An alleged relationship between Mark Walter and Alexandra Court is concerning Guggenheim’s investors and employees. (LinkedIn/Ken Kistler, Malibu background)
The purchase of two California mansions have been linked to Guggenheim Partners’ Chief Executive Mark Walter and distribution executive Alexandra Court, between whom an alleged relationship is concerning the company’s investors and employees.
One mansion, purchased last year for $13 million in Pacific Palisades, is now the residence of Court, while the second Malibu mansion was bought in May for $85 million with Walter as a co-investor, according to the Wall Street Journal. Both houses were bought by the same company, ABS Capital Company LLC.
A spokesperson for Walter and Guggenheim denied that the company’s chief executive owned ABS and told the Journal that Walter purchased the Malibu mansion as part of a “small group of partners.”
Court has been off work since June and Journal sources say she is negotiating her exit from the firm.
The spokesman for Guggenheim and Mr. Walter told the Journal that “if there were a relationship, the prospect of a non-business relationship would have been fully and promptly disclosed to the appropriate parties at Guggenheim.”
The Journal’s sources say the firm’s board reviewed Walter and Court’s relationship, though what if any action was taken is unknown, and people at the firm say employee resentment has grown as a result of the mansions. Meanwhile, several clients have reportedly met with the firm since June to raise concerns.
Beyond the news of the mansions, Guggenheim is undergoing a regulatory review with the Securities and Exchange Commission.
The department store behind Nordstrom Rack is losing the rack.
Nordstrom Local, a 3,000-square-foot shop on Melrose Place in Beverly Grove, is deviating from Nordstrom’s traditional department store offerings and serving up personal stylists and other experiences instead, the Los Angeles Times reported.
Instead of traditional store with clothing racks, the newly opened spot has a bar equipped with wine, beer, coffee and pressed juice, a Nail Bar and personal stylists offering consultations and curated items. Customers can also exchange, tailor or pick up items purchased online.
The store is designed around a one-stop shopping approach and accommodates Nordstrom’s Trunk Club, which offers personalized, designer clothes to consumers.
The 3,000-square-foot boutique is a fraction of its traditional 140,000-square-foot spaces. The Beverly Grove location is a trial run for the concept, which suggests one way for retailers to stay relevant as shoppers flock online.
On the same day as Nordstrom Local’s opening, the department store opened a 154,000-square-foot location at Westfield Century City mall. The mall recently underwent a $1 billion two-year renovation, adding cryotherapy, “frictionless parking” and a VIP service.
The Seattle-based company operates 121 traditional Nordstrom stores in the U.S. and Canada, 224 Nordstrom Racks discounted stores, two Jeffrey boutiques and two clearance stores. [LAT] – Natalie Hoberman
Sam Zell’s Equity International bought into Brazil, while Brookfield is preparing to sign a deal in India. (Victor Grigas, back/ Studio Scrivo, front)
Over the last 18 months, investors like Sam Zell’s Equity International and Brookfield Property Partners have started inking deals in emerging markets at levels not seen since 2012.
Brookfield is on the cusp of finalizing a $1 billion deal to buy office and retail space in a suburb of Mumbai; Blackstone Group is reportedly keeping a lookout for investment opportunities in India; and Equity International bought a $154 million stake in a Brazilian company, according the Wall Street Journal.
“Our appetite has increased and our enthusiasm has increased,” said Sam Zell to the Journal.
The cause for investors’ interest can be attributed to growth forecasts for emerging markets, which the International Monetary Fund expects to increase from 4.1 percent in 2016 to 4.8 percent next year. Even though the IMF’s expected growth rate for these markets is the slowest on the books since 2009, it’s better than the expected growth rate of developed markets.
But the lay of the land in emerging real estate markets has changed since their peak years prior to the financial crisis when strong growth in “BRIC” economies — Brazil, Russia, India and China — attracted big investments.
Now, Russia is largely seen as a pariah due to its legal system and China’s homegrown players are “formidable competitors,” according to the Journal. What hasn’t changed is the high rate of return emerging markets can yield — in some cases returns can be more than 20 percent despite higher risk.
“If you were pricing ground up development risk in an emerging market, you would be entitled to earn at least 1,000 basis points more on a currency hedged basis return relative to a U.S. project of similar ground-up real estate risk,” said head of KKR Real Estate Ralph Rosenberg to the Journal.
