The Real Deal – Robert Khodadadian

Housing nonprofit Weingart Center has closed a $27.3 million acquisition of a 76-unit assisted living facility in Cheviot Hills, with plans to turn the site into a homeless shelter, The Real Deal has learned. 

The property, at 3340 Shelby Drive, is known as the Terraza of Cheviot Hills. The facility contains a three-story structure that spans 38,200 square feet. Weingart completed the deal on April 12, according to a deed filed in Los Angeles County’s Recorder’s Office. 

The seller is a Sacramento-based entity called Palms Affordable Housing. The limited partnership, managed by David Cardena, flipped the site after just months of ownership, records indicate. The company bought the asset in December from Florida firm Bridge Investment Group.

According to a Los Angeles Housing Department report from last June, Weingart requested nearly $19.6 million in capital funding for the project. The financing will come through Project Homekey, a $1.4 billion state program that funds homeless housing conversions. Weingart plans to use the financing to renovate units and build amenities. The unit count for the complex will stay the same. 

The Los Angeles Housing Department recommended $20.5 million in match funding to cover cost increases for the project. 

Weingart Center, headquartered in L.A.’s Skid Row, provides supportive housing to the homeless. Former California State Senator Kevin Murray serves as CEO of the center. 

The nonprofit is converting another Project Homekey site in Baldwin Park. That property, located at 13921 Francisquito Avenue, housed a 108-key hotel called the Grand Park Inn. Weingart closed its $21.4 million acquisition of the property on April 2, property records show. The organization plans to convert the Francisquito Avenue property into a residential complex with 107 units. Weingart and Los Angeles County received $34.6 million in funding for the project.   

The state has funded 250 projects through the Homekey program, according to data from California’s Department of Housing and Community Development. The financing is expected to create a total of 15,319 homes.  

The post Weingart Center pays $27M for Cheviot Hills assisted living facility appeared first on The Real Deal.

Robert Khodadadian has long had a simple philosophy about selling real estate. There are approximately a million buildings in the city, and the broker that gets to sell any one among the multitude that will hit the auctioning block at a given moment is, sometimes, simply the person who happens to pitch their services to the right seller.

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The Real Deal – Robert Khodadadian

UPDATED MAY 9 at 1:30 p.m.:

A Los Angeles lawsuit entangles a television producer, a city with deep pockets and a Brentwood home once owned by Marilyn Monroe, whose life ended in a back bedroom.

Real estate heiress Brinah Milstein Bank of the Milstein Properties family in New York and her husband, reality TV producer Roy Bank, have sued the City of Los Angeles for their alleged right to bulldoze a Spanish hacienda-style home at 12305 5th Helena Drive, Business Insider reported.

The Banks bought the first and last home owned by the Hollywood siren in July for $8.35 million. They bought the house next door, a 6,000-square-foot dwelling at 12306 6th Helena Drive, in 2016 for $8.2 million.

But their plans to raze the 2,900-square-foot Monroe home to make room to expand their house next door created an international outcry — and an order by the city to temporarily stave off the wrecking ball.

Days after reports surfaced that the century-old home faced demolition, the Los Angeles City Council in September rushed through a motion to consider designating the property a historic cultural monument, a move that would invalidate the demolition permits.

The City Council will vote on whether to declare the house a historic cultural monument by mid-June.

In a written statement to The Real Deal, Milstein and Bank’s attorney Peter Sheridan alleged the city “engaged in an illegal and unconstitutional conspiracy” involving government officials and tour operators and violated the law “with regards to the quasi-judicial process required for evaluation of alleged historic cultural monuments.”

Monroe bought the one-story, four-bedroom home in early 1962 for $77,500 — or roughly $790,000 in 2023 dollars — after her divorce from playwright Arthur Miller. Less than six months later, the 36-year-old actress was found dead from a drug overdose in her bedroom.

Its front step tiles read “Cursum Perficio” — Latin for “my journey ends here.”

The Banks contend the house has been “substantially altered” since Monroe’s death, according to their complaint.

“There is not a single piece of the house that includes any physical evidence that Ms. Monroe ever spent a day at the house, not a piece of furniture, not a paint chip, not a carpet, nothing,” the lawsuit states.

The Banks claim they were issued a demolition permit from the city, which was initially “held” for 30 days to allow for objections. 

No objections were raised and permits were subsequently issued, they say, which led to them incurring more than $30,000 in expenses before receiving an actual notice of a “stay” invoked by the city.

Their lawsuit also alleges that the city’s push for the designation violated its own codes, which has deprived the plaintiffs of their “vested rights as owners of real property” and has caused them “irreparable harm.”

Liz Waytkus, the U.S. executive director of the conservation nonprofit Docomomo, told Dezeen last month that the demolition highlighted a “systemic” problem in the area.

“The land has become more valuable than the house, and even if people understand the value of such a home, location and land value often trump architectural significance,” she said.

Correction: Previous story incorrectly identified Milstein and Bank.

— Dana Bartholomew

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The post Couple sues LA for right to demolish Marilyn Monroe’s former home appeared first on The Real Deal.

Robert Khodadadian has long had a simple philosophy about selling real estate. There are approximately a million buildings in the city, and the broker that gets to sell any one among the multitude that will hit the auctioning block at a given moment is, sometimes, simply the person who happens to pitch their services to the right seller.

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The Real Deal – Robert Khodadadian

A plan by AvalonBay Communities and Abode Communities to replace a Mid-Century Modern courthouse complex with a retail village in West Los Angeles may fizzle for lack of financing.

Los Angeles Councilwoman Traci Park has filed a motion to delve into the West L.A. Commons project at 1645 Corinth Avenue after the joint venture reported market conditions had jeopardized its financing, Urbanize Los Angeles reported. Its development agreement expired this spring.

The Virginia-based AvalonBay and Abode, based in Downtown L.A., had been tapped three years ago by the city and Los Angeles County to redevelop the 7.6-acre West Los Angeles Civic Center site in Sawtelle. 

Plans called for 926 homes, 36,600 square feet of shops and restaurants, 76,341 square feet of city offices, a new Felicia Mahood Senior Center, 118,000 square feet of open space and parking for 1,500 cars. Some 431 apartments would be set aside as affordable.

