What’s in the new Universal Co-brokerage Agreement, and does any of it address commissions?  There are 5 distinct changes:

1.)  Commercial and retail spaces in a residential building may be listed in the REBNY RLS.

Normally, the REBNY RLS is only for residential listings (RLS == Residential Listing Service).  However, now these commercial units will be allowed in the RLS, however, they are subject to the same simultaneous advertisement rules.  If you do choose to include the listing the RLS, it must be done within 24 hours of any public marketing of the listing.  You may not put it in a commercial database for a week and then decide to widen the net using the RLS.  That would be a violation of the RLS cooperation mandate.

2.)  Coming Soon Listings

While not new for 2024, the Coming Soon listings will now be formally codified in the REBNY RLS Universal Co-brokerage Agreement.  Also, there are new rules clarifying that unsolicited offers received on a Coming Soon status listing should be presented to the seller.  However, prior to presenting any offers, the listing status must be changed to Active.

3.) Owner Opt-out Rules

Sellers and Landlords may now opt-out of the REBNY RLS by filling out some formal paperwork.  Why would they do so?  One reason would be to give a pocket listing and exclusive to the agent, but with strict instructions that they do not want any mass or public marketing done for privacy reasons.  It might be a way to give an agent a long-standing listing agreement without the pressure of accumulating a high days on market and giving the impression of a stale or undesirable home.

4.) Electronic Payments Formally Accepted

Acceptable forms of payment now include Zelle, Venmo, and other electronic funds transfers in addition to checks.

5.)  Decoupling Commissions for Broker Services

This is the big one.  It was already agree upon by REBNY in October and so far REBNY hasn’t felt like it requires any additional changes since the landmark Sitzer/Burnett suit.

First, there is no standard commission.  REBNY discourages any notion that there is a typical or mandated commission, and they are always negotiable.  Neither REBNY or the RLS fixes, controls, suggests, recommends, or maintains fees of any sort between cooperating participants on the RLS.

Offers of compensation, if any, to the buy side broker, must originate from the owner.

There is not, and never has been, a rule that REBNY prescribes a 50-50 split between cooperating brokers.  An older version of the UCBA had language that prescribes a 50-50 split only when the listing agreement between the listing broker and owner omitted any mention of compensation.  The latest version has removed these provisions.

The post REBNY Changes Their Universal Co-Brokerage Agreement appeared first on CitySignal.

What Questions Does the ZoLa Map Answer?

The name speaks for itself in this situation. The Zoning and Land Use Interactive Map gives you information about your zoning district and what landowners are allowed to do in said district. Most people use this map to understand regulations for their zoning district, research new zoning and city planning initiatives, and find their zoning district. However, that’s just the tip of the iceberg regarding the info this map can provide. 

When it comes to full districts, you can find out what kind of district you live in, be it commercial, residential, manufacturing, or special purpose district. The map will have info on building regulations for your area, such as how high they can be, the requirements for quality buildings, and the requirements for the construction of new buildings. You can also find current and pending amendments for the area, as well as whether or not your district is legally obligated to provide flood insurance for those who want it. 

If you search for your specific address, you can learn even more info. You can learn who owns your building, whether or not you live in a historic district, and even find a link to the building’s public records. They can even show you some fun things like landmarks, cafes, and FRESH zones (locations with special tax codes for grocery stores) in your area. The ZoLa Map will tell you everything you want to know and more about your zoning district.

How to Use the ZoLa Map

The ZoLa map has recently gone through an update to make navigation simple. Once you head to the portal on the government website, type in the building number, street, and borough you’re searching for. You’ll find yourself on the map, and you can search by block or lot numbers to find your district. When you’ve found the address or district you’re looking for, two menus will appear on either side of the map, each with different links and information.

Some of the links that can be found in the menus include ACRIS (The public records for buildings), transit zones, and coastal zones. The website is intuitive since it’s been updated earlier this year, and anyone can use it for any purpose. The ZoLa map might seem complex at first glance but is very easy to use once you get the hang of it.

Why Would You Use ZoLa?

The ZoLa map can, and should, be used by everyone. Landowners, business owners, and developers will benefit the most from it for several reasons. Developers, especially, will want to pay attention to this map. District zoning policies are extremely rigid, and any new development project must follow the district’s rules. Landowners should check the map frequently to keep up with current zoning laws and pending regulations for the neighborhood. This way, owners can be sure that additions or renovations to their buildings are completely legal. Business owners will want to check the map to see changes in their zoning areas’ tax status.

Although the map is most helpful for professionals, it can also be helpful for individual use. Residents should check the map regularly, especially if there’s a new addition to your building. They should also keep track of any zoning changes regarding sanitation and tax codes, which the map also provides info on. That said, ZoLa also provides an exciting look into your zoning district. You can find hidden gems on the map, see if you live in a historical area, and find out cool information about your zoning district. Pair that with some stats and trends on rents in your area to have a better understanding of the real estate market. Cartography enthusiasts, especially, will love this portal.

Additional Resources 

Many people might have specific questions that the ZoLa map cannot answer. For more information, people should visit the ZoLa help desk, a resource designed to answer any questions you might have about the platform. They address common questions like what people in multiple zoning districts should do if they want to know how their area works. 

They can also answer questions like, “when was my area last rezoned,” “How can zoning policies in my area change,” and “can I run a business out of my home?” If this page doesn’t answer your question, you can contact the Zoning Help Desk or fill out the Zoning Inquiry Form. The form is probably the fastest way to get your question answered, as a response should be sent to you in a matter of days. 