Renderings of hotel, with Mark (left) and Arman Gabay (R&A Architecture & Design)
The Charles Company filed plans to build a 19-story, 185-key hotel on the corner of Doheny and Sunset Boulevard, WeHoville reported.
Renderings by R&A Architecture and Design suggest a circular, abstract building could take shape at 9034 Sunset Boulevard next to Steve Witkoff’s Edition hotel.
The proposed project is called Sunset Tower at the moment, but Charles Co. is likely rushing to submit a name change now that its plans are public — given that Jeff Klein’s iconic, celebrity-studded Sunset Tower Hotel in West Hollywood is already world famous.
The development would include 17,000 square feet of banquet and event space, 5,700 square feet of retail space, a restaurant, an art gallery and 14 apartments. Four underground parking levels, fitted for 550 vehicles, and a helicopter pad would also be on site.
There has been concern that the city is facing a potential oversupply of hotel rooms. West Hollywood Mayor Lauren Meister even proposed a moratorium on new hotel development earlier this year.
If it is approved, the proposed project would join West Hollywood’s 19 open hotels containing a total of 2,346 rooms. That number has the potential to increase by 71 percent once the Kimpton La Peer Hotel on La Peer Drive and the Edition open, and if all other projects under construction or consideration are approved.
The Charles Company, led by brothers Mark and Arman Gabay, is also behind the long-awaited Melrose Triangle project at 9060 Santa Monica Boulevard. The 2014-approved mixed-use project, designed by Studio One Eleven, will bring three new buildings to the site. [WeHoville] – Natalie Hoberman
Property at 430 N. Main Street (Historic Los Angeles Theatres via Bill Counter)
Three years after the project’s inception, the restoration of the Merced Theatre at 430 N. Main Street has been delayed once again.
Construction bids for the project from Amoroso and Pinner Construction came in at $35 million and $40 million — more than 50 percent higher than the city’s budget, the Los Angeles Downtown News reported. The city expected a $23 million price tag.
But the 147-year-old historical building needs more work than anticipated. Initial details suggested the exterior façade would remain intact, while the interior space would be reconstructed into modern offices and a television studio. New plumbing, electrical systems and other infrastructure elements would need to be installed.
Once the studio is complete, Channel 35, which broadcasts City Council and governmental meetings, is expected to move its headquarters from Little Tokyo to the building.
The Bureau of Engineering, El Pueblo and Channel 35 are considering alterations to bring down costs. The next call for bids will likely occur next February. The city plans to hire a contractor by the end of next June. [DTN] – Natalie Hoberman
Porter Ranch community in San Fernando Valley (Getty)
As available square footage shrinks and rents soar in Los Angeles, a new startup is helping families migrate outwards.
Suburban Jungle, a New York-based company, helps city-based families find suitable suburbs and connects them with local agents, the Los Angeles Times reported. The startup expanded to L.A. earlier this year.
Clients are first assigned a strategist and asked to fill out a thorough questionnaire to identify their preferences. Then, clients are given two to six potential neighborhoods with details including nearby schools, restaurants, gyms and tax figures.
Suburban Jungle does not handle transactions, but works by connecting clients to local agents. Once a client purchases a home, the startup collects a commission from the seller’s broker.
Founder Alison Bernstein said the recent influx of people to L.A. prompted her to open an office in Hollywood late September. She describes the company as “relocation for the noncorporate employee.”
The company also operates in Chicago, Boston, San Francisco and Dallas. It has plans to expand in Washington D.C., Philadelphia, Atlanta and London. [LAT] – Natalie Hoberman
Metro line with Mayor Eric Garcetti (Getty Images)
28 express tickets, please.
Mayor Eric Garcetti announced a “28 by 28” initiative at the Metro Board of Directors meeting last week which he hopes will speed up the development of transportation projects in preparation for the 2028 Olympics, Curbed reported.
Staffers are expected to make recommendations for the new initiative by the end of October. Metro’s board will vote on recommendations in November.
But the details of the initiative aren’t yet clear, and stipulations on Measure M-funded projects could provide some obstacles. The voter-approved measure has a set, specific construction timeline for more than 90 projects in Los Angeles County. Expediting one project could come at the cost of another — a clear violation of the new law.