But given current market conditions, the project may no longer pencil out, according to Park’s motion.

AvalonBay and Abode told the city in February last year that increased financing and construction costs had cut the projected return on investment for West L.A. Commons to 5.1 percent, from 5.98 percent.

Furthermore, the joint venture reported a “significant gap” in the project’s financing, which may jeopardize its feasibility.

The motion from Park requests a report from the City Administrative Officer within 60 days on the status of the project — including its design, financing structure and recommendations to resolve issues which may prevent the project from moving forward. 

Her motion indicates that the CAO is already talking with the developers and city departments on new designs that could lower construction costs.

Park’s motion has been referred to the Trade, Travel and Tourism Committee for further consideration, according to Urbanize.

AvalonBay and Abode have already extended their development agreement with the city and county, citing challenges with financing the project and a hope that a delay would allow for market conditions to improve. That agreement, however, expired on March 22.

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Meanwhile, preservation groups have identified the West Los Angeles Civic Center as an eligible historic district, given its “eye-catching” Mid-Century Modern architecture.  

The Los Angeles Conservancy has advocated for the adaptive re-use of the Civic Center’s 1960 Courthouse Building, 1961 branch City Hall/Municipal Building, 1962 Community Center (Felicia Mahood Senior Center) and 1965 Bandshell.

In late 2022, the county voted to buy the former West Los Angeles Courthouse at 1633 Purdue Avenue, within the civic center, “to incentivize development of affordable housing.” The state courthouse closed in 2013, and was put up for sale under a bill signed by Gov. Jerry Brown.

— Dana Bartholomew

The post AvalonBay and Abode hit funding shortfall for West LA Civic Center appeared first on The Real Deal.

Robert Khodadadian has long had a simple philosophy about selling real estate. There are approximately a million buildings in the city, and the broker that gets to sell any one among the multitude that will hit the auctioning block at a given moment is, sometimes, simply the person who happens to pitch their services to the right seller.

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The Real Deal – Robert Khodadadian

Neil Shekhter’s WS Communities is looking to sell 11 apartment buildings in Santa Monica, months after losing about half its portfolio to lenders, The Real Deal has learned. 

WS Communities has tapped a JLL team led by Blake Rogers to market the 399-unit portfolio for sale, according to marketing materials obtained by TRD. No asking price has been disclosed and Rogers did not respond to a request for comment. Shekhter did not respond to a request for comment.

The portfolio represents more than a third of Shekhter’s current holdings, which now stands at about 1,100 units. In December, lenders Madison Realty Capital, Hankey Capital and Lightstone Capital took over almost 30 properties, totaling more than 870 units, through deeds-in-lieu of foreclosure, after Shekhter and his affiliated entities defaulted on hundreds of millions of dollars in debt. 

Last month, Shekhter also lost control of a 16-unit apartment complex in Sawtelle — 1743 Butler Avenue — to a receiver, court records show. Shekhter defaulted on a $6.2 million business loan from Bank of Southern California tied to the property, prompting the bank to file a lawsuit asking for a receivership. Bank of SoCal also foreclosed on another 24 units owned by Shekhter in March

The Santa Monica properties up for sale, which are mostly clustered around 6th Street and 7th Street in Downtown Santa Monica, are subject to affordable housing agreements with the City of Santa Monica, limiting how much the portfolio’s owner can increase rents. 

Shekhter has owned the majority of the buildings since the early 2000s, according to property records filed with Los Angeles County. 

Nine of the buildings are backed by a $127.6 million senior loan from Ready Capital, which was securitized into a collateralized loan obligation for investors, records show. WS Communities also got more than $13 million in preferred equity for the portfolio, according to data from Real Estate Capital. 

About 60 percent of the units are subject to California rent control laws, which limit landlords from increasing rents more than the Consumer Price Index plus 5 percent. 

And about 20 percent are subject to Santa Monica’s rent control rules, which allows for a 2.8 percent increase or 75 percent of the CPI, whichever is less. 

But the portfolio will be sold with a new regulatory agreement under California’s welfare exemption, which lowers property taxes for landlords that rent units to people with incomes at or below 80 percent of the area median income. 

JLL said the portfolio will benefit from a minimum property tax reduction of 50 percent. No property tax exemption is guaranteed until the regulatory agreement is signed. 

The portfolio’s occupancy has flip-flopped over the last five years — in 2019, occupancy was 92 percent and dropped to 86 percent in 2020. By 2022, it recovered to 97 percent, but dropped to 91 percent in 2023. 

The dip in occupancy in 2023 was because of evictions, according to the marketing materials. After Los Angeles County ended the three-year eviction moratorium in March 2023, which prevented landlords from evicting tenants affected financially during the pandemic, landlords were able to evict tenants who fell behind on rent. 

The post Neil Shekhter’s WS Communities looks to sell a third of its LA apartments appeared first on The Real Deal.

Robert Khodadadian has long had a simple philosophy about selling real estate. There are approximately a million buildings in the city, and the broker that gets to sell any one among the multitude that will hit the auctioning block at a given moment is, sometimes, simply the person who happens to pitch their services to the right seller.

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The Real Deal – Robert Khodadadian

Name your price for three partially built skyscrapers slathered with graffiti in Downtown Los Angeles.

China-based Oceanwide Holdings, which sank $1.2 billion to develop Oceanwide Plaza before abandoning it to the whims of taggers, has put the complex up for sale at Figueroa, Flower, 11th and 12th streets, Bloomberg reported.

The asking price for the 49- and 40-story eyesores that cast L.A. under an international spotlight for Downtown blight was not disclosed.

Colliers and Hilco Real Estate have been hired to sell the property, subject to bankruptcy court approval, according to a statement. Lenders and other creditors need around $400 million to recoup their money.

“We are determined to run a disciplined and orderly process to identify the right developer to finish the project in time for the 2028 Summer Olympics,” Mark Tarczynski of Colliers said.

Oceanwide broke ground in 2015 on what was foreseen as a $900 million hotel and condominium complex in the heart of Los Angeles, turning Downtown from “an in-and-out destination to a place to dwell,” according to its architect.

But in early 2019 the development stalled, leaving in the lurch a 2 million-square-foot hotel, condo and retail complex without roofs. Estimated costs to complete the abandoned project grew to $2.3 billion.

