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Creditors want to force Rudy Giuliani to sell his $3.5 million Florida condo to help pay his significant debts, according to a court document filed on Friday, CNBC.com reported. The former New York City mayor filed for bankruptcy protection in December, citing myriad unpaid debts including a $148 million payment to two Georgia election poll workers who he falsely claimed had tampered with the 2020 election ballots while he was serving as a lawyer for former President Donald Trump. In response to Friday’s filing, Giuliani’s counsel said the request to sell the Florida condo is “extremely premature.” “The case is still in its infancy,” said Heath Berger, partner at Berger, Fischoff, Shumer, Wexler & Goodman, LLP, who is representing Giuliani in his bankruptcy litigation. Giuliani has argued that he does not have the funds to pay his debts, the Friday court filing said: “According to the Debtor’s counsel, ‘there’s no pot of gold at the end of the rainbow.’” Giuliani’s primary income comes from Social Security payments and money from his Individual Retirement Account, Berger told CNBC. But the court document cited various expenses Giuliani pays now to maintain his lifestyle.

A Charlotte-based construction company has filed for liquidation as it faces $11.4 million in total liabilities, the Charlotte Business Journal reported. Arbor Construction LLC last week filed for chapter 7 bankruptcy in North Carolina, bankruptcy court records show. The company reports its liabilities surpass its total assets of $11.1 million. It has between 200 and 999 creditors. Arbor Construction focuses on homebuilding and remodeling, according to its LinkedIn page. The company's assets include $10.8 million in real property. That includes sites throughout the Charlotte region in Waxhaw, Lancaster, Indian Land and Fort Lawn, bankruptcy court records state.

The National Association of Realtors agreed to settle litigation over commission rules for U.S. real estate agents, clearing the way for possible changes in how Americans buy and sell homes, Bloomberg News reported. For homeowners and buyers, the proposed settlement marks an important shift, altering the way that agents communicate with each other about commissions in a move that may result in lower fees. “We believe the potential changes would likely accelerate commission pressure on buyer agents, and could support overall commission rates around a home transaction trending lower in the near term,” William Blair analysts including Stephen Sheldon said Friday in a note. The NAR, a trade group for U.S. real estate agents that counts about 1.5 million members, would pay roughly $418 million over about four years under the agreement, which is subject to court approval, according to a statement Friday from NAR. The Realtor group continues to deny any wrongdoing with how it structured a model rule for broker compensation. The NAR has come under fire from multiple lawsuits taking aim at the industry’s compensation structure, in which sellers pay a commission — often around 6% — that is then divided between representatives for both sides of the transactions. In many cases, sellers have been compelled to enter into commission-sharing arrangements as a prerequisite for marketing their homes on multiple-listing services, the industry’s main tool for publicizing listings.

Patrick S. Nelson built his student housing property management company by raising money from big lenders and hundreds of wealthy individuals. But his business has soured in recent years, and Mr. Nelson — who has so far reneged on promises to pay back some of those partners — now faces more than a dozen lawsuits and a challenge from a private equity firm, the New York Times reported. Nelson is on the hook for at least $115 million, which he has not paid despite escalating fines and interest and twice being held in civil contempt by judges over the alleged misuse of company money. His defiance has frustrated investors and lenders, and irritated some of the judges hearing those disputes. “I am seeing a lot of money moving around, and I don’t like it,” Justice Melissa Crane said in February at New York County Supreme Court during a hearing involving Fortress Investment Group, a private equity firm that is trying to foreclose on one of Mr. Nelson’s properties. In January, Justice Crane held Mr. Nelson in contempt of court after finding that he had violated court restrictions by using nearly $3 million from his business to pay for personal expenses, including mortgages on an upscale vacation rental ranch in Utah and a home in California, golfing trips and credit card bills. Nelson started Nelson Partners Student Housing in 2018 after parting ways with his brother, with whom he ran a student housing business for nearly two decades. The siblings were among the first to spot an opportunity that has become a $10 billion-a-year market.