“Any acceleration policy I want to make sure maintains the integrity of the expenditure plan we have, and the trust that’s been put in us by the voters of Los Angeles County,” Garcetti said at the meeting.
It is also unclear whether the 28 transportation projects will be in addition to or included in the projects already slated for completion by 2028. [Curbed] – Natalie Hoberman
Star brokers such as Ryan Serhant and Fredrik Eklund employ an army of foot soldiers
“I call Jordan our flight control tower. He is the oil in our machine. On top of that, he mans the calendars, phones, emails and, yes, he will be the one you meet if you knock on the door to my office,” Douglas Elliman’s Fredrik Eklund wrote in his 2016 book “The Sell.” Referring to longtime assistant Jordan Shea, the reality TV star added: “Your goal is to get on his good side, and therefore mine.”
But as of last month, Eklund and business partner John Gomes are out a gatekeeper. Shea has transitioned from assistant to full-time resales broker on the Eklund-Gomes team, which claims to have sold $721 million worth of real estate last year.
For Shea, the shift is emblematic of every aspiring agent’s dream: parlaying long hours and grunt work into a lucrative real estate career of their own.
While lead agents may get all the glory, many employ armies of agents, marketing pros and assistants behind the scenes to manage demanding, 24/7 businesses. These foot soldiers play the role of deputy, sidekick and receptionist — or anything else the lead agent asks of them. “It’s about efficiency, because time is money,” Eklund wrote in “The Sell.”
A post shared by Jordan Garrett Shea (@jordangarrettshea) on
Richard Phan, a longtime assistant to the Corcoran Group’s Carrie Chiang, for example, is known as a savant of addresses, prices and dates, while Katja Shamburger and Angie Thompson serve as point people for Corcoran’s Sharon Baum. Maggie Leigh Marshall is a top lieutenant for Elliman’s Raphael De Niro — ranked as the No. 1 team by The Real Deal this spring with $721.4 million in sell-side deals — and has acted as a “stand in and voice” for him on occasion.
“As long as I am awake, I am available,” she said.
For Sotheby’s International Realty’s Nikki Field — whose team is 15 strong — Helen Marcos acts as COO, “running our machine on and off for 12 years and is the keeper of all the secrets,” Field said. Meanwhile, Nest Seekers International’s Ryan Serhant — whose team of 62 may be the biggest in the industry — described agents who work under him as “strong tentacles to my octopus.” Unlike firms that limit team sizes (Elliman caps teams at 10 members), Nest Seekers has given Serhant free rein. The “Million Dollar Listing New York” star has offices in Manhattan and Brooklyn, and team members in Los Angeles. “It enables me to run a company within a company,” he said.
How lead agents run their fiefdoms varies widely.
The Leonard Steinberg Team — headed by Compass’ president and Hervé Senequier, a senior managing director at the firm — has four core members plus six agents who work under the team umbrella. The setup requires everyone to multitask, though unofficial roles are “a bit specialized,” said Senequier, who handles logistics and finances, while Steinberg oversees marketing and negotiation. Amy Mendizabal handles a lot of deal flow while Calli Sarkesh pitches in with showings, follow-up work with buyers and sellers and logistics.
[TRDPullQuote align=”right”] “As long as I am awake, I am available.” [/TRDPullQuote]
“Not everyone is working on all the exclusives,” added Steinberg. “You don’t have a seller get a call from 10, 12 or 15 people. It has to be carefully assigned.”
Amy Mendizabal
Compass’ Eugene Litvak, the self-described CEO of a “micro-brokerage within a brokerage,” has designated heads of marketing, design, rentals and client care. He recently hired a COO to run day-to-day operations, letting him focus on relationship-building.
“When we’re talking to bigger developers,” Litvak said, “they want to talk to me.”
For Corcoran’s Meris and Kenny Blumstein, whose team includes their children Sydney and Cole, tasks are divvied up between the family members and five teammates based on property type and location. “My parents really have their own business, of which we all are a branch of,” said Sydney Blumstein, who launched a rentals business during the 2008 financial crisis. For the most part, Meris gravitates toward the luxury market and Kenny handles commercial deals.
