Marina Crossings (Courtesy of Cushman & Wakefield)

Nationwide, the Inland Empire area around Los Angeles and the Chicago region were go-to places for industrial and logistics lease signings. Both were among the top markets leases inked in the first half of 2018, accounting for 25 of the top 100 deals.

Southern California tallied 11.6 million square feet of deals signed, while another 6.8 million square feet was leased in the Chicago area, according to a new CBRE report.

The rankings shouldn’t come as a surprise to industry observers, in either the Los Angeles area or Chicago, where demand for industrial space has led to plunging vacancy rates and rising rents, primarily from the continued growth in e-commerce sales.

CBRE’s analysis of the 100 largest industrial leases showed 56 were signed by e-commerce companies and third-party-logistics companies, which predominantly handle distribution for goods purchased online.

Rounding out the top five markets for large industrial leases were Atlanta at 7 million square feet, Pennsylvania’s Interstate 78/I-81 corridor at 6.8 million square feet and Dallas-Fort Worth at 5.2 million square feet.

CBRE found 30 of the leases were for warehouses larger than 750,000 square feet, which it said reflects e-commerce users’ preference for expansive facilities with high ceilings and, in many cases, modern specifications for automation and rapid movement of massive inventories. The 100 largest leases accounted for 67.8 million square feet.

Nicole Urquart-Bradley (Credit: Twitter, and iStock)

A former executive at Cushman & Wakefield said the brokerage regularly paraded her around as an ambassador for diversity at the firm, but behind the scenes the company culture is one of sexism and racism.

Nicole Urquart-Bradley, an African American woman, claims her career was held back at Cushman — and she was ultimately fired from the company — due to her race and gender, according to a discrimination lawsuit she filed Tuesday in Washington, D.C. federal court.

“In the age of MeToo, Cushman & Wakefield is facing a new world, where the old boys’ network behaviors will no longer be tolerated,” said David Sanford, the attorney representing Urquart-Bradley, which is representing Urquart-Bradley. “The commercial real estate industry has a long-standing reputation for devaluing women; it’s time they recognize that these behaviors cannot continue.”

A spokesperson for Cushman said the company does not comment on ongoing litigation.

Urquart-Bradley — who worked out of the brokerage’s D.C. office and was head of the Valuation and Advisory department for the United States since 2010 — said she was one of only two female service-line leaders at Cushman.

She said that when the president of Global V&A, John Busi, left to start a competing division at Newmark Knight Frank in 2016, she was tasked with fending off a poaching effort by Busi known internally as the “Newmark Siege.”

But while Cushman was happy to offer Urquart-Bradley “her white male predecessor’s job responsibilities, it refused to give her Busi’s global title to accompany them,” her lawsuit claims.

“This decision by C&W is consistent with a pattern and practice of refusing to offer female executives global titles,” her attorneys wrote.

Urquart-Bradley said that Cushman regularly publicly promoted her as an example of diversity at the company — a public image that was “at odds with the deeply entrenched culture of discrimination against women and people of color.”

She pointed to Cushman’s initial public offering in August — when the company invited two white men and more than a dozen men and women of color to ring the bell at the New York Stock Exchange — as an example of the disparity between Cushman’s public image and what goes on behind the scenes.

Urquart-Bradley alleged that despite growing revenue for the V&A division by 59 percent between 2010 and 2016, she faced undue hostility from chief operating officer Todd Schwartz and Shawn Mobley, president of Cushman’s eastern region.

During one particularly confrontational call last year, Urquart-Bradley claims, Schwartz accused her of being “defensive” and claimed she argued her point in an “unprofessional” manner.

“He then proceeded to provide [Urquart-Bradley] with ‘mentoring,’ telling her that if she wanted to be ‘taken seriously’ she needed to ‘stop whining’ and ‘get with the program,’” court papers claim.

Urquart-Bradley said that after successfully fending off the Newmark siege, she asked for a small fraction of the non-monetary retention benefits her white male subordinates had received, at which point Mobley “accused her of disloyalty and abruptly terminated her employment.”

Urquart-Bradley is seeking $30 million in damages.

This is not the first time Cushman’s been hit with discrimination claims. In 2016, former director Hongmei “Janice” Li filed a lawsuit in New York State Supreme Court claiming she was demoted and fired and replaced with a younger, white male employee who lacked her qualifications.

Former COO Suzy Reingold and former research head Maria Sicola have also filed discrimination lawsuits in recent years.

Across the world of commercial real estate, companies are grappling with a lack of diversity among their ranks.

Women accounted for only 21 percent Cushman’s workforce in New York City, according to an analysis conducted by The Real Deal earlier this year. That was behind competitors JLL and CBRE, where women make up 26 percent and 25 percent of the workforce, respectively.

Angelo Gordon CEO Michael Gordon, Lincoln Property Company Senior Executive Vice President David Binswanger, and the Redstone office property.

Lincoln Property Co. and Angelo Gordon & Co. scored a $128 million loan from Pacific Coast Capital Partners for a four-property play in Orange County.

The senior loan goes toward acquiring and leasing a quartet of office properties totaling 540,000 square feet, according to REBusinessOnline. The two New York-based firms plan to improve the properties and increase rents, as well as lease any vacant space.

The Newport Beach properties are the 181,000-square-foot Redstone Plaza at 1300 Dove Street and an 83,000-square-foot office nearby at 1201 Dove Street. The joint venture paid $62 million for the former and $26 million for the latter, according to property records. The properties each sold in 2007 for about $10 million over the joint venture’s purchase price.

In Irvine, the venture picked up the 163,000-square-foot Inwood Park and 112,000-square-foot Irvine Summit buildings for $39 million and $34 million, respectively. All of the properties were owned by Chicago, Illinois-based entities. The sales closed in late August.

Angelo Gordon and Lincoln are frequent partners. Their last big play together in the Los Angeles area was the sale of the 325,000-square-foot Corporate Center Calabasas to Majestic Asset Management for $53 million. They also jointly own the LNR Warner Center — they purchased the 509,000-square-foot complex for $150 million in late 2016. [REBusinessOnline] – Dennis Lynch

(Illustration by Adria Fruitos)

A lawyer with ties to Venezuela’s oil ministry, a member of the country’s “boliburguesía” elite and a money launderer sat around a Caracas office table while armed guards and a German shepherd with a shock collar stood watch.

The boliburgués placed his handgun on the table. It was November 2015, and the three Venezuelans were pressuring an unnamed associate to persist with a scheme that U.S. authorities would later allege embezzled $1.2 billion from the Venezuelan state oil company, PDVSA. Much of that money, according to a criminal complaint, ended up in South Florida real estate.

Among those reportedly alleged to be connected to the scheme: the three stepsons of the country’s embattled president, Nicolás Maduro; a billionaire Venezuelan TV mogul; and former executives at PDVSA. Eight people have been charged in the case so far, while one defendant — a wealth manager at a Swiss bank — was arrested in August.

