A landlord facing multiple indictments, a pair of new lawsuits and a boffo sale of a game show host’s estate. From the wild and wooly world of real estate, here are our hits and misses for the real estate week of April 29-May 3.
Miss: The Landlord from Hell. A New York City landlord is on the receiving end of multiple indictments related to the dismal maintenance of his properties. Daniel Ohebshalom and four shell companies affiliated with him were indicted on 80 counts of harassing tenants in his five rent-regulated buildings, making false statements and endangering a child’s welfare. Manhattan District Attorney Alvin Bragg offered photographic evidence of deteriorating properties, with walls and ceilings caving in. Ohebhshalom’s miserable behavior was rooted in efforts to force out his tenants so he could renovate the apartments and sell the properties for a substantial profit. Ohebshalom learned about his indictments at the Rikers Island prison, where he is serving a 60-day sentence on other charges. Yeah, guys like Ohebshalom give property owners an extraordinarily bad name.
Hit: Score One for Zillow. Earlier this week, Zillow’s Chief Industry Development Officer Errol Samuelson posted a blog piece noting that the “proposed NAR settlement outlines the requirement that buyers have written agreements with agents before touring.” As a result of this, Samuelson said, “Zillow has created a non-exclusive touring agreement, and we’re making it available for use to the entire residential real estate industry.” The touring agreement expires after seven days and covers touring activities only, but it also does not mandate compensation or exclusivity – and it creates a PR bullseye for Zillow, separating it from NAR and the brokerages in the Sitzer/Burnett case. “Buyers and sellers deserve to work with an agent who is committed to their best interests and only represents them,” Samuelson added.
Miss: Another Lawsuit, Part 1. One week after it announced a $250 million settlement agreement to resolve concerns raised over real estate agent commissions, HomeServices of America, the real estate brokerage unit of Warren Buffett’s Berkshire Hathaway, is facing a new class action lawsuit over the same issue. The new lawsuit was filed in a Miami federal court and is seeking at least $5 million in damages. Is it cynical to wonder if such a lawsuit would occur if it didn’t involve a Warren Buffett company? The lawyers behind this litigation seem to be taking a cue from legendary bank robber Willie Sutton by going where the money is.
Miss: Another Lawsuit, Part 2. Real estate brokerages aren’t the only ones being sued – six major hotel operators are being sued in federal court in Northern California by consumers who claim the companies conspired to fix room prices in several markets by using algorithmic software. The lawsuit claims the defendants are “currently charging the highest or near-highest average rates for hotel rooms in its history despite a lack of corresponding increase in occupancy demand.” Strangely, the plaintiffs don’t realize there are other factors that determine room rates besides occupancy demand – nor do they seem to realize that the price of everything has been going up recently, which would make stagnant hotel room prices an unlikely aberration. The lawsuit insists this is “an old-fashioned horizontal conspiracy between competitors” – hopefully, the hoteliers will not follow the brokerages’ lead and rush into a shut-up settlement to quiet the agitators pushing this lawsuit.
Miss: An Unexpected Demise. One of the most surprising commercial real estate stories of the week involved the announcement by Walmart Inc. that it was closing of all 51 of the Walmart Health centers over the next 90 days. The retail giant ventured into the urgent care sector of the healthcare industry in 2019, expanding into five states with in-person and telemedicine services. Walmart Health had great potential for lowering medical costs and offering a new option for healthcare services. In an unattributed press statement, the company said it was “a difficult decision” based on a financial model that no longer worked. And while Walmart will still offer its in-store pharmacy and vision care services, the fact this ambitious endeavor failed is more than a little sad and disturbing.
Hit: The Price is Incredibly Right. Someone answered the call of “Come on down!” with gusto this week as the Hollywood Hills estate of Bob Barker, the late host of “The Price is Right” – the six-bedroom, six-bathroom property was acquired by $3.788 million, which was $800,000 over the asking price. Barker acquired the home in 1969 and lived there until he passed away last August – the property’s 5,906-square-foot Spanish Colonial Revival-style abode was built in 1929 and still offers all the original detail from that period, including the original bar with an icebox in its den.
