Robert Khodadadian

Neutrogena to move headquarters from LA to the Garden State – Robert Khodadadian

Apr 24, 2024

Neutrogena, maker of Beach Defense sunscreen and cosmetics, will move its headquarters from Los Angeles to New Jersey. New Jersey?

The Westchester-based unit of New Jersey-based Kenvue is closing its corporate headquarters at 6080 West Center Drive to consolidate operations in Skillman, in the Garden State, the Los Angeles Business Journal reported.

The move comes as Kenvue executives try to boost Neutrogena’s lackluster performance. It also represents the latest major business exit out of L.A.

Neutrogena, which had called Westchester home for decades, is laying off 84 local employees in three waves, with most given the option to relocate. The company expects to shut the doors by August.

Founded in 1930 in itially as Natone, the company changed its name to Neutrogena in 1962 and went public in 1973. Johnson & Johnson bought the firm in 1994 for $924 million. It then spun off its consumer health division last year into the independent Kenvue, owner of Aveeno, Band-Aid, Tylenol and Neutrogena.

The publicly traded firm reported an 8 percent drop in sales for skin health and beauty last year, a segment driven largely by Neutrogena.

A company executive told Bloomberg Finance this month that the decision to move to New Jersey was made in an effort to “boost growth and improve collaboration.”

The size of its headquarters at the 13-story office building north of LAX were not disclosed.

The 316,000-square-foot, Class A office building, built in 1987 off the 405 Freeway, is part of a six-building, 1.4 million-square-foot Playa District campus owned by EQ Office, based in Chicago. Tenants include Sony and Pepperdine University.

The pending departure by Neutrogena is just the latest in a series of mergers and moves by homegrown firms out of Los Angeles since 2000, according to the Business Journal.

Northrop Grumman moved from Century City to Virginia in 2011, though it’s still a large employer in Los Angeles County. In 2009, Hilton Worldwide Holdings moved from Beverly Hills to Virginia. In 2014, Occidental Petroleum moved from Westwood to Houston.

Real estate brokerage CBRE moved its headquarters from Los Angeles to Dallas in 2020. A year later, engineering and construction firm AECOM also left L.A. for Dallas.

Last year, Santa Monica-based Activision Blizzard was acquired by Microsoft in a deal that kept local operations, but resulted in substantial layoffs. Mexican food producer Cacique Foods last year moved its hub and dairy plant from Monrovia and City of Industry to Texas.

Only two Fortune 500 companies are now headquartered in L.A.: Reliance Steel & Aluminum and Farmers Insurance. Outside the city limits, Disney is in Burbank and Amgen is in Thousand Oaks.

— Dana Bartholomew

New York

CBRE moving HQ from LA to Dallas

Los Angeles

AECOM shifts corporate HQ from LA to Dallas

Los Angeles

In-flight entertainment firm planning renovation at Playa District

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Uncategorized, headqarters

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Spec home developer lists Beverly Hills PO manse for $29.5M – Robert Khodadadian

Apr 24, 2024

A spec home in Beverly Hills Post Office has hit the market for $29.5 million, more than eight years after the developer, Yosef Dangor, bought the property.

Josh Flagg at Compass is listing the home at 9705 Oak Pass Road for sale, according to an announcement from the brokerage.

9705 Oak Pass Road (Marc Angeles, Getty)

The seven-bedroom, 8,800-square-foot home was designed by Noah Walker, an L.A.-area architect famous for designing some of the county’s costliest homes. The contemporary-style “architectural masterpiece” is located in a gated community, according to listing notes.

An entity tied to Dangor bought the property for $3 million in 2016, records show, and scored an $8 million loan from Anchor Loans in Westlake Village on the site last year.

9705 Oak Pass Road (Marc Angeles, Getty)

Beverly Hills Post Office, though the area shares the same famous 90210 zip code with the city of Beverly Hills, technically lies in the city of Los Angeles. That means Dangor will have to shell out a 5.5 percent transfer tax if the property sells for $10 million or more.

The property is flush with amenities — a Himalayan salt sauna, pool, spa, outdoor kitchen, fire pit, steam showers, movie theater and gym.

The listing discloses a 2 percent buyer’s agent fee, though it’s subject to negotiation.

Flagg, who stars on Bravo’s “Million Dollar Listing L.A.,” jumped to Compass from Douglas Elliman last month. The listing marks one of his first deals under the Compass brand.

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Uncategorized, Luxury Real Estate

Industrious lease expands coworking presence in Century City – Robert Khodadadian

Apr 23, 2024

Industrious has signed a lease for 19,000 square feet of offices in Century City, weeks after the coworking company expanded its offices in Westwood and Santa Monica.

The New York-based flex workspace firm led by Jamie Hodari and Just in Stewart signed a 10-year lease for the offices in the North Tower of Watt Plaza at 1875 Century Park East, Commercial Property Executive reported.

Financial terms of the lease with Santa Monica-based Watt Companies, owner of the 23-story, 476,100-square-foot building and twin tower next door, were not disclosed.

Industrious is now listing coworking space from $399 a month, according to its website.

The deal comes after Industrious opened a 20,800-square-foot office at 1100 Glendon Avenue in Westwood Village, with plans to open a 23,300-square-foot office in December at 808 Wilshire Boulevard in Santa Monica.

The Industrious lease in Century City expands on 40,000 square-feet of coworking offices the firm occupies at the South Tower of Watt Plaza at 1925 Century Park East.

Industrious also has offices in Playa Vista,, Hollywood, West Hollywood and Downtown L.A. The firm has also scooped up locations left behind by WeWork across the nation following that company’s bankruptcy. Industrious claims more than 200 coworking offices in 65 cities worldwide.

Thirteen months ago, a Chicago-area judge ruled that Industrious owed Stockbridge Capital Group, its former West Loop landlord, more than $2.3 million for walking out on its lease.

In 2022, CBRE announced it was investing another $100 million in Industrious to help speed up international expansion. A year earlier, the Dallas-based firm acquired a 35 percent stake with the cash purchase of about $200 million in primary and secondary shares.

Early this year, Industrious partnered with PGIM Real Estate and HPI Real Estate and Investment Services to open a 20,600-square-foot coworking office in Austin, its fourth in the Texas capital.

As of January, Los Angeles had 4.3 million square feet of coworking office space, making it the second largest flex office footprint in the U.S., according to a CommercialEdge market update.

— Dana Bartholomew

National

Why co-working firms won’t save WeWork’s landlords

Los Angeles

Industrious expands into LA’s Westwood and Santa Monica

Chicago

Judge: Industrious owes Stockbridge $2.3M for abandoning lease

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Fogel Real Estate plans resi, retail project in Venice Beach – Robert Khodadadian

Apr 23, 2024

Fogel Real Estate, run by Steven Fogel, is planning to build a 36-unit apartment building, spanning 36,700 square feet, in Venice, according to a filing with the Los Angeles Planning Commission on April 16.

The plans for 825 South Hampton Drive include a 3,400-square-foot, ground-floor retail section with a cafe and three levels of below-ground parking with 60 spaces.

The limited liability company, SJF Venice, which filed the plans, lists Steven and Kelly Fogel as managers, according to state business records.

Steven Fogel is the co-founder and chairman of Westwood Financial, a Los Angeles-based firm that owns and operates 127 shopping centers across the U.S, according to a company website.

His daughter Kelly Fogel, a Los Angeles-based photographer, declined to comment on the plans.

The firm bought the roughly half-acre site for $15 million in 2022, according to property records filed with L.A. County. The land sits on the intersection of Hampton Drive and Abbot Kinney Boulevard, a popular shopping strip in Venice.

The purchase came after an entity tied to Fogel Real Estate defaulted on a loan from Columbia Pacific Advisors tied to the property next door, 812 South Main Street, records show. Columbia Pacific foreclosed on that 30,000-square-foot piece of land for $2.3 million in 2021.

Fogel Real Estate’s plans rework earlier designs for the site that included eight live-work condos, three levels of subterranean parking and 9,000 square feet of commercial space on the ground level, TRD reported in 2017. Fogel previously leased the property, before it bought the site, records show. It’s unclear why Fogel pulled the 2017 plans and has refiled.

Venice continues to be a desirable neighborhood, despite a “continuing decline in occupancy” and “subdued” renter demand, according to recent data compiled by Mathews Real Estate Investment Services.

Rents in Venice Beach dropped 0.8 percent between March 2023 and last month, according to the report, but is still “one of the three most expensive” neighborhoods in Los Angeles for renters, with asking rents averaging $3,290 a month.
Other developers that have filed plans in Venice over the last couple of years include Amadora Heights and Wiseman Residential.