No matter how tasks are divided, top agent teams require round-the-clock communication. In addition to email, phone and text messaging, Compass’ Debra Bondy communicates via Slack while Corocran’s Deanna Kory and her assistant use a cloud-based app called Wunderlist to manage their to-do list. Jessica Chestler, who works for CORE’s Emily Beare, said the flurry of emails and text messages starts at 4:30 a.m. and doesn’t end until midnight. “I speak to Emily more than anyone else in my life,” she said. “At the end of the day, I’m there to make sure that no ball is dropped in any sense of the word.”
That means lots of grunt work — like cold calls, creating mailers and working open houses. “It’s a lot of rental business, and then so many Sunday open houses,” said Sydney Blumstein, who added that any new broker who doesn’t shadow the lead broker is “squandering an opportunity to learn.”
Serhant said he goes on almost every initial client pitch, but has agents stand in for him other times. His team also staffs new development sales offices, since he can’t be there 24/7. “A lot of my value is face time,” he said. “It’s more of an apprenticeship than a mentorship. The apprentice is put to work.”
Jessica Chestler
The work is tough, and few see big bucks early on. The average agent assistant takes home just $31,887 a year, according to the online jobs marketplace Glassdoor (New York numbers are likely to be higher.) Meanwhile, the worker bee agents who toil away on top teams generally work for a slice of the commission, depending on their experience and involvement. (Agents who bring in their own client, however, earn more.) A current job posting on Glassdoor, seeking an agent to join a top Douglas Elliman team, said the ideal candidate is exceptionally well organized, “coachable” and available on weekends. “Qualified agents will earn six figures!” promised the ad.
If the money is there, top agents still generally receive credit for listings and deals, even if their underlings are doing the heavy lifting. On the marketing side, too, it’s often the lead agent who gets credit for listings and deals. “Because of our marketing efforts, a lot of our clients come through Deanna,” said Dee Dee Tiller, Kory’s marketing director. Tiller said Kory farms out listings to agents but stays involved in negotiations, pricing and closings. “If she gets all the glory,” Tiller said, “I’m doing my job effectively.”
Some relationships between team players and the star brokers end very poorly — and very publicly.
[TRDPullQuote align=”right”] “I speak to Emily more than anyone else in my life.” [/TRDPullQuote]
Last year, Joe Aquino — who for years was retail broker Faith Hope Consolo’s right-hand man — sued Elliman for allegedly withholding $1 million in commissions to pay for his boss’ spa treatments, cashmere sweaters and $100-a-day makeup sessions. Elliman said the allegations were a “manufactured attempt” to get more money from the company, and in October 2016 a judge dismissed the claims. Aquino later joined Swiss retail brokerage the Location Group as head of North American operations.
In May, a former assistant to Elliman’s Jared Seligman filed an explosive lawsuit alleging the broker forced her to support his drug habit and witness his sexual exploits. “To act as a Personal Assistant to a wealthy real estate broker, especially in New York City, means putting up with indignities that most people never have to experience,” Amy Gagnon claimed in the suit. (Seligman vowed to discredit her “scurrilous accusations” in court.)
Colby Billhardt
But often, team members parlay the glamour-free gig into their a career of their own.
Serhant suffered a blow in August when four longtime team members — Danny Nassimi, Brian Atienza, Peggy Zabakolas and Colby Billhardt — struck out on their own. “I just felt ready to take a page out of his book and create my own brand,” said Billhardt, who moved to Brown Harris Stevens.
Clayton Orrigo
Another Eklund-Gomes success story, Clayton Orrigo, spent several years on the team before jumping to Compass and forming the Hudson Advisory Team with former Town Residential broker Stephen Ferrara.
Though he handled his share of last-minute Friday night showings, Orrigo said he relished experiences like flying to Asia with Eklund and Gomes to meet with a developer client. “How many brokers get to do this type of thing?” he said.
The life expectancy of a baby born in Los Angeles County in 2014 averages 82.1 years, a report by Social Science Research Council found. This surpasses the national average by nearly four years, KPCC reported.
Within the county, communities in the northwest section of the county lived the longest, while the southeast and northeast pockets of the county had the shortest life expectancy, a report by the Social Science Research Council found.
Babies born in Walnut Park seem to be the luckiest with an average lifespan of 90.5 years. Malibu was a close second with a 89.8-year average.
Map from Social Science Research Council (Measure of America)
Variables such as access to green spaces, affordable housing and health care, and jobs with living wages all play into life expectancy, according to KPCC.
