The new Coffee Bean & Tea Leaf headquarters, at nearly 220,000 square feet, is slated for a vacant lot at 6000 W. Jefferson Blvd. (Credit: City of Los Angeles)

Big plans have percolated for a new Coffee Bean & Tea Leaf headquarters in Baldwin Hills.

The Los Angeles-based coffee shop chain is planning to leave its offices in Miracle Mile and set up near the Expo Line, UrbanizeLA reported. At nearly 220,000 square feet, the new facility is slated for a vacant 3.6-acre lot at 6000 W. Jefferson Blvd.

While a new beginning for Coffee Bean, the move will be a blow to Tishman Speyer, the commercial developer. Coffee Bean has been headquartered at the Wilshire Courtyard complex since 2015. In September, Tishman Speyer put the 1-million square-foot campus up for sale, after E! Entertainment Television terminated its nearly 400,000-square-foot lease there, leaving the facility 60 percent occupied.

The coffee shop chain’s new headquarters will feature two buildings – a three-story structure fronting Jefferson and a six-story building at the rear.

The six-story building will contain 90,000 square feet of office space. The smaller building will have almost 54,000 square feet of manufacturing space for coffee roasting, and nearly 51,000 square feet of warehouse space.

The plan also calls for a 2,200-square-foot drive-thru Coffee Bean toward the front, with 828 parking spaces on a surface lot and a five-level, subterranean garage.

Construction is expected to begin Jan. 19 and take just under three years to complete.

Coffee Bean bought the land from the city, which used it for vehicle and container storage for about 12 years. It is near Metro’s Expo Line, Culver City and the Hayden Tract, which has been transformed into a hub for tech firms.

The Expo Line has spurred other investment, including the 12-acre Cumulus development, which will bring more than 1,200 apartments near the La Cienega/Jefferson station. [Urbanize] – Gregory Cornfield

The Michaels Organization CEO Michael J. Levitt and the recently completed first phase of the Jordan Downs redevelopment

The second phase of a massive redevelopment of the Jordan Downs public housing community in Watts neighborhood of South Los Angeles has begun.

Construction has begun on 135 apartments spread over a six-block area, according to Urbanize. The $73 million project is part of a larger $1 billion, 1,400-unit redevelopment of the neighborhood, which will include a retail component , a community center, and nine acres of green space.

The larger redevelopment would double the number of existing units in Jordan Downs, a planned semi-permanent community built during World War II, and which fell into neglect over the following decades. The project is meant to attract a mix of tenants at varying income levels.

The Michaels Organization and BRIDGE Housing are leading the latest development phase. SVA Architects is designing the larger redevelopment.

South L.A. has seen a handful of smaller affordable construction over the last several months, but the Jordan Downs project is by far the largest.

All of the 135 units — which are one to five bedrooms — will be priced for tenants making below 60 percent of area median income, meaning rents will be between $507 and $1,307 per month. All units will be subsidized with Section 8 federal funds.

Renters and buyers in Los Angeles are struggling in one of the least affordable markets in history.

The first phase of the Jordan Downs project included construction 115 units and extending Century Boulevard. The redevelopment was approved in 2016 after being held up over concerns about ground contamination. 

The project received some state funds in January, but is also funded with $25 million in private equity and $32 million in bonds. [Urbanize] — Dennis Lynch 

Chris Van Hollen and Sheldon Whitehouse(Credit: Ervins Strauhmanis via Flickr)

The risk of money laundering in residential real estate is high.

That’s according to two U.S. senators who are calling for an investigation to probe the potential vulnerabilities of existing U.S. money-laundering provisions, according to the Wall Street Journal.

Chris Van Hollen of Maryland and Sheldon Whitehouse of Rhode Island, both Democrats, sent a letter to the Government Accountability Office, saying the real estate sector has less far oversight when it comes to money laundering than the lending sector.

That fact, they wrote, presents “increased risk of access by foreign and domestic criminal organizations,” the Journal reported.

In South Florida, federal authorities are looking to seize 16 high-end properties that are alleged to be tied to the defendants of a $1.2 billion Venezuelan money laundering case.

The letter comes a day after a sweeping New York Times investigation found that President Donald Trump and his family engaged in a series of elaborate schemes — including some that could be illegal — to avoid paying taxes on the family’s vast real estate empire. 

The lawmakers’ request includes an assessment of the Department of Treasury’s Financial Crimes Enforcement Network, or FinCEN.

In 2016, it began requiring title insurance companies to report the identities of individuals behind all-cash buys in vulnerable locales like Miami.

Lawmakers are moving to expand that program from just a handful of U.S. cities to all stateside transactions. 

A letter from the senators asks how FinCEN has used the data to help fight money laundering. Political infighting has hampered efforts to crack down on money laundering in the U.S., even with the new FinCEN reporting requirements in place. [WSJ] – Dennis Lynch

David and Victoria Beckham sold their Beverly Hills home for $33.1 million (Credit: Getty Images, iStock)

Soccer champion David Beckham and former pop superstar Victoria Beckham are on the move.

The celebrity couple sold their home in Beverly Hills for $33.1 million, the Los Angeles Time reported. The buyer is a limited liability company.

The Beckhams lived in the one-story, H-shaped estate for about a decade. They purchased it for $22 million about five months after David signed a five-year contract to play for the L.A. Galaxy.