China Oceanwide had poured $3.5 billion into projects in Los Angeles, San Francisco, New York and Hawaii, none completed.

Then the pandemic and a shift to remote work hammered commercial values in Downtown L.A., which grew worse with higher borrowing costs. The city’s third tallest office building sold in December for nearly half its 2014 price.

In January, intrepid graffiti artists then scaled the abandoned Oceanwide towers, leaving their mark and a $3.8 million bill to taxpayers to secure and clean the project site. Some intruders parachuted off a tower.

In February, contractors on the project, led by Lendlease, filed an involuntary bankruptcy petition against the limited liability company for Oceanwide Plaza. 

The project now has debtor-in-possession financing for payroll, security, repairs to comply with the city order and to assist in a sale process, according to Sharon Weiss, lead counsel for the debtor with Bryan Cave Leighton Paisner.

“I think this is a good opportunity for this building to come back alive, and to show how a bankruptcy case can fix a lot of problems,” Weiss told Bloomberg.

Oceanwide Holdings owes creditors nearly $400 million, including $180 million to EB-5 visa investors, $175 million to construction contractors, $18 million for back taxes to L.A. County and money to repay the city for security, Weiss said.

An April appraisal by Colliers submitted in the bankruptcy court estimated the as-is market value at nearly $434 million. The brokerage projected a cost of $865 million to complete the project, now 60 percent complete.

The appraisal report also noted “two serious buyers with pricing negotiated at $850 [million]” in its current condition, numbers attributed to Ken Choi, an attorney for Oceanwide. The names of the buyers are confidential, the appraisal said. Choi didn’t respond to requests for comment.

“We did not place any weight on these offers,” the appraisers, Jay Kwong and Brian Tankersley, wrote in their report.

Completing Oceanwide Plaza and selling its condominiums would be an uphill challenge for any prospective buyer, according to Alexander Shing, CEO of Cottonwood Group.

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Apartments in downtown Los Angeles are 9.8 percent vacant, the highest of any submarket in the region, according to CoStar Group. Asking rents fell 1.5 percent in the 12 months through March, while the average sale price per unit dropped to $520,000, down 20 percent from early 2022.

More than 500 “outsized condos is no longer the right product for this market cycle,” Shing told Bloomberg in an email. “It would be challenging for someone to get the necessary financing, in this environment, to complete the construction and project in a profitable manner.”

— Dana Bartholomew

The post Oceanwide puts graffiti-covered towers up for sale in DTLA appeared first on The Real Deal.

Robert Khodadadian has long had a simple philosophy about selling real estate. There are approximately a million buildings in the city, and the broker that gets to sell any one among the multitude that will hit the auctioning block at a given moment is, sometimes, simply the person who happens to pitch their services to the right seller.

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The Real Deal – Robert Khodadadian

A century-old mansion in Hancock Park once owned by heavyweight boxing champion Muhammad Ali is set to sell at auction, with a current bid of $8 million.

The 14,500-square-foot Italian Renaissance estate is up for auction at 55 Fremont Place, USA Today reported. Live bids are accepted via Concierge Auctions through May 15.

The seven-bedroom, eight-bathroom home was bought by Los Angeles attorney Michael Lawson and his wife, Mattie McFadden-Lawson, in 2001 for $2.5 million, according to the Robb Report.

Lawson, former CEO of the Los Angeles Urban League and a U.S. ambassador during the Obama administration, had listed the home in early 2019 for $16.999 million, before pulling it and relisting it many times for the same price.

Mattie McFadden-Lawson worked as a philanthropist and served as a super delegate to the Democratic National Convention in 2016. Her interior design firm MML Design Group oversaw the mansion’s restoration.

The 1.6-acre estate was listed in January last year for $15 million, pulled, then relisted in February and in April for $13.5 million, the listed auction reserve price. Bidding began on April 26.

The home is also subject to a nonjudicial foreclosure, with a notice of default on Feb. 7, according to Zillow. Whether it’s being sold in a foreclosure auction wasn’t immediately confirmed.

The three-story mansion, built in 1916, was designed by John Austin, the architect behind the Griffith Observatory and Los Angeles City Hall. 

It sits on a corner lot within the gated Fremont Place, whose 70 estates were once home to A.P. Giannini, founder of Bank of America, and King Gillette, founder of the razor firm. The neighborhood has been home to Shonda Rhimes, Mindy Kaling and Sharon and Ozzy Osbourne.

Ali, whose boxing career ran from around 1960 to 1980, bought the mansion in 1979. He lived there until 1986, according to USA Today. He later focused on social activism and philanthropy. He died at age 74 in 2016.

The home has hosted such luminaries as Michael Jackson, Sylvester Stallone, Clint Eastwood and President Barack Obama, according to the listing.

The mansion is split into public and private areas, according to Robb. It includes a grand entry foyer, salon and circular-shaped conservatory, living room and dining room. The lower level was made for entertaining. 

A large stained-glass window designed by Louis Comfort Tiffany is set on the second floor, along with original stone fireplaces, French Empire crystal chandeliers and wood paneling.

The mansion includes two offices, as well as a ballroom and a full-sized bar. A large master suite has its own fireplace and a column-lined deck.

The home is surrounded by a large swimming pool, landscaped gardens, fountain-filled patios and pergola-covered walkways, in addition to a 1,000-square-foot guest house. 

Elsewhere in Hancock Park, the former Spanish Revival estate of Howard Hughes was listed in August for $23 million at 211 South Muirfield Road.

— Dana Bartholomew

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The post Former Muhammad Ali estate in Hancock Park lands on auction block appeared first on The Real Deal.

Robert Khodadadian has long had a simple philosophy about selling real estate. There are approximately a million buildings in the city, and the broker that gets to sell any one among the multitude that will hit the auctioning block at a given moment is, sometimes, simply the person who happens to pitch their services to the right seller.

Uncategorized, Luxury Real Estate Los Angeles – The Real DealRead More 

The Real Deal – Robert Khodadadian

Clarion Partners has sold an apartment complex in Playa Vista for $122 million, a price that technically amounted to a discount after the city took its 5.5 percent tax on the sale under Measure ULA, The Real Deal has learned. 

