration is responsible for creating and maintaining a business-unfriendly state.
Hit: A Stylish Flip. Kudos to tennis star Naomi Osaka on what must be the best house flip of the year. Three years ago, the four-time Grand Slam winner purchased a Los Angeles estate from Nick and Vanessa Lachey, the stars of Netflix’s “Love is Blind,” for $6.3 million. This week, the Wall Street Journal reported Osaka sold the property back to the Lacheys for $7.95 million. The Journal sourced its reporting from an unnamed “person familiar with the property” who said Osaka updated the property by adding a new structure with a gym and a “recovery center” featuring a sauna, a cold plunge, a steam room, and a massage table. The Lacheys first bought the property in 2020 for $5 million – the Journal’s “person familiar with the property” didn’t explain why the celebrity couple bought back their old home.
Hit and Miss: Paid in Full. Kudos to the City of Arlington, which paid off its debt for AT&T Stadium this week, a decade ahead of its payment schedule. According to Fox4News.com, the city was slated to pay the debt on its $325 million contribution to the stadium project in 2035. By settling the debt 10 years early, the city saves nearly $151 million less than the projected costs. Still, the city needed to pay $490 million in principal, interest and fees for the stadium, which hosts the Dallas Cowboys – a team that is more than capable of paying its own bills. Also, the city announced that the half-cent sales tax, 2% hotel occupancy tax and 5% rental car sales tax allocated towards the stadium payments are staying in place. Isn’t that lovely?
In Memoriam: New York City’s Carter Hotel. This week saw the official end to one of New York City’s most notorious lodging establishments – the Carter Hotel, a Times Square fixture that gained an infamous reputation from its disregard for basic hygiene and a history of criminal activity. Seriously, this was the type of place where bedbugs were the least of the problems. As a property that was more prominent in the police blotter than in the tourist guides, its departure was long overdue – and its story offers a bizarre lesson in how not to run a hotel and an even crazier consideration of how such a squalid establishment could stay in business for decades. This obituary in the British news site The Times provides a wonderful tribute to an utterly unwonderful mess.
Editor’s Note: Today is the 80th anniversary of V-J Day, which marked the end of World War II. Let’s take more than a few minutes to express our deepest thanks to the men and women who served during wartime – we owe them the most extraordinary debt of gratitude for what they accomplished.
Phil Hall is editor of Weekly Real Estate News. He can be reached at [email protected].
Photo courtesy of Luvmakphoto / Getty Images