The Italian villa-style home was designed by Tim Morrison and built as a spec home in 2007. It has more than 13,000 square feet of living space, with nine bedrooms, a library, elevator and media room.

The soccer icon has been busier in Miami than Los Angeles the past few years. He is looking for a site for a Major League Soccer stadium in Miami. Beckham and his partners will be asking residents there to approve their latest proposal at the ballot box later this year. [LAT] – Gregory Cornfield

JLL Retail of Americas CEO Greg Maloney and a Toys “R” Us store (Credit: Getty Images and Wikipedia)

Raider Hill Advisors has hired JLL to manage 275 former Toys “R” Us stores across the country as the bankrupt retailer continues to sell off its entire portfolio. Even amid the orderly liquidation, the New York company’s stakeholders have plans of their own for the brand.

JLL will handle retail and facility management, tenant coordination, construction, accounting and tax services for the properties, according to Commercial Observer. JLL CEO Greg Maloney said his firm would “support Raider Hill Advisors on their operational ambitions, tenant relationship building program, and the identification of future value enhancing opportunities.”

The announcement comes a day after news that a group of stakeholders in Toys “R” Us are devising a plan to relaunch the retail brand as a toy wholesaler. A planned auction of the rights to the company’s name was canceled.

Toys “R” Us hired Raider Hill Advisors in July to help sell off its real estate assets, four months after announcing it would shutter all of its stores following bankruptcy. The retailer had been battered by the e-commerce industry.

While JLL is only managing retail properties, the former toy giant’s portfolio is not only former Toys “R” Us and Babies “R” Us retail locations — it includes large distribution centers and the company’s 585,000-square-foot headquarters in Wayne, New Jersey.

About 500 of the properties are leased from numerous landlords, which makes JLL’s job no small task. The real estate industry is watching closely what happens with the stores. [Commercial Observer] – Dennis Lynch 

Did you miss The Real Deal LA’s Commercial Real Estate Showcase & Forum last week? Not to worry, we have a sneak peek above, and subscribers will have access to videos of the full panels next week.

Our star line-up of panelists included: Jay Luchs, NKF; Owen Fileti, LA Realty Partners; Jeff Rinkov, Lee & Associates; Elizabeth Clark, Pacific Union/Compass; Pat McRoskey, CBRE; Bryan Witkow, The Tenant Group; and Ralph McLaughlin, Veritas Urbis Economics (formerly chief economist at Trulia).

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Stay tuned for the full panel videos next week!

Paula Thorby (Credit: Pixabay)

A former recruiter for Cushman & Wakefield claims that after repeatedly being promised a permanent position at the brokerage she was snubbed for a job because she became pregnant.

Paula Thorby on Wednesday filed a lawsuit against her former firm, alleging that she was passed over for promotion earlier this year shortly after notifying her bosses of her pregnancy. After complaining about such discrimination, Thorby was fired, the lawsuit claims.

Representatives for Cushman declined to comment. The lawsuit also named as defendants Danielle Dutcher, Cushman’s manager of talent acquisition;  and Stanley Telford, vice president of talent acquisition.

Thorby started working for Cushman as a temporary recruiter in April 2013 and accepted a permanent role in September 2014, according to the lawsuit. She briefly left in March 2016 to take another job but then returned three months later.

At the time, Cushman didn’t have any open permanent positions, but the firm repeatedly assured Thorby that she’d eventually transition back into a full-time role, the lawsuit claims. The firm’s treatment of Thorby allegedly started to change soon after she notified her bosses that she was pregnant.

She informed Dutcher, Cushman’s manager of talent acquisition and recruiting, that she was pregnant in October 2017 to which Dutcher “inappropriately” replied: “When are you due?” according to the lawsuit. Dutcher then instructed Thorby to come into the office three to four times a week, a demand that wasn’t made of the other recruiters who all continued to work remotely, the complaint states.

Still, when a permanent senior recruiter position became available, Thorby was allegedly told that she was the only candidate being considered for the job. She went through three rounds of interviews for the position, but on the third, two of the interviewers abruptly canceled, according to the complaint. Thorby remained confident that she’d be offered the job, due to her experience and the assurances of her bosses.

In January of this year, Thorby was diagnosed with placenta previa, meaning that she was a high-risk pregnancy and would need to temporarily go on disability, according to the lawsuit. Thorby informed Dutcher of her condition on January 2, and the next day, she received a call saying that Cushman decided to hire an external candidate for the senior recruiter role. She was told that she’d maintain her current role “indefinitely.” She was also allegedly reassigned to focus on interns and entry-level positions, considered a demotion since Thorby had previously recruited mid- to senior-level positions.

Thorby complained to the firm that she felt her treatment was a form of discrimination, but Cushman officials ultimately determined on January 11 that “no wrongdoing” had occurred, according to the complaint. The next day, January 12, Thorby was informed that her temporary role would come to an end by the end of the year. An attorney for Thorby, Rachel Allen, indicated that Cushman has since set that date for October 9.

Thorby filed a complaint with the Equal Employment Opportunity Commission in February 2018 and received the go-ahead from the agency to file a lawsuit in August.

Last month, Cushman was hit with a separate discrimination lawsuit by a former executive who claimed that her career was held back due to her race and gender. An analysis done by The Real Deal earlier this year showed that women accounted for only 21 percent of Cushman’s workforce in New York City.