San Francisco-based DivcoWest bought the 214-unit Reveal Playa Vista, located at 5710 East Crescent Park, according to property records filed with Los Angeles County. The deal came out to about $570,000 per unit. 

Clarion bought the property for $117.5 million, or roughly $549,000 per unit, in 2018, records show. 

Things have changed in Los Angeles since then. The city now has a 5.5 percent transfer tax on all commercial sales of more than $10 million.

Clarion had to pay the city almost $7.3 million under the tax, according to the deed for the property. Taking that off the top, the sale yielded about $114.7 million for Clarion. The company did not respond to a request for comment.

Monthly rents at Reveal Playa Vista range from about $3,500 for a one-bedroom to about $5,000 for a two-bedroom, according to online listings for the apartment complex. 

The median rent for a one-bedroom unit across the market from Westchester to Playa del Rey, where Playa Vista is located, was $2,830 last month, down about 8 percent over the last year, according to Zumper. 

The post Clarion Partners sells Playa Vista apartments at slight discount appeared first on The Real Deal.

Robert Khodadadian has long had a simple philosophy about selling real estate. There are approximately a million buildings in the city, and the broker that gets to sell any one among the multitude that will hit the auctioning block at a given moment is, sometimes, simply the person who happens to pitch their services to the right seller.

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The Real Deal – Robert Khodadadian

Sluggish home sales and construction in the wake of higher interest rates have pumped the brakes on Southern California real estate hiring.

Property-linked companies have cut their seasonal hiring pace by more than a third in March for Los Angeles, Orange, Riverside and San Bernardino counties, the Orange County Register reported, citing state employment figures.

Property-linked employment was 755,900 in March, up 2,200 jobs from February, a gain of 0.3 percent — but 36 percent off the normal seasonal pace. Before the pandemic, between 2015 and 2019, an average 3,460 jobs were added each March.

In the past year, local real estate work grew by 7,400 jobs — 46 percent fewer than the typical 13,800 jobs added each year since 2010, according to the Register.

The number of current real estate positions is 26,800 jobs below the recent employment peak in July 2022. Many people who work in the real estate industry are self-employed and aren’t tracked by government job counts.

Across the four counties in Southern California, the real estate share of total employment was 9.5 percent in March, and 11 percent of all new jobs since 2010, the end of the Great Recession.

At the same time, employment in all other sectors was 7.19 million workers in March, up 25,600 jobs in a month. Over 12 months, non-real estate jobs rose 1 percent to 69,500, the same growth rate as real estate.

Over the past 12 months, local jobs in specialist trade construction rose 2.9 percent to 248,800; jobs in building, civil engineering and construction rose 1.7 percent to 121,400 workers; jobs in lending fell 4.3 percent to 88,200; jobs in real estate services rose 0.1 percent to 138,200; jobs in building supplies fell 1.6 percent to 50,700 jobs; and jobs in building services rose 2.7 percent to 108,600, according to the Register.

At the same time, jobs in real estate fell 0.2 percent to 371,200 in Los Angeles County, while jobs in March rose 300 for the month, versus an average 1,100 hires.

Real estate jobs in the past year rose 1.09 percent to 213,700 in Orange County, while jobs in March were up 800 for the month, versus an average 500 hires.

Year-over-year real estate jobs in the Inland Empire rose 3.3 percent to 180,900, while jobs in March were up 1,100 for the month, versus an average 1,800 hires.

The sluggish growth in real estate jobs comes after a spike in hiring last fall, mostly in home construction, when local jobs hit a post-Great Recession high of 805,200.

— Dana Bartholomew

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The post Pace of real estate hiring slows across Southern California appeared first on The Real Deal.

Robert Khodadadian has long had a simple philosophy about selling real estate. There are approximately a million buildings in the city, and the broker that gets to sell any one among the multitude that will hit the auctioning block at a given moment is, sometimes, simply the person who happens to pitch their services to the right seller.

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The Real Deal – Robert Khodadadian

An entity linked to the co-founder of buy-now-pay-later firm Afterpay, Nick Molnar, has bought an estate in Holmby Hills for $65 million, marking the most expensive residential sale across Los Angeles County this year, The Real Deal has learned. 

Lapro Property Trust, based in Sydney, Australia, bought the home on North Faring Road, also known as the “Funny Girl” Estate, given it was built for legendary comedian Fanny Brice in 1938, according to property records. The trust was tied to Molnar after it sold a penthouse in Century City for $21 million in March 2023 to Rihanna. 

James Harris and David Parnes of Carolwood Estates brokered the deal on behalf of the buyer and seller.

Molnar did not respond to a request for comment.

British pop singer Robbie Williams sold the 18,900-square-foot, seven-bedroom estate in an off-market deal. Williams bought the property for $49.5 million in March 2022, using a $32 million loan from JPMorgan, records show. 

Last year, the building was put up for rent asking $220,000 a month, according to online listings, though by October the listings were removed. 

The Georgian-style main house has three stories, with a grand spiral staircase, chef’s kitchen, and marble and stone fireplaces. 

The sweeping 2-acre estate has no shortage of amenities: a garage for more than 15 cars, a sauna, fitness center, two guesthouses, a wine cellar, saltwater pool, koi pond and vegetable gardens, according to the 2022 listing for the property. 

Given the property is in the city of Los Angeles, Lapro Property Trust coughed up almost $3.9 million in transfer taxes, under Measure ULA, which adds a 5.5 percent transfer tax on all residential and commercial sales of $10 million or more. 

The transfer tax hasn’t scared off everyone from buying and selling. Last month, a spec home in the Bird Streets sold for $63 million, the second most expensive deal across L.A. County this year.

Lapro Property Trust also owns an estate less than a mile away in Bel-Air. In 2022, the trust bought a home on Copa De Oro Road from nightclub and hotel mogul Sam Nazarian for $34.8 million, records show. 

The post Afterpay co-founder buys $65M mansion in priciest LA deal this year appeared first on The Real Deal.

Robert Khodadadian has long had a simple philosophy about selling real estate. There are approximately a million buildings in the city, and the broker that gets to sell any one among the multitude that will hit the auctioning block at a given moment is, sometimes, simply the person who happens to pitch their services to the right seller.