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Uncategorized, Development, LA multifamily market

Santa Clarita looks to Irvine model for redeveloped Valencia Town Center – Robert Khodadadian

Apr 22, 2024

Valencia Town Center could become a great destination for families to live, play and work, not unlike Irvine Spectrum Center in Orange County.

The Irvine mall developed by the Irvine Company could serve as a model for Santa Clarita, whose planners laid out a framework for redevelopment of the Valencia Town Center mall in a Planning Commission meeting on April 16, the Santa Clarita Signal reported.

The 1 million-square-foot indoor mall at 24201 West Valencia Boulevard was purchased by Dallas-based Centennial last fall for $199 million after Unibail-Rodamco-Westfield, based in Paris, defaulted on its mortgage loan.

The Texas investor then said it had one goal: to add value by building homes, offices and more businesses at its 53-acre property in north Los Angeles County.

City planners were already hard at work drafting a Town Center Specific Plan — creating flexible guidelines for its redevelopment. The plan’s area extends beyond the mall to cover 111 acres, including City Hall.

Senior Planner Dave Peterson said the city wants to require that commercial and residential development be built in tandem.

He said “making a great place” where a family could live, play and work was as important as having the right mix of commercial tenants.

For that, he pointed to the Irvine Spectrum Center, which for nearly three decades has evolved into a Moroccan-style retail magnet that now includes a Nordstrom, Ferris wheel, 21-screen cinema, Improv Comedy Club and around 130 shops and restaurants, in addition to two office towers.

One of the appeals of the Irvine Spectrum Center, Peterson said, is that you can read a book in one of the grassy areas and not realize the 5 Freeway is a few hundred feet away, because of the intentionality of the center’s design.

“What that defines is the experience of the place,” Peterson said, referring to the fact that people said they just like to go there. “And that is the kind of thing that the Town Center Specific Plan is aiming for.”

The city’s specific plan calls for the city to “strongly encourage” the developer to include 2,200 homes, of which 440 would be set aside as affordable housing for households earning less than 80 percent of area median income.

At the same time, planners pondered the possible demolition of portions of the mall, including its food court, JC Penney store and “the Sears box,” while adding a hotel and convention center on the south side.

Michael Platt, executive vice president of mixed-use development at Centennial, said the company would wait until the city finished its Town Center Specific Plan before laying out its plans. He praised the city for its “forward-thinking” and “holistic” in itiative.

— Dana Bartholomew

Los Angeles

Centennial spends $199M to buy Westfield mall in Santa Clarita

Los Angeles

Centennial plans to redevelop Valencia Town Center into a retail village

Los Angeles

Santa Clarita prepares for possible Westfield mall sale

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Uncategorized, Mall redevelopment, specific plan

Rancho Palos Verdes OKs state-mandated housing plan two years late – Robert Khodadadian

Apr 22, 2024

Rancho Palos Verdes has approved a new draft of its state-required housing plan, more than two years after the city blew its deadline.

The upscale South Bay city approved a plan to build 647 homes by 2029, despite pushback from residents concerned about density, traffic and local control, the Torrance Daily Breeze reported.

The deadline to get the “housing element” plan approved by state regulators was Oct. 15, 2021. Each city and county is required every eight years to create the blueprint to rezone for a specific housing goal.

The failure to get its plan certified leaves Rancho Palos Verdes open to the builder’s remedy, a legal loophole in state housing law that allows developers to bypass local zoning with projects that meet affordable housing thresholds.

Builders have triggered the remedy in cities from Redondo Beach to the Bay Area that have failed to certify their housing plans.

Rancho Palos Verdes has grappled with its required update requiring more low-to-moderate housing for some time, according to the Breeze.

“Most California cities have struggled mightily in this particular round of the housing element,” Rancho Palos Verdes Mayor Pro Tem Eric Alegria told a room packed full of constituents.

“I hear a lot of passion from our speakers, understandably,” he said. “We are all passionate about our homes — (and) we can all agree that housing is needed, in general. (But) I also agree that promoting housing alone does not solve homelessness as a singular tactic.”

For elected officials and residents alike, the major concern was having to plan for apartments in an upscale city of mostly single-family homes.

Mayor John Cruikshank expressed sympathy with many in the audience.

“The onslaught of Sacramento continues and there’s not much we can do about this until we change Sacramento,” Cruikshank said. Rancho Palos Verdes, he added, is “about low density; we are about single-family homes.”

“We’re all frustrated by this process and all five of us up here get that.”

— Dana Bartholomew

Los Angeles

“Tool of last resort”: Inside California’s costly crusade to make builder’s remedy work

New York

Builder’s justice: How a legal loophole could reshape California

Los Angeles

“A real penalty”: how Newsom has legitimized builder’s remedy

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Uncategorized, Builder’s Remedy, Housing Element

Bank of Southern California puts Neil Shekhter portfolio up for sale – Robert Khodadadian

Apr 20, 2024

Bank of Southern California has listed three apartment complexes in Santa Monica for sale — properties formerly owned by developer Neil Shekhter, The Real Deal has learned.

NMS Properties’ Neil Shekhter

The bank foreclosed on the three buildings at 1038 10th Street, 1007 Lincoln Boulevard and 1516 Stanford Street in February, L.A. County records show, after Shekhter defaulted on almost $16 million in loans tied to the properties.

At a public auction, Bank of Southern California foreclosed with a credit bid of $9.5 million, coming out to about $394,000 per unit.

Now the bank is asking $10.8 million for the three buildings, which together total 24 units, according to listings on LoopNet for the property. At that price point of $450,000 per unit, Bank of Southern California could recoup some of its loss that came from Shekhter’s unpaid debt. A team led by JLL’s Luc Whitlock is market ing the portfolio for sale.

Shekhter paid about $10.6 million for the three buildings between 2015 and 2016, property records show.

The buildings can be bought individually or as one portfolio, according to the LoopNet listing. Almost half of the units will be vacant at the time of sale.

The properties could be bought by owner-occupiers — someone who could occupy one of the units and rent out the rest, according to JLL’s market ing materials.

Shekhter and his firm, WS Communities, had refinanced the three properties in September 2022, using a business loan from Bank of Southern California, court records show.

Shekhter’s sons Adam, Alexander and Alan Shekhter, each signed unlimited personal guarantees with recourse, meaning if the properties could not pay back the loan, the brothers would be personally liable for paying it back, according to court documents.

Bank of Southern California had sued Shekhter’s sons over the defaulted loans, claiming the three “failed and refused, and continue to fail and refuse, to pay the sums due and owing to plaintiff, in breach of said guaranty,” court records show.

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Uncategorized, Distress, Foreclosure, Investment Sales, LA multifamily market, REO

Redcar plans three-story mass timber office building in Santa Monica – Robert Khodadadian

Apr 20, 2024

Redcar Properties has upgraded plans for a 47,300-square-foot office building in Santa Monica.

The locally based developer led by Jim Jacobsen unveiled a new look before the city Architectural Review Board for the three-story building proposed for 1630 Euclid Street, Urbanize Los Angeles reported.

The project, presented to the same board in August, would replace a 7,300-square-foot commercial building west of Memorial Park.

The office building was designed by Culver City-based House & Robertson Architects, which led the design for the distinctive stainless steel ribbon façade at the Petersen Automotive Museum in L.A.’s Miracle Mile.

Its upgraded design for 1630 Euclid includes a “hybrid” mass timber building topped with rooftop solar panels above a two-level underground garage.

The offices would include floor-to-ceiling windows surrounded by outdoor balconies and stairways, according to renderings. A rooftop deck would be shaded by a trellis canopy.

In a report, Santa Monica planning staff recommended the Architectural Review Board approve the project, according to Urbanize.

The proposed offices, revised from brown to white with wood trim, is a sister project connecting to a 39,000-square-foot building Redcar built next door at 1650 Euclid. The two buildings will attach on each floor, according to Urbanize, and the parking levels at 1630 Euclid will be accessed through the next-door building.

In February last year, Redcar filed plans to build a 75,000-square-foot office building at 3122 Nebraska Avenue, which would replace two mid-century industrial buildings.

The firm has built projects in Culver City and in Chinatown. In August, construction was underway for its five-story office complex in Chinatown, among the first in Los Angeles built of cross-laminated timber.