With a federal investigation ongoing, the U.S. attorney’s office could seize at least 16 South Florida properties tied to the defendants. But in the initial complaint filed in July 2018, only one was explicitly named: Unit 2205 at the Porsche Design Tower in Sunny Isles. Federal officials allege this condo was ultimately transferred by Carmelo Urdaneta Aqui – who until 2015 was legal counsel to the Venezuelan oil ministry – to the alleged money launderer, José Vicente Amparan Croquer, as payment for services rendered.

Luxury real estate in South Florida has long served as a magnet for wealth from South America. The continent’s tycoons, celebrities, athletes and assorted hustlers have seen it both as a playground and a bank — a good place to invest or park cash, given its proximity, culture, weather and, most of all, its discretion: The provenance of the wealth has historically mattered little to Miami-area developers and brokers. What’s mattered is that their buyers have it.

But even though today’s tougher anti-money laundering laws impose stricter disclosure requirements on banks and lenders involved in real estate purchases, those who build product and those who sell for them can continue to benefit from a culture of secrecy, thanks in no small part to the real estate industry’s intense lobbying and donations at every rung of the political ladder.

“Developers and real estate agents have no legal obligation to conduct customer due diligence on the purchasers of real property,” said Ross Delston, a Washington, D.C.-based lawyer and anti-money laundering expert, “other than to abide by the general tenet that a business would want to avoid taking part in a criminal scheme.”

Gil Dezer, who built the Porsche Design Tower, maintains that his firm operates within the law. He cited anti-discrimination laws, including the Fair Housing Act, that his company interpreted as requiring it to sell to a buyer who can sign a contract and send a deposit. It’s an argument some of his fellow developers have also made. But experts in money laundering and housing law challenged this interpretation.

“There’s nothing in the fair housing law that eliminates or reduces the duty to ensure the legitimacy of funds in a transaction,” said Charles Intriago, a former federal prosecutor and anti-money laundering expert. “That’s bullshit.”

The builder

In May 2016, Urdaneta told associates about a “significant deposit” he put down on a unit in Miami. The developer, he said according to the complaint, was pressuring him to close in 60 days.

The condo was located on the 22nd floor of the glassy, black cylindrical Porsche Design Tower. The skyscraper marked the apex of the post-recession luxury condo construction boom in South Florida, and the buyer pool, the building’s marketing materials bragged, included 22 billionaires. Among the owners: Carlos Peralta Quintero, chairman of Grupo IUSA; Igor Yakovlev, a Russian home appliance mogul; and Terry Taylor, America’s biggest car dealer. Prices started at $1,100 a foot, unheard of at the time in Sunny Isles, and Taylor paid $2,600 a foot, or $25 million, for the four-story penthouse.

The tower was geared toward “the wealthy, runners and gunners, the machismos and testosterones,” said Peter Zalewski, a principal with the Miami real estate consultancy Condo Vultures. “That was the niche, that’s who they were hitting.”

That description could easily be used for the developer himself, Dezer: A brash 40-something with a penchant for supercars and shirts with one too many buttons open.

Dezer is the only son of Israeli émigré Michael Dezer, who in the 1970s used proceeds from a junk mail business to amass a Manhattan real estate portfolio. He then expanded out to South Florida, and today the family owns over 27 acres of oceanfront property in Sunny Isles. Dezer joined the family business in the late 1990s while taking night classes at the University of Miami. He found success in establishing licensing agreements with someone he had long admired, Donald Trump, and Dezer Development went on to build six Trump-branded towers. In December 2007, Dezer got married at Trump’s Mar-a-Lago, with Melania Trump and Ivanka Trump in attendance.

Like Trump, Dezer’s tastes tend to the extravagant. His personal car collection includes a $1.5 million Bugatti Veyron, and he has a 1950 Porsche Spyder 550 mounted on the wall of his home. He also owns a $17 million silver Gulfstream IV jet, which he showed off on a CNBC segment of “Secret Lives of the Super Rich.” (Still, he was careful to note in a 2016 Bloomberg profile that “we don’t have security guards and things like that. We don’t show it off too much.”)

In 2012, Dezer secured a master licensing agreement with German-based Porsche Design Group. The building would feature a patented car elevator, known as the “Dezervator,” which would allow owners to park their vehicles right next to their residences in so-called “sky garages.”

Gil Dezer discussing the Porsche Design Tower in Sunny Isles Beach in 2015.

In a 2013 interview with The Real Deal, he explained his vision for the tower. “In the downturn,” he said, “we decided we had to do something so unique, so crazy, so outrageous, so incredible, that we’re not going to be looking for a buyer who needs financing, because at that time there was zero financing. We needed people who had a lot of money and who would respect something that was so wow that they’d want to buy it.”

Unlike some other big developers, Dezer Development did not tap outside brokerages such as Douglas Elliman or One Sotheby’s International Realty to sell condos. Instead, it relied on its internal sales operation, Dezer Platinum Realty.

“We market, we don’t advertise, and the upper-level marketing I do myself,” Dezer said in that 2013 interview. “With most of these guys, the key is to make them want it and to be willing to part with their money to have it.”

The buyer(s)

Urdaneta, for one, was willing. According to a confidential informant cited by U.S. authorities in the complaint, he and his co-defendants had gamed Venezuela’s unusual currency exchange system to reap large rewards.

Venezuela had a system where the government was able to exchange its currency (bolivars) at a fixed rate for U.S. dollars. But the fixed exchange rate, six bolivars to one dollar, was far more favorable than the actual exchange rate, 60 bolivars to one dollar. This opened up a possibility for fraud and abuse.

If someone, for example, was able to exchange $10 million for 600 million bolivars at the actual rate, and then exchange the money at the government’s fixed rate, they would end up with $100 million. In just two transactions, someone could make a $90 million profit by exploiting this difference.

According to the complaint, Urdaneta and his co-defendants pulled off a similar maneuver by bribing officials at PDVSA. One of the alleged money launderers they used, Amparan, also known as Chente, needed to be paid. The unit at the Porsche Design Tower would become his fee.

As the tower neared completion, Urdaneta received an email from Dezer Development that perturbed him. The email included a pre-closing questionnaire, with a caveat that “taking title under a company or trust may trigger FinCEN reporting requirements.”

The Financial Crime Enforcement Network (FinCEN), a bureau of the U.S. Treasury, is tasked with looking into crimes including money laundering. In January 2016, just a few months before Unit 2205 was purchased, FinCEN launched its Geographic Targeting Order (GTO) program, which requires title insurance firms to identify the beneficial owners of shell companies seeking to purchase luxury residential real estate in all-cash deals.

“Under the GTOs, the responsibility has been handed to the title insurance companies,” said Andrew Ittleman, an attorney who focuses on white-collar defense and money-laundering cases. “They have been deputized to address this issue.”

Given Urdaneta’s deep ties to PDVSA, which were the subject of a 2015 U.S. investigation into a $2 billion money laundering scheme, it would make sense that he would not want to buy the unit in his name. So, according to the complaint, he created a company with his wife as a beneficiary and used that to make the $5.3 million purchase. Property records show that his wife was listed as the manager of a Florida company called Paladium Real Estate Group, created in June 2016.