The government is also aware that the map isn’t a perfect tool. Though it’s much improved, people can still make suggestions via Github and Twitter @NYCPlanningLabs or with #ReimagineZoLa. You can also email them at zolagis@planning.nyc.gov. Your suggestions could very well make it easier for the public to access public information, which is a net positive for the entire city.

ZoLa is an excellent yet underused resource that every New Yorker should know about. It provides essential public info that residents and developers can use to make their lives easier and follow the complicated zoning rules of their area. The map is incredibly easy to use, and the amount of information is mind-boggling. One could spend an entire day learning about their zone alone. This resource is important, and more people should be aware of it. So head to the portal and learn about your district today. A well-informed resident is a powerful one. 

The post How to Use ZoLa: NYC’s Zoning and Land Use Interactive Map appeared first on CitySignal.

Fintech startups were one of the most financially backed industries of 2021, securing 21% of all venture capital dollars worldwide. Across 4,969 deals, fintech startups received a generous $131.5 billion in financing. Yet, in 2022, they’re accounting for the third largest number of layoffs globally. Proptech companies raised a record-breaking $32 billion in 2021 but are laying off employees in droves in 2022.

Auspicious startups that were well on their way to billion-dollar valuations and international expansions are now backtracking on hiring promises. An alarming amount of layoffs, hiring freezes, and rescinded offers have spread the tech industry in the last few months. 

Analysts are comparing the phenomena to the dot-com bubble of the late ’90s, where Nasdaq lost two-thirds of its value in just three years between November 1999 and May of 2002. Notable dips in economic activity and talks of a possible recession further exacerbate founder and investor anxieties. 

With venture capital funding down 20% across all industries, founders are cutting costs in case their investors start to get cold feet. 

U.S. Jobs Are Abundant, Unless You Work In Tech 

Fintech has been especially plagued by a lack of investment. The total dollar volume raised by private fintech companies is down 31%, having only reached $27.5 billion so far in 2022. Given that we’re already two quarters into the year, it’s not likely this year’s numbers will be able to compare to last year’s.

Proptech startups, on the other hand, have managed to secure $13.1 billion investment dollars in just the first half of 2022—marking a 5.65% year-over-year increase. Despite these funding wins, several proptech companies have decided to follow the herd and lay off large portions of their workforce. 

As the U.S. economy continues to struggle with the highest inflation since the 80s, investors are strategically shying away from risky investments such as early-stage VC funding and placing their bets on more stable assets. However, newbie startups aren’t the only ones feeling the effects. Established tech companies such as Netflix, Salesforce, and Meta have announced hiring freezes and layoffs, as well. 

The economy doesn’t look great. That’s no secret. But it’s not exactly tanking. Following the Great Resignation, American employees have managed to shift the balance of power back to themselves. Job seekers are experiencing a considerable amount of bargaining power in the quest for new employment. 

In fact, job opportunities outside the tech industry are growing at a healthy pace. According to the Bureau of Labor Statistics, U.S. employers added 428,000 jobs in April alone, marking the 12th straight month of job growth above 400,000. Average hourly wages are also growing (although not at the pace of inflation).

The Economy Doesn’t  Make A Lot of Sense Right Now

More than uncertain, the economy is slightly contradictory. Events that are supposed to be occurring in tandem, aren’t, which makes it that much harder to predict an outcome and answer the golden question–are we headed into a recession?

In periods of inflation wages are supposed to grow. This is because the cost of living rises as our purchasing power declines. However, when adjusted for inflation, weekly earnings growth has actually been falling, even as the job market continues to grow. Growth in the labor market is supposed to indicate economic growth, yet the economy is shrinking.

The numbers are at odds. 

The national unemployment rate is currently 3.6 percent. It’s one of the lowest unemployment rates we’ve seen since the end of World War II. In June of 2020 when the pandemic was at its peak, the unemployment rate shot up to 11 percent. That’s an impressive turnaround in just 2 years. 

But, despite this healthy growth in job opportunities, economic growth has been lagging. The Atlanta Fed’s unofficial GDPNow forecast suggests that GDP is contracting by 1 percentage point annually. Two consecutive quarters of negative growth usually indicate a recession, although not always. 

So if there’s no certainty of a recession on the horizon and jobs are growing in various industries, why is the tech industry witnessing a massive wave of layoffs?

Are Layoffs and Hiring Freezes Necessary?

Financial uncertainty is hardly a deterrence for tech investment. After all, tech investors need a high-risk tolerance, given that startups can take years to finally turn a profit. When the economy is actively expanding, some investors will even forgo profitability for long-term growth. 

However, the investing landscape starts to shift when borrowing becomes more expensive, as it is now. High inflation and high-interest rates aren’t supportive of startup founders in need of funding, leading them to cut back on their most costly expenditures—salaries. 

High-interest rates are particularly unfavorable for proptech startups who work with homebuyers, a demographic heavily impacted by mortgage rates. Many prospective homeowners are waiting for the average 5.70% interest rate on a 30-year fixed mortgage to drop, causing a number of proptech employees to sit idle. 

In 2021, not a single fintech employee was laid off, and in just the first half of this year, a total of 4,189 fintech employees were let go. When looking at the U.S. tech sector as a whole, that number jumps to a shocking 32,000 tech layoffs. 

Tech companies cite lingering effects of the pandemic and overhiring during periods of growth as two of the main reasons for widespread layoffs. Even the most promising tech companies have made significant cuts. Many of these companies began announcing layoffs at the start of the Spring, after less than satisfactory Q1 reports rolled in for some of the companies mentioned below.

Loft

Having achieved a valuation of $2.9 billion in April of 2021, Sao-Paolo-based proptech startup Loft had high hopes for the near future. That same year the company acquired Mexico City-based startup, TrueHome, marking the start of its international expansion. 