— Dana Bartholomew

Los Angeles

Redcar plans 75K sf office building in Santa Monica

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Redcar buys Dynasty shopping center in Chinatown

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Macerich faces “imminent” default on $300M Santa Monica Place loan

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DJM and PGIM list Bella Terra mall in Huntington Beach for sale – Robert Khodadadian

Apr 19, 2024

DJM Capital and PGIM have listed an 853,000-square-foot shopping center approved for 300 homes in Huntington Beach. The outdoor mall could fetch $300 million.

The San Jose-based developer and the real estate arm of Prudential Financial, based in New Jersey, are market ing the Bella Terra retail center at 7777 Edinger Avenue, Bisnow reported, cit ing a report by Real Estate Alert. The asking price was not disclosed.

But the nearly fully leased shopping center could sell for as much as $300 million, or $352 per square foot, market experts say.

If Bella Terra sold for that price, it would become “one of the biggest single-asset trades of a U.S. retail property within the past four years,” Real Estate Alert said.

The shopping center at the 405 Freeway and Beach Boulevard is 96.8 percent leased. Whole Foods serves as its grocery anchor, while Costco has a ground lease for its big-box store. The Cheesecake Factory, Kohl’s, REI and Ulta Beauty are also tenants.

The property is billed as a retail center among the top 1 percent of shopping centers by foot traffic, according to Real Estate Alert. Some 92 percent of its stores are leased to national retailers, while the average tenant stays for 14.5 years.

Eastdil Secured is market ing the mall on behalf of DJM Capital and PGIM.

DJM bought the shopping center in 2005 for an undisclosed price.

The open-air mall, once known as the Huntington Beach Mall, was built in 1966. It was renamed Bella Terra and redeveloped, with DJM replacing an underused amphitheater with new shops and restaurants, while adding a performing stage, lawn and beer-and-wine garden.

In 2015, PGIM paid nearly $289 million for a 75 percent stake, according to the Orange County Business Journal.

In 2022, the mall’s co-owners won approval to build a 300-unit apartment complex on 47 acres at Bella Terra, replacing a 149,000-square-foot store occupied by Burlington Coat Factory and a 33,000-square-foot store next door.

Plans call for a U-shaped building of four and six stories with 300 apartments and 25,000 square feet of ground-floor shops and restaurants. Construction was supposed to have begun last year, but the project never broke ground.

PGIM and DJM are also partners at Long Beach Exchange, a 266,000-square-foot shopping center they bought in early 2022 for nearly $160 million.

DJM Capital teamed up with Gaw Capital Partners in 2019 to buy the 463,000-square-foot Hollywood & Highland Center in Hollywood for $325 million. They renamed the outdoor mall Ovation Hollywood.

DJM also has stakes in Lido Marina Village in Newport Beach, Pacific City in Huntington Beach and Runway, an outdoor mall in Playa Vista.

In early 2022, the company bought Gateway Center, a 79,000-square-foot, nine-building retail center in Mission Viejo for $29.5 million.

— Dana Bartholomew

Los Angeles

DJM Capital and PGIM eye 300 apartments at Huntington Beach retail center

Los Angeles

DJM adds shopping center in Mission Viejo to portfolio

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CIM Group sells Hollywood & Highland mega-complex for $325M: sources

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Uncategorized, Open-air mall

Long Beach ups zoning so Linc Housing can build affordable apartments – Robert Khodadadian

Apr 19, 2024

Long Beach has upgraded its zoning to allow Linc Housing to build 72 affordable apartments and other developers to build homes in “high resource” neighborhoods.

The City Council approved the zone change to allow the locally based affordable housing developer to build four- and three-story complexes at 4151 Fountain Street and 4220 Wehrle Court, the Long Beach Press-Telegram reported.

The council also declared a two-thirds acre lot with a defunct grocery store owned by the city in California Heights to be surplus property. It’s where West Hollywood Community Housing Corporation has proposed building a 100-unit affordable housing complex.

Both projects are in “high resource” or “high opportunity” neighborhoods, a designation by the State Tax Credit Allocation Committee. It’s based on the presence of schools, parks, access to employment, retail and other factors, according to one city official.

Last summer, Linc Housing filed plans to build the 73-unit complex at 4151 East Fountain Street and 4220 Wehrle Court, to replace a troubled group home for disabled teens, Urbanize Los Angeles reported.

The City Council unanimously approved the zone change, general plan map amendment and a sustain able communities project exemption to make the project possible.

Plans for the complex, dubbed the Fountain Street Apartments, call for a manager’s unit and 72 one-, two- and three-bedroom affordable apartments for households that earn between 30 and 60 percent of area median income.

The complex will include 18 homes for people with disabilities, plus a playground, community room, green space and parking for an unspecified number of cars.

The $58.7 million project was awarded $23.1 million by the California Department of Housing and Community Development this week as part of $523.8 million in “Super NOFA” grants for affordable housing, according to Urbanize.

Neighbors expressed concerns about extra traffic, public safety and access impacts at a nearby elementary school.

Councilwoman Kristina Duggan, who represents the Third District, said residents’ concerns were her concerns.

She said city staff are looking to change street sweeping and work with the school district to improve before- and after-school traffic.

“I’m happy that this is in the Third District and we’re part of the solution and we’re providing 72 families homes,” Duggan told the council and constituents. “Now, I also want to acknowledge the neighbors who have come out and worked with me and talked with me about this project.

“It’s rooted in real concerns about the impact to the neighborhood and the quality of life for the people who will be living in the new development.”

Long Beach must plan for 26,502 homes, more than half of them affordable to low- and moderate-income residents, by 2030, according to its state-mandated housing blueprint.

— Dana Bartholomew

Los Angeles

LINC Housing eyes third affordable housing complex in Willowbrook

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340-unit affordable complex planned for Glendale

Los Angeles

Trammell Crow scores $200M for Long Beach multifamily project

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Uncategorized, Affordable Housing, Zoning

Macerich faces “imminent” default on $300M Santa Monica Place loan – Robert Khodadadian

Apr 18, 2024

Macerich has an episode of déjà vu, after a $300 million loan on its Santa Monica Place mall goes to special servicing — the second time in two years.

The loan on the 527,000-square-foot mall is expected to see “imminent maturity default,” according to Trepp.

In August 2022, the same loan was sent to special servicing for the same reason. But Macerich managed to negotiate an extension with lender Wells Fargo, by buying a rate cap, a hedge against rising rates. With that new extension, the loan is currently set to expire in December.

Macerich did not respond to a request for comment.

The property at 395 Santa Monica Place has struggled for the last five years. As tenants have given up space and in the wake of the pandemic, Macerich, a real estate investment trust headquartered in Santa Monica, has struggled to fill the vacancies.

At the end of 2019, the property was 95 percent leased, including to higher-end department stores Bloomingdale’s and Nordstrom, according to financial filings.

Macerich was reeling in an average of $58 per square foot a year on its owned malls, it disclosed in a 2019 financial report. Based on that average, Santa Monica Place would have generated about $1.4 million a month in rent — almost double what was needed to service the debt.

But in 2020, after the pandemic hit, occupancy dropped to 91 percent. In 2021, Bloomingdale’s and ArcLight Cinemas both vacated the property, causing occupancy to shrink to 85 percent.

More than half of the property was available for lease at the beginning of 2023, according to Macerich.

At the end of 2023, the property was reeling in about 70 percent of what was needed to service the debt.

Macerich expects that a renovation of the spaces left by Bloomingdale’s and ArcLight will help attract new tenants, according to a 2023 annual report. The firm plans to spend up to $40 million to redevelop the 150,000-square-foot space, a project it anticipates will finish by next year.

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Uncategorized, Breaking, Breaking News, Distress, LA retail market, Real Estate And Finance

Panot Capital snags $51M loan for vintage apartment buildings in LA – Robert Khodadadian

Apr 18, 2024

Panot Capital has scored a $50.8 million loan to refinance 10 century-old apartment buildings in Hollywood and other parts of Los Angeles.

The Houston-based investor led by Aaron Iskowitz and Zain Sayed secured the loan for the vintage properties with 482 apartments across the city, the Commercial Observer reported. The locations of each property were undisclosed.

The loan from Israel Discount Bank of New York, or IDB, comes on a seven-year term with four years of interest-only payments at a rate of 5.94 percent.

The deal was arranged by Northmarq, which described it as “a below-market-rate loan on vintage brick buildings across Hollywood.”

Pinot Capital, founded late last year, focuses on data-driven multifamily and mixed-use properties, with offices in Houston, Los Angeles, New York and Rhode Island.

The startup has acquired a portfolio of 1.3 million square feet of properties with more than 850 units, and 11.3 million square feet of land in California, New Jersey, North Carolina, Ohio and Rhode Island, according to its website.