“Dezer Development allows buyers to close on units in the name of a company so long as the individual controlling the company is the same as the person who signed the initial contract,” the developer said in an email to TRD. “We do this to make sure buyers are not flipping.”

In 2013, Dezer had spoken of personally taking charge of the “upper-level marketing” of the building. When asked now about Unit 2205, however, Dezer said: “I was not involved in this sale. I never met the buyer.”

The complaint alleges that Urdaneta then sought to transfer the unit to Amparan. On Sept. 23, 2016, Amparan’s wife was added as a manager of Paladium, and on Sept. 15, 2017, after the closing, Urdaneta’s wife was removed, leaving Amparan effectively in control of Paladium and thus the condo, according to the complaint.

The purchasing entity was set up through a Brickell Avenue law firm, Juris Magister. Calls and emails to the firm were not returned.

“After closing the developer is no longer involved in transfers of that unit,” Dezer said. As of August 2018, 118 of the building’s 132 units have closed, he added. The total projected sellout of the tower, according to a press release from the developer in March 2017, was $840 million.

The Money Laundering Control Act of 1986, which made the practice a federal crime, came during the heyday of Miami’s “cocaine cowboys.” Banks facilitated the money laundering that was essential to the city’s rampant narcotics trade, and the proceeds were pushed through real estate.

Unlike most other cases where money laundering in real estate is alleged, the buyers of Unit 2205 are listed clearly in Miami-Dade County property records instead of being concealed through a labyrinth of opaque offshore or Delaware shell companies such as those documented in the Panama Papers. Property records show Amparan’s wife, Carolina Croquer, as the most recent owner of the property.

Financial institutions are required to flag a transaction to FinCEN following a suspected incident of money laundering or fraud. Real estate brokers, escrow agents and other real estate professionals, however, are not subject to these same rules.

Money laundering experts said that unless Dezer Development was explicitly aware that Urdaneta had purchased the unit for money laundering purposes, the company would not be required to report it.

“The developer is probably technically correct that he has or she has no obligation to report, but that is really kind of weak, particularly in today’s environment,” said John Cassara, a former special agent with the U.S. Treasury who focused on money laundering.

“It strikes me as willful blindness,” Cassara added. “They don’t want to ask questions.”

A FinCEN advisory last July said the bureau encourages brokers, escrow agents and other real estate professionals to “voluntarily report suspicious transactions involving real estate purchases and sales.”

The influence game

One of the reasons real estate brokers are exempt from the same requirements as financial institutions, experts said, is the industry’s successful lobbying efforts.

In total, the National Association of Realtors has spent $27.52 million in lobbying so far in 2018, data from the Center for Responsive Politics shows, ranking second out of 3,669 organizations involved in lobbying. Since 1998, the group has spent nearly $500 million on lobbying, the data shows.

A FinCEN advisory last July said the bureau encourages real estate professionals to “voluntarily report suspicious transactions involving real estate purchases and sales.”

In total, 44 federal lobbying disclosures were filed on anti-money laundering reporting issues in the first quarter of 2018, up from 21 during the same time last year, according to Bloomberg.

“After the passage of USA PATRIOT Act in 2001 it was expected that FinCEN would include real estate agents as one of the businesses subject to the new rules,” said Delston, the D.C-based anti-money laundering expert. “Not only did that not happen, but also real estate agents were expressly exempted from coverage by those rules.”

On top of NAR’s lobbying, real estate developers have gained clout by donating extensively to both local and national politicians, political parties and political action groups. Michael Dezer gave $100,000 to the pro-Trump Make America Great Again political action committee in 2015, along with Seryl Kushner of Kushner Companies. And according to a sworn statement filed in April, North Miami Beach’s then-mayor, George Vallejo, admitted that his wife was on the Dezers’ payroll at the same time that he was voting on issues related to Dezer Development’s proposed projects. Vallejo said he used an LLC to hide payments from the public so that “his wife’s business would not be seen by … all the political enemies,” according to the statement.

Related Group’s Jorge Pérez gave money directly to local candidates, including congressional candidates Matt Haggman and Donna Shalala, as well as $245,000 to Right to Rise USA, a political action committee for Jeb Bush. There’s also Moishe Mana, who has donated to a number of Democratic candidates, including $33,400 in 2016 to the DNC Services Corporation, a PAC that gives money to Democratic candidates.   

Elizabeth Mendenhall, current president of NAR, said in a statement that “real estate professionals understand their responsibilities in the current efforts to combat money laundering, such as filing suspicious activities reports.”

However, Mendenhall added, federal mandates for brokers “already subject to diverse and comprehensive state and local licensing laws across the country would prove burdensome and unnecessary.”

The NAR’s website further states that “any risk-based assessment would likely find very little risk of money laundering involving real estate agents or brokers.”

Local South Florida brokers echoed the point that the responsibility to report transactions under the GTOs should fall on the title insurance industry rather than them.

“The burden is currently in the right place, which is with a company and an industry that understands the reporting guidelines,” said Christina Pappas, district sales manager with the Keyes Company in Coral Gables.

“At the end of the day, our responsibility is to be a consultant to the customer … to help a buyer buy and a seller sell,” she added. “If someone wants to hide something, they are going to be able to hide something.”

Michael Haltman, the president of Hallmark Abstract Service, a New York-based title insurance provider, said his industry is well-suited to report suspicious transactions because title insurance firms are a “third party to the transaction” and “have less of a vested interest in the business.”

However, that distance from the deal also makes it less likely that they have the full picture. “These people [brokers] are salespeople, they are selling a property,” Haltman said. “That’s their job, and that’s what they do, and unless the government says you need to know your client then nothing will change.”

“I would imagine,” he said, “that realtors talking to a buyer would be in the best position to know what the true intention of the buyer really is.”

An endemic issue

The criminal indictment in the case, filed Aug. 16, lists another 16 South Florida properties as being tied to the defendants. These include a condo at the Related Group’s Icon Brickell, six units in a small Miami Beach apartment complex, four Coral Gables homes and a Wellington equestrian estate with adjacent vacant land. Related declined to comment.

The government defines some of the properties in the indictment as “substitute properties” that it can seize if necessary, but does not allege the properties are connected to any criminal activity. The Porsche Design Tower unit, however, is set to be seized by the government.

Even so, Dezer Development maintained that it was following the letter of the law outlined in the Fair Housing Act and other legislation mandating that a developer sell to a buyer with the ability to sign a contract and send a deposit.

Money laundering experts and fair housing experts however, called this interpretation expedient.

Rigel Oliveri, a University of Missouri professor who studies the Fair Housing Act, said “it prohibits discrimination, [but] it doesn’t say that you have to sell to every person, it doesn’t say you can’t do a background check.”

In response, Dezer said: “What are my other options if I advertise a unit for sale and someone agrees to buy it, writes a contract for the price I am asking and gives me a deposit? What would be a valid reason to turn them down? Because they are from a different country? Because they have different political beliefs? What is an acceptable test?”