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The Real Deal – Robert Khodadadian

The widow of the late oil heir and businessman Robert Day has put their 18,800-square-foot Gilded Age-style estate in Bel-Air on the market for $150 million.

Marlyn Day has listed the 3.3-acre gated compound known as Villa dei Fiori, or Villa of Flowers, at 729 Bel Air Road, the Wall Street Journal reported.

Robert Day, founder of Trust Company of the West and grandson of Superior Oil founder William Myron Keck, bought the house in 1995 for $7.4 million, then renovated and expanded it. He died in September.

If sold for its asking price, the Palladian-style villa would be one of the most expensive homes to change hands in the U.S.

The nine-bedroom, 20-bathroom estate includes a 15,000-square-foot mansion, built in 1972, and two guesthouses.

The white two-story home, capped by an orange Italian-tile roof, has views of Downtown Los Angeles, the Pacific Ocean and the San Gabriel Mountains, according to listing agents Linda May and Drew Fenton of Carolwood Estates. 

It also served as a regal gathering spot for dinners, fundraisers and such guests as former President George W. Bush and former presidential adviser Henry Kissinger, according to Marlyn Day. 

The mansion has a two-story entry rotunda lit by a skylight and chandelier. 

A formal living room has wood-carved doorways, an ornamental plaster ceiling and an antique gold-leaf mantelpiece. A library has an 18th-century chandelier dangling from a similarly intricate ceiling. 

A formal dining room that opens to the outdoors has a coffered ceiling with a porcelain chandelier and walls lined with 18th-century French wallpaper. 

The home has a large covered terrace with an outdoor dining area, plus a home office, a wine cellar, screening room with a fireplace and a lounge with a built-in bar.

Outside, the home is surrounded by manicured gardens, including a rose garden, small lake and waterfall. The grounds contain a croquet lawn, an orchid hot house, an indoor plant nursery and an Argentine padel court, where Robert Day would host mixed doubles.

After buying the property, Day added the padel court, viewing platform and guesthouses.

“Robert and I had a significant lifestyle in this remarkable home together. We entertained constantly and we were the hub for many things going on in our city,” Marlyn Day said in a statement. “With his absence, I feel compelled to embark on a new chapter, desiring to shift my lifestyle and pass on this magnificent estate for its next illustrious owner’s chapter.”

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The Day property is located near the Hotel Bel-Air and across the street from the Chartwell estate, which in 2019 sold to Lachlan Murdoch for $150 million.

Nine-figure deals have surged during the last few years in L.A., New York and Palm Beach, according to the WSJ. As of early this year, at least 24 homes have sold for $100 million or more since 2020, more than the total number of nine-figure sales during the previous decade.

— Dana Bartholomew

The post Estate of late financier Robert Day lists in Bel-Air for $150M appeared first on The Real Deal.

Robert Khodadadian has long had a simple philosophy about selling real estate. There are approximately a million buildings in the city, and the broker that gets to sell any one among the multitude that will hit the auctioning block at a given moment is, sometimes, simply the person who happens to pitch their services to the right seller.

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The Real Deal – Robert Khodadadian

Mohamed Hadid has settled a lawsuit against developer Zach Vella in relation to a partially built Beverly Crest mansion that was once listed for sale at $250 million. 

In September 2022, Hadid, through an entity called Treetop Development, sued Vella’s Skylark Capital for perpetrating a “loan-to-own scheme” on 9650 Cedarbrook Drive, a planned 78,000-square-foot home that’s reportedly the largest-ever permitted residential development in Los Angeles. Beverly Crest is a section of L.A. overlooking Beverly Hills.

The dispute related to a $92.8 million mortgage on the mansion property. In a complaint filed in California’s Central District bankruptcy court, Hadid claimed that Vella only provided a $29 million chunk of the promised figure. “This in turn led to the construction project not being timely completed and Treetop unable to timely pay the subcontractors performing the work,” the complaint states. 

On April 23, Hadid filed a motion asking a judge to approve the settlement, court records show. Treetop agreed to the deal with Skylark Capital’s servicer, Skylark (UK) Servicing LLC. 

“The parties have now reached an agreement that consensually addresses their various disputes, will facilitate a sale and potential plan process, and maximize the value of the debtor’s property which will serve to benefit the debtor’s estate and all of its creditors,” the court filing reads.  

 Under the terms of the agreement, Hadid will sell the property on an “as is where is” basis with the possibility that Skylark itself will lodge a bid for the 37-acre site. 

The deal sets Skylark’s secured claim at $40 million. The figure is much lower than the $63 million that Vella claimed at the time the lawsuit was filed. The agreement also extends the maturity date and increases the debtor-in-possession financing on the property to $16.6 million. 

In its motion, Hadid’s counsel said that the embattled developer may not be able to afford a long legal fight. 

“The costs of discovery, expert testimony and trial would be very costly and time intensive, and would likely involve multiple trial days. Additionally, the debtor may not have the resources to fully pursue a final judgment against the Skylark parties,” the court filing states. 

A possible wrinkle in the deal is the intervention of the City of Los Angeles. In January, Hadid sued the city for canceling the building permits for the site. The court issued an order that reinstated the building permits for the site. In an objection to the settlement, the city claimed that the settlement should not be approved because it would give Hadid more resources to sue taxpayers. 

“The settlement funds further litigation over the issue and also enables the expansion of litigation into other areas that seek damages against city taxpayers. Even if the settlement would lead to payment in full to all creditors, the settlement does nothing but drive the parties further into two camps: the City of Los Angeles versus virtually everyone else,” the city’s filing reads.  

The city has since appealed the decision, with hearings set for May 6 and May 10, court records show. Hadid could not be reached for comment. 

The post Mohamed Hadid settles suit against Zach Vella over Beverly Crest site appeared first on The Real Deal.

Robert Khodadadian has long had a simple philosophy about selling real estate. There are approximately a million buildings in the city, and the broker that gets to sell any one among the multitude that will hit the auctioning block at a given moment is, sometimes, simply the person who happens to pitch their services to the right seller.

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The Real Deal – Robert Khodadadian

While Executive Directive 1, Los Angeles Mayor Karen Bass’ attempt to expedite affordable housing approvals, has generated interest from developers, there has been at least one major point of contention: parking. 