According to TechCrunch, $700 million of its impressive $2.9 billion valuation had been acquired in just a matter of weeks. At the time, the company had also claimed it was “the real estate e-commerce platform with the highest revenue in emerging markets outside China.”

On July 5th, Loft announced it had laid off 380 employees, citing “a reorganization of its operation.” In April of this year, Loft had already cut 159 jobs, bringing the total number of layoffs in 2022 to 540. The company currently has about 3,200 employees. 

HomeLight

Real estate referral company, Homelight, laid off 19% of its workforce in mid-June. This came as a surprise to some, given that the proptech startup had successfully secured $60 million in its most recent round of funding. 

In an interview with TechCrunch the company’s founder and CEO, Drew Uher, stated that “This fundraise and acquisition allow us to play both offense and defense — expanding our business while also positioning the company to weather uncertainty this year and into next year.”

Compass

Residential brokerage company, Compass, recently laid off 450 employees representing 10% of its workforce. Having debuted on the stock market at $20 a share in April of last year, Compass is now down 80%, trading at less than $5 a share. In addition to the layoffs, Compass plans to pause its expansion plans to acquire other companies and combine some of its offices. 

Robinhood

Popular trading app Robinhood laid off about 9% of its full-time workforce in late April. CEO Vlad Tenev disclosed in a company blog post that after a period of hyper growth, the company was forced to cut down duplicate roles in order to “improve efficiency, increase our velocity, and ensure that we are responsive to the changing needs of our customers.” Although the total number of layoffs was not mentioned in the article, Techcrunch reports the layoffs affected about 340 Robinhood employees.

Knock

Back in March, Knock laid off 46% of its staff, about 120 employees in total. That same month the company had plans to go public at a $2 billion valuation. However, the company instead only managed to raise $70 million in equity and $150 million in debt via private funding. The proptech startup helps homeowners make an offer on a new house before selling their old one. 

Understanding How Tech Companies Work

In their public announcements, CEOs and founders frequently reference the need to “remain lean” and “improve operational efficiency.” While they can’t come out and explicitly say that tech salaries are an expense they simply can’t afford at the moment, that’s what’s happening. 

Worker wages are large expenditures for any company—but especially tech companies—who are known to offer new employees alluring, six-figure salaries. In the wake of a massive (perhaps miscalculated) amount of growth, tech companies are now struggling to fulfill their promise to rookie employees. 

With the prospects of new investor dollars looking weak and talks of a recession on the rise, founders can’t risk not having enough cash to stay afloat, should the economy tank.  

At the end of the day, startups dance to the beat of the drum of their investors. Founders need to be able to show that they can weather periods of economic distress to secure the trust of existing and future investors. Many startups, if not most, aspire to go public, further extending their financial responsibility to shareholders. 

The Desire To Go Public

Going public provides startups two key advantages: increased capital and a higher market value. When a company goes public, they’re granted liquidity to invest in the company’s growth. Increased liquidity and transparency strengthens trust among investors, resulting in more frequent investments and ultimately, increasing the company’s overall market value. 

Now that Nasdaq Composite is down 22.4% for the second quarter, and has lost 30% of its total value since January, the likelihood of going public is well out of reach for new startups this year. 

“Many technology startups that saw tremendous growth in 2020, particularly in the real estate, financial and delivery sectors, are beginning to see a slowdown in users,” says Andrew Challenger, senior vice president at Challenger, Gray & Christmas. 

Challenger’s statement to Yahoo Finance aligns with what tech leaders have been saying in their company announcements—they simply grew too fast. 

The Effect On Wall Street

Talks of hiring freezes and layoffs have even reached Wall Street, as desires for IPOs and other corporate investments die down. The NY Post reports that in early July, JP Morgan’s investment banking fees had slumped to 54% in the second quarter, and that Morgan Stanley’s equity underwriting fees were off an alarming 86%. 

In June, JP Morgan began laying off hundreds of bankers in the mortgage division. There’s concern that bankers focused on special purpose acquisition companies—a new vehicle for taking companies public, popular among early-stage startups—will be next. 

SPACs, also known as “blank check companies,” allow for startups to bypass the traditional public offering process. Having accounted for half of all U.S. initial public offerings last year, SPACs quickly became a viable alternative for early-stage startups to access capital without having to face the many regulatory hurdles associated with traditional IPOs. 

To meet demand, big banks such as JPMorgan, Morgan Stanley, and Goldman Sachs offered existing and new employees lofty bonuses, making 2021 an exceptional year for the investment banker. Now that SPAC deals are drying up, bonuses are much less likely this time around. 

The Financial Logic Behind Cutting Jobs As A Tech Startup

Latch, a proptech company that raised $152 million in private capital before its debut on the stock market as a SPAC in 2021, has already conducted multiple rounds of layoffs this year. The company recently announced it has reduced 28% of its workforce, amounting to 130 employees. 

Having decreased a stark 80% in value since its June 2021 debut, from $11 to just $2 per share, Latch had to quickly cut costs in order to regain investor confidence and achieve a leaner state. 

Severance payments and operational restructuring is expected to cost the company between $4 and $6 million in cash. However, once the workforce reduction is complete, Latch anticipates it will achieve an annual run rate cost savings of $40 million across multiple departments. Financially, it’s not hard to see why cutting salaries is the best option for startups.

A Call For Hiring Transparency In Tech

When it’s all said and done, startups respond first and foremost to their investors. And when veteran venture capital firms such as Sequoia urge you to cut costs or face a “death spiral” amid economic turbulence—you fall in line. 