Clockwise from top left: Jeeb O’Reilly, Jeffrey Cole, Rob Rubano, Chris Johnson, and Jeremy Burton.

Jeeb O’Reilly and team jumped ship for Aaron Kirman’s team at Pacific Union International. The move puts O’Reilly and her team back under the umbrella of Compass, which bought Pacific Union in late August. The team returned to Elliman from Compass in early 2017, two years after leaving Elliman for the venture-backed firm.

Just as O’Reilly’s team leaves, Douglas Elliman is bringing in new blood to help expand their L.A. business. The company hired Paige Gordon as executive manager of sales at its Malibu office and Bradley Feldman at the same position for its South Orange County offices, according to a press release. Gordon comes from Agents of L.A., a boutique brokerage based in Westlake Village.

Cushman & Wakefield announced this week it hired Rob Rubano as Executive Managing Director. He will lead the Investment Sales and the Equity, Debt and Structured Finance business on the West Coast for Cushman & Wakefield. Rubano comes from Eastdil Secured.

Cushman & Wakefield also promoted Jeffrey Cole to Vice Chair in the Capital Markets Group from his position as Executive Managing Director. Cole is based in the company’s Orange County office and has been with Cushman & Wakefield for over a decade. Cole completed $1.9 billion in transactions last year across 26 deals.

Calmwater Capital has added Jeremy Burton as director of originations at its L.A. office. Burton was previously a vice president at Garrison Investment Group, based in New York. He will lead sourcing, underwriting, and execution of loan opportunities. He’ll also work in the firm’s Midwest, Texas, and Southeast markets.

Lee & Associates has promoted Chris Johnson to Senior Vice President. He specializes in professional and medical office leases and sales in the San Gabriel Valley and Inland Empire, the company said in a release. Before working in the Pasadena office, Johnson worked for Lee & Associates in the San Gabriel Valley town of Ontario.

Netflix CEO Reed Hastings, HPP CEO Victor Coleman and a rendering of the Epic project

Netflix is leasing the entirety of not just one Hollywood office tower, but two.

The top Internet video streaming service has signed on to occupy all of Hudson Pacific Properties’ 13-story Epic office development, which is under construction at 5901 Sunset Boulevard.

The building, which will span 327,913 square feet, is across the street from the Sunset Bronson Studios lot, where Netflix is also extending two other leases with HPP.

The extensions are for a similarly large space at HPP’s 14-story Icon building and a 92,000-square-foot space at the Cue building. That brings Netflix’s total square footage around Sunset Bronson Studios to over 745,600 square feet. CBS and KTLA also lease space there.

Netflix is scheduled to move into Epic in January 2020 when the Gensler-designed project is expected to wrap up construction. It will occupy it in phases.

HPP broke ground on the Epic building in September 2017, a few months after settling a lawsuit with the AIDS Healthcare Foundation over the project. HPP reduced its height from 15 stories to 13 as part of the settlement.

The Epic building includes a number of terraces and floor-to-ceiling windows that open to allow access to them. There’s also a rooftop deck. Altogether, there is 25,000 square feet of outdoor space. HPP says its also equipped for “next-generation office needs” like autonomous vehicle drop-off and drone deliveries.

HPP did not list its leasing agents, but tapped CBRE to lease the building after it successfully leased the Sunset Bronson Studios spaces to Netflix.

Netflix is at the center of a multibillion-dollar battle over the subscriptions and eyeballs of consumers. Goldman Sachs projected earlier this year that Netflix would spend around $13 billion on programming in 2018 alone, more than twice what it spent in 2017.

Earlier this week, Showtime president and CEO David Nevins called the competition over original content alone “an arms race,” according to entertainment site AV Club.

Just how crazy an arms race? Amazon’s “Lord of the Rings” prequel series is expected to cost $1 billion, according to the Hollywood Reporter.

From left: Michael Caruso, Billy Rose, and Mauricio Umansky (Credit: iStock, The Agency)

Less than three weeks before a major lawsuit was filed against the Agency, Billy Rose, the co-founder, stepped down from his position as the firm’s broker of record, The Real Deal has learned.

Michael Caruso, a former boutique brokerage owner who has been with the Agency since December, replaced Rose in the role in July, license records show.

The title shift came as a lawsuit was being filed against Mauricio Umansky, another Agency co-founder, claiming the agent misled a client when he conspired with another investor to underpay for a Malibu mansion and then flip it for $70 million.

State licensing records show Rose rescinded his broker of record title with the Agency on June 7, just 18 days before the Agency’s insurance company, Western World Insurance, filed a complaint against Umansky and the brokerage.

“It has nothing do with the lawsuit,” Rose said. The timing is “completely coincidental.”

Rose, who is not named as a defendant in the suit, said he stepped down from his broker duties because of the mounting administrative work that came with it. “As we proliferate, there are more of these obligations, duties and administrative exercises that have to be undertaken every day,” he said.

The Beverly Hills-based brokerage is planning to open an office in Miami by the end of the year, bringing its total number of offices up to 25.

Caruso, who is also the Agency’s senior vice president of administrative services, echoed Rose’s reasons for the change, saying he was recruited to alleviate some of the pressure off of the co-founder. He became the official broker of record for the firm on July 16, he said.