Its Los Angeles portfolio includes 532 apartments within 263,300-square-feet of buildings.

— Dana Bartholomew

Los Angeles

Hollywood developer Leeor Maciborski proposes 131 apartments

Los Angeles

Onni’s decision: Office or apartment towers in Hollywood?

Los Angeles

Bolour eyes conversion of Hollywood landmark

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Uncategorized

WeWork keeps North Hollywood location, sees LA as “key market” – Robert Khodadadian

Apr 17, 2024

WeWork, the embattled New York-based coworking firm, said on Monday it filed a motion to keep its leases at two Los Angeles locations.

The company included both as a part of the five lease assumptions it disclosed on April 15 as part of its Chapter 11 bankruptcy reorganization. The first L.A. location is at 5161 Lankershim Boulevard in North Hollywood. The other WeWork coworking space is located at 10250 Constellation Boulevard in Century City.

According to a WeWork spokesperson, the company has seen “really strong demand” for coworking spaces with the rise of flexible work post-pandemic, describing Los Angeles as a “key market for WeWork.” The firm reports market demand for both “on demand” daily bookings and monthly memberships, called WeWork All Access, which “factored into” WeWork’s decision to stay in the NoHo building.

“We continue to work with our landlords to achieve more sustain able lease terms so that we can really stay in as many buildings in the city as possible,” the spokesperson said.

In addition to coworking space itself, the 5161 Lankershim Boulevard WeWork location offers nearby amenities such as restaurants in the NoHo Arts District and galleries in Valley Village.

“The buildings we’ve assumed in L.A. are ones where we see a sustain able path forward for our operations in the long term,” the spokesperson noted. “We’re just really excited by the progress that we’ve made in L.A. so far, and we look forward to continuing this momentum.”

Across the country, WeWork has been on a hunt for fresh financing while negotiating leases with landlords as a part of its comeback plan.

Earlier this month, the company announced that it “determined a final path forward at 90 percent of the locations in its global real estate portfolio through amended leases, new management agreements, or via the lease rejection process” in a statement on April 2. The company plans to exit Chapter 11 by the end of May.

“We remain committed to emerging from our global real estate and financial restructuring later this quarter, and expect to do so with little to no debt,”said CEO David Tolley.

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Industrious expands into LA’s Westwood and Santa Monica – Robert Khodadadian

Apr 17, 2024

Industrious is expand ing its coworking offices around Los Angeles with new locations in Westwood and Santa Monica.

The New York-based coworking firm led by Jamie Hodari and Just in Stewart has opened a 20,800-square-foot office at 1100 Glendon Avenue in Westwood Village, the Commercial Observer reported.

In December, the flex workspace company plans to open a 23,331-square-foot office at 808 Wilshire Boulevard in Santa Monica.

Given their size, it appears each office was leased. Terms of the deals were not disclosed.

Industrious teamed up with Santa Monica-based Douglas Emmett to open the Industrious at Westwood Center, which includes 243 desks in Westwood Village near UCLA.

The firm will open the Santa Monica office at the four-story Lincoln Wilshire building, with 242 desks, nearly two blocks from Santa Monica Boulevard.

“Santa Monica and Westwood are two submarkets we’ve had our sights set on for years, and we’re thrilled to be planting our first flags in the area,” Peri Demestihas, head of North American real estate growth for Industrious, said in a statement.

Industrious also has offices in Playa Vista, Century City, Hollywood, West Hollywood and Downtown L.A. The firm has also scooped up national offices left behind by WeWork following that company’s bankruptcy. Industrious claims more than 200 coworking offices in 65 cities worldwide.

Thirteen months ago, a Chicago-area judge ruled that Industrious owed Stockbridge Capital Group, its former West Loop landlord, more than $2.3 million for walking out on its lease.

— Dana Bartholomew

Chicago

Judge: Industrious owes Stockbridge $2.3M for abandoning lease

New York

CBRE doubles down on flex-office provider Industrious

National

WeWork eyes $8B in savings from rent reductions

The post Industrious expands into LA’s Westwood and Santa Monica appeared first on The Real Deal.

Uncategorized, Coworking offices

Lincoln Property defaults on Newport Beach office loan – Robert Khodadadian

Apr 16, 2024

When Lincoln Property Company bought 1500 Quail Street in Newport Beach in 2018, the company lauded the office building as a “trophy asset,” a “rare opportunity” and a property with “very stable cash flow.”

Circumstances have changed.

Lincoln Property defaulted on a $23.3 million loan tied to the 90,000-square-foot building last month, according to a notice of default filed with Orange County. The firm did not respond to a request for comment before publication.

The Dallas-headquartered commercial landlord bought the building with an unnamed institutional investor in 2018, paying $32 million, according to property records and an announcement at the time. The firm used the loan from Capital One for the acquisition, and then extended the debt twice.

Lincoln Property currently owes $20.9 million under the mortgage, according to the notice of default. Capital One can schedule a foreclosure on the building no earlier than June 26, in accordance with California law.

At 1500 Quail Street, the building is 83 percent leased, down from 90 percent when Lincoln bought the property.

Many Orange County office buildings have fallen victim to the same factors suppressing office demand — from both tenants and investors — across the country. Remote work has led to companies shrinking footprint and lenders have become hesitant to make loans on office buildings. Rising interest rates have also hurt borrowers with floating-rate loans, as their monthly mortgage payments have skyrocketed.

Last month, Greenlaw and Walton Street lost an entirely empty, 350,000-square-foot building at 1 City Boulevard West in Orange, signing over the property to TPG Real Estate Finance Trust in a deed-in-lieu of foreclosure, after defaulting on a $64 million loan.

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Uncategorized, Default, Orange County

Amazon.com leases two 1M sf warehouses in the Inland Empire – Robert Khodadadian

Apr 16, 2024

Amazon.com has inked deals for two distribution warehouses of 1 million square feet each in the Inland Empire, where vacancy has ticked up in the top industrial market in the nation.

The Seattle-based e-commerce giant last quarter leased one warehouse at 4000 South Hamner Avenue in Ontario and another at 6120 Clinker Drive in Jurupa Valley, the Commercial Observer reported, cit ing a report from Savills.

The owner of the new Amazon warehouse in Ontario is Dermody Properties, based in Reno. Terms of the deal were not disclosed.

The property is not far from three other large Amazon distribution and fulfillment centers in one of the region’s densest warehousing submarkets near Ontario International Airport and Ontario Ranch.

The owners of the new warehouse at the Agua Mansa Commerce Park in Jurupa Valley are Newport Beach-based CT Realty and PGIM Real Estate, based in New Jersey. Terms of that deal were also not disclosed.

The two new Amazon leases were among the five tenant contracts signed for more than 1 million square feet in the first quarter in the Inland Empire, which has experienced a weakening market, according to the Observer.

The industrial vacancy in the IE rose 1 percent to 7.8 percent from the prior quarter, and increased 4.9 percent from the previous year.

Even with the large Amazon leases, leasing activity dropped by 500,000 square feet, according to Savills.

Available sublease space jumped by 33.3 percent to more than 20.3 million square feet — the highest amount on record. Vacancy is expected to continue to increase this year, the report said.

In January, Denmark-based Maersk leased a 1.2 million-square-foot distribution warehouse along the 15 Freeway at 8140 Caliente Road, in Hesperia, on the edge of the Inland Empire.

— Dana Bartholomew

Los Angeles

Maersk leases 1.2M sf distribution warehouse in the Inland Empire

Los Angeles

EQT Exeter spends $197M to buy Fontana warehouse from Manulife

Los Angeles

Fontana nixes trio of warehouses, cit ing truck traffic near schools

The post Amazon.com leases two 1M sf warehouses in the Inland Empire appeared first on The Real Deal.

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Jamison clears hurdle for 23-story apartment towers in LA’s Koreatown – Robert Khodadadian

Apr 15, 2024

Jamison Services has moved ahead with plans to build two 23-story apartment buildings in Koreatown.

The Koreatown-based developer led by Jaime Lee won approval from the Los Angeles Planning Commission to construct the dual highrises with 760 apartments at 3600 Wilshire Boulevard, Urbanize Los Angeles reported. They would replace a parking garage behind an office tower.

The project, proposed eight years ago, calls for two buildings contain ing 760 studio, one- and two-bedroom apartments on the north side of 7th Street, between Harvard Boulevard and Kingsley Drive.

The buildings would contain 6,400 square feet of ground-floor shops, and parking for nearly 1,300 cars.

The side-by-side towers, designed by Chicago-based Perkins&Will, would each rise 269 feet, their floor-to-ceiling glass windows and doors covered by rows of external balconies, according to a rendering.