Jeff Bezos and an assembly of a pre-fab home (Credit: Getty Images and iStock)

Amazon putting its money behind pre-fabricated homes.

The tech giant’s Alexa Fund was among the investors in Plant Prefab’s Series A funding round. The company, which manufactures custom single- and multifamily homes, raised $6.7 million, according to a statement.

The move comes as Amazon’s virtual assistant Alexa has expanded. There are now more than 20,000 Alexa-compatible smart home devices from 3,500 different brands, Paul Bernard, director of the Alexa Fund, said in the statement.

Plant Prefab was spun out of LivingHomes, a design and development company, in 2016. The company aims to build housing more sustainably and tackle the demand growth in urban markets. It has installed 26 units in California and Utah, and a multifamily project in Berkeley. Plant Prefab has a 62,000-square-foot facility in Rialto, California.

Last year, Amazon was selling prefabricated houses for between about $3,500 to $36,000 in different sizes and styles. One 244-square-foot cabin with a loft, for example, was going for about $19,000.

In May, Amazon announced a partnership with home builder Lennar. Under the deal, standard features in Lennar homes will include built-in Wi-Fi, smart locks, doorbells, thermostats and lights — all controlled by Alexa

Kris Jenner reportedly paid $12 million for a mansion in Coachella Valley. (Credit: Coldwell Banker, Getty Images)

It’s not easy to keep up with the Kardashians’ real estate deals.

The latest home purchase by a member of the reality-TV-and-social-media influencers was by Kris Jenner, who paid $12 million for a mansion in a country club development in Coachella Valley, Variety reported. The news comes three days after it was reported that one of Jenner’s daughters, Kylie, had sold one of her two homes in Hidden Hills for $6.7 million.

The sellers in Kris Jenner’s deal were developers Gala Asher and L.A.-based Coldwell Banker broker Ginger Glass, who was also the listing agent. They acquired the property in 2015 for $2.15 million. The original asking price was $15 million in June.

(Credit: Coldwell Banker)

According to the Desert Sun, it is the highest amount paid for a single-family home in Coachella Valley since 2016, when investor Ron Burkle paid $13 million for a property long owned by Bob Hope.

Jenner’s new one-story mansion includes more than 11,000 square feet of indoor living space and 3,500 square feet of outdoor living space. There are seven bedrooms, a spa and a 100-foot-long infinity edge pool.

(Credit: Coldwell Banker)

There’s no telling if Jenner actually plans to live in the mansion, especially with the family’s growing habit of flipping properties the past few years. The matriarch’s portfolio alone includes a Century City condo she bought in 2015 for $1.7 million and three condos in a Calabasas complex acquired in 2017 for more than $4.7 million. She also owns a Hidden Hills mansion. And last year, she paid more than $9.9 million for another home across the street from a 15,000-square-foot compound her daughter, Kim Kardashian, bought with husband Kanye West, in 2014 for $19.75 million. [Variety] – Gregory Cornfield

2217 West Sunset Boulevard in Echo Park

Dromy International Investment has been trying to build an apartment complex in Echo Park for the last decade.

With the economy having long since rebounded and with Echo Park development now surging, the Santa Monica firm is once again turning its attention to the property at 2217 W. Sunset Boulevard.

Dromy has requested the city verify the project’s tier status under the Transit-Oriented Communities program. The city measure awards incentives to projects located near mass transit and whose developers set aside a portion of the units as affordable. Dromy has not yet applied for that bonus, but wants to verify its tier level, from 1 to 4. The higher the tier, the more residential units the city would allow to be built. The Sunset Boulevard property appears to qualify for either a Tier 3 or 4. The property is near numerous bus lines.\

In the first 10 months of the TOC program  — from September to July — developers filed for more than 1,000 affordable units.

Dromy last planned a 62-unit project there two years ago.

The latest request suggests Dromy plans to either develop the property or sell it.

Dromy purchased the 0.35-acre lot for less than $1 million in 2009, and soon filed for a 64-unit project with 9,600 square feet of commercial space there.

The city approved it amid local opposition over traffic concerns, but Dromy didn’t move on it for another seven years. In 2016, it refiled for the 62-unit project with 10,000 square feet of retail space. Representatives for the family firm could not be reached for comment.

Kevin Garnett and his half-finished Malibu mansion (Credit: Getty Images, Hilton & Hyland)

NBA superstar Kevin Garnett was known as a finisher on the basketball court, but he’s bowing out early in Malibu.

The 42-year-old retired star is shopping a seven-acre property with a half-finished mansion in the beachside city for $19.9 million, according to the Los Angeles Times.

Listing photos show an 11,000-square-foot mansion under construction on the three-parcel property. The home is reportedly a year away from completion, with room for a buyer to customize portions of it.

The home has ocean views and sits across the Pacific Coast Highway from the Pacific Ocean. It also has a huge motor court, pool, and spa.

He purchased the property in 2003 for $6.4 million, the same year he won the NBA Most Valuable Player award while playing for the Minnesota Timberwolves. At the time, the property held a six-bedroom home.

L.A. is a popular destination for NBA players, even those like Garnett who have never played for either the Lakers or the Clippers.

Andrei Kirilenko owned a property in Bel Air before it was burned down in the Skirball fire in late 2017.  David Lee is another former NBA player with L.A. real estate — he’s shopping three condominiums at the Sierra Towers in West Hollywood for a combined $22.5 million.

And of course, LeBron James, who owns two homes in Brentwood, is now suiting up for the Lakers. [Los Angeles Times] — Dennis Lynch

Realogy CEO Ryan Schneider with a home on piles of cash (Credit: iStock)

Realogy is getting into the business of all-cash offers for sellers who want to shed their properties quickly, putting it in direct competition with Zillow’s Instant Offers and venture-backed Opendoor.

The real estate holding company announced that one of its subsidiaries, Coldwell Banker, will launch an all-cash program in Atlanta and Dallas starting next month, Inman reported. Coldwell might start offering the program in Tampa later this year, and Realogy could eventually expand the program to its other brands, which include Sotheby’s International Realty, Century 21, Corcoran Group and Better Homes and Gardens Real Estate.

Realogy’s “cataLIST Cash Offer” program is funded by Home Partners of America, which is backed by firms such as BlackRock and KKR. After the seller provides basic information about a property, cataLIST will come back with a cash offer usually within one business day. The seller has five days to consider the offer.

In the case of an accepted offer, cataLIST will charge a convenience fee.

Coldwell joins other so-called “iBuyer” companies, like OpenDoor and Zillow’s Instant Offers program, which provide similar all-cash offers. Coldwell agents will be actively involved in the process, a spokesperson for Home Partners of America told Inman.

“With many other cash-offer models, consumers lose that value and expert opinion that a real estate agent brings to the table,” the spokesperson said. “We see ourselves as different from those typical iBuyer models.” [Inman] — Kathryn Brenzel

Thomas L. Safran and the Thatcher Avenue site

A public-private partnership is moving forward with a scaled-back plan for an affordable housing complex in Venice.