An Agency spokesperson said Thursday that Rose, who had been the broker of record since the Agency’s inception in 2011, did not leave the position “for any other reason than to focus on serving his clients as well as the expansion” of the firm. He continues to work as an agent selling properties.

The spokesperson added that Caruso, who had previously served as the broker of record at his own firm, was selected after a “long search” that began in early 2017.

Being a broker of record is “a tremendous responsibility,” Caruso said. “The broker of record is really the responsible party for all the agent activity within the company as it pertains to the state of California, and the interaction with the Department of Real Estate.”

In the lawsuit, filed June 25 in federal court, Umansky’s insurance firm sued in an effort to avoid paying any damages to the seller, Teodoro Nguema Obiang, the son of the president of Equatorial Guinea. Western World alleges that the failure of the Agency and Umansky to disclose other offers was an “obvious violation of fiduciary duties of disclosure” owed to the seller.

The Agency applied for an errors & omissions liability insurance policy in June 2017, according to Western World’s complaint.

Umansky countersued last month, claiming he “did exactly what he was retained to do” when he sold the 15,000-square-foot mansion on Sweetwater Road to Mauricio Oberfeld.

Umansky also sought to dismiss the initial charges to no avail. A judge recently ruled the first case can proceed.

Alexei Barrionuevo contributed reporting.

The DoubleTree Suites by Hilton in Santa Monica sold for $154 million – or nearly $608,700 per room (Credit: Google Maps)

It’s been a busy year for Hilton hotel trades in Southern California.

In the latest deal involving the hotel giant, Canada-based hotelier Westmont Hospitality Group and New York-based real estate firm Square Mile Capital Management purchased a 253-room DoubleTree Suites hotel in Santa Monica for $154 million.

At 206,000 square feet, the sale translates to nearly $608,700 per room.

Pennsylvania-based Merion Realty Partners and Rhode Island-based Procaccianti Cos. were the sellers of the eight-story building at 1707 4th St.

The deal, which closed Sept. 28, also included about 32,000 square feet of office space and less than 10 apartments, according to the Los Angeles Business Journal, which reported the news first.

Earlier this year, Woodbine Development Corp. paid $152 million for a DoubleTree hotel in Culver City. Next year, a new Hilton is slated to open in Inglewood.

Natalie Hoberman contributed reporting.

Renderings of the Olympic Tower (Credit: Nardi Associates)

Convicted fraudster Morad “Ben” Neman appears to have passed ownership for a 58-story skyscraper being built on the site of a South Park car wash to another Neman.

Business registration records and a draft environmental impact report, published Thursday, reveal that Shahin “Simon” Neman, a Beverly Hills-based attorney, became the sole manager for Olymfig26, the project applicant, on Sept. 24.

Ben Neman first proposed plans to redevelop the car wash on the corner of Olympic Boulevard and Figueroa Street into a mixed-use project in late 2015, about a year after he paid $25 million to acquire the property.

His plans got derailed late last year when he and his brother, Hersel Neman, plead guilty to charges of tax fraud and money laundering, respectively, for using their textile company to launder $370,000 from an undercover agent posing as a cash courier.

Despite the ownership change, plans for the site have remained largely unchanged.

The high-rise would include 65,000 square feet, or three floors, of retail space, 33,500 square feet of office space, 373 hotel rooms and 374 condos, according to the environmental report. There would also be a six-story, underground parking structure, a conference room and landscaped atrium.

Renderings by architecture firm Nardi Associates portray a flashy structure with large LED panels on the building’s exterior.

Curbed first reported the news.

The relationship between the Nemans remains unclear. A source familiar with the project said Ben Neman, despite facing years in prison, is still involved. The Nemans could not be reached for comment.

In late June, Ben and Hersel Neman resurfaced when they filed a complaint against a former investment partner who they said stole money from them. They are seeking $40 million in losses and damages from Saeed Farkhondehpour, according to the lawsuit.

Clockwise from top left: New York launches investigation into Trump family finances after bombshell report, senators write letter asking for investigation into real estate money-laundering, shopping malls see highest vacancy rate they’ve seen in seven years, and co-living company’s funding round could make it the best-funded company of its kind in the U.S.

New York launches investigation into Trump family finances after bombshell report
The state of New York plans to investigate President Donald Trump and his family over allegations that they evaded taxes on hundreds of millions of dollars over the years, Bloomberg reported. The state’s Department of Taxation and Finance’s probe comes on the heels of a bombshell New York Times report that claimed Trump and his siblings employed a number of elaborate methods to avoid paying taxes on their father’s estate. The investigation also found that Trump received hundreds of millions of dollars from his father’s empire — a revelation that flies in the face of Trump’s “self-made man” campaign trail rhetoric. Trump’s attorney Charles Harder has claimed the Times’ investigation bases its allegations on facts that “are extremely inaccurate.” A spokesman for the Department of Taxation and Finance said the department is “vigorously pursuing all appropriate avenues of investigation.” [TRD]