Each building would have a rooftop pool, with a shared fitness center and a landscaped plaza with pools down below.

Construction would take two years, but a ground-breaking date was not disclosed.

The proposed apartments look like another Jamison Services project down the street at 3470 Wilshire Boulevard, where another parking garage behind an office tower would be replaced by residential highrises.

Jamison has also built a pair of apartment towers along the north side of the street at 3545 Wilshire, and is now building a hotel across Harvard Boulevard from the 3600 Wilshire site, according to Urbanize.

Jamison Services, founded in 2013, is a unit of Jamison Properties. It has amassed more than $3 billion worth of real estate, according to Lee’s LinkedIn page. It owns 5,500 apartments in Los Angeles, with 11,000 more in the pipeline.

— Dana Bartholomew

Los Angeles

Jamison plans twin buildings on Wilshire Boulevard

New York

Jamison picks LA courthouse for next office-home conversion

Los Angeles

Jaime Lee is not your father’s real estate executive

The post Jamison clears hurdle for 23-story apartment towers in LA’s Koreatown appeared first on The Real Deal.

Uncategorized

HED: Supreme Court rules builders can challenge California impact fees – Robert Khodadadian

Apr 15, 2024

The U.S. Supreme Court has ruled that California developers and home builders may challenge impact fees imposed by cities and counties for roads, bridges and more.

The justices said the fees may be unconstitutional if builders and developers are forced to pay an unfair share of the cost of public projects, the Los Angeles Times reported.

In the landmark case, a 72-year-old retiree from Placerville, George Sheetz, took on El Dorado County over a $23,420 building fee, raising questions about the justification of “impact fees” imposed on new construction projects.

The outcome of the case could have major repercussions for local government budgets and housing markets, especially in the Golden State.

But the justices didn’t set a rule for deciding when such fees become unfair and unconstitutional.

Developers contended that limit ing California’s high fees for new construction would lead to more affordable housing. California state courts had blocked such claims.

But the 9-0 Supreme Court decision opened the door for such challenges. The justices revived a constitutional claim brought by Sheetz, who put a manufactured home on a small lot and was told he would have to pay the $23,420 “traffic mitigation fee.”

Justices Sonia Sotomayor and Ketanji Brown Jackson said they joined the court’s opinion in Sheetz vs. El Dorado County because it was limited to allowing such challenges.

In a separate opinion, Justice Brett Kavanaugh said he saw merit to the “common government practice of imposing permit conditions, such as impact fees, on new development through reasonable formulas or schedules that assess the impact of classes of development rather than the impact of specific parcels of property.”

State and county attorneys made just that argument. They said it was fairer to impose a development fee on all the lots in an area.

But the justices nonetheless ruled that homeowners or developers may sue to challenge these fees as an unconstitutional taking of their private property.

The Pacific Legal Foundation in Sacramento, which supported Sheetz, hailed the ruling as a significant victory for property rights.

The case will now go back to the California courts.

Attorney Paul Beard, who represented Sheetz, said the “fee must be set aside as an unconstitutional taking, because the county has failed to show — and cannot show — that the fee is sufficiently related and proportionate to the traffic impacts of Mr. Sheetz’s modest home.”

The debate over development fees is especially relevant in California as local governments have increasingly relied on the charges to finance parks, streets, schools and other infrastructure and services in the decades after the passage of Proposition 13 in 1978 limited property tax revenues, according to the Times.

The fees have come under scrutiny as developers and others have blamed them for driving up the cost of housing and for wide disparities between cities.

A 2018 study by UC Berkeley’s Terner Center for Housing Innovation found that fees for new single-family homes in California range from $21,000 to $157,000 per home, accounting for 6 to 18 percent of the price of a typical home, depending on the location.

— Dana Bartholomew

Los Angeles

Supreme Court deliberates question of California impact fees

San Francisco

Fees must shrink if SF wants new housing, developers say

Los Angeles

Rising housing development costs bad news for LA’s housing crunch: report

The post HED: Supreme Court rules builders can challenge California impact fees appeared first on The Real Deal.

Uncategorized

Decron sells Ventura County multifamily to AEW for $133M – Robert Khodadadian

Apr 12, 2024

Decron Properties has sold an apartment complex in the Ventura County city of Moorpark for $133 million, as it continues offloading some of its Greater Los Angeles assets.

AEW Capital Management bought the 376-unit complex, named Ranch at Moorpark at 51 Majestic Court, according to an announcement from Decron on Thursday. The deal came to about $354,000 per unit.

It’s unclear how AEW financed the acquisition and the deed has not yet been recorded with the county. The firm did not respond to a request for comment.

Decron, which is based in Los Angeles, bought the property for $84 million in 2013, according to property records, or about $224,500 per unit. The firm renovated every apartment, plus common areas, and expanded parking.

Over the last six months, Decron has worked to sell off assets in and around Los Angeles, with plans to take those proceeds and put them to work in other markets.

“We’re looking at markets like San Diego, where we recently made a substantial acquisition, and places like Phoenix and Seattle where we already have created a significant portfolio,” Decron CEO David Nagel said in a statement.

In December and January, Decron sold two properties in the city of L.A. and two more in Thousand Oaks for a combined $212 million, Nagel told TRD earlier this year. All in all, the company’s cashouts sum to a total $345 million over the last six months.

In L.A., Nagel said Decron was particularly “disincentivized” to stay

“Once Measure ULA went through, it really disincentivized us to stay,” he said. “And what’s the next thing that’s going to happen that’s going to hurt us and prevent us from reinvesting in our properties as we would like to?”

New York

AEW Capital seeks $350M for Grand Central dev site

Los Angeles

AEW Capital trades Hollywood apartment complex for $48M

Los Angeles

Decron cashes out of LA market by selling apartments for $212M

The post Decron sells Ventura County multifamily to AEW for $133M appeared first on The Real Deal.

Uncategorized, Investment Sales, LA Multifamily, Ventura County

HOA at Ocean Towers in Santa Monica stole $5.7M, prosecutors say – Robert Khodadadian

Apr 12, 2024

Views from the 19-story twin Ocean Towers above the beach in Santa Monica are stellar. But a look into management at the 317-unit luxury co-op is as dark as a Hollywood film noir.

A decade-long saga of alleged fraud and manipulation has unfolded at the Ocean Towers condo complex at 201 Ocean Boulevard, the Los Angeles Times reported in a 4,300-word expose.

A web of deceit involves former figures within its homeowners association, including John Spahi, his son Omar, former HOA President Joseph Orlando, and his late wife, Dorothy.

Residents of Ocean Towers, built in 1971, had long harbored suspicions about John Spahi’s abuse of power within the HOA board.

Allegations included manipulating board elections, drain ing HOA accounts for personal legal battles and orchestrating inside deals with valuable real estate.

The scale of the alleged grift came to light when a grand jury indicted the Spahis and Orlandos on 119 charges, including grand theft, identity theft and money laundering, totaling $5.7 million in stolen funds, according to Los Angeles County prosecutors and the state Attorney General’s office.

The fraud allegedly involved billing the HOA for construction projects that were never completed by a company named Progressive, in the name of an unwitting owner.

Lawsuits and investigations revealed a complex scheme of financial maneuvering, including transferring units among relatives and partners and taking out massive loans without homeowner approval.

Ocean Towers residents faced intimidation tactics, lawsuits and eviction threats when challenging the Spahis and Orlandos.

Despite in itial resistance, some residents, led by Michael Reach and attorney Jeffrey Wittenberg, took legal action against the entrenched board. Eventually, a court-appointed receiver ousted the old guard, revealing the dire financial straits of Ocean Towers and the extent of the alleged embezzlement.

As the legal battles continue, the residents looks toward recovery under new management.

However, the repercussions of the fraud may linger, with residents burdened by high HOA fees and debt incurred during the Spahi era.

Meanwhile, John Spahi awaits trial at an unscheduled date, while facing scrutiny from residents who question how he has evaded accountability for years of alleged misconduct.

— Dana Bartholomew

National

Florida HOA manager accused of $25K grift

New York

Long Island attorney accused of stealing $700K from real estate clients

National

“Embarrassed” Tavistock founder Joe Lewis avoids prison time

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Uncategorized, embezzlement

Stockdale sues Mark Weinstein’s MJW over Santa Monica hotel ground lease – Robert Khodadadian

Apr 11, 2024

Stockdale Capital Partners has started a legal battle over the value of the ground beneath the Le Merigot hotel, just steps away from the ocean in Santa Monica.