A pair of Iowa developers has filed for bankruptcy in federal court, leaving uncertain the future of homes and properties in three states — including some under construction in the Des Moines metro, the Des Moines Register reported. Court records show creditors are owed millions of dollars, including for luxury vehicle purchases. Jeffrey and Tina Ewing, husband and wife developers from Pella, filed for chapter 11 bankruptcy in federal court on March 5. Their Vintage Cooperatives real estate business operates homes and independent living communities for people who are 55 years old and older in Iowa, including in Altoona, Ames, Ankeny, Bettendorf, Coralville, Des Moines, Indianola, Iowa City, Johnston and Pella. It also has communities under construction or planned in Cedar Rapids, Dubuque, Iowa City, North Liberty and Waukee, as well as Columbia and Liberty, Missouri, and Sioux Falls, South Dakota. At least five homes have been sold at the development in Waukee, under construction now. It's unclear how the bankruptcy proceedings may affect those homeowners, though the Ewings' lawyer told the Des Moines Register there's a plan in place to address the issue. The Ewings' other real estate businesses and holdings include Ewing Land Development and Services LLC and Harvest Investments LLC.

New York Community Bancorp has sold some loans for gains and was working to integrate collapsed lender, Signature Bank, into its financial reporting process, it said in its annual report yesterday, Reuters reported. Its first quarter will include the sale of consumer loans worth $899 million on March 13 and a commercial co-operative loan in late February as the lender works to cut exposure to the beleaguered commercial real estate (CRE) sector. Several Wall Street analysts have flagged concerns that the turnaround could take a long time as profit remains under pressure from its efforts to boost reserves for potential bad loans. NYCB had earlier this month said that it was getting interest from non-bank bidders for some of its loans and would outline a new business plan in April while once again cutting its dividend and disclosing a 7% drop in deposits. The lender also named Joseph Otting, former Comptroller of the Currency in the Trump administration, as CEO as part of a $1 billion capital injection from a group of investors that included former Treasury Secretary Steven Mnuchin.

The presiding judge in the bankruptcy case involving Reverse Mortgage Investment Trust (RMIT) — the parent company of former leading reverse mortgage lender Reverse Mortgage Funding (RMF) — has approved a request to transfer the company’s bankruptcy status to chapter 7 from its current chapter 11 status, HousingWire.com reported. The move allows the RMIT estate to sell off its remaining assets to satisfy creditor claims. It can also provide an additional mechanism for resolving disputes while reducing the administrative costs the estate would need to continue paying under chapter 11. In the original request, the RMIT plan administrator explained that conversion to chapter 7 was being sought to preserve the value of the estate’s remaining assets and ease the overall liquidation process. “The Plan Administrator hopes that by converting this case, instead of seeking dismissal or simply resigning, that the estate will be able to preserve value of any potential recovery from the TCB dispute or other litigation for the benefit of all unsecured creditors,” the January filing explained. “Absent conversion and the installation of a chapter 7 trustee, this value could be significantly eroded, if not entirely eliminated.” Presiding Judge Mary Walrath of the U.S. Bankruptcy Court for the District of Delaware found that the request was “due and sufficient under the circumstances.” The conversion will be effective anywhere from five to 10 business days after the entry of the March 12 order, according to the court filing.

In San Francisco, a 20-story office tower that sold for $146 million a decade ago was listed in December for just $80 million. In Chicago, a 200,000-square-foot-office building in the city’s Clybourn Corridor that sold in 2004 for nearly $90 million was purchased last month for $20 million, a 78 percent markdown. And in Washington, D.C., a 12-story building that mixes office and retail space three blocks from the White House that sold for $100 million in 2018 recently went for just $36 million. Such steep discounts have become normal for office space across the United States as the pandemic trends of hybrid and remote work have persisted, hollowing out urban centers that were once bustling with workers. But the losses are hitting more than just commercial real estate investors. Cities are also starting to bear the brunt, as municipal budgets that rely on taxes associated with valuable commercial property are now facing shortfalls and contemplating cutbacks as lower assessments of property values reduce tax bills, the New York Times reported. “They’re being sold at massive discounts,” Aaron Peskin, president of the San Francisco board of supervisors, said of office buildings in his city. Peskin said that San Francisco’s $14 billion budget is facing the prospect of a $1 billion shortfall over the next few years, in part because of lost commercial real estate tax revenue. Read more.

ABI will present a program April 30-May 2 that will address CRE exposure: the 2024 Distressed Real Estate Symposium, to be held in Ojai, Calif. Click here to register!