The Department of City Planning accepted an application for the 98-unit updated version on Tuesday.

The developer, Thomas Safran & Associates, wants to build one- to three-story apartment buildings for seniors and families. The project is slated for 3311-3233 S. Thatcher Avenue, a vacant two-acre parcel of city-owned land known as Thatcher Yard.

The low-slung design was in response to community concerns that a tall complex would change the area’s single-family home character, according to Venice Update, a local blog. Thomas Safran first revealed plans for the updated version in December 2017.

A group called Oxford Triangle Association formed to oppose an earlier version of the project, which called for 150 units. The revised plan has the support of a City Council member Mike Bonin.

The city tapped Thomas Safran to redevelop the site in late 2016. It once housed city-owned street maintenance equipment used in the area.

The Brentwood developer builds both market-rate and affordable projects and manages 61 properties in the L.A. area. It’s working on a 68-unit affordable senior living facility in Hollywood.

Federal Reserve Chairman Jerome Powell and the Federal Reserve headquarters in Washington, D.C.

The Federal Reserve raised interest rates on Wednesday to between 2 and 2.5 percent, a move that is expected to push up the cost of borrowing for commercial and residential loans.

The 0.25 percent hike is the third so far this year, following raises in March and June. The Fed opted not to increase rates in August, which gave watchers another reason to expect one this month.

The Fed noted that inflation has remained near its 2 percent objective. It expects to gradually raise interest rates “consistent with sustained expansion of economic activity, strong labor market conditions,” and inflation.

Interest rate hikes have sped up under Chairman Jerome Powell in response to a robust economy, which will help curb inflation.

The Fed also released economic projections on Wednesday. It raised its projected gross domestic product growth for this year to 3.1 percent from the 2.8 percent it projected in June. It also raised its projection for growth in 2019 to 2.5 percent from 2.4 percent. It also expects the unemployment rate to drop from a projected 3.7 percent this year to 3.5 percent next year.

President Donald Trump said he was “not thrilled” with the rising rates last month during a fundraiser at developer Howard Lorber’s Southampton mansion.

The Fed was expected to raise rates three times this year, but earlier this year signaled there will be four hikes, which means another is likely coming by the end of December.

Tishman Speyer’s Rob Speyer and 600 Fifth Avenue (Credit: Getty Images, Google Maps, and Tishman Speyer)

We-who?

Tishman Speyer, one of the world’s biggest private landlords, is launching its own co-working brand, putting it in direct competition with a host of venture-backed startups such as WeWork and Knotel.

The new brand, dubbed Studio, will launch November 1 at Tishman’s 600 Fifth Avenue, the New York Post reported. Studio will take 35,000 square feet on the tower’s second floor. The developer plans to expand the brand to its other buildings and will next launch in Chicago, Beverly Hills, Boston, Washington D.C. and Germany.

Prices range from $450 per month for a flex desk to $22,500 for 30 desks. “Having our own brand and running it ourselves enables us to serve our tenants in a more bespoke way,” a Tishman spokesperson told the newspaper.

Tishman already has a significant co-working presence in it buildings. Earlier this month, Spaces inked a lease for 110,000 square feet at its Chrysler Building — the co-working company’s largest New York City location to date. WeWork is taking 250,000 square feet at Tishman’s new Long Island City office and retail complex, the JACX.

Other major landlords have made their own forays into own co-working brands. Silverstein Properties, for examples, operates “Silver Suites” at 7 World Trade Center and 4 WTC. [NYP] — Kathryn Brenzel

The Real Deal Century City Forum

The force fueling consolidation in the commercial real estate industry has little to do with the current cycle. Now, something else is happening.

The ultra competitive environment, coupled with new technology and more available capital, has pushed companies to scale up fast. That can be seen in the level of consolidation industry-wide, which has surpassed the 2007 record by more than 25 percent.

“If you look back 100 years, usually at the end of a cycle, there’s a big uptick in mergers and acquisitions,” said Ralph McLaughlin, founder of Veritas Urbis Economics. While that is the case today, the panelists agreed that current market dynamics don’t tell the whole story.

McLaughlin was among a panel of speakers who gathered for The Real Deal’s Century City showcase on Wednesday, there to discuss how big data, consolidation and IPOs will shape the industry in the 21st century.

“The dynamics of this business have changed a lot,” said Pat McRoskey, managing director at CBRE, who on the panel. McRoskey, who started off his career by cold-calling for business, said the industry will start seeing far fewer family-run and mom-and-pop shops.

“You’re going to see bigger companies getting bigger and smaller companies getting absorbed,” he added.

Jeff Rinkov, CEO of Lee & Associates, said commercial real estate is now in an “environment where capital is chasing transactional volume.” That has been a catalyst for his firm to expand, he said. That expansion could now include Canada and “opportunities in Mexico,” he added.

The poster-child for rapid expansion in the commercial real estate industry may very well be Compass. The venture-capital behemoth has recently expanded into the commercial end through its acquisition of Paragon and most recently, Pacific Union International.

But as Compass digs deeper into commercial, traditional commercial brokerages are flirting with residential. Konrad Putzier, senior reporter at TRD and the panel moderator, posed that question, as a possible trend.

But it may not fit everywhere.

“We don’t have aspirations of becoming a crossover company,” said Rinkov, who recently launched a residential division in his firm’s New York office. But, he added, New York is a “unique case.” He doesn’t see the company becoming what he called, “resimertial.”

Within the last year, two commercial giants, Cushman & Wakefield and Newmark Knight Frank, went public. Some speculate Compass, on a nationwide tear, might be next. Elizabeth Clark, who joined Pacific Union in May, and had been at BRC Advisors, said she’s heard rumblings that her new firm might do the same. To her, however, it doesn’t make a difference.

“We’re so insulated in our business that I don’t think it will affect us in a negative way,” she said.

But going public isn’t in everyone’s future.

“I never wish I was a public company,” Rinkov said. “We’re transactional brokers. I would not want to report to an investor group or conference call each quarter.”

In addition to mergers and IPOs, perhaps the biggest impact on the industry has been big data, which has forced companies to retool in recent years with the additions of Zillow, Trulia, CoStar and others.

But unlike residential, there is still “a long way to go” for data on the commercial side to make a big impact, said McLaughlin, a former economist at Trulia. On the commercial side, it needs to be more “value-add” he said, than on the residential side, where the typical consumer might be less informed.

“The next level of data is predictive analysis,” Rinkov said. His firm is already eyeing transit plans and government investment as a way to spot “real catalysts and drivers” fueling new neighborhoods.  He added that the firm won’t pivot to become a tech company. It will, however, “buy great technology.”

Still, IPOs and technology aren’t panaceas.

“I think it’s just going to complement our business as opposed to taking over our business,” said Clark. Knowing the zoning codes, or the future plans of an abandoned house down the street, are more “irreplaceable data points in the business.”

And nothing replaces the “human factor,” McRoskey said. “Many people have same data — it’s way you market and present it. I think that human factor has a lot to do with it.”