The investment firm, which owns the leasehold interest in the property, is suing MJW Investments, which owns the ground under the property, for allegedly artificially driving up the value of Le Merigot in order to charge higher rents to Stockdale, according to Los Angeles Superior Court filings.

Stockdale acquired the lease in the 175-key hotel, located at 1740 Ocean Avenue, in 2021. The firm paid around $75 million and did not seek financing to do so, TRD reported at the time.

The lease which Stockdale acquired dates back to 1987, according to the lawsuit. Under the agreement, the leaseholder would pay a fixed rate for 23 years. Starting in 2010, the rent would reset every five years, based on a fair market value appraisal.

In 2020, the rent was scheduled to be reset.

Instead of hiring an “independent appraiser,” Stockdale alleges MJW “knowingly hired an appraiser it had used before in order to orchestrate an inflated value of the property,” according to Stockdale’s complaint.

MJW, a West L.A.-based investment firm run by Mark Weinstein, did not respond to a request for comment. The company has bought more than a $1 billion worth of real estate, according to its website, and developed more, including the 800,000-square-foot redevelopment of Santee Village in L.A.’s Fashion District.

MJW allegedly gave the appraiser a commissioned plan for 88 condo units on the site of Le Merigot, even though zoning regulations at the time did not allow for the plan.

MJW “nonetheless told the appraisers to value the property as if this use were legally permitted — when in actuality it was not,” according to the complaint.

Stockdale claims because the valuation involved a hypothetical development, the land under the hotel was appraised at $62.2 million in November 2020, up from $35.9 million in 2019. Stockdale also did not respond to a request for comment.

Under the lease, Stockdale has to pay either 9 percent of the fair market value of the land or the annual base rental for the prior lease year, whichever is greater.

“This enormous increase occurred at the height of the COVID pandemic when real estate valuations were plummeting globally, and is antithetical to what a ‘willing,’ ‘prudent’ and

‘knowledgeable’ buyer would have paid for the property in 2020,” according to the complaint.

Stockdale has asked the court “declare that the 2020 appraisal process is null and void,” and that MJW pay back any excess rent once a new fair market value appraisal is conducted.

The post Stockdale sues Mark Weinstein’s MJW over Santa Monica hotel ground lease appeared first on The Real Deal.

Uncategorized, LA Hotel Market, Lawsuits

LA to consider ban for criminal checks on housing applications – Robert Khodadadian

Apr 11, 2024

The Los Angeles City Council will consider whether to bar landlords from snooping into potential renters’ criminal past and using their records to deny them housing.

The council voted 11-0 to reactivate a motion seeking to establish a “fair chance” housing ordinance that would prohibit property owners from asking about an applicant’s criminal history, then acting on it, Fox11 Los Angeles and City News Service reported.

Council President Paul Krekorian and Councilman Curren Price recused themselves, while Councilwomen Katy Yaroslavsky and Monica Rodriguez were absent.

The motion will head to the council’s Housing and Homelessness Committee for consideration.

The proposed ordinance would “prohibit landlords from, at any time or by any means, whether direct or indirect, inquire about an applicant’s criminal history or requiring an applicant to disclose criminal history” when an applicant is applying for an apartment or other type of housing.

The proposed city law would also prevent landlords from using such information to deny an applicant. Prospective renters would have a “private right of action,” with a landlord facing fines for discriminating based on a tenant’s record.

Such cities as Oakland and Berkeley have already enacted similar housing laws. The ordinances have detailed exceptions for when the law shouldn’t apply — such as when a person applies to rent owner-occupied units or shared living arrangements.

The fair chance motion was originally introduced by Councilmembers Nithya Raman, Marqueece Harris-Dawson and Mike Bonin. It’s not clear why it stalled.

They said that Angelenos with past criminal histories often face insurmountable barriers to housing and are routinely screened out when applying to rent housing because of criminal background checks.

“We must follow the lead of cities like Oakland, Berkeley and Seattle and prohibit the use of criminal background checks when evaluating rental applications for housing,” the motion states.

— Dana Bartholomew

New York

Criminal history bill overhauled after defeat by landlords

New York

Home page

New York

Home page

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Uncategorized, criminal records, fair chance housing, Legislation

Beverly Hills brokers make sense of NAR settlement – Robert Khodadadian

Apr 10, 2024

A home nestled high up in the zigzags of sprawling Beverly Hills estates played backdrop last week for some of the area’s top agents to debate, hypothesize and agonize over the latest seismic developments around residential real estate.

Broker Zach Goldsmith of The Agency Beverly Hills was the host of the panel featuring luxury residential brokers Josh Flagg, Branden and Rayni Williams, and Aaron Kirman, which evolved into an agitated, and at times unruly, discussion on the impact of National Association of Realtors settlement on the business of being a broker.

Held at the home of Andrew Shanfeld, who runs real estate investment firm Carolwood, the event attracted around 40 people. The familiar faces in the front row included Parker Beatty, an agent at Compass, along with Farrah Britanny and Ben Belack, both brokers at The Agency and cast members of the Netflix series “Buying Beverly Hills.”

The event came days after NAR agreed to settle antitrust lawsuits over broker commissions in a deal that will cost the organization $418 million in damages to resolve claims from home sellers — and some key rule changes that open buyer brokers’ earnings up to negotiation.

“How are we going to get paid?”

To paraphrase Leo Tolstoy, happy brokers are all alike, but every unhappy broker is unhappy in their own way.

The rule changes as specified in the settlement agreement breaks open what was previously an assumed cost for sellers to compensate buyer brokers.

The event hit on much of the uncertainty around what the rules, slated to take effect in July, will mean in practice for day-to-day operations like signing the buyer’s contracts, hosting open houses and other logistics to turn a profit in a new environment.

“How are we going to prove our worth as buyer’s agents?” asked Kirman. “I see that much like listing agents, when we go to list a house, we have to prove our worth. It’s going to be the same with buyers now — it’s not going to be a free-for-all.“

Most who spoke at the event projected the fallout from the NAR settlement would be profound, but disagreed about what the new rules will mean for their operations, how to adjust their business models and long-term impacts on the industry.

“The federal government is going to want buyers to have representation. It’s a good thing, there’s no way around that,” Kirman noted. “The question becomes, how are we going to get paid?”

The answer: buyer-broker agreements, according to Kirman.

“This is going to be the new system,” Kirman said. “We didn’t have buyer-broker agreements that were used very often; soon they are going to be used very often — the buyers are going to need to have an advocate on their side.”

Kirman is already working to implement the agreement at his firm. But beyond agreeing that brokers are likely on the edge of contending with a new reality to conduct daily business, some questions remained about the new logistics involved in working with brokers.

“I’m confused about the buyer’s contract. I think it’s super fucked,” said Sharona Alperin, an agent at Sotheby’s International Realty specializing in Beverly Hills. She added it was “just kind of fucking degrading to ask from your buyers.”

A wave of change crashing on residential real estate

Branden Williams described the NAR settlement as a part of a profound existential threat to the real estate industry, alongside the Measure ULA transfer taxes, demographic shifts, inflation and corporations fleeing California.

“Now everybody’s getting squeezed every which way: Attorneys have always thought we made too much money, business managers — they’re pissed,” he said.

At one point, he compared the new plight of the real estate brokers to what happened to stockbrokers’ compensation with the arrival of electronic trading platforms like E-Trade. His list of complaints wasn’t limited to the NAR settlement; it also included the increasing minimum wage and inevit able arrival of robots.

Some brokers agreed with many of his concerns, even the most seemingly alarmist parts of his forecast.

On the other end of the spectrum was Flagg, who said he did not anticipate dramatic changes to his business and doesn’t planning on lowering his commission fees.

The changes to some of the longest-held practices in the industry come amid a challenging few years for the residential market for brokers across the country. Logistics and new agreements aside, one resounding takeaway is the shifts, on top of already tight market conditions, will likely spell more competition for the industry.

“The fittest will survive and do great, and a lot of people will probably be eliminated from the business,” Kirman said.

National

“Everything changes now”: Here’s what NAR’s $418M settlement means for broker commissions

San Francisco

Sales commissions to shrink after NAR ruling, agency heads say

National

The winners and losers in NAR’s historic settlement

The post Beverly Hills brokers make sense of NAR settlement appeared first on The Real Deal.

Uncategorized, Beverly Hills, NAR, Residential

State Farm targets wealthy areas of LA for policy non-renewals – Robert Khodadadian

Apr 10, 2024

A flood of non-renewal notices for home insurance policies from State Farm will hit upscale neighborhoods from Calabasas to Bel-Air, while leaving others relatively unscathed.