Or, rather, the lack of it when it comes to proposed ED1 projects: the vast majority of the ED1 plans don’t offer on-site parking. Land use research firm ATC Research found that 73 percent of ED1 projects, totaling about 9,100 proposed units, have no on-site parking.

Mayor Karen Bass introduced ED1 in December 2022 to exempting affordable housing developments from lengthy environmental reviews and cutting the approval process to under 60 days.

With these projects, developers don’t have to build parking, bringing costs down. 

“Developers are finding that in order, given the restrictions on rent, and construction costs today are really high, that the only way they can make a pencil is not to have parking,” said Chris Tourtellotte, who runs development for LaTerra Development.

But the question is: will developers be able to lease an apartment complex in Los Angeles without parking?

“What happens when you have no parking? It’s harder to rent the units,” said Moses Kagan, who runs Adaptive Realty and currently manages about 130 buildings in L.A., some of which have no parking. “As soon as your tenants start to earn more money, they move out, so you get more turnover. Over time, it’s harder to push your rents up, because you’re sort of constantly dealing with people turning over.”

L.A. is synonymous with parking — just watch any movie about L.A. and you’ll notice a lot of driving. 

For some, not building parking is the only way for the projects to pencil. And the issue of parking is emerging as a key factor in whether developers take advantage of ED1. 

For developers that are jumping on the ED1 bandwagon right now while the program is still in its early stages, getting rid of parking is no brainer given high construction costs.

“The reason why a lot of these projects have no parking is because of the nature of private developers that are doing these projects, because they’re taking the biggest risk,” says According to Ben Lee, an agent at Marcus & Millichap, who has sold a number of sites entitled under ED1.

Lee notes that these smaller developers, who he calls “cowboy” investors, that are using ED1 are taking on more risk because costs are high and the program is new, — no projects have been built, yet. More risk-averse builders and institutional investors are still evaluating how these ED1 projects pan out. 

At the end of the day, it’s about finding the cheapest land, and the cheapest way to build. 

“The reason why these developers are doing it in South LA without parkings because the dirt is the cheapest there,” he said.

“Developers are finding that in order, given the restrictions on rent, and construction costs today are really high, that the only way they can make a pencil is not to have parking,” says Chris Tourtellotte, who runs development for LaTerra Development.

For most, parking is just a part of the overall calculations and assumptions the builders are making.

Some developers are using the ED1 program as a way to expedite projects that previously looked to score incentives under the city’s Transit Oriented Communities, or TOC, program.

The city introduced Transit Oriented Communities (TOC) Affordable Housing Incentive Program in 2017 as a way to incentivize affordable housing, with the incentives correlated with proximity to public transport. The program offers density bonuses, height increases and fewer parking requirements for residential projects that have a certain number of affordable units.

“A developer who has bought a piece of land and has a sunk costs into the TOC entitlement strategy that doesn’t pencil anymore is using ED1,” Lee said. 

Developers are not necessarily flocking to ED1 because it removes parking requirements, but is an alternative route to getting a project approved. 

Some developers don’t see parking as an issue long-term. 

“There’s such a lack of affordable housing in the city of L.A., that people would still be glad to find an affordable unit with rent restrictions, and then either get rid of their car and take the bus or Uber or taxi or ride their bicycle, or park their car on the street,” Tourtellotte said.

“With fully autonomous self-driving vehicles and robo taxis, less and less people will own cars, because cars won’t really be in park.”

The post Parking emerges as contention point for ED1 projects appeared first on The Real Deal.

Robert Khodadadian has long had a simple philosophy about selling real estate. There are approximately a million buildings in the city, and the broker that gets to sell any one among the multitude that will hit the auctioning block at a given moment is, sometimes, simply the person who happens to pitch their services to the right seller.

Uncategorized, Affordable Housing, ED1, LA Development Los Angeles – The Real DealRead More 

The Real Deal – Robert Khodadadian

Hudson Pacific Properties is feeling the burn of withering office markets. 

The Los Angeles-based real estate investment trust lost $52 million in the first quarter, up 160 percent from its $20.4 million loss reported in the same period last year, according to an earnings release on Wednesday. 

The reason: Hudson Pacific harvests less and less revenue from its office properties. 

Vacancy “remains stubbornly high as many existing tenants continue to downsize,” CEO Victor Coleman said on a call Thursday discussing the firm’s quarterly earnings. 

The company reeled in $175 million in revenues from its office portfolio from January through March, down roughly 15 percent from the first quarter of 2023, financial filings show. 

Its office portfolio was 78 percent occupied on average in the first three months of this year, down from 85 percent a year prior. 

Hudson Pacific is looking to sell three office buildings totaling around 900,000 square feet, or roughly 8 percent of its office portfolio, Coleman said on the call. The firm did not identify which buildings it was looking to shed. 

The San Francisco Bay Area is causing the most pain for the company in terms of vacancy — its portfolio there was 74 percent leased on average in the first quarter. 

The leasing is uneven, too. One building, Skyport Plaza in North San Jose, was 6 percent occupied, while others including 3400 Hillview Avenue, were 100 percent leased.

On some buildings, Hudson Pacific is still bullish. At 1455 Market Street, where the firm just signed the City of San Francisco to a 157,000-square-foot lease, the firm paid $43.5 million for a 45 percent interest in the building, the firm said on Wednesday. 

Over the past few years, Hudson Pacific has relied on its movie studio portfolio to boost revenues, given the uncertainty around the office sector. 

But, with two sweeping strikes that hit the entertainment industry, Hudson Pacific is in recovery mode on those assets, too. 

Revenues from its studio portfolio — about 10 percent of all its holdings — have shrunk 15 percent over the last year, financial filings show. In November, the firm was expecting a “tremendous upswing” when filming resumed, but hasn’t seen it yet. 

“The film and television industry has recovered far more slowly than anticipated,” Coleman said, though he remained hopeful. “There is no question that high-quality, original content will remain essential for the studios growing their subscriber bases and building valuable IP.”

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The post Hudson Pacific posts $52M loss as office causes pain in portfolio appeared first on The Real Deal.