In times of inflation, high-interest rates, and stock market lows, investors want to see founders take initiative. Right now, a startup’s success has less to do with how innovative or popular the company is among customers—and more to do with how investors feel about what startups are doing with the money they’ve already been given. To be able to grow in the future, startups feel the need to lay low now.

Still, it’s hard to justify massive and rapid layoffs such as the ones at Coinbase, who laid off 1,100 employees in June, alone. CEO Brian Armstrong cited the possibility of entering a “crypto winter” and the mistake of having “over-hired” as the reason for the cutbacks. 

Most startup founders and CEOs say they now understand that they grew too fast and, unfortunately have to conduct layoffs to achieve sustainability. They’re all saying the same thing in different words. 

It’s unlikely they had no idea whatsoever that widespread tech layoffs were a possibility, if not a probability. If this is the reality of the tech job market, then perhaps startup leaders should be more forthcoming about the longevity of life-changing, six-figure salaries they’re offering new employees.

Tech salaries are enough to change an employee’s life, motivating them to relocate and make life decisions based on the assumption that they are going to stay for at least a few years. 

In an unpredictable environment such as startups and an uncertain economy like now, tech companies could be more transparent in the hiring process, or at least not bite off more than they can chew.

The post Widespread Tech Layoffs and Hiring Slowdowns: Could They Have Been Avoided? appeared first on CitySignal.

This shift in renter behavior contributes to what Venn identifies as “The Experience Era,” where customers are willing to pay more for a more pleasant consumer experience. Venn recommends property owners who want to improve tenant experiences and retention focus on implementing neighborhood-based amenities and features to connect tenants with their community. Between messaging portals, social events, and local small business subscription services, property owners can embrace The Experience Era to create better renter experiences. 

What is The Experience Era? 

Customers consider their overall experience when selecting which product to use in their day-to-day life. Consumers often opt for a product geared toward convenience and connection between industries, entertainment, transportation, and health and fitness. This desire influences purchase behavior, as customers value the experience of using the product as much as the product itself, contributing to The Experience Era. 

Venn points to several innovative products that have already successfully captured this type of consumer. Companies like Lyft and Netflix offer the same product to customers like taxis and cable television but focus on easing the experience of consuming that product. When a customer hails their car, handles payment, and communicates with the support team all through an app on their phone, they have a more direct experience and will likely continue to use that service in the future. 

The Experience Era also focuses on communication and connection, where consumers feel a sense of community. Fitness-based companies use online classes and programming to capture this audience and allow users to feel connected to those with similar interests. Outside fitness, consumers go to online groups, threads, and message portals to join communities and share their ideas. 

While many companies have created products to target customers purchasing in The Experience Era, one industry remains significantly neglected – real estate. Venn’s study suggests that property owners currently do not cater toward this experience-based purchasing behavior and can make changes that benefit themselves, their tenants, and their community. 

What have property owners been doing? 

Over the past decade, property owners implemented tech-based products and luxury communal areas for their tenants to satisfy their wants and needs effectively. While items like keyless entry and communal spaces like movie theaters may appeal to some residents, they remain vastly underutilized. Landlords commonly miss the mark when appealing to their renters, trying to find quick-fix solutions that immediately fix a particular problem in the building. 

According to Venn, many landlords do not financially interact with their tenants beyond collecting monthly rent payments. Most do not offer tenants the ability to pay for add-on services or features. Typically, tenants pay for building amenities through rent and do not make additional monthly payments. 

What do current renters value? 

Venn suggests that property owners do not cater to a tenant’s significant needs and desires. Less than half of the surveyed renters with access to technology-based amenities and common spaces found those features necessary when deciding whether or not to renew their lease. More than half of renters with access to unique amenities and technology do not heavily consider those factors in their decision-making process. 

What do renters value then? Over 80% report that they want to live in a neighborhood with a thriving array of local businesses, and around 75% claim that they want to expand their social network and know their neighbors. Additionally, 75% look for opportunities to improve their neighborhood through volunteer work. 

These statistics suggest that renters in The Experience Era crave easy access to a connected community. Yet many renters do not know their neighbors, limiting their local interaction and level of satisfaction with their neighborhood. Less than 40% of renters feel they belong in their community. 

How does The Experience Era impact moving behavior? 

When asked to identify factors that contribute to their likelihood of renewing their leases, 57% of participants identified one of the three following neighborhood-based contributors: 

• Friends, neighbors, and acquaintances in my neighborhood
• The local businesses in the neighborhood they regularly shop at
• The sense of belonging they feel in my neighborhood

Furthermore, renters with more than five close relationships in their neighborhood are one and a half times more likely to renew their leases. Tenants crave strong connections to their neighbors and community and are likely to continue living in the same unit as long as they feel that connection. Without a community and sense of belonging, renters will take their business elsewhere and move to a different neighborhood. 

What can property owners do to cater to neighborhood-focused renters? 

To better keep their tenants happy and renew their leases, property owners should shift away from luxurious gadgets and common areas, instead refocusing their resources toward experiences that connect their tenants to their community. Venn suggests that while landlords can still use technology to implement new features, they should use it to communicate with community members instead of just opening a front door. They, therefore, recommend property owners consider the following possibilities when considering how to foster a sense of community between tenants and their neighborhood. 

Messaging portal

Residents who can easily connect with community members and submit maintenance requests are more likely to renew their leases. By combining both sides of The Experience Era, ease and connection, into one cohesive app, landlords can retain their tenants and provide them the opportunity to communicate their wants and needs efficiently. 