The region’s expectancy as a whole surpasses most nations. If L.A. County were a country, it would rank 11th in longevity, just below France and Israel. [KPCC] – Natalie Hoberman
From TRD New York: A happy and healthy workplace is a productive workplace, according to engineers, architects and scientists who are using academic research to build better office spaces.
Planners are using what’s called “evidence-based design” to help mitigate environmental factors that lead to a loss in productivity, but the research is still preliminary, the Wall Street Journal reported.
Combining sensors with workers’ self-reported levels of productivity and satisfaction — not dissimilar to what how scientists are studying the possibility of life on Mars — can produce data that helps to qualify the effects of new designs, according to the newspaper.
“We can now with sensors just see what works well and what works badly, said Arjun Kaicker, the head of user parametrics at Zaha Hadid Architects in London.
One of the worst offenders is the level of CO2 in an office. A study from researchers at Harvard University, Syracuse University and SUNY Upstate Medical University in 2015 found that high carbon dioxide levels in offices can decrease cognitive performance in knowledge workers by 15 percent.
Levels are often highest in meeting rooms, where they can reach 3,000 parts per million. That’s about 7.5 times the current level of CO2 found in Earth’s atmosphere.
Developers like Delos, which implemented its own “Well” standard at its healthy Greenwich Village Building, are are trying to codify design standards to make the workplace healthier. But experts said it can be difficult to correlate tweaks and changes to actual productivity levels. [WSJ] – Rich Bockmann
Photo Illustration of Long Beach skyline (Getty Images/ Creative Commons)
Long Beach residents showed up in herds at Whaley Park on Oct. 4 to voice their concerns about officials updating the Land Use Element to allow for more density, the Press Telegram reported. The Town Hall meeting was called by Mayor Robert Garcia, who isn’t allowed to vote on legislation but wanted to hear his constituents’ thoughts.
City officials are pushing for a complete rewrite to the 1989 edition of the Land Use Element, a hand-written ordinance that’s been guiding development from a time when Long Beach had 44,000 fewer residents. A draft calls for taller buildings, including five- and six- story buildings around the Traffic Circle, and 10-story buildings in the Wrigley area and near Anaheim Street, Pacific Coast Highway and Willow Street.
Southern California Associated Governments recently determined the city would need over 7,000 new housing units between 2014 and 2021. City Hall would need to permit roughly 5,900 homes to meet that goal.
Neighborhood residents, however, believe opening the floodgates to new development will increase traffic congestion and give way to crime.
Two more Town Hall meetings are scheduled to take place.
Anti-density sentiment is rampant in coastal cities, whose residents fear their neighborhoods will lose their sea-side charm and become replicas of Downtown. Just down the Bay, Redondo Beach City Council recently extended a moratorium on mixed-use development to ten months. The ban, however, contrasts sharply with what folks in Sacramento are preaching and signing into law to encourage apartment development during a housing crisis.[PT] – Natalie Hoberman
Canyon Square Plaza, a shopping center spanning nearly 97,000 square feet on the corner of Soledad Canyon Road and Sierra Highway, sold to a private investor for $22.5 million, The Real Deal has learned.
The seller of the property at 18507-18523 Soledad Canyon Road was New York-based real estate investment trust Kimco Realty. Kimco purchased the site in April 2013 for $18.5 million, property records show.
Tenants at the plaza in the Santa Clarita Valley include a 40,700-square-foot Vallarta Supermarkets, Flame Broiler, Paul’s Paint and Hardware and 26 others, according to the broker’s release. A parking lot on the property’s 14 acres has space for 343 vehicles.
Dixie Walker and Charley Simpson of Cushman & Wakefield represented the seller.
Kimco Realty, a publicly-traded company, owns 510 properties comprising 84 million square feet across the nation, according to its website. It also owns 13 other shopping centers in the county, including plazas in Northridge, Torrance, Valencia, Covina and Long Beach.
Property at Greenway Drive (Hilton & Hyland/Getty Images)
“It will come to you, this love of the land…”
The longtime home of Ann Rutherford and her second husband, producer and actor William Dozer, at Greenway Drive in Beverly Hills hit the market at a whopping $39.9 million, Variety reported. The house was originally built for former Beverly Hills Mayor Edward Paul Dentzel.