Shopping malls see highest vacancy rate they’ve seen in seven years
In the third quarter of 2018, shopping malls saw the highest vacancy rates they’ve seen in seven years, the Wall Street Journal reported. Mall vacancies in the second quarter hit 9.1 percent, up from 8.6 percent in the second quarter. That jump could be partially attributed to Sears and Bon-Ton closings, according to the outlet. Average shopping mall rents, meanwhile, were down from $43.36 per square foot in the second quarter to $43.25 per square foot in the third quarter, the first time average rents have slid since 2011. The vacancy rate increasing may seem like a harbinger of doom for malls, but Reis senior economist Barbara Denham told the outlet that the “retail sector is still correcting.” And while lower-end malls have struggled, higher-end malls in wealthier neighborhoods are still doing well, the outlet reported. [TRD]

Senators write letter asking for investigation into real estate money-laundering
A pair of senators want Congress to launch an investigation that will determine how the U.S. can best curtail money laundering in the real estate sector, the Wall Street Journal reported. Maryland Senator Chris Van Hollen and Rhode Island Senator Sheldon Whitehouse called for the probe in a letter they sent to the Government Accountability Office. “Residential real estate markets currently have fewer [anti-money-laundering] protections than lending financial institutions, presenting increased risk of access by foreign and domestic criminal organizations,” they said in the letter. The senators want the investigation to assess the Department of Treasury’s Financial Crimes Enforcement Network, known as FinCEN, and hopes a FinCEN program that aims to crack down on money-laundering in certain areas can be expanded. [TRD]

Co-living company’s funding round could make it the best-funded company of its kind in the U.S.
A co-living company that’s poised to raise more than $50 million in funding could become the best-funded company of its type in the country. Ollie plans to raise the money in a new venture funding round, sources told TRD. The startup founded by brothers Christopher and Andrew Bledsoe is competing with companies like Common and Bungalow, both of which have raised millions of dollars. But the $50 million would propel Ollie — which raised $15 million in a funding round in January — to the top. The company has been mum about the new funding round so far, saying in a statement that its “policy is not to comment on speculation about our fundraising activity.” It recently signed a lease for a new headquarters in Manhattan. [TRD]

MAJOR MARKET HIGHLIGHTS

NYC developer Silverstein Properties launching real estate lending venture
Silverstein Properties is branching out, Bloomberg reported. Silverstein Capital Partners, the company’s real estate lending venture, will dole out loans starting at $25 million for projects ranging from residential to industrial, according to the outlet. Silverstein CEO Marty Burger said the company is partnering with a pension fund and a sovereign wealth fund to finance the venture. “We’re a developer at heart, and we usually do very large projects, and we found that there was just a gap in the financing markets where there were large loans needed for complicated projects,” Burger told the outlet. Silverstein has developed projects including 3 World Trade Center and the Four Seasons Hotel downtown. [TRD]

Waldorf Astoria hotel-condo tower set to rise in downtown Miami
Downtown Miami will soon have its own Waldorf Astoria. New York-based Property Markets Group plans to build a Waldorf hotel-condo tower designed by Sieger Suarez Architects on Biscayne Boulevard, according to Bloomberg. Condo sales in the glass tower won’t launch until the luxury market improves, but when the 1,049-foot tower opens, it will include 140 hotel rooms and around 400 condo units, the outlet reported. This will be the first Waldorf development in Miami. Hilton Worldwide Holdings Inc., which owns Waldorf, has opened Waldorfs in several cities abroad, including Amsterdam and Dubai. PMG bought the site where the hotel-condo will rise for $80 million back in 2014. [TRD]

New York-based firm specializing in retail build-outs opening Irvine office
New York-based construction firm Schimenti Construction is expanding out west. The retail build-out company, which has worked on flagship shops in Times Square, including Fossil, Gap and Old Navy, plans to open an office in Irvine, California — its first office on the West Coast, according to company representatives. Schimenti is currently working on the Dover Street Market in Los Angeles, which has an expected fall opening. The firm’s executive vice president Ray Catlin will head up the new Irvine office. Catlin said his firm isn’t worried about the challenging retail market affecting his business, maintaining that the “demise of retail… is overstated.” [TRD]

Former Chicago Cubs player seeking $1.3M for mansion outside Chicago
David DeJesus is selling his mansion outside of Chicago, the Chicago Tribune reported. The former Chicago Cubs player and his wife Kim are seeking $1.3 million for the 6,700-square-foot, five-bedroom home in Wheaton, which they bought for $1.1 million in 2011. DeJesus, who played for the Cubs in 2012 and 2013, moved to Los Angeles with his family after he retired from the MLB, but then he got a gig as an analyst for NBC Sports Chicago. He told the Tribune he wanted to be closer to his job. “Having that house [in Wheaton] is great, but it’s still 45 minutes from work,” DeJesus told the outlet, adding that he and his family are “city people.” [TRD]

Dallas-based developer wins former billionaire’s Colorado ranch in an auction
Dallas-based developer Mehrdad Moayedi has purchased former billionaire Sam Wyly’s six-house ranch outside Aspen for around $14 million in an auction — ”a fraction” of the property’s original $60 million asking price, Mansion Global reported. The Aspen property went to auction after Wyly was ordered to pay more than $1 billion for committing tax fraud. It’s the second estate Moayedi has won in an auction in the past two years, according to the outlet. In 2017, he snapped up one of the biggest mansions in Dallas, and is in the process of subdividing it and building nine homes on it. Wyly’s attorney Stewart Thomas told the outlet it was “a shame [the Colorado property] didn’t sell for more.” [TRD]