(Illustration by André Da Loba)

There’s an eyebrow-raising issue playing out in the private equity world right now. While funds have pulled back on the amount of money they’re pouring into real estate deals, they’re also looking to raise more money than ever for new deals. 

And those fundraising efforts come on top of a record amount of dry powder already sitting on the sidelines. Private equity research firm Preqin pegged that dry- powder figure at a record $278 billion at the end of June.

Meanwhile, the opportunistic deals that many funds are searching for are still rare, property valuations are high, competition is stiff and interest rates are rising.

“All this capital’s been raised, and now it’s potentially a sort of tricky time to put it to work,” said Tom Carr, head of Preqin’s real estate group.

And the numbers are starting to reflect that skittishness.

Real estate deal volume among private equity firms declined in 2018’s first two quarters following a peak at the end of 2017, according to Preqin. That marks the first time since at least the beginning of 2010 that the number of transactions fell for two consecutive quarters.

Nonetheless, funds are aggressively hunting for even more cash.

In July, there were 624 investment vehicles looking to raise a record $206 billion.

And since funds have been so active in selling assets over the past several quarters, they’ve been redistributing the proceeds from those sales back to investors, Carr said.

That means that those investors, who are still eager to deploy their capital, are in play for other funds.

“You always sort of get the impression that if investors are willing to put money in, then managers will be willing to raise,” said Carr.

However, he added that funds could increasingly branch out to different regions or segments of the market in their quest for stronger returns.

“In certain areas it’s definitely very competitive,” he said.

Rethinking risk

The biggest chunk of private equity money in real estate has long targeted opportunistic, high-risk investments with big payoffs — often for fix-and-flip properties.

In July, opportunity funds held about $108 billion in capital — or 40 percent of all the private equity money earmarked for real estate. That was the largest percent of the dry-powder pie.

But investors are starting to show signs that they have less of a stomach for those kinds of deals.

That’s partly because those opportunistic investments tend to do better during the earlier, high-growth times of the real estate cycle, experts said. In New York, that time was in the early years of the recovery starting in 2010, and is now a distant memory.

Toward the end of a cycle — which many economists have long predicted the New York market is already in — less-volatile investments with guaranteed revenue streams (such as fully leased office buildings with at-market rents) tend to attract more investors.

Sources say that the private equity world is also roiling now because too much money has been allocated to opportunistic funds during this cycle. Since the deep correction those funds were banking on has yet to come, there is a massive shortage of those deals to go around.

“I would imagine that certain groups tried to get ahead of the potential downward trajectory,” with the goal of investing in opportunistic assets when the market started falling, said Mo Beler, head of investment sales in New York for JLL.

But, he noted, “that simply has not yet occurred in New York.”

Beler said that of the about 40 Manhattan office buildings on the market, only seven could be considered value-add investments.

With these deals so few and far between, private equity funds are starting to rethink their strategies. 

During the second quarter, funds seeking value-add investments — a notch below opportunistic investments in terms of risk — dominated on the fundraising front. They pulled in nearly half of the $22.4 billion raised during the quarter.

And managers are increasingly raising funds focused on debt, a space many investors are turning to as a risk-adjusted alternative to pricey equity stakes.

For example, the Midtown-based Cerberus Real Estate Capital Management and TCI Real Estate Partners — the property arm of London’s Children’s Investment Fund — are raising some of the biggest funds in the market at $4 billion and $3 billion, respectively.

Blackstone president and COO Jonathan Gray

Meanwhile, GreenOak Real Estate closed a $1.55 billion value-add fund in the second quarter. It’s the third private equity fund for the firm, which was founded in 2010 by a trio of former Morgan Stanley real estate executives.

Over the past two years, GreenOak has been more of a seller than a buyer, but now it’s changing its ways as it’s finding more reasonably priced deals. And the company is looking beyond its core markets, mainly in New York and San Francisco, to places such as Seattle and Washington, D.C.

The new fund has already made two New York investments. The first is the 464-unit Biltmore rental at 271 West 47th Street, which it picked up with Slate Property Group for more than $250 million. The second is the Gansevoort Park Avenue hotel — which it bought with Highgate Hotels for $200 million and has rebranded as the Royalton Park Avenue.

In May, GreenOak partner Sonny Kalsi told Bloomberg that he sees hotels as an area of opportunity in New York.

“We had been nervous about oversupply in New York but now feel like the market is close to or at the bottom and that there are pockets of good value,” he said.

Small, but mighty

With so many funds looking for investors, competition is intense. But capital is increasingly concentrated among fewer firms.

“The bigger guys are raising more money, and a lot of smaller guys are not raising what they were able to,” said Michael Rotchford, co-head of the capital markets group at Savills Studley. “Pension funds and other institutional investors continue to sharpen their focus on the number of managers they want to have at any given point in time.”

Meanwhile, institutional investors — such as insurance companies and sovereign wealth funds — have for some time been limiting the number of funds they work with as a way to keep fees down. That’s shifted the balance of power from funds to investors, who have more leverage when it comes to negotiating fees and other terms.

But while larger funds may be having an easier time raising money, bigger is not always better for real estate private equity — at least on a dollar-for-dollar basis.

Major private equity players, including the Blackstone Group, Lone Star Funds and Brookfield Property Group, have several billion dollars at their disposal at any given time. But the smaller funds actually tend to generate better returns.

Of the 44 consistently top-performing fund managers tracked by Preqin, only one — OakTree Capital Management — appears on the company’s list of the 10 largest fund managers.

Smaller companies such as the Philadelphia-based Arden Group — which launched its private equity fund business in 2012 — regularly rank in the top tier of managers.

Here in New York, Arden signed a contract in July to buy the Viceroy Hotel on Billionaires’ Row for $41 million from the now-liquidated New York REIT — a steal compared to the $149 million the seller purchased it for in 2013.

And last year, Arden launched its first debt vehicle: a $300 million fund that in May provided a $34 million condo inventory loan to JDS Development Group’s 613 Baltic Street in Brooklyn.

Other top-performing funds include TH Real Estate — the property arm of the mega asset manager TIAA — which is now unloading assets in New York. The company is shopping its 49 percent stakes in 470 Park Avenue South and 8 Spruce Street, as well as the Midtown office property at 730 Third Avenue.

Blackstone, meanwhile, is currently investing its eighth real estate private equity fund — a $16 billion opportunistic vehicle launched in 2015.

But the company, the world’s largest real estate private equity fund manager, is looking overseas amid concerns about interest rates in the United States.

Blackstone president and COO Jonathan Gray told CNBC in July that interest rates are “one of the headwinds here in the United States” compared to Europe, where they are expected to stay lower longer.

“We found the investment environment, on balance, a little bit better,” in Europe, despite the fact that U.S. economic growth is stronger, Gray said.

On a July earnings call, Gray also said the company is getting ready to launch its newest global real estate fund, which could close by the end of the year.

A spokesperson for Blackstone declined to comment further.

But investors, especially those in high-risk opportunistic funds, have been asking for vehicles with longer life spans.

