A power couple putting their money into real estate, an entertainment industry giant stumbling badly on misbegotten real estate projects and a mortgage company offering a remarkable gift to help families in need. Looking into the wild and wooly world of real estate, here are our Hits and Misses for this week.
Hit: Queen B Has Landed. California’s problematic housing market received a much-needed infusion of glamor today as TMZ reported Beyonce and Jay-Z paid $200 million for a 30,000-square-foot all-concrete home on an 8-acre property in Malibu. This purchase created a new record in California previously held by venture capitalist Marc Andreessen with his 2021 purchase of a $177 million Malibu property, and it is the second most expensive residential real estate purchase in U.S. history – number one was hedge fund billionaire Ken Griffin’s $238 million of a multi-level penthouse in New York City’s Central Park South in 2019. Oh well, at least there is one set of homebuyers who are not that concerned with mortgage rates being above 6%.
Miss: Disney’s Real Estate Hiccups. The Walt Disney Co. (NYSE:DIS) found itself with two real estate nightmare this week. First, the company canceled its over-budget and behind-schedule Lake Nona Town Center campus complex in the Orlando area – a $1 billion endeavor that was supposed to be ring 2,000 California jobs to Florida. The cancelation was blamed on “changing business conditions,” which many saw as an unsubtle jab at Florida Gov. Ron DeSantis’ ongoing feud with Disney. Perhaps more embarrassing was the company’s announcement that is shuttering its immersive Star Wars: Galactic Starcruiser luxury hotel in Orlando this September, less than two years after it opened. For a company that is among the world leaders in hospitality, that failure was nothing less than stunning.
Hit: Raising Money for a Worthy Cause. Kudos to Lennar Mortgage for raising $100,000 in its 10th Annual Derby and donating the funds to the Mortgage Bankers Association’s Open Doors Foundation, which will use this gift to help mortgage and rental assistance to families with critically ill or injured children, thus enabling parents and guardians to be at a child’s side during their medical care without fear of missing mortgage or rent payments. The Lennar Mortgage Annual Derby has raised more than $300,000 for Opens Doors from 2,400 individual donations nationwide from Lennar Mortgage associates, starting with a roughly $12,000 fundraiser in 2019.
Miss: Sleeping with the Fishes. California has no shortage of bizarre stories, but this one takes the cake – or, perhaps, the fishcake. San Diego’s City Council voted to sue SeaWorld San Diego, which is in default for $12 million rent payments incurred during the pandemic. Considering that SeaWorld San Diego reported record revenue at $293.3 million during the first quarter of this year, it seems odd that it is shrugging off its rent responsibility. Hopefully, municipal rent collectors won’t be thrown into the killer whale tank when they show up demanding payment.
Hit: Bang, Zoom, to the Moon! Dubai is already home to the world’s tallest building and it hosted the world’s most imaginative architectural designs during its Expo 2020. It should be no surprise that the next oversized real estate project is a 900-foot, $5 billion replica of the Moon. The Associated Press reported that Canadian developer Michael Henderson’s Moon World Resorts Inc. has proposed new destination resembling the Moon that will encompass a 4,000-room hotel, a 10,000-seat arena and a “lunar colony” that recreates what Neil Armstrong and his pals experienced in their lunar walkabouts. Hey, if you’re looking for inconspicuous projects, Dubai is not the place for you!
Miss: Speaking Poorly of the Dead. Sam Zell, one of the most innovative figures in the commercial real estate industry, passed away this week at the age of 81. The New York Times assigned his obituary to Robert D. McFadden, who turned out a surprisingly mean-spirited overview of Zell’s life that dismissed him as “an abrasive and eccentric Chicagoan” and a “diminutive man with a raspy voice, a bald pate, squinty eyes and a white beard.” (And this McFadden guy looks like Brad Pitt?) The writer barely acknowledged Zell’s importance in the creation of the real estate investment trust industry and instead launched into a massive fixation on the anomaly of Zell’s career – his unsuccessful ownership of the Tribune Company publishing operation. If McFadden has a personal axe to grind against Zell, he should have kept it in his toolshed and not sought to denigrate Zell’s legacy with his vitriolic babbling.
Photo by Meaghan Kelly / Flickr Creative Commons
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Why are you categorizing Disney pulling out of Florida a “failure”? It’s not a failure at all – but a company choosing where to put its future capital – and choosing not to invest in a state that is going full christian nationalist. I say that’s a full win for Disney.