Robert Khodadadian has long had a simple philosophy about selling real estate. There are approximately a million buildings in the city, and the broker that gets to sell any one among the multitude that will hit the auctioning block at a given moment is, sometimes, simply the person who happens to pitch their services to the right seller.

Uncategorized, Earnings, LA Office Market, SF Office Market, Studio Real Estate Los Angeles – The Real DealRead More 

The Real Deal – Robert Khodadadian

Shangri-La Industries, the troubled developer of motel-to-housing conversions for homeless residents, has declared Chapter 11 bankruptcy on four projects in California.

The Los Angeles-based firm, accused of fraud by the state in connection to its state-funded conversions, filed for bankruptcy protection on former motel projects in Redlands, Thousand Oaks, Salinas and San Ysidro, the Los Angeles Daily News reported.

The court filing affects the former Good Nite Inn in Redlands, the former Quality Inn & Suites in Thousand Oaks and the former Sanborn Inn in Salinas, each funded by the state’s Project Homekey program.

It also affects a former Travelodge in San Ysidro, which was funded under the state Community Care Expansion program, according to Brian Sun, the attorney representing Shangri-La. 

City officials couldn’t say how it might impact their respective Homekey projects.

Gov. Gavin Newsom launched Project Homekey in June 2020 to provide shelter for homeless residents during the pandemic. The state has allocated more than $3 billion to cities and counties to buy motels, hotels and vacant apartment buildings for permanent homeless housing.

Since 2020, the state Department of Housing and Community Development has provided Shangri-La Industries more than $121 million in Homekey funds to convert motels up and down the state into permanent supportive housing for the homeless.

Then the developer defaulted on loans tied to seven properties, and owed about $41 million in delinquent debt as of Dec. 1, The Real Deal reported. In separate court cases, lenders had sued Shangri-La and asked the court for receiverships, an alternative to bankruptcy. 

In January, Shangri-La Industries lost control of six out of seven former motels for Project Homekey sites to court-appointed receivers in Salinas, King City, San Bernardino and Redlands.

After TRD reported on the defaults, the state opened an investigation into Shangri-La and found the firm had violated its operating agreements tied to six of the properties. In January, state Attorney General Rob Bonta filed a lawsuit against the firm, claiming the developer breached state contracts and alleging fraud. 

A Southern California News Group investigation last year also found that lenders and contractors doing business with Shangri-Li said they weren’t paid for completed work at the former Good Nite Inn in Redlands, now Step Up in Redlands, and the former All Star Lodge in San Bernardino, now Step Up in San Bernardino.

Dozens of mechanic’s liens totaling millions of dollars have been filed over the past year at recorders’ offices in San Bernardino, Ventura and Monterey counties, the sites of Shangri-La projects for Homekey. The firm’s failure to pay resulted in more than a dozen lawsuits.

Last month, the Redlands City Council terminated its Homekey agreement with Shangri-La as the state housing regulators accused the developer of misappropriating $114 million in Homekey funds.

Sun, the attorney for the developer, said the bankruptcy filings are part of the developer’s plan to restructure and finish its commitments on the various Homekey projects.

In a lawsuit in March, Shangri-La Industries accused its former chief financial officer, Cody Holmes, of embezzling millions of dollars in company money so he and his former girlfriend could live high on the hog, placing the developer’s state-funded projects in jeopardy, including those listed in its Chapter 11 filing.

Andy Meyers, CEO of the embattled company he co-founded with the late Hollywood producer Steve Bing, has blamed the state for the firm’s delinquencies, saying that lenders triggered defaults because government officials failed to sign regulatory agreements for the various conversion deals.

— Dana Bartholomew

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The post Shangri-La files for Chapter 11 on four motel-to-home conversions appeared first on The Real Deal.

Robert Khodadadian has long had a simple philosophy about selling real estate. There are approximately a million buildings in the city, and the broker that gets to sell any one among the multitude that will hit the auctioning block at a given moment is, sometimes, simply the person who happens to pitch their services to the right seller.

Uncategorized, Fraud, mechanics liens, Project Homekey Los Angeles – The Real DealRead More 

The Real Deal – Robert Khodadadian

WeWork has agreed to keep two more locations in Southern California — one in Long Beach and another at South Coast Plaza in Costa Mesa. 

The coworking firm, which is currently making its way through bankruptcy, has filed motions to keep its leases at 100 West Broadway, a building owned by Redwood Urban, and CJ Segerstrom’s Park Tower at South Coast Plaza, according to court records. 

WeWork leased two floors totaling 33,000 square feet at 100 West Broadway in 2016, according to reports at the time. When Redwood Urban bought the building for $60.5 million in 2018, one of the hooks was that WeWork held a long-term lease there. 

WeWork will pay $307,400 to keep its Long Beach lease, a maneuver known as a lease cure, court records show. Redwood Urban agreed to reduce its rent, extend WeWork’s term and require a reduced guaranty — cash that will go towards paying the landlord if WeWork defaults on the lease.

At Park Tower, a 335,500-square-foot building at 695 Town Center Drive in Costa Mesa, WeWork leased about 38,000 square feet and opened its location in 2019, according to a marketing brochure for the space. 

At that location, WeWork has agreed to pay $383,000 to keep the lease and share some profits with landlord CJ Segerstrom, court records show. CJ Segerstrom, in return, agreed to reduce rent and WeWork’s guaranty on the lease. 

WeWork has been working to determine which leases across the country it wants to keep, and which it wants to shed. 

The firm recently rejected leases in Houston, Texas, and San Jose, according to bankruptcy records. 

Last month, WeWork said it came to an agreement to exit bankruptcy, thanks to $337 million in funding from Yardi Systems and $112 million from existing bondholders. The deal will allow WeWork to skirt being sold to its co-founder and former CEO Adam Neumann, who had emerged as a potential buyer. 

The post WeWork negotiates to keep Long Beach, South Coast Plaza locations appeared first on The Real Deal.

Robert Khodadadian has long had a simple philosophy about selling real estate. There are approximately a million buildings in the city, and the broker that gets to sell any one among the multitude that will hit the auctioning block at a given moment is, sometimes, simply the person who happens to pitch their services to the right seller.