Renters who can communicate with other tenants in their building or community are more likely to develop close relationships, contributing to the five close relationships the average tenant needs to stay in their area. Messaging portals and apps also allow tenants to submit maintenance requests, contact leasing departments, and easily ask for support as needed. Tenants who can easily reach out for help will likely have a better experience and therefore find the motivation to stay in their unit. 

The prospective financial gain may inspire property owners who are not motivated to connect their tenants with each other. Nearly two-thirds of survey participants are ready to pay an additional fee for services that connect them to their community. 

In-person events 

In a world driven by technology and digital connection, landlords can revisit in-person opportunities for social connection to help tenants develop friendships with their neighbors. Landlords can even attend community events to connect with their tenants and put a face to the name on a lease agreement. Renters who feel they have opportunities to develop friendships in their neighborhood are more than twice as likely to renew their lease than tenants who feel differently. 

One spot for community-based subscriptions

The average American renter spends hundreds of dollars monthly on grocery delivery, fitness and wellness services, and utilities. Between 63% and 82% of survey participants report wanting access to these services, with varying levels of interest based on the product. Therefore, property owners can best cater to their tenant’s needs by connecting them with local businesses that provide these kinds of services. 

Property owners can utilize technology to easily create neighborhood guides that renters can access to purchase subscription-based services and products conveniently. Keeping all businesses in the same app or website will make it simple for tenants to browse and buy all their desired products in one sitting, simplifying the purchasing process and connecting them to the businesses in their neighborhood. 

Connecting renters to local businesses will satisfy their desire to interact with their local community while investing money into those businesses and helping them stay in the neighborhood. Furthermore, these subscription programs will also encourage community members to start their small businesses, as they could immediately directly sell to their neighbors and reduce their barrier to entry. 

Conclusion

Venn’s recent study states that 1,500 American renters are more likely to renew their leases when they feel connected to and valued by their community. While property owners recently switched to implementing lush communal areas and technology-based apps to cater to tenants, these measures did not drastically impact a renter’s decision to stay in the building. 

Using technology and promoting social engagement, property owners can increase tenant renewal rates by connecting their residents through messaging portals and social events. They can further connect their building to the rest of their community through generating programs and websites that highlight local businesses and allow tenants to purchase products and subscriptions in one convenient place. 

The post New Study Finds Renters Want A Sense Of Community Due To Experience Era appeared first on CitySignal.

The lawsuit alleges that CEO Garg, several executives, and the company itself knowingly misled investors before their SPAC merger deal and fired Ms. Pierce when she raised the alarm. Her lawsuit is asking for $195 million in compensatory and punitive damages. A company lawyer for Better says the lawsuit has no merit, and they will vigorously defend themselves against it. However, the SEC isn’t so sure about that.

Better.com, The SEC & The SPAC

According to the Wall Street Journal, the Securities and Exchange Commission, better known as the SEC, has requested documents from Better and Aurora Acquisition Corp., their blank-check company, concerning their business activities. Additionally, they seek information on CEO Vishal Garg and his business activities in light of Pierce’s allegations in her lawsuit. While Better released a statement saying, “the company is confident in our financial and accounting practices, and we will vigorously defend this lawsuit,” there seem to be reasons as to why that might not be the truth.

Inman reports that the banks, CitiGroup and Barclays, who were advising Better and Aurora, have now officially resigned their positions, waiving over $16 million in fees. The fees would have been paid after the companies completed their SPAC merger. Even Bank of America, which was not officially retained by Better, indicated it was resigning from any role it may have had, implied or otherwise. Yet it was confirmed in a legal filing on July 14th, 2022, that they are still attempting to move forward with the deal. They must complete the merger by a deadline of September 30th, or it will be null and void.

Background On Better.com

We’ve covered Garg’s shady behavior in the past, so his current unscrupulous dealings are not a shock. His leadership has been less than savory, saying crazy things to employees, like the email sent company-wide reading in part:

“You are TOO DAMN SLOW. You are a bunch of DUMB DOLPHINS and…DUMB DOLPHINS get caught in nets and eaten by sharks. SO STOP IT. STOP IT. STOP IT RIGHT NOW. YOU ARE EMBARRASSING ME!”

Or perhaps you remember Garg’s prediction for this year’s interest rates, citing they would stay low because President Biden would die from COVID. He is clearly a man who struggles with impulse control. But what is surprising is that he’s still pushing ahead with the SPAC merger, despite the overwhelmingly bad press both he and his company have drawn.

Since Garg’s fateful Zoom call in December 2021, when Better had 10,400 employees, they’ve laid off 7,500–a loss equal to 72% of its workforce. At the end of May 2022, they had about 2,900 employees in both the U.S. and India, where Garg was born. The Indian Express has also revealed that Garg had employed about 1,100 people in India, where employees received a stipend from Better/Garg during the pandemic of 10,000 rupees (Rs) a month, equal to about $125 U.S. dollars. They were also given money from Better for costs to get themselves set up to work from home. Oddly, the article said Better originally recruited those in India who had been laid off from the hospitality industry.

All of this financial turmoil, particularly surrounding Vishal Garg, certainly begs the question,

Just how badly did Garg mishandle his own company’s funds?

Maybe this could be answered partly by the company’s over $300 million loss for 2021, despite posting profits of $172 million in 2020. Or possibly there are some answers in the several other lawsuits he’s targeted by multiple investors, including PIMCO and Goldman Sachs, according to TechCrunch, for misdealings in other companies he controlled. In fact, an extremely comprehensive article by Forbes that details all of Garg’s legal battles states: “Ongoing lawsuits accuse Garg or entities he controls of improper and even fraudulent activity at two prior business ventures, and of misappropriating ‘tens of millions of dollars’,” amidst many other facts of his dastardly behavior. And hey, if nothing else, perhaps looking back at our previous warnings could give us some clues. Until then, Better “better call Saul”–if they have any hope of survival.