Canadian company trying to open “robot brothel” in Houston lacks proper permits, city says
A Canadian company that’s trying to open a “robot brothel” in Houston has been hit with a stop-work order because it doesn’t have the right permits, the Houston Chronicle reported. KinkySDollS had said it planned to open a brothel “where human-like dolls are erotically displayed and can be rented to use in private rooms,” the outlet reported. The company will have to obtain a demolition permit and submit plans for the site if it wants to proceed, a spokesperson for the mayor’s office told the outlet. The mayor, however, is opposed to the project, and said the city is trying to determine whether an existing ordinance could either keep the brothel from opening or regulate it. The city is also mulling drafting new ordinances to do so, according to the outlet. [Houston Chronicle]

John Akhoian and 11280 N. Wilbur Avenue

A 39,000-square-foot office development is planned in the north San Fernando Valley neighborhood of Porter Ranch, where a major gas leak forced thousands of people to leave their homes three years ago.

An entity based in Wyoming filed for the two-building complex at 11280 N. Wilbur Avenue on Thursday. The property sits at the corner of Rinaldi Street near Ronald Reagan Freeway, in a mixed residential and commercial area. The project will include 117 parking spaces.

The developer is Hovhov Holdings, Inc., which is connected to a Granada Hills individual named John Akhoian, the CEO of regional plumbing company Rooter Hero Plumbing, based in nearby Mission Hills. His entity bought the property from a Delaware entity for $1.9 million in late 2017.

Porter Ranch is an affluent neighborhood north of Northridge and east of Granada Hills on the northern edge of the San Fernando Valley. In 2015 it was heavily affected by the Aliso Canyon natural gas leak, the worst methane leak in American history. It forced thousands of people in the neighborhood out of their homes for months.

Toll Brothers has been building thousands of homes there over the last few years and claimed shortly after the leak was under control that the leak didn’t affect pricing. CEO Douglas C. Yearly Jr. said in April 2017 that the company was selling homes for record prices, including sales above $2 million.

Shaul Kuba (Credit: iStock)

CIM Group is studying whether to dissolve the REIT side of its business as it explores a recapitalization of its stock, according to a Securities and Exchange Commission filing published Friday.

The Los Angeles-based firm, which trades on the NASDAQ as CMCT, announced “an intent to dissolve” CIM REIT, which holds 95 percent of the firm’s outstanding common stock. Any shares of CMCT stock held by the REIT would be distributed to the REIT’s 27 institutional partners, CIM said in a filing.

Simultaneously, the firm announced it is eyeing a potential recapitalization, which would involve changing its debt to equity structure. The move is intended to shrink the firm’s debt.

CIM is offering certain stockholders the option to exchange, or cash out, of their stock.

Should CIM follow through with the dissolution, CIM REIT would cease to exist and its creditors would be paid back, according to an attorney familiar with the process.

Dissolution generally requires board and shareholder approval, as well as paying any outstanding debts and liabilities, the attorney said.

CIM’s REIT business owns several properties in California, Washington D.C. and Texas. Its L.A.-based holdings include 9460 Wilshire in Beverly Hills, two properties in West L.A., and one in Koreatown.

CIM Group, led by Shaul Kuba, has projects in all parts of the city. The firm is currently working on reopening the Sunset Gordon Tower in Hollywood, a 299-unit residential tower that has been vacant since 2015. It also owns the 2 California Plaza in Downtown L.A., currently the subject of a lawsuit involving the building’s contractor.

Thinking about remodeling your home — redoing a bathroom or the kitchen? Or maybe purchasing a new home from a builder? Or simply buying new appliances?

Then get ready to dig deeper into your wallet as the Trump administration’s new $200 billion in tariffs begin to flow through to hundreds of the products that go into your planned project. They range from iron nails to flooring to granite countertops, tiles, sinks, roofing, cement, paints, cabinets, wooden and steel doors, windows, lighting, appliances and much more. And get ready to negotiate with remodelers and builders about “allowances” and escalation clauses as vendor pricing and availability of these imports become more difficult to predict.

New estimates from the National Association of Home Builders indicate that of the 6,000 items on the list of goods imported from China that are now subject to tariffs, 463 are “ubiquitous” in home construction and remodeling. They total roughly $10 billion in expenditures a year nationwide. If the White House raises the tariff to 25 percent from the current 10 percent early next year as threatened, “the industry-wide cost increase would be $2.5 billion,” according to David Logan, director of tax and trade policy analysis for the home builders group.

Tim Ellis, president of T.W. Ellis, LLC in Forest Hill, Maryland, a remodeling firm that specializes in kitchens and home additions, estimates that the latest round of tariffs — along with the existing levies on Canadian lumber — now affect somewhere between 15 percent and 20 percent of the products in a typical project for his firm. They have the potential to increase costs to the consumer by anywhere from 5 percent to 10 percent or more, depending upon what the client selects.

“We are trying to absorb as much as we can until it starts to really impact our bottom line,” he told me. But like other remodeling firms, Ellis is also including flexible “allowances” in contracts that, in the event of big price hikes to tariff-affected products, give clients the flexibility to shift to alternative products that are not subject to the add-on levies.

For example, if the quartz or granite specified in the original job by the client has the potential to become much more expensive — or difficult to obtain — the contract might contain language that allows a shift to alternative sources that are not subject to tariffs. Ellis calls it “skating around the tariffs” on imports from China.