Illinois-based State Farm General Insurance has released new details of its non-renewals announced last month for 30,000 property insurance and 42,000 commercial apartment policies across the state, KTLA5 reported, cit ing a new filing with the state.

The numbers suggest the insurance giant has taken aim at several high-priced ZIP Codes in Los Angeles, while sparing others.

State Farm, the state’s largest insurer in 2022, said the move would impact 2 percent of its total policies in California and was made to ensure “long-term sustainability.”

The 42,000 apartment non-renewals represent a complete withdrawal from the commercial apartment market in California. The other 30,000 non-renewals would impact homeowners, rental dwellings and other property insurance policies, according to State Farm.

The new filing with the California Department of Insurance shows where the nonrenewals will be concentrated, with State Farm saying it wouldn’t renew policies “that present the most substantial wildfire or fire following earthquake hazards, or that are in areas of significant concentration.”

In areas such as the Hollywood Hills, Rolling Hills Estates and Duarte, less than 1 percent of policies won’t be renewed.

But in other areas, more than half of policyholders would be impacted.

In Brentwood’s 90049, State Farm won’t renew policies for 61.5 percent of its 2,114 policyholders, according to the filing. In Bel-Air’s 90077, the non-renewed policies rise to 67.4 percent, with Pacific Palisades’ 90272 hitting 69.4 percent, or 1,626 policyholders.

In Beverly Hills’ 90210, 46.1 percent of policyholders won’t be renewed, comparable to 46.9 percent of Malibu’s 90265.

San Fernando Valley communities were also impacted, including 60.4 percent of State Farm policyholders in Calabasas, 50.4 percent of those in Tarzana, and 40.1 percent in Encino, according to the filing.

Customers affected by the decision will retain coverage until their current contract is up. The company said those impacted will be notified between July 3 and Aug. 20.

“This decision was not made lightly and only after careful analysis of State Farm General’s financial health, which continues to be impacted by inflation, catastrophe exposure, reinsurance costs and the limitations of working within decades-old insurance regulations,” the company said in a statement.

“State Farm General takes seriously our responsibility to maintain adequate claims-paying capacity for our customers and to comply with applicable financial solvency laws. It is necessary to take these actions now,” the company said.

The company also said it will continue working with the Department of Insurance, Gov. Gavin Newsom and other policymakers as they pursue reforms “to establish an environment in which insurance rates are better aligned with risk.”

In February, the state’s Department of Insurance announced proposals to reform California’s insurance regulations. The new proposal would allow insurance companies to switch from using historical data to catastrophe modeling, meaning companies would calculate projections of future risk when raising rates and pass on the cost of reinsurance to consumers.

The new changes are expected to take effect at the end of the year.

Last year, State Farm announced it would stop accepting new insurance applications for all business and personal property in California. Since then, other insurance companies, including Allstate, have announced similar changes.

This comes as California’s property insurer of last resort told lawmakers that it’s financially unprepared to cover the costs of a major catastrophe in the state. The plan now faces $311 billion in potential losses, up from $50 billion six years ago, California FAIR Plan President Victoria Roach said in a state legislative hearing.

— Dana Bartholomew

Los Angeles

State Farm will not renew 72K property policies in California

Los Angeles

Agents gauge State Farm’s exit from home insurance market

Los Angeles

Fire insurance in California to come at higher cost to homeowners

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Despite developer doubts, LA mayor wants to make ED1 permanent – Robert Khodadadian

Apr 9, 2024

In spite of developers’ concerns about the feasibility of Executive Directive 1, a program designed to speed up affordable housing construction, Los Angeles Mayor Karen Bass is looking to make the order permanent.

The L.A. City Planning Department is referring ED1 to two city council committees — the Planning and Land Use Management (PLUM) Committee and the Housing and Homelessness Committee — to set the policy in stone, according to the mayor’s office. If the committees approve the directive, it will be sent to the full city council for a final sign-off.

Bass first issued ED1 over a year ago, ordering the city to trim approval processes for affordable housing projects to 60 days and exempt the projects from lengthy environmental reviews.

Some developers have been hesitant to take advantage of the program, arguing the math on these projects still doesn’t pencil.

“The projects that exist are taking pretty aggressive stances on the rents they’ll achieve,” Jared Goldstein, an executive at Canfield Development in Sherman Oaks, said at a conference in February. “The rents that they’re inputting in their financial models are often the maximum Section 8 rents. That rent is greater than what the unit would lease for, in many cases, even as a market-rate unit with no restrictions.”

There is currently no set expiration date for the ordinance issued in December 2022.

“Projects are being approved in a matter of weeks instead of six to nine months,” Clara Karger, the mayor’s press secretary, told TRD in an email.

More than 14,000 units of affordable housing are proposed using ED1 and the city said it has seen an 85 percent increase in the annual number of affordable housing units proposed, according to the mayor’s office.

But none of those projects have been built and developers have expressed concerns about how many of these projects will materialize.

“When you actually underwrite them with real numbers, then these things don’t pencil,” Adrian Berger, who runs acquisitions at Cypress Equity Investments, said at the same event in February.

This story has been corrected to reflect that L.A. City Planning Department referred ED1 to two city council committees.

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Uncategorized, Affordable Housing, Development, Policy

Douglas Elliman to market Fairmont Residences for lease at Century Plaza – Robert Khodadadian

Apr 9, 2024

Douglas Elliman has been tapped to market for lease the Fairmont Residences at the Reuben Brothers’ Century Plaza development in Century City.

The 50 hotel-branded apartments will only be available for lease, with minimum stays of six months, according to an announcement from Century Plaza’s owners, the Reuben Brothers, and Douglas Elliman Development Market ing on Tuesday.

Rents at the Fairmont are between $10,000 and $50,000 a month and renters will have access to the adjacent hotel’s amenities, plus a residents-only lounge, fitness center and wine storage room.

The Reuben brothers, David and Simon, took over the Century Plaza project through foreclosure last year, acquiring the hotel, retail properties and a handful of condo units for about $1 billion, after the developer, Michael Rosenfeld, defaulted on senior and mezzanine loans.

The apartments are located in the same building as the hotel, though residents have a private elevator.

While Los Angeles has a handful of hotel-branded condos for sale, such as Michael Shvo’s Mandarin Oriental Residences in Beverly Hills, it’s rare for these buildings to only offer leases.

Douglas Elliman has already done a “whisper friends-and-family campaign,” but is opening up leasing to the public this week, according to Cory Weiss at the brokerage, who is market ing the residences.

“We’re seeing a lot of executives interested,” Weiss said, referring to high office rents and low vacancy for offices in Century City.

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Uncategorized

Measure ULA challenge lands in federal appeals court – Robert Khodadadian

Apr 9, 2024

Measure ULA is getting another day in court.

Newcastle Courtyards, a group that has fought the measure over the last year, appealed a federal court ruling that dismissed a lawsuit seeking to abolish the City of Los Angeles’ tiered transfer taxes on commercial and residential sales above $5 million.

The group filed a brief last week with the U.S. Court of Appeals for the Ninth Circuit, asking the court to review and overturn the dismissal.

“In a paradigmatic case of class warfare and tyranny of the majority against the minority, on November 8, 2022, voters in the ULA In itiative, were misled by its sponsors,” Newcastle Courtyards said in its brief.

Measure ULA was misrepresented to voters, Newcastle Courtyards argued to the Ninth Circuit, as taxes that only mansions would be subject to and real estate “millionaires and billionaires” would have to pay. The taxes add 4 percent on sales $5 million and over and 5.5 percent on sales $10 million and over.

“The imposition of the ‘tax’ on gross sales prices (rather than net profits) of real properties sold within Los Angeles furtively targeted all types of real estate — not just ‘mansions’ — including ‘mom and pop’ apartment buildings, the stores of small neighborhood merchants and even parking lots,” the group said in its brief.

“This levy disregarded the financial circumstances of sellers, whether they were not billionaires or even millionaires, were financially strained, selling under distressed circumstances, selling at a loss, and/or lacked sufficient equity to even be able to pay the exorbitant ULA tax,” the brief added.

Measure ULA, which went into effect a year ago, has been widely criticized by real estate industry players for freezing sales and disincentivizing investment in the city. After the so-called “mansion tax” went into effect, Newcastle Courtyards filed its lawsuit against the city, alongside the Howard Jarvis Taxpayers Association, which sued the city in state court.

The city originally estimated the taxes would generate $900 million annually, all of which would be placed into a special fund for affordable housing development and other revenue for tenants.