The post Better.com Moves Forward With SPAC Despite Legal Issues and SEC Probe appeared first on CitySignal.

The Metaverse is making headlines these days, and leading the pack in virtual real estate is the company EveryRealm, formerly known as Republic Realm. You may have seen their name in the news late last year for their record purchase of $4.3 million dollars for a plot of land in the Sandbox, one of the many realms, or worlds, in the Metaverse. Although the stock excitement of the Metaverse, NFTs (non-fungible tokens), and other cryptocurrency tends to fluctuate wildly, it’s not going away anytime soon. The fact is, it is next-generation technology, especially in gaming, that we will see via the internet – and its popularity is undeniable. So what’s the story on EveryRealm and why are they vested in the MV so heavily?

EveryRealm is a company that invests in, manages, and develops assets like NFTs, virtual real estate, metaverse platforms, gaming, and infrastructure. Their mission is to become the leading and most trusted metaverse & NFT innovation and investment platform by building or buying companies in order to grow.

They are one of the largest real estate developers and landowners in many popular MV realms, like the Sandbox, Decentraland, Treeverse, and Axie Infinity. They operate both here in the real world, to help guide savvy investors who want to get in on the ground floor of this amazing, unprecedented opportunity, and also in the metaverse. They’re hedging all their bets on virtual reality. And they aren’t the only ones, as is witnessed by Facebook’s name change to Meta Platforms this last October.

Previously, Microsoft announced their purchase of ActivisionBlizzard for $69 billion dollars, as part of their expansion into the metaverse. At the beginning of December last year, it was reported that goods and services in the metaverse were approaching a value of $3 trillion dollars globally. Stars are already marketing and performing concerts in the MV. With all this activity and attention from celebrities and tech giants, it’s sparking understandably intense interest from investors, businesses, and celebrities everywhere – all over the world. And just like that, even Snoop Dogg has NFTs.

How Does the Metaverse Work?

The metaverse, at present, consists of multiple different realms, or worlds, each with its own name, owner, and in most cases, its own cryptocurrency. To enter the MV, interact with these realms, and have the most immersive multidimensional experience, we need to have a combination of technologies as well as an AR or VR headset. Virtual reality or VR helps create an experience that simulates realistic situations, and by wearing a headset or goggles the user is transported more immersively to the MV realms. VR gloves are another asset likely to become popular.

The next type of technology is AI, or artificial intelligence. AI is necessary for helping the user create and develop avatars and build assets, as well as securing “smart contracts” on the blockchain (more on this below), enabling transactions to be carried out without the need for a centralized bank or authority. In addition, many of the characters users interact with will be created using AI.

Next is the main technology used in the metaverse – augmented reality, or AR. Augmented reality enhances parts of the physical world with computer-generated input. To augment reality is to enhance it. In other words, make it more realistic and lifelike. Augmented or mixed reality headsets are available but expensive, however, prices are expected to decrease in the near future as demand increases. Combined with sophisticated AI, it will help users navigate in both worlds. Currently, AR contact lenses and regular-looking eyeglasses are in the works.

What is Blockchain Technology?

By combining the technologies listed above, users get the best interactive experience possible. But there’s one more technology involved that has been coined the “DNA of the metaverse”, and that’s blockchain technology. Blockchain is a shared database allowing multiple parties to access and verify data in real-time, facilitating purchases and transactions with cryptocurrency. It offers a decentralized, transparent method of verifying things like: digital evidence of ownership, digital collectibility, value transfer, governance, accessibility, and interoperability. In the MV, it facilitates the ability for users to shop, trade and complete transactions with value much like in the real world. The blockchain is essentially a digital ledger that records information and transactions involving NFTs and other cryptocurrencies.

What are NFTs?

NFT stands for non-fungible tokens, which basically means a unique piece of digital information that can’t be replaced with something else. Unlike a cryptocurrency like bitcoin, Ethereum or dogecoin, where the “coins” have a certain value assigned, NFTs have no preset value and are instead kind of like trading cards. Some will become valuable and some will not, mostly depending on popularity and scarcity. Quality does not necessarily have anything to do with value when you’re talking NFTs, though of course, it may play a part in an NFT’s popularity.

Currently, the Ethereum blockchain supports NFTs. An NFT can be a piece of digital art, a photograph, a song or video, or really anything that you want that can be recorded onto a digital file. Anyone can create, buy, trade, or sell NFTs. The metaverse is run by cryptocurrency, and you can start turning dollars into cryptocurrency by obtaining a crypto wallet like MetaMask.

What Does EveryRealm Do?

One thing EveryRealm does is develop their own MV real estate NFT projects, like:

• Metajuku – the first shopping mall with retail tenants and leases in the Metaverse

• Fantasy Islands – a luxury, master-planned real estate development in The Sandbox, a popular MV realm
• Realm Academy – the first online university set in the Metaverse where you can receive a Metaverse education certificate NFT.

Additionally, EveryRealm has two gaming guilds being created, one of these is a DAO – a decentralized autonomous organization. They have holdings in 26 different MV platforms and own over 3,500 NFTs. Their CEO, Janine Yorio, seems to have a good handle on it. In an interview with Bloomberg, she talks about the volatility surrounding NFTs and cryptocurrency as part of the draw for people involved. She makes a good argument for the fact that volatility in the market is actually a part of the excitement and addiction of the whole experience in the MV. She also seems to realize that the only way to make the metaverse interesting is to have people to meet, places to go, and things to see when you get there.