Bill Millholland, executive vice president of Case Design/Remodeling, says “we try to be honest with clients” but the tariff situation “puts us in a quandary. Do we bake in the 10 percent” increase expected from suppliers of Chinese products, or, looking months ahead, “do we bake in 25 percent?”

The Canadian wood tariffs are especially troublesome for remodelings that involve extensive framing and carpentry work. They’re already adding $2,000 to the price of a typical new home, according to Logan. Kitchen cabinet prices have undergone multiple increases in recent months. Millholland said they are already adding “significant” bumps to the prices of custom cabinetry along with other component increases. The “dirty little secret” in the industry is that “vendors started to ramp up prices” on various components even before the latest round of tariffs took effect, he noted.

Millholland estimates that 40 percent of the materials in major kitchen or bathroom remodelings are now affected by the tariffs. If a project is expected to cost $100,000, for instance, then $40,000 of the products in the job could be subject to tariffs, whether this year’s 10 percent tariffs or next year’s 25 percent.

The Chinese and Canadian tariffs are not the only ones worrying builders and remodelers. The administration has also imposed 25 percent tariffs on steel imported from many countries and 10 percent tariffs on aluminum. According to a study by Freedonia Group, a market research firm, these tariffs are affecting prices on “most indoor and outdoor kitchen appliances” to varying degrees based on how much steel or aluminum they use. They include stoves and ranges, ovens, refrigerators, freezers, gas grills, among others. Together, according to Freedonia, they “have the potential to upend a product market that accounted for more than $18 billion in sales in the U.S. in 2016.” Sales could “slump as consumers decide a new fridge or stove isn’t worth the price.”

The sobering bottom line: The tariff war is on. Building and remodeling are getting whacked, and the costs to you could go even higher soon.

Triple Five Group chairman Nader Ghermezian, the One Beverly Hills project and American Dream Miami

Before this year, Triple Five Group hadn’t made a blip on the Los Angeles development radar. But two big moves in the last six months have put the developer on L.A.’s star map.

News broke in April that the Edmonton, Canada-based firm was in talks to buy the 47-acre Aerojet Rocketdyne facility in Warner Center for $150 million.

Then earlier this month, The Real Deal learned that Triple Five Group was in escrow with troubled Chinese developer Dalian Wanda Group to buy its One Beverly Hills condo and hotel project.

The One Beverly Hills project is valued at $1.2 billion, meaning that if both sales close by next spring, Triple Five Group will have dropped $1.35 billion in L.A. in just one year.

So who’s behind Triple Five Group and what is driving their L.A. moves?

Triple Five was founded by the Edmonton, Canada-based Ghermezian family. The family, which still runs the business, is interested in L.A. because they see it as an attractive market and want to maintain a “strong pipeline” of projects in the works, according to Reuben Benhaghnazar of Reuben Realty, who has represented Triple Five in negotiations for both the One Beverly Hills and Aerojet Rocketdyne sites.

“They like the demographics,” he said. “It’s a high-income area, people want to move here, live here, there’s the sex appeal of Hollywood and celebrity.”

Triple Five couldn’t be reached for comment.

Benhaghnazar said he expects to wrap up the One Beverly Hills deal by Halloween. He didn’t have an official timeline for the Aerojet Rocketdyne site, but said he hopes to wrap up that deal early next year. There is healthy interest from potential investors looking to join in on the One Beverly Hills deal, he said.

“It seemed a lot of people didn’t have the courage to move forward with One Beverly Hills and now everyone wants to get involved,” Reuben said.

Triple Five Group is an umbrella company for the Ghermezian family’s business interests. Jacob Ghermezian, who emigrated from to Canada from Iran with his wife and four sons in the late 1950s, founded the company in 1972. Before Triple Five, Ghermezian was a rug merchant in Iran. He founded Triple Five’s predecessor company in the 1960s as part of an oil venture, which Triple Five is still involved with, according to the Canadian Broadcasting Corporation.

Ghermezian raised funds for his first retail development —the West Edmonton Mall — through a series of land deals. A decade later, in 1992, he opened Triple Five’s most famous retail development, the Mall of America in Bloomington, Minnesota.

Today, Jacob’s grandson Don Ghermezian is the CEO of Triple Five and his son Nader Ghermezian is chairman. While Triple Five has its hands in a number of businesses, including financial advisory in Canada, retail development remains its bread and butter.

It’s two largest recent projects are the American Dream Meadowlands in New Jersey and the American Dream Miami mall in Florida. To call them “malls” is a bit of an understatement. Both, like Triple Five’s Minnesota and Edmonton malls, will feature amusement parks and other entertainment offerings.

American Dream Meadowlands has started and stalled over the last 16 years and it will cost around $5 billion on completion, according to Costar. Triple Five secured $1.2 billion in tax-exempt bonds and a $1.6 billion private construction loan for the project last year.

It’s scheduled to open in April 2019, a target plenty of New Jerseyans have expressed skepticism over, according to the New Jersey Star-Ledger. Nearly half of the 3.2-million-square-foot development is dedicated to entertainment. It’s most notable amenity? A 16-story-tall indoor ski slope.

American Dream Miami, which Triple Five revealed in 2015, is slated to be nearly twice that size — 6.2 million square feet — and cost $4 billion to complete. The Miami-Dade County Commission gave final approval for the project in May. The project will take up 174 acres, include 2,000 hotel rooms, another 16-story ski slope, a 20-slide waterpark, and a 14-screen 3D movie theater, among other entertainment facilities.