Tim Bodner, head of the real estate private equity group at PricewaterhouseCoopers, said investors are trying to figure out what to do with the capital that’s been returned to them.

“To some degree, it’s hard to reinvest that capital and get the same level of return they may have gotten on a prior fund,” Bodner said. “Having that capital tied up for a longer period of time means a lower return, but it takes away some of the risk of having to reinvest it.”

There may also be larger systemic changes that could shake up the way investors and managers are allocating dollars.

David Eyzenberg, founder of the Manhattan-based commercial real estate investment-banking firm Eyzenberg & Company, predicted an increase in demand for safer investments because of broader demographic changes.

As baby boomers retire and the defined-pension plans that they draw down from look to invest more money, Eyzenberg said investors will be less concerned with monster returns and more interested in stabilized properties that produce what’s akin to a stock dividend. “It’s not about me getting a pop on my money. I can do that buying Apple or Amazon,” he said. “What I need is a current return.”

“There’s probably a lot more demand from investors on a global basis — from the grandmother in Ohio to the sovereign in Dubai,” he added. “They want stable, current returns. And there’s probably much higher demand for that, and that’s probably where a lot of that money is going to be going.”

Julien Smith (Credit: Bryan Hill Media via inoveryourhead)

The co-founder and CEO of Breather has left the short-term space rental startup just months after it raised $45 million in a funding round, The Real Deal has learned.

Julien Smith, who started the Montreal-based company in 2012 along with Caterina Rizzi, is no longer at the firm, the company confirmed Wednesday. He will stay on as chairman of the board.

“As I reflect on my strengths and consider what it will take for the company to reach its full potential, I realize bringing on an executive with experience scaling a company through the next level of growth is the best thing for the business,” Smith said in a statement.

Breather rents out rooms in commercial properties and offers short-term private space rentals, where individuals and business can book spaces for meetings or as offices.

During Smith’s tenure, the firm grew to over 500 spaces in 10 cities, including New York, Chicago, London and Toronto and raised nearly $120 million in venture funding.

Its most recent funding round in June raised $45 million from the likes of Menlo Ventures, and Caisse de dépôt et placement du Québec, parent company of real estate investment firm Ivanhoe Cambridge.

Before he founded Breather, Smith co-wrote a popular book about digital influencers called “Trust Agents.”

CoreLogic analyst Andrew LePage and Van Nuys

Southern California saw the slowest summer for home sales in four years.

June to August sales fell 6.8 percent year over year in the SoCal area, according to a new CoreLogic report. That covers Los Angeles, Orange, Riverside, San Bernardino, San Diego, and Ventura counties.

The slowdown was unusual. Year-over-year summertime sales have fallen just five times in the last 20 years, said Andrew LePage, a CoreLogic analyst. He pegged the slowdown on a lack of affordable inventory. Year-over-year sales in SoCal below $500,000 fell by 17.8 percent.

“The drop in affordability is the result of both price hikes and a significant rise in mortgage interest rates this year,” he said, adding that the monthly mortgage rate on a median-priced home jumped 16 percent since a year ago.

In L.A., exactly 700 fewer homes sold in August compared to a year earlier — an 8.5 percent drop in sales. Prices have continued to push up. The median sales price in August was $615,000, or 7 percent higher than in August 2017. While the lower ends of the market have seen a softening, the higher end of the market has continued to hold strong.

Some 7,497 homes sold in L.A. County last month, CoreLogic said. That was down year-over-year, but was 1.2 percent higher than July sales.

Rising interest rates have some buyers scrambling to buy now to lock in a lower rate. Interest rates are expected to climb in the near future thanks to hikes in the federal benchmarket lending rate.

CoreLogic released their report the same day that the Federal Reserve voted to hike the benchmark rate by another quarter-percentage point to between 2 and 2.5 percent. Federal officials cite a strong economy as a reason to raise rates, as higher rates help curb inflation.

The Real Deal Century City Forum

Real estate leaders throughout the country have been bracing for a “retail apocalypse,” as brick-and-mortar locations continue to crumble amid the rapid spread of online shopping.

In Los Angeles, a strong tech and entertainment economy is buffering the retail sector from a major meltdown, commercial brokers said Wednesday. But the rapid shift to online shopping is forcing them to re-calibrate their expectations for big retail leases — and to scramble to make up for the shortfall.

“We’re still getting deals done but there are less of them happening,” Jay Luchs, a broker with Newmark Knight Frank, said at The Real Deal’s real estate forum on Wednesday at Creative Artists Agency’s headquarters in Century City.

Luchs, who has reportedly been involved in a few recent record-setting retail property sales in Beverly Hills, said that the shifting retail landscape has made it more common for major brands to buy space and “control their own destiny,” instead of worrying about increased rents or disagreements with landlords when leases come up for renewal.

“Rodeo Drive is probably better off than it ever has been, but there’s also just not a lot of opportunity there,” he said.

Luchs said his team has experienced a fall-off in retail leasing, likening the shift to dramatic changes in industries like music sales. “The Amazon stories are real,” Luchs said. “Online is real, and it’s changing our business without a doubt.”

L.A. has seen its share of major industry changes resulting from the retail shift, like the owners of the Westside Pavilion mall planning to convert 500,000 square feet into an office park.

Still, Elizabeth Clark, a broker at Pacific Union, said that fears of an apocalypse were overblown. L.A. “is not seeing a real scare in the marketplace,” she said. “We’re still seeing tenants come out of the woodwork.”

L.A.’s experience has been somewhat different than other parts of the country, the panelists said, in part because of its thriving tech economy. The birth of Silicon Beach has helped offset the downswing from places like Robertson Boulevard, where retail activity fell off dramatically in the wake of the 2008 financial collapse. (Luchs said that recently Robertson has seen falling vacancy rates and is beginning to thrive once more.)

Owen Fileti, a broker with LA Realty Partners, called L.A.’s booming tech economy the “fourth industrial revolution.”

A slew of major tech firms, including Facebook and Google, are pushing forward with plans to lease more commercial and office space in the South Bay of L.A., which includes Santa Monica and Playa Vista. Google is wrapping up the transformation of the Spruce Goose, which will become the tech firm’s new Silicon Beach headquarters.

Fileti said there are a few additional 100,000-square-foot deals coming to Los Angeles from major companies in Silicon Valley over the next few months. He declined to provide more details.

“San Francisco really started to price people out, so they are more often considering coming to Los Angeles,” he said. “We had four blockchain leases just this year. Last year, we had none.”

Fileti said Santa Monica continues to “reign supreme for tech,” but the boom is extending into other parts of West L.A. and Culver City, and even Hollywood.

The demand for office space amid the tech boom introduced Los Angeles to the co-working phenomenon. The modern work spaces and short-term leases have impacted the market. But Bryan Witkow, with the Tenant Group, argued the phenomenon has created an overabundance of such spaces.

“What’s going to happen to these places in a downturn?” Witkow said. “Where are all these mom-and-pop type companies filling WeWork spots going to go? Something is going to have to give when that happens.”