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Boom to Bust?

For several years, the real estate industry has been hot, but signs have been pointing to a change in the market. Mortgage rates are on the rise and home sales have been down for several months in a row and are expected to fall further. This week alone mortgage rates went up more than half a percentage point. The average rate of a 30-year fixed mortgage was around 3.5% in January as compared to 6.28% as of Tuesday, according to Mortgage News Daily. This is the highest rate since 2008. At the same time, the demand for mortgages has fallen to its lowest level in over two decades. Home prices which are inflated as much as 20% as compared to last year at this time, coupled with high inflation this year, have made homes unaffordable.

Real Estate Firms’ Reaction to Market Changes

Concerned with the downswing of the market, Compass made the decision to cut their workforce. A spokesperson from the company explained, “Due to the clear signals of slowing economic growth we’ve taken a number of measures to safeguard our business and reduce costs, including pausing expansion efforts and the difficult decision to reduce the size of our employee team by approximately 10%.” This layoff will affect about 450 workers.

The company is also reducing other costs, such as the wind-down of the use of Modus Technologies, a real estate software platform the company purchased two years ago, when home sales were surging.

Redfin CEO Glenn Kelman posted in the weekly blog, “With May demand 17% below expectations, we don’t have enough work for our agents and support staff, and fewer sales leaves us with less money for headquarters projects.” Mr. Kelman also stated that since mortgage rates are increasing faster than at any point in history, it could be years of slower home sales.

The company laid off about 470 employees, which will take place throughout the month of June, or 8% of the total staff. The Redfin staff that is being laid off will receive a minimum of 10 weeks base salary in addition to three months of health care and severance pay that will be equivalent to sales bonuses.

Today, news broke of Zumper laying off 15% of their 300-person staff last Friday. Zumper, like the other companies, stated that these lay-offs were due to revenue, not performance-based.

Cooling U.S. Economy

The cooling off of the real estate market comes at the same time as other parts of the U.S. economy that are showing signs of heading to a potential recession. Many companies have initiated layoffs over the last few months, the most recent being cryptocurrency trading firm Coinbase also announced an 18% layoff of its workers on Tuesday. Latch, a proptech smart lock company that raised $152 million in known private capital cut 130 people, or 28% of its full-time employee base last month. Rhino, another proptech startup that offers an alternative to security deposits laid off more than 20 percent of its staff, or 57 employees, earlier this year.

As economic growth slows and labor costs increase, there will be more layoffs to come. Most likely with higher prices for goods, rising fuel prices, as well as higher mortgage rates, the real estate industry could be in for a rough patch this summer, and possibly beyond.

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New Lawsuit

Recently, Better’s former Executive Vice President of Sales and Operations, Sarah Pierce, filed a lawsuit claiming Garg misrepresented the company’s business metrics in order to secure the SPAC merger enabling them to go public. Pierce also alleges that Garg assured other executives that company sales would increase because “President Biden will die of COVID”, which he believed would lower interest rates and save the company. Further, Pierce claims Garg repeated the bizarre prediction “on several occasions over a period of several weeks, to at least 50 other executives and senior employees of the company, and to the board of directors.”

The lawsuit goes on to claim that Pierce was forced out of the company as retaliation for her calling Garg out on the financial situation of the business, and raising concerns about misleading investors as to their financial status. And if that wasn’t enough, she says Garg then turned around and made her the scapegoat to other executives and the board, blaming the company’s deteriorating finances solely on her. There was a lot of tension reported between the two, when Pierce left the company with other executives after the Zoom call debacle.

According to Insider, after Garg’s Zoom call and resulting bad P.R., especially when he went on to accuse at least 250 of the employees of “stealing” from the company for not working a full 8 hours. Pierce, the COO at the time, went into damage control mode, she says, with zero cooperation. She confronted Garg and told him she would not enable his false narrative, who then turned his anger on her. Allegedly, the lawyers in the company took Garg’s side, attorney Paula Tuffin telling Pierce not to “contradict” the boss (Garg), and attorney Nicholas Calamari taking the initiative to put her on administrative leave.

Furthermore, Pierce claims she was “iced out” incrementally – but progressively – from there, primarily due to her raising red flags about the company’s financial situation. Pierce says she explained to the board it was Garg who wasn’t forthcoming about the company numbers, not her, additionally telling Tuffin Garg had made multiple misleading statements about the company finances to investors and the board. The response was that they were processing her resignation – one she never submitted. Pierce claims she was then locked out of her company email and accounts, forcing her to leave. This was just the latest of many lawsuits Garg’s been involved in, leaving most of us again wondering, when will it all finally end?

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Arrived Has Perfect Timing

Launching a proptech/fintech startup a year and a half ago, when the industry was booming but uncertain, would’ve been a challenge. But to still be in business and growing stronger than ever today, amidst record-high inflation and an unpredictable housing market, is nothing short of a miracle. Yet Arrived Homes seems to have arrived right on time, and is doing just that. The company stands out not as the first of its kind, but as the first SEC-qualified real estate investment firm to allow virtually anyone to invest in single-family rental homes, including non-accredited investors. To top it off, Arrived is a billionaire-backed firm. Besides Amazon’s founder Jeff Bezos, there’s Marc Benioff, co-founder and CEO of Salesforce, owner of Time magazine and multi-billionaire, who also backs Arrived. And someone else we know well: Spencer Rascoff, former CEO of Zillow. Arrived was founded in 2019 by CEO Ryan Frazier, Kenny Cason and Alejandro Chouza.