While Triple Five has stated it will not need public money for the Miami project, it remains unclear if the company will continue to develop it using only private funds.

JP Morgan Chase CEO James Dimon (Credit: iStock, Getty Images)

One of the largest mortgage lenders in the country is laying off about 400 of its consumer mortgage banking employees as home sales slow and interest rates continue to rise.

JPMorgan Chase is cutting employees in Jacksonville, Florida; along with Phoenix; and Cleveland and Columbus, Ohio, according to the Wall Street Journal. In August, Wells Fargo said it was laying off 650 mortgage employees.

Parts of the mortgage banking industry have slowed down, attributed to a combination of factors, including rising home prices, a lack of homes on the market, and fewer mortgage delinquencies.

Those delinquencies fell 22 percent year over year for JPMorgan’s customers in August.

And as some major banks pull back on mortgage lending, nonbank lenders — which are less regulated — are becoming more popular, accounting for nearly half of all mortgages in the U.S. in 2016. [WSJ] — Katherine Kallergis

Donald Trump and Trump International Hotel and Tower in Chicago (left) and New York (right) (Credit: Wikipedia)

Small-time investors in Trump properties in cities like New York and Chicago have taken a hit since Donald Trump became president.

Revenue at the Trump International Hotel & Tower New York between 2015 and 2017 went from $34.4 million to $30.9 million — a 14 percent decline after adjusting for inflation, the Washington Post reported. Bookings at Trump’s hotel in Chicago dropped 8 percent between 2015 and 2016.

Some investors at the hotels — who, through condo-hotel arrangements, share in the booking profits for the rooms — say that revenue now isn’t covering the fees and taxes that they pay on the rooms. Earlier this year, the board of the New York hotel considered shedding Trump’s name. Donald Trump Jr. and a New Jersey doctor named Stephen Soloway, who was later named to the President’s Council on Sports, Fitness and Nutrition, tried to shut down the effort. They were outvoted, but the idea ultimately didn’t go anywhere.

“There’s a lot of people who have nothing to do with him, that are being injured,” said Howard Finkelstein, an investor in Trump’s New York hotel. “We’re the ones that are paying the price for his ridiculous ego. There’s no reason to have that name on there.”

Meanwhile, the Trump Organization’s hotel in Washington D.C. is benefiting from an influx of conservative groups, GOP fundraisers and foreign embassy parties. The Las Vegas hotel has attracted tourists from China.

And while bookings at Trump’s Chicago hotel have been down so far in 2018, according to an update shared with investors late last month, it’s seen an influx in visitors from Saudi Arabia. Bookings from those travelers skyrocketed 169 percent so far in 2018 from the same period two years earlier. The investor note also stated that there’s been an uptick in guests from China.

It’s unclear how the latest inquiries into the Trump real estate empire will impact its properties. The New York State Department of Taxation and Finance announced on Wednesday that it’s launching an investigation into the Trump family for possible tax evasion following an explosive New York Times report. City officials subsequently announced that they too will look into whether the Trumps underpaid taxes on their real estate for decades. [Washington Post] — Kathryn Brenzel

LeBron James is beefing up security after a rash of celebrity burglaries. (Credit: Getty Images, iStock)

It happened to Rihanna. Los Angeles Dodgers star Yasiel Puig was another victim, as was L.A. Rams wide receiver Robert Woods.

For months the celebrity site TMZ has breathlessly reported on one burglary after another of celebrity homes in L.A.

This week the police struck back, charging four people with burglarizing more than 24 homes of actors, singers and athletes.

LeBron James, in his first year as an L.A. Laker, beefed up his security in response, sources told TMZ.

The rash of burglaries points to a different reality that real estate experts have noted in recent months.

The growth of real estate listing portals like Zillow and Trulia, along with the very public lives that celebrities are leading on social media, has made their homes increasingly vulnerable.

“Today there is more transparency and access to information, more ease of access to gain information and start scouting these thefts,” said Nick Segal, the president for Southern California for Pacific Union International, which was recently acquired by Compass.

Segal and other managers and brokers say that celebrities are making it much easier for thieves by posting information about their whereabouts on social media. Thieves look at pictures of homes on the multiple listing service and freely accessed sites like Zillow, and then “they track the buyer and realize they are having a fabulous time in Italy.”

Even homes that are not for sale can be targets. In response, sellers are increasingly turning to pocket, or off-market, listings as a means of trying to limit access to information, Segal said.

“There are going to be more off-market deals through the brokerage community, through broker networks, because of the fear of invasion of privacy and actual theft of personal property, of breaking into the house,” he said.

Segal was one of the architects of Pacific Union’s Private View service, a pocket-listing service that Pacific Union debuted earlier this year, which Compass recently adopted for its website.

But thieves have also gotten more sophisticated. Police this week said the arrested alleged burglars had a list containing 12 more celebrities they were targeting, including James, and actors Matt Damon and Viola Davis.

With a busy NBA travel schedule and a wife and children at home, James has hired at least 10 armed security personnel at his L.A. home, including off-duty police officers, TMZ reported.

Woods, the L.A. Ram, is working with the NFL security team to ensure his safety as well.