Uncategorized, Bankruptcy, LA Office Market, Leasing Los Angeles – The Real DealRead More 

The Real Deal – Robert Khodadadian

Los Angeles could soon protect rent-controlled apartments in a part of the city that could be bulldozed for streamlined affordable housing projects, displacing tenants who can’t afford to move.

City Councilwoman Eunisses Hernandez has filed a motion to impose a discretionary review of projects containing rent-controlled units within her First District, which stretches from Eagle Rock to Chinatown, City News Service reported.

The motion comes in response to a proposal by an affiliate of Lou Jacobs, an executive with California Landmark Group, to bulldoze a 17-unit apartment complex at 4719 North Toland Way in Eagle Rock, as reported by Urbanize Los Angeles.

The demolished apartments would make way for 153 affordable apartments in a development fast-tracked by Mayor Karen Bass’ Executive Directive 1, which expedites affordable housing projects and allows developers to avoid discretionary review. 

The proposed building would be income-restricted, with units priced below market rate.

But critics said the redevelopment would lead to the loss of 17 rent-controlled apartments and displace 45 tenants, including families, seniors, disabled and sick residents who have lived there for years.

“Most were unaware of the redevelopment plans until it was published by niche media outlets (Urbanize LA) focused on development, leaving them with limited time and options to understand their rights and prepare for relocation,” Hernandez’s motion reads.

“This in part was attributed to the swift approval process without discretionary review and the absence of public hearings and related notices.”

The council voted 12-0 to instruct the Planning Department to immediately prepare an Interim Control Ordinance. Once drafted, it will go before the Planning and Land Use Management Committee before a final vote by the City Council.

The temporary regulation would include a discretionary review process for the “demolition, building, use of land, grading and any other applicable permits” of properties with five or more rent-controlled units, or units that have been vacated as a result of the Ellis Act within five years.

Hernandez told the council before the vote that she wished they had more tools to support tenants living in rent-controlled units. While the city has a policy in place to ensure relocation assistance, she said it was not enough. 

Los Angeles gives tenants “first access” to new units if they previously lived in a building that was redeveloped, but Hernandez said tenants often don’t rent the redeveloped units because they can’t afford them. 

She said her motion is “not anti-development” — in fact, she said she wants to see a lot more development, according to City News.

“We want to streamline affordable housing, all of it, but the missing middle cannot come at the expense of our most affordable units,” Hernandez said. “This is about ensuring that we protect our RSO (rent stabilization ordinance) housing stock.”

The Los Angeles Housing Department reports more than 650,000 rent-controlled units citywide, including 51,631 in the First District. 

Councilwoman Monica Rodriguez, who represents the northeast San Fernando Valley, backed Hernandez’s motion.

She called it “disheartening” to see such an immense shift in areas like Highland Park and Eagle Rock, when redevelopment displaces long-time residents who are often low-income minorities.

“We shouldn’t be doing an exchange and displacing people. This is not the way it’s supposed to work,” Rodriguez said. “We have to be smarter policy makers, and not just fall to whatever whim that people have in directives that are trying to accelerate the construction of housing — not at the expense of the very affordable housing that is keeping people housed.”

— Dana Bartholomew

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The post LA City Council may save affordable apartments from mayor’s ED1 appeared first on The Real Deal.

Robert Khodadadian has long had a simple philosophy about selling real estate. There are approximately a million buildings in the city, and the broker that gets to sell any one among the multitude that will hit the auctioning block at a given moment is, sometimes, simply the person who happens to pitch their services to the right seller.

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The Real Deal – Robert Khodadadian

Millennium Partners has killed a $1 billion plan to build highrises around the Capitol Records Building in Hollywood, a decade after active earthquake faults were found under the site.

The New York-based investor withdrew its requests for approvals for the four-building Hollywood Center project on parking lots next to Capitol Records and the Pantages Theatre along Vineland Avenue, north of Hollywood Boulevard, Urbanize Los Angeles reported.

The L.A. Planning Department has terminated each entitlement request, ending the development.

Plans for the 4.5-acre Hollywood Center, proposed in 2012, called for two office and residential towers of 35 and 45 stories, which would have become the tallest in Tinseltown. They would be flanked by two 11-story buildings, with underground parking.

The project was to contain 1,005 homes, including 133 set aside as affordable housing for “extremely-low-income” and “very-low-income” seniors in the two smaller buildings.

Millennium bought the parcels of parking lots in 2006 from Capitol Records for an undisclosed price.

But the 1.3-million-square-foot development, once known as the Millennium Project, hit a couple of serious snags.

The first resulted from active earthquake faults found beneath the development site by California Geological Survey, which raised questions about the safety of the project. Consultants hired by the developer said the faults didn’t run below the site.

The second came after a judge halted the project because an environmental impact report failed to note the state seismic research that “strongly suggest” an active strand of the fault crosses the project site.

Philip Aarons, founding partner of Millennium Partners, didn’t reveal the firm’s plans for the failed project site’s future.

“Sixteen years ago, we spearheaded the effort to save the world-renowned Capitol Records Building by getting this iconic structure declared a City of Los Angeles historic-cultural monument so that future generations could continue to appreciate its timeless beauty,” Aarons said in a statement. 

“Over the last several years we have worked to preserve this architectural treasure by completing a full seismic upgrade of the structure so that the building can return to its critical role within the music industry,” he said. “While we have made the decision for now not to move ahead with our vision to build housing on the surrounding surface parking lots, we remain committed to working to make the Hollywood community a better place to live and work.”

The developer had also faced criticism over its 58-story “leaning” and sinking tower in San Francisco. Last summer, the condominium highrise stood 1 inch straighter after a $100 million fix.

While Millennium Partners may have stepped away from the star-crossed site near Hollywood and Vine, it hasn’t left the neighborhood, according to Urbanize. In late 2022, the developer won approval to build a 15-story office tower at 6450 Sunset Boulevard.

— Dana Bartholomew

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The post Millennium Partners scuttles $1B plan for highrises in Hollywood appeared first on The Real Deal.

Robert Khodadadian has long had a simple philosophy about selling real estate. There are approximately a million buildings in the city, and the broker that gets to sell any one among the multitude that will hit the auctioning block at a given moment is, sometimes, simply the person who happens to pitch their services to the right seller.

Uncategorized, Earthquake fault Los Angeles – The Real DealRead More