704! That’s the new, record-high average FICO credit score among millions of Americans, and it’s positive news for home buyers, sellers, lenders and the economy overall.

What it signifies, according to Ethan Dornhelm, FICO’s vice president of scores and analytics, is that 10 years out from the housing bust and the global financial crisis, Americans are “making more judicious use of credit.” They’re using less than the maximum amount of credit available to them, paying their monthly mortgages on time, and exhibiting fewer glaring negatives in their credit-bureau files.

FICO scores predict the probability that a borrower will default on a loan. They run from 300 — indicating that the individual is extremely high risk — to 850, meaning almost no risk of default. A score of 704 is considered good and, along with other favorable factors in your application, will help get you approved for a mortgage — though not necessarily at the lowest interest rate and fees available. A score of 750 will get you primo rates and terms, but a 450 will probably get your application tossed. In the mortgage arena, FICO scores are used by virtually all lenders, and are the only scores that mega-investors Fannie Mae and Freddie Mac accept. They are also used extensively for credit card, auto loan and other loan applications.

FICO periodically studies a 10-million-person sample of the 200 million-plus consumers whose credit histories are on file at the three national credit bureaus. In 2009, the average score of consumers nationwide was 686. Since then, average scores have been improving gradually along with the economy, lower unemployment and rising incomes. The 5-point increase from 699 in 2016 to 704 this year is one of the largest two-year improvements on record.

A few noteworthy trends jump out of FICO’s latest data on Americans’ scores:

— Age matters. Young people 18 to 29 tend to have lower scores than other age groups — they score an average 659. Part of the reason may be that many of them have so-called “thin” files with relatively few credit accounts or transactions in their histories. When they fail to make payments or pay late on a credit card, the event weighs more heavily on their score than it would if they had longer histories with more accounts. The average score for people ages 40 to 49 is 690, and for seniors 60 and older it’s 747.

— Fewer people are hobbled with collection accounts. When you don’t pay back what you borrowed, your lender may hire third-party collectors to track you down. That gets reported to the credit bureaus and can depress your FICO score for years. Twenty-eight percent of all Americans had collection accounts on their credit files in 2015; today it’s just 23 percent.

— Rock-bottom FICO scores are fewer. In 2009, 7.3 percent of American consumers had terrible scores, ranging between 300 and 499. Now that’s down to 4.2 percent. In 2009, 8.7 percent of consumers scored between 500 and 549; today it’s down to 6.8 percent. Overall, fewer Americans now have FICO scores below 650 than in previous years. In 2009, just under 35 percent of consumers scored 649 or less; today it’s 28.7 percent.

— Super scorers are increasing. A record number of Americans — nearly 22 percent, more than one of every five — now have FICO scores of 800 and higher. Forty-two percent score between 750 and 850.

— Mortgage borrowers’ scores are dropping. Though FICO scores for most categories of consumers are up, average scores for people taking out home mortgages are sliding in the opposite direction. In 2009 and 2013, borrowers had average scores of 745; now they’re down to around 733. This may seem odd, but FICO says it shows that lenders are relaxing their approval standards slightly to include a broader range of borrowers — people with thin files, dings in their credit histories and higher debt-to-income ratios. Think millennial first-time buyers and people who hit a rough patch during the Great Recession.

What to make of the latest FICO numbers? Lessons learned from the housing bust and the recession clearly are having impacts on consumers’ scores and behavior. Dornhelm believes that more Americans have access to — and understand — their credit scores better than in previous years, and they’re avoiding doing things that can depress them, such as maxing out on credit cards.

If you’re smart, you’ve been doing the same.

Nike CEO Mark Parker and a rendering of 5860 Jefferson Boulevard

Nike to Culver City landlord: Just do it.

The Oregon sportswear brand sued Samitaur Constructs earlier this month seeking $1 million in damages for failing to complete construction of an office space at a Samitaur-owned building in Culver City.

Nike says that its lease with Samitaur stated that the construction firm would complete the space at 5860 Jefferson Boulevard by December 2017. But Nike says the property still isn’t suitable for occupancy.

The suit was filed in Los Angeles County Superior Court on September 18. Nike is suing both Samitaur directly and 5860 Jefferson Boulevard LLC, the entity that controls the building.

Frequent collaborator Eric Owens Moss Architects designed the 49,000-square-foot building. Marketing materials describe it as a “development by” Samitaur.

Nike claims it’s losing out on business. Along with $1 million in damages, the sportswear maker is demanding a period of free rent to be determined by a judge. It also wants Samitaur to complete the space at its own expense.

Nike’s attorneys and Samitaur did not return calls requesting comment.

Nike alleges the space “presently suffers from numerous incomplete and/or defective aspects of construction” including incomplete and unsafe staircases, incorrectly built floor slabs, incomplete staining and painting, and missing bathroom fixtures.

Nike signed a lease for the unbuilt space with Samitaur and the LLC in April 2016. Construction started in August 2017, according to Urbanize.

The lease stipulated that Samitaur would complete the space in a timely manner.

The building on Jefferson Boulevard is near Samitaur’s distinctive (W)rapper building, which is architecturally unique. It is a narrow warehouse-like building with a ground floor and a mezzanine area that runs its length. It also features large metal bifold doors and skylights.

Monthly rents were advertised at $3.60 per square foot.

Samitaur and Eric Owens Moss Architects are major developers in Culver City, particularly in the Hayden Tract area. They are known for their creative, twisting office buildings.

San Bernardino County had $138.17 billion in total retail sales last year, and is currently at record low unemployment (Credit: Wikimedia Commons)

With land still readily available, retail continues to thrive in San Bernardino County, where there has been an increasing number of jobs and housing units, and a surge of young people to fill them.

According to recent reports from CBRE, San Bernardino County posted 162,395 square feet of positive retail absorption in the second quarter of 2018, the newsletter Inlandempire.us reported.

By comparison, the Greater Los Angeles area posted a negative retail absorption rate over the same period, with a loss of 182,971 square feet.

No major shopping centers were completed during this period in the Greater Los Angeles area, although 609,000 square feet remained in the construction phase. Despite a fair amount of retail space coming back onto the market, vacancy in Greater Los Angeles remained static at 5 percent, according to CBRE.

Absorption is calculated by the estimated sum of space occupied and vacated.

Greater Los Angeles’ average asking lease rate also dropped to $2.49 per square foot, a minor decrease of 1.2 percent compared to the same period in 2017.

Meanwhile, San Bernardino County posted $138.17 billion in total retail sales in 2017, and currently has record low unemployment.

Ryan Gast, a senior associate for CBRE, said San Bernardino is on the upswing because of the amount of available land in the county.

There’s more on its way for San Bernardino, as big projects are expected to be completed in the final quarter this year. That includes the Soboba Casino in San Jacinto. The renovated complex will feature an 83,500-square-foot casino floor with 2,000 slot machines and 24 table games. The property will include bars, restaurants and other amenities in addition to a 200-key hotel. [Inlandempire.us] – Gregory Cornfield