Spanning across 10,400 square feet, the French Revival-style property has five bedrooms, ten bathrooms, a billiards room, a library and a breakfast room paneled with 200-year-old Chinese wallpaper. Outside, a backyard features lush landscaping and an oval swimming pool, gym and spa.
A trust linked to businessman Mark Cohen and his wife, Laurie, purchased the home in 2013 for $7.55 million, property records show. The two renovated and expanded the property to its current state.
Kurt Rappaport of Westside Estate Agency shares the listing with Linda May and Drew Fenton of Hilton & Hyland.
Mark Cohen, who’s made his fortune in the mortgage business, previously owned a 1930s, Paul Williams-designed estate in Holmby Hills. The couple renovated that property, as well, and later sold it to producer Joe Roth for $21.5 million in 2011.
Ann Rutherford, best known for her role in “Gone With the Wind” and as Mickey Rooney’s love interest in the Andy Hardy films, resided in the home until she passed in 2012. Her husband, William Dozier, is credited with creating the 1960s “Batman” television series. [Variety] – Natalie Hoberman
Christie’s terminated its affiliation with Brown Harris Stevens in June and plans to open its own residential brokerage in New York City by the end of the year.
From TRD New York: Nada. That’s exactly how much New York City’s most in-the-know real estate brokers know about Christie’s forthcoming standalone brokerage. Since breaking its 22 year-long partnership with Brown Harris Stevens in June, mum’s the word on how the venerable brand is faring in its headfirst descent into the city’s real estate scene, according to brokers from Brown Harris Stevens, Douglas Elliman, Compass and Nest Seekers International.
But that’s exactly the way the auction house likes it.
“I don’t think anybody inside of Christie’s, myself included, feels that we need to beat the drum on our behalf,” Dan Conn, the CEO of Christie’s International Real Estate, said during a recent tour of their new facility. “Christie’s has a global client base of a million-and-a-half high-net-worth people. We are going to have the best physical space, I think, in the auction house to showcase properties. I don’t think we need to front-run the experience at all.”
That isn’t exactly chest puffing. The 251-year-old firm seems ideally situated within its universe of privilege and luxury for a successful gambit at the crowded and cosmopolitan Manhattan marketplace. Its new real estate showroom is slated to open in the front of the house at 20 Rockefeller Center, Christie’s sprawling auction and gallery space, by year’s end. Thousands of the world’s richest men and women already pass through Christie’s doors every year, but now, to bid on a Rockwell or a Picasso, they’ll have to give the real estate a gander first.
“Asia Week, for example, where you have Chinese buyers coming in through the auction house. They will come in here and see New York properties. That is a huge prospect,” said Alyson Barnes, Christie’s head of marketing and communications. Christie’s will sell across Manhattan and even in Brooklyn, she added.
“This isn’t a space just to promote the New York market,” Conn said. “It is a space to promote what we are doing globally through the affiliate network.”
But industry players wonder if foot traffic alone is enough to give Christie’s a fighting chance, after what BHS president Hall Willkie called its “broken promise” to not compete with his firm. Skeptics say that the art auction market and the business of selling homes don’t necessarily go hand-in-hand.
“To work in New York City, you need to have some knowledge, you need to know what you’re doing, and you need to understand brokerage,” Bess Freedman, Brown Harris Steven’s second-in-command, said in June. “They do not.”
The breakup between one of the world’s most esteemed auction houses and its old-money partner in New York didn’t produce hard feelings among many BHS agents. Christie’s 139-firm network boasted combined annual sales between $115 billion and $120 billion in 2016, and some at BHS felt like that the auction house frequently failed to deliver the resources it promised. Meanwhile, BHS and its brokers were paying millions of dollars each year to Christie’s.
“[BHS was] spending a fortune to be affiliated with Christie’s and Christie’s wasn’t really delivering,” a broker who was once affiliated with Christie’s said on the condition of anonymity. “You could end up paying them 25 to 50 percent of the commission. I know I paid them $250,000 on a sale on which they did nothing.”
Christie’s is also facing the prospect of breaking into into the New York brokerage business at time when the luxury housing market, in which they will operate exclusively, is on shaky ground.
“It’s a tricky market. It’s interesting that a brokerage is launching today,” Nest Seekers’ Ryan Serhant said.