However, a year into the measure and the city has collected $181.6 million in revenues from the program — and nothing has been spent on development yet, according to data from the city controller.

The federal court that dismissed Newcastle’s case ruled that because ULA was a tax, it did not have the power to rule on it. Under federal law, lower federal courts cannot rule on state tax measures.

Newcastle, however, is arguing Measure ULA is not a tax that goes towards the general fund of the city.

“It is a special fund for a special program,” Newcastle said in its brief. “The city has gotten along without this fund for over a hundred years and can continue to do so.”

The post Measure ULA challenge lands in federal appeals court appeared first on The Real Deal.

Uncategorized, Breaking, Breaking News, Measure ULA

Alon Abady pays $17M for Beverly Hills home, puts it on rental market – Robert Khodadadian

Apr 9, 2024

It took Alon Abady two days to try to recoup his investment after buying a Paul McLean-designed mansion in Beverly Hills for $17 million.

Within 48 hours of purchasing the 11,200-square-foot mansion at 1357 Laurel Way, the co-managing partner of locally based Waterfall Bridge Capital put it on the rental market for $125,000 a month, according to the Robb Report.

Abady, who sold several top-priced houses in the market during the last year including one to Just in Bieber, bought the five-bedroom, nine-bathroom home on March 25, for $1,514 per square foot, according to Zillow.

The sellers were conservationists Dan and Susan Gottlieb, who bought the contemporary hillside home in 2019 for $18 million, or $1,604 per square foot.

Almost immediately, Abady hoisted it onto the rental market.

The three-story, split-level house, completed in 2019, is clad in glass and stone, its interior sheathed in travertine and wood. A bridge entryway overlooks a lounge flanked by a living wall and pool surrounding a tree sculpture.

Highlights include a wet bar and game room, tiered movie theater, fitness studio with a sauna and a six-car garage.

A formal living room has a linear fireplace, bar and walls of glass. A family room and din ing area connect to a gourmet kitchen with dual islands and top appliances.

There’s also a glass-lined master bedroom with a fireside sitting area, walk-in closet and luxe bath with an oval soaking tub and large glass-encased shower. The bedroom and balcony have views overlooking Los Angeles and the Pacific Ocean.

The half-acre grounds include an infin ity-edge pool with a spa and a sunken fire pit.

The listing was held by brokers Ernie Carswell of Douglas Elliman and Lea Porter of The Beverly Hills Estates. Brokers Branden Williams and Rayni Williams of Beverly Hills Estates represented the buyer. Rayni Williams now serves as the rental listing agent.

Last year, Abady flipped Simon Cowell’s former mansion at 717 North Palm for $33.6 million, in one of the priciest deals south of Sunset Boulevard. Abady paid $25 million for the property in 2020.

Abady also sold a Coachella Valley estate in The Madison Club to Justin Bieber and his wife Hailey for $16.6 million, according to Robb. Abady paid $6.3 million in 2019.

In January, a limited liability company managed by Abady sold a 10,000-square-foot mansion at 910 North Alpine Drive in Beverly Hills for $24 million, or $2,315 per square foot, according to The Real Deal.

In March of last year, Abady bought a 250,000-square-foot, vacant office building in Pico-Robertson for around $35 million, or $140 a square foot, just days before the City of L.A.’s new transfer tax went into effect, TRD reported.

— Dana Bartholomew

Los Angeles

Sale for nearly $34M marks priciest this year in Beverly Hills Flats

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Alon Abady trades Beverly Hills mansion for $24M

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Alon Abady buys 250K sf vacant building from Blackstone-led venture

The post Alon Abady pays $17M for Beverly Hills home, puts it on rental market appeared first on The Real Deal.

Uncategorized

Joshua Tree’s housing boom is drying up – Robert Khodadadian

Apr 7, 2024

Joshua Tree’s housing market during its pandemic surge looked like an investment oasis, but instead it may have been a mirage.

The market in the California desert has dried up after exploding four years ago, the Wall Street Journal reported. Those who bought homes in recent years — which are typically modest, despite some architectural marvels — are facing a difficult dilemma if they choose to sell.

Joshua Tree home values jumped significantly during peak Covid. In July 2020, the typical value in the area was $217,007, according to the Zillow Home Value Index. Two years later, that number had more than doubled to $467,348. But as of February this year, the typical home value fell to $385,941.

Approximately 40 percent of the market’s 199 listed homes have seen price reductions, Bryan Wynwood, a local agent told WSJ. Buyers are also grappling with increased interest and mortgage rates from the height of the pandemic, which is having an impact on markets across the nation.

Wynwood did, however, admit that the price boom was unsustain able.

During the height of the pandemic, homes were often sold in under two weeks. But in February, those that did sell were on the market for a median of 106 days, according to Redfin.

One factor impacting Joshua Tree’s housing market is its popularity as a tourist destination. In 2021, more than 3 million people visited the area, according to the National Park Service. The trickle effect has increased demand — and supply — of short-term rentals, which have nearly doubled in four years, upping competition and dragging down long-term rents.

Investors who bet on long-term rentals are not making as much money as expected, so buyers are thinking twice about the potential payoff they can deliver in the future. According to one source WSJ spoke with, sales may instead be driven by investors looking at short-term rental assets.

— Holden Walter-Warner

Los Angeles

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Governor signs law protecting Joshua trees, imposing developer fees

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Uncategorized, Home Sales, Housing Market, Joshua Tree, Luxury Real Estate, short-term rentals

Hackman Capital revises vision for Television City in L.A.’s Fairfax – Robert Khodadadian

Apr 6, 2024

Hackman Capital Partners has scaled back plans for its $1.25 billion redevelopment of Television City in L.A.’s Fairfax District.

The Culver City-based property investor was expected to file revised plans to update the 25-acre landmark production complex once known as CBS Television City at 7800 Beverly Boulevard, the Los Angeles Times reported.

The $1.25 billion plan had called for more than 1 million square feet of new soundstages — doubling the number to 15 from eight — plus 700,000 square feet of offices and production facilities.

With the revised plan, Hackman Capital has whittled down the project to add a combined 980,000 square feet to Television City after hiring a new design architect, Foster + Partners, and getting feedback from city officials, stakeholders and residents.

The firm is also responding to a downturn in the office market after a pandemic shift to remote work. Revised plans now call for eliminating a 15-story, 150,000-square foot office tower on the west side of the lot, as well as lowering the heights of some buildings.

Hackman Capital bought the CBS studio, founded in 1952 next to the Original Farmers Market, in 2019 for $750 million. CBS is now its major tenant.

Three years ago, the firm led by Michael Hackman filed plans to redevelop and renovate the studio lot at Fairfax Avenue and Beverly Boulevard, home for such shows as “All in the Family,” “Sonny and Cher” and “American Idol.”

The new proposal calls for combin ing old and new space to create 700,000 square feet of offices to support production, plus another 550,000 square feet of offices for rent to entertainment and media firms, company officials told the Times.

The plan still calls for raising the number of Television City stages to at least 15, from eight, along with production support facilities. To make room for the planned additions, surface parking lots would be turned into parking garages for 4,930 cars.

Two stages built in the 1990s on the east side of the lot would be bulldozed as part of a planned reconfiguration of the site.

The four original stages built by CBS in 1952 would be preserved along with other historical design elements created by Los Angeles architect William Pereira, who also designed the futuristic Theme Building at LAX and the Transamerica Pyramid in San Francisco.

At the same time, plans for Television City call for a new commissary and more than 4 acres for production base camps. Streets would be improved for passersby, with wider sidewalks.

On Fairfax Avenue, a fenced parking lot would be replaced by ground-floor shops and restaurants of 20,000 square feet or less for the public, with offices above accessible from inside the lot.

If approved, the revised project is expected to be completed by 2028.

Hackman Capital is trying to make Television City feel more friendly to the neighborhood, while retain ing the security and exclusivity of a closed studio campus for celebrities and others who make movies and TV shows, according to the Times.

Landlords can also charge premium rents for offices on movie lots because they are close to the action for independent production companies.

To mitigate concerns over traffic, Hackman Capital said the new plan will cut the number of estimated daily car trips to Television City by 5,000 to 8,700. A “mobility hub” would be moved to Fairfax and 1st Street to serve public transit, shuttle buses, rideshares and dropoffs.

— Dana Bartholomew

Los Angeles

Hackman unveils massive plan to redevelop CBS Television City

Los Angeles

Hackman Capital closes $750M purchase of CBS’ Television City campus

Los Angeles

Neighborhood council OKs Hackman’s TV City Project

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Uncategorized, Entertainment studios, Soundstages