Commercial real estate behaving badly; Steve Ross launches new firm... and more

The best national real estate stories from The Real Deal Jul 13, 2024 [View in Browser]( | [$1 for 1 Month]( [The Real Deal Logo](   [The National Logo](   In this week’s newsletter, we look at a crackdown on bad financial behavior in commercial real estate. Plus, Steve Ross takes a step back from Related to set up shop in South Florida, the FBI investigates the Alexander brothers’ rape allegations and office vacancy ticks up in Chicago. These and more below.   Commercial real estate behaving badly It’s a tough time to be in CRE. The cheap money era is over. Now steep interest rates, falling valuations, market uncertainty and more have commercial investors struggling to keep their heads above water. And if treading in deep financial waters wasn’t hard enough, federal agencies are putting the industry under scrutiny for deals made in the good times. In the last nine months, commercial brokerage Meridian Capital Group was put under [investigation by Freddie Mac,]( Fannie Mae zeroed in on [two of the largest title insurers]( in the tri-state for their involvement in [fraudulent deals]( and Freddie announced [new anti-fraud guidelines](. Meridian and the title insurers have not been charged with wrongdoing, but the probes continue. On Friday morning, The Real Deal reported that the Department of Justice is seeking to indict Eli Puretz, [alleging]( that the Lakewood, New Jersey, investor was a co-conspirator with his father Aron Puretz and [Boruch Drillman](. Drillman and the elder Puretz have already [pleaded guilty]( to their roles in the mortgage fraud. On Friday afternoon, we reported the next click: Mark Silber, another co-conspirator, [pleaded guilty as well](. Drillman and the Puretzes aren’t the only investors under fire. Shaya Prager, another Lakewood investor, made a splash by scooping up more than [$2 billion worth of real estate]( in two years. But the splash has turned into a wave of trouble – he’s now facing foreclosures, scrutiny over his ground lease methods and accusations from investors that he [defaulted on guarantees](. It’s not just the mortgage industry. Across the country lawsuits are cropping up accusing investors and developers of fraud. In Chicago, for example, a new lawsuit depicts landlord Larry Weiner of Marc Realty as a business partner who will use [“ruthless” and “illegal” tactics]( to exert financial and “emotional control” over his investors. And that suit is just the [latest in a series of legal battles]( against one of Chicago’s biggest CRE players. On the West Coast, meanwhile, the SEC [charged Newport Beach, Calif., investor John Kralik]( and his firm JKV Capital for allegedly lying to investors and misappropriating investor money in a fix-and-flip scheme. And up in Sonoma, a [group of investors are suing]( developer Ken Mattson and his business partner, Timothy LeFever, accusing them of fraud, elder abuse and other financial misconduct. Mattson and LeFever, who are under a spotlight from the FBI, SEC and IRS, also [filed lawsuits against each other]( alleging financial misconduct in June. In this industry, there are always lawsuits. But it does seem like there are an awful lot of them lately. So maybe the tide is going out. In which case, as Warren Buffett would say, we’re about to see who’s been swimming naked.   Together with Entrata Manage leads for multiple properties in one dashboard [Entrata]( View and keep track of leads, keep a record of all prospect communication, and easily track and search for info—for multiple properties and in one dashboard.   [I'm an image]( Steve Ross launches firm focused on West Palm investments, steps back from Related The billionaire also plans to spend more time on Miami Dolphins and Formula One race, both of which he owns. [I'm an image]( Developer Brandon Miller dies at 43 Brandon Miller, managing partner and son of founder of Real Estate Equities Corporation, died July 3. [I'm an image]( Behind the evolution of rent control’s politics Pushes to overturn state bans on rent control have been mostly futile across the nation, but have gained traction recently in Illinois and California.   Advertisement   [I'm an image]( [Brand Studio Powerful CEOs and Famous Rappers Trust MV Group to Build Their Dream Home]( [I'm an image]( Unmasking the developers of South Florida’s biggest Live Local Act project Pablo Castro and Laura Tauber are planning more than 3,000 units in six towers in Miami-Dade County’s West Little River neighborhood. [I'm an image]( FBI investigating Alexander brothers rape allegations The FBI is investigating allegations of rape and sexual assault by former top real estate brokers Oren and Tal Alexander, and their brother Alon Alexander. [I'm an image]( Another record-breaking quarter for office vacancy in Chicago Chicago's downtown office market has notched another record high for vacancies of 25.8 percent at the halfway point of 2024. [I'm an image]( San Francisco deemed the “worst place to be a real estate agent” in the US Owning a home is unaffordable on the typical San Francisco agent’s $65,000 salary, according to data and analysis from Clever.     [The Real Deal Logo]( [Facebook]( [Twitter]( [Instagram]( [LinkedIn]( [YouTube]( [Manage Newsletters]( | [Unsubscribe]( | [Privacy Policy]( | [Subscribe]( | [Advertise]( The Real Deal 450 West 31st Street, New York, NY 10001 ©2024 TheRealDeal. All rights reserved. [View Online](