“Real estate is hyper-localized and people really go to the experts of the area to find what they are looking for. As much as I think that a buyer from São Paulo is going to recognize the Christie’s or Sotheby’s brand names, ultimately they will come to the local agent,” said Compass’ Leonard Steinberg, who added that historic brands often have a lot of catching up to do on technology and infrastructure.
Christie’s appears well aware of those challenges. It’s spending the bulk of its startup efforts on getting the space ready and integrating technology across multiple platforms. Technology is a particular hurdle for Christie’s as all of its listing photography, file formats and virtual tours need to work harmoniously across all of its markets. Building its technological suite has proven a much greater challenge than the design of its physical, soon-to-be screen-covered sales office.
And given that Christie’s didn’t break from BHS until June, the company is essentially building a New York City residential brokerage from scratch, with a six-month deadline to flick the switch. Since June, it’s joined the Real Estate Board of New York, secured the physical space, and started the build-out, but still has yet to bring aboard any agents (Christie’s hopes to have about 25 to 30 brokers in the future, with company reps saying commission splits would be in line with market standards).
So while it may appear like slow going, Conn said it’s essential that the new space fit like a puzzle piece with the larger space and brand. Conn insists that the sword isn’t swinging overhead, that time and money are no objects.
“We said we would be up and running towards the end of the year, and we still expect to be the case. We are doing all the things we need to do to transform the business from a global affiliation model to that plus having a New York operation,” Conn said. “That entails technology, back-office functionality, building physical space for agents that we will ultimate onboard. That is where we are focusing now. It all takes time, but it was all anticipated.”
As to just how an international company like Christie’s will fare against the established local competition once it is operational is anyone’s guess. But Conn maintained that as a local brokerage, Christie’s edge is, ironically, its international reach.
“Where you get uneven experience with firms,” he said, “is in terms of their ability, and frankly, their desire to really run a global marketing effort for a top listing. One of the reasons clients come to us and say, ‘We want Christie’s,’ is because they know that if they do it through us, they will get maximum global exposure to a high-net-worth audience.”
Renderings of 5500 Jefferson (via 5500jefferson.com, Gensler)
Apple may have found a home for its original-content division in West Los Angeles, The Real Deal has learned.
The company is in talks to lease the entirety of Hackman Capital Partners’ 85,000-square-foot creative office development at 5500 W. Jefferson Boulevard near Culver City, sources said. The space, which sits near the La Cienga Expo Line Station, would be used for production.
CBRE’s Jeff Pion, who is the listing broker, declined to comment. Savills Studley is representing Apple, sources said, but representatives of the brokerage declined requests. Hackman could not be reached.
The website for the property lists triple net rent at $3.75 a square foot a month, which would value the lease at $3.83 million a year. A tenant can move into the completed development in January 2018, according to Loopnet.
Hackman purchased a 74,000-square-foot warehouse on the site in late 2016 from Modern Props Inc. for $25 million, with the intention of converting it into a creative office development. Gensler designed the redevelopment.
If completed, the lease could be Apple’s second with Hackman. There are rumors that the company is in talks to move its original content division to Hackman-owned Culver Studios. Hackman also developed the headquarters of Beats By Dre, a company Apple now owns, in Culver City. The developer sold that property to IDS for $110 million in 2015.
Apple is aggressively moving into the original content space where Netflix has thrived, and recently announced it would set aside $1 billion for production. Its first endeavor is a revival of Steven Spielberg’s 1980s series “Amazing Stories,” the Wall Street Journal reported Tuesday. Apple will make new episodes of the show. Spielberg is expected to be an executive producer.
Property at Wonder View Drive, with Steve Angello (MLS/Getty)
The DJ slash producer is looking for a new House.
Steve Angello listed his Hollywood Hills pad, equipped with a full recording studio, for $5.5 million, the Los Angeles Times reported.
The 6,000-square-foot, two-story property has four bedrooms, five bathrooms, a music room, and a living room featuring 18-foot ceilings. A swimming pool with an outdoor shower can be found outside.
Angello purchased the property for $3.9 million in 2013, property records show.
Gary Gold of Hilton & Hyland has the listing.
The DJ, producer and actor is best known for Swedish House Mafia, a group he formed with Axwell and Sebastian Ingrosso. The trio — which has since split — became famous for hits including “Don’t You Worry Child” and “Save the World.” [LAT] – Natalie Hoberman
After nearly 20 years of residence, the industry veteran is calling “cut.”