The company has big ambitions, and wants to make investing in real estate attainable to anyone, which is exactly what they do, with a minimum investment of just $100 bucks. And speaking of good timing, Arrived has gained popularity quickly, fully funding each group of homes first in hours, then just minutes. People, for the most part, understand the value of real estate and many would love to be able to invest. But there are barriers, not the least of which are time and money. Still, most people can scrape up $100 bucks, especially for a fairly solid investment. The homes are released every couple of weeks, the most you can invest in one home is $20K, and the only requirement is that you’re over 18.

Two homes that were offered up recently were in Birmingham, Alabama. The Stonebriar has 142 investors, cost $202K, has 3 bedrooms and 2 bathrooms, and is 1,162 ft².

The Grove has 95 investors, cost $225K, has 3 bedrooms and 2 bathrooms, and is 2,050 ft².

Each property showcased has a target rate of interest, and the homes are rented and managed by third party property management firms for 5-7 years, then sold. Investors get a check with their share of the rent quarterly, and one when the property is sold, according to the number of shares held. But as we said, Arrived might be the most talked about platform, but it’s not the only one of its kind. Still, it seems to be the most popular.

What Is Fractional Investing

Let’s talk for a moment about fractional investing. This is a type of investing strategy designed to help people who want to invest, but just don’t have the capital to buy the shares they want. It’s a tool to help beginners get a portfolio started with less money to start it with. It’s just what it sounds like; instead of buying a full share of a company, you can buy just half a share, or a quarter of a share. Not all brokerages allow fractional investing, and it’s sometimes difficult to transfer them, but the really cool thing about fractional investing is that you’re entitled to the same benefits and dividends as someone with full shares. Plus, with fractional investing you can diversify your seed money across several companies, owning your own slice – er, well, part of a slice – of the pie. It also gives you a better idea over time which stocks to put more into, and which ones to pull out of. Especially for the beginner, this is one of the best ways to start investing. Now let’s briefly look at the other companies that currently offer similar value to Arrived.

Arrived’s Top Competitor: Fundrise

First of all, the platform Arrived runs on is called Benzinga, and there are other choices there for fractional investing. One of the most popular is called Fundrise. With Fundrise, you can start with a $500 investment in single-family rental homes, multi-family rental homes or commercial buildings. Additionally, just like with Arrived, you’ll have a longer-term target range of at least 5 years, and the requirements are the same, no accreditation necessary. Fundrise was started in 2016 as an REIT (real estate investment trust), and this startup has secured a $300 million dollar credit line from Goldman Sachs to finance new construction for single-family investable homes. This company is the closest model to Arrived Homes out there, as they are singularly unique. Either of these options provide a great way to get your feet wet, and for the average income earner to get an idea of what investing is like, and what it can do to enrich and fortify your level of success in life.

Investing in REITs

A real estate investment trust is a company that owns and typically operates cash-producing real estate of any type. This is typically commercial real estate, including office and apartment buildings, warehouses, hospitals, shopping centers, hotels and commercial forests. There are two main types of REITs: equity and mortgage. The type we’ve been talking about, of course, are equity REITs, which were recognized as a distinct asset class in November 2014. Since then, investors have witnessed that they seem to be a solid bet, and are known to reduce risk in a diversified portfolio and increase returns.

Closing Remarks

The fact is, these companies are providing yet another way for smart people who know the value of real estate to get involved in investing. Real estate investing is not for the impatient, or the impetuous. It’s generally a long-term investment, but if you have the fortitude, it has the best outlook for appreciation. There are many ways to get involved in investing, and some require more money upfront than others. Talk to a financial advisor if possible, and be sure to research everything completely before investing anything. Once you are confident in where you want to invest, start small, but begin building your nest egg as soon as possible. It will pay off in the long run. Happy investing – and good luck!

The post Arrived Homes Arrives Right On Time – One More Way to Get Involved in Real Estate appeared first on CitySignal.

Better Not Pout

Let’s see, so the last time we were drawn to Better Homes in the headlines, it was for their continued massive layoffs. (I remember thinking, when is it going to end, already?!) The TechCrunch article also contained multiple tidbits of new information as well, such as the fact that apparently, Better offered all its employees in India the “voluntary separation” package we reported on last time. The problem occurred when an overwhelming 90% of their 2,100 employees tried to take them up on it! However, only about half of them, 920, were accepted.

Better Not Cry

Additionally, “numerous” laid-off employees outside of their New York headquarters have now reported problems receiving unemployment pay due to Better not paying the appropriate taxes. Incidentally, that happens to be one of the charges in one of the multiple lawsuits CEO Garg is trying to stave off. But apparently, the original SoftBank investors are well aware of his involvement in litigation and furthermore have incentivized Garg to settle the lawsuits “quietly” for further voting rights in Better.com. Garg has also personally guaranteed the $750 million dollar infusion from late last year, an unusual arrangement.

Garg’s “Love Letter”

One other slightly humorous fact is that upon learning that the details of the financial situation were going to be published, Garg wrote an email to all the current Better employees. Within it, he acknowledges the responsibility of his debt to SoftBank for the $750 million in November 2021. He further explains it by saying he: “wanted the capital to build our dream,” because he knew “the world was about to get ugly.” He additionally stated, “I might be foolish, but I believe in us. I believe in you.”

Better Say Goodbye

Even TechCrunch noted Garg’s arrogance and the fact that regardless of the outcome of the lawsuits, he stands poised for possible financial ruin and devastation. His alleged crimes are with past business partners and investors from past companies Garg founded or co-founded. The accusations are centered around his misappropriation of funds and even call Better’s founding ethics into question. This will likely not be the last time we hear about Garg and his reprehensible behavior.

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