A slippery definition of “reopening,” an unlikely grant and a merger’s messy failure. From the wild and wooly world of real estate, here are our Hits and Misses for the week of Dec. 9-13.
Miss: An Unsettled Settlement. The US Department of Justice (DOJ) offered tortured logic before the US Supreme Court this week when asked to explain why it reopened its investigation into the National Association of Realtors (NAR) after agreeing to a 2020 consent decree that settled a probe of the organization. The DOJ explained its action by declaring in a filing, “The disputed question is whether, in addition to agreeing to close the investigation, the division agreed not to reopen it … Although the division agreed to close its investigation, the words ‘close’ and ‘reopen’ are not mutually exclusive.” Obviously, the DOJ attorneys studied law with Yogi Berra, hence their embrace of his aphorism “It ain’t over till it’s over.”
Miss: Another Investigative Article? Speaking of NAR, the New York Times published another investigative feature on the trade group this week, this time focusing on the political donations of its nonprofit affiliate, the American Property Owners Alliance. The Times found this affiliate donated heavily to “Republican-aligned super PACs and groups with conservative agendas,” unlike NAR’s political action committee that divides its donations evenly between Democrats and Republicans. This is the latest in a series of Times investigations into NAR, which only serves to erode realtors’ confidence in the organization while giving the profession a poor reputation with the general public.
Miss: Was This Grant Necessary? The U.S. Department of Housing and Urban Development’s (HUD) Office of Policy Development and Research is providing a $400,000 grant to West Virginia University (WVU) to support research into housing panels designed to reduce CO2 emissions and enhance thermal performance. While the WVU students and faculty deserve commendation for their skills and knowledge, it is difficult not the groan over another hefty Green New Deal-focused allocation of HUD funds that does nothing to improve either the state of the housing or the cause of urban development. Hopefully, next year we can look forward to HUD leadership that isn’t obsessed with climate change and is focused on its core mission.
Miss: Clean-Up in Aisle Five. The proposed merger between the supermarket giants Albertsons Companies Inc. and The Kroger Co. collapsed this week when a federal judge blocked the deal. Albertsons abruptly terminated the transaction while filing a breach of contract lawsuit against Kroger by claiming it failed to exercise “best efforts” and take “any and all actions” to secure regulatory approval. In fairness, the fault was not with Kroger but with the Federal Trade Commission (FTC) under the direction of Commissioner Lina Khan, who worked aggressively to block the merger, which would have created a combined company with more than 4,000 stores; 579 stores would have been transferred to C&S Wholesale Grocers LLC. Too bad Albertsons didn’t wait until next month when Khan is no longer running the FTC and a more business-friendly administration could consider the deal.
Miss: A Not Very Merry Christmas. The financially troubled retailer Macy’s announced it was closing more stores than previously planned. In February, the company said it was going to shutter 50 locations this year as part of a plan to shut down 150 locations. However, in this week’s third quarter earnings report CEO Tony Spring declared, “We now expect to close roughly 65 locations this year. In line with our typical cadence, closures will occur post-holiday.” This news followed efforts by activist investors to force Macy’s to create a real estate subsidiary that could squeeze value from its property assets – they believe Macy’s real estate portfolio is worth much more than the company’s market value. It looks 2025 is going to be a frantic and tumultuous time for Macy’s.
Hit: Texas Hold ‘Em. Our lone hit of the week comes from the Lone Star State, where a new rule went into effect that requires elected officials to formally disclose their properties. The Texas Ethics Commissions is now requiring the lawmakers’ annual persona finance statements to identify properties and how they are used – either as an owner-occupant residence or as revenue-generating rental housing – and this includes properties that are put in a blind trust. The new rule followed media reports that Texas Attorney General Ken Paxton did not fully disclose his real estate activities – going forward, hopefully Paxton will lead by example.
Phil Hall is editor of Weekly Real Estate News. He can be reached at [email protected].
Photo courtesy of Warner Bros.
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