Hollywood veteran Frank Biondi Jr. listed his home on Rockingham Avenue in Brentwood for $23.9 million, Variety reported.
Originally built by Wallace Neff in 1968, the French Manor-style estate has four bedrooms and nine bathrooms across 9,300 square feet. Amenities include a digital screening room, manicured gardens, a swimming pool with a spa and a clay tennis court.
The entertainment executive purchased the property in 1996 for nearly $4.1 million from producer couple Kathleen Kennedy and Frank Marshall, records show.
Linda May of Hilton & Hyland has the listing.
Frank Biondi Jr. has served executive roles at Viacom and Universal Studios. Currently, he’s the director for several companies, including Yahoo, Seagate, Cablevision and Hasbro. The entertainment mogul recently scooped up a condominium on Wilshire Boulevard with his wife, Carol, for $3.25 million. [Variety] – Natalie Hoberman
From TRD New York: Have you heard the one about the priest who walks into a vacant shopping center?
As retail’s struggles continue across the country, landlords have started to expand the types of tenants they look at to fill vacancies, and churches are now getting more consideration, according to the Wall Street Journal.
Shopping center owners generally considered religious institutions to be weak tenants, as they are usually not open all week, do not draw a ton of daily foot traffic and could be harder to evict they don’t pay rent. But the institutions can bring advantages with them as well, as they require less allowance for tenant improvement and can help shopping centers diversify their credit exposure.
At least 111 malls and open-air centers now have churches in them, according to an analysis of August 2017 data from the Directory of Major Malls, which tracks 8,200 retail centers in the U.S. At Grand Cities Mall in Grand Forks, North Dakota, there are three churches in the shopping center, and at the Outlets in Loveland, Colorado, the center leases 34,000 square feet to three churches and a synagogue.
“We’ve been delighted by that experience,” president and CEO of Outlets owner Craig Realty Group Steve Craig told the Journal. “I’m not saying that I’d do it for every property, but for this it makes a lot of sense.” [WSJ] – Eddie Small
Nearly 172,000 homes in Napa Valley and Santa Rosa are in the line of fire in Northern California as wildfires continue to swarm the region, the Wall Street Journal reported.
Most of the homes are low-risk but roughly 11,000 face significant damage, a CoreLogic Inc. report found.
Rebuilding the homes from scratch would cost a whopping $65 billion, according to CoreLogic. That estimation considers factors such as geography, labor and materials, and represents the absolute maximum cost.
“Although the majority of homes, 161,059, or 94 percent, are at Low or Moderate risk of damage, wildfire can easily expand to adjacent properties and cause significant damage even if a property is not considered high risk in its own right,” the report reads.
Homes in the area aren’t cheap, either. Average homes in the Napa and Santa Rosa metro cost about $599,000 — far greater than the country’s average of $201,900 — according to Zillow.
The fires spreading through Northern California have already claimed the lives of 15 individuals and destroyed much of the wine country. [WSJ] – Natalie Hoberman
La Concha Renaissance San Juan Resort (Credit: Marriott)
From TRD New York: Deep-pocketed investors like Paulson & Company, Lone Star Funds and the Blackstone Group pumped hundreds of millions of dollars into Puerto Rico real estate in recent years. In hindsight, that doesn’t look like such a great idea.
The island’s economy is in tatters in the wake of Hurricane Maria. Storm damages could add up to $95 billion, according to one estimate.
“We sustained a lot of damage, and we’re facing very significant losses,” Brian Tenenbaum of the Morgan Reed Group, a major office landlord, told the New York Times.
Hedge funder John Paulson, famous for betting against the U.S. housing market in 2007, flew to Puerto Rico on his company’s private jet days after the storm to inspect the damage. Two of the company’s hotels were slightly damaged. A third shut down for now. In a statement the firm said it looks “forward to welcoming guests as early as the winter season.”
CPG Real Estate had to charter a private plane carrying canned goods, diapers and batteries to open part of an outdoor shopping mall in San Juan.
Some investors see light at the end of the tunnel: federal funding. “I think a lot of money will be spent fixing Puerto Rico, and that should be better for everyone,” Marc Lasry, of hedge fund Avenue Capital Group, told the Times. [NYT] — Konrad Putzier
