Downtown Los Angeles skyline (Credit: Pixabay)

Los Angeles office investment sales totals was down nearly 25 percent, which market pros attributed in part to investors buying up lower-priced properties like older office stock ripe for creative conversions.

As part of Savills Studley’s third quarter office report, it tallied office investment sales over the first seven months of 2018. Sales from that January to July period totaled $3.8 billion, or 23.3 percent below the same period last year. Despite the decline, there have been major trades. Boston Properties paid $628 million for the Santa Monica Business Park and StarPoint Properties closed on its $193 million purchase of the Wells Fargo Center in Downtown, among others.

From July to September, leasing was largely steady, totaling 3.3 million square feet, according to the report.

Like other major markets, L.A. has seen larger firms brine to dominate more of the local leasing market. The biggest lease of the year so far was CoreSite’s extension for 176,700 square feet, at GI Partners’ One Wilshire tower. The extension added 17,200 square feet to its existing space. CoreSite is looking to build its own 180,000-square-foot data center north of DTLA as well.

At the same time, Savills Studley found that companies are downsizing into more “efficient space” and “densifying” with new leases. Availability for Class A office space fell slightly to 17.9 percent in the third quarter compared to the same period last year, but availability rates for older Class B and Class C spaces ticked up to 23.8 percent.

Asking rents continued to rise from July through September. The citywide average was $39.27 per square foot, up from $36.58 last year. Hollywood remains the most expensive market, with asking rates at $57.54, more than twice the amount in the cheapest market, the San Gabriel Valley.

On Tuesday, the Wall Street Journal reported that Masa Son’s SoftBank was in discussions to take a majority stake in WeWork. The Real Deal‘s senior reporter Konrad Putzier sat down with his colleague David Jeans on Wednesday and talked about what it would mean for WeWork CEO Adam Neumann, potential conflicts, and how a deal could lead to a $100 billion tech incubator with WeWork at the center of things. Check out the video above!

Tobias Lütke, Shopify CEO and the store

Shopify, an online marketplace that sells products ranging from Kylie Cosmetics to Budweiser beer, has opened its first brick-and-mortar shop in Downtown Los Angeles.

But don’t expect there to be any of Shopify’s online products on display.

The e-commerce platform is instead offering up business advice at the new outpost, located at the Row DTLA. Its “comprehensive network of Gurus” will also teach its existing and potential merchants how to navigate the Shopify platform, according to a company statement published Thursday.

David Pressberg, a retail broker at Kennedy Wilson, said he anticipates there will be more of this type of retail offering in the next few years as online shopping continues to outpace traditional retail. 

“I look at these stores as them putting a billboard in the middle of town for people to go to their website,” Pressberg said.

This retail concept has already expanded into fashion and even health care, he added. Nordstrom Local, which sells no clothes but offers personal stylists and manicures, is opening its third shop in L.A. Smile Direct Club, an online orthodontics company that provides invisible aligners, now lets clients take a 3D image in its flagship store in Beverly Hills, only to then mail them the aligners.

In the statement, Shopify said it chose L.A. for its first in-person location because of its strong customer base in the city. There are 10,000 Shopify merchants in L.A. alone, with more than 400 of them generating over $1 million in annual revenue.

The firm signed a two-year lease at the Row, the Los Angeles Business Journal reported. It will be joining Adidas, Spaces and advertising studio WC+A.

From left: 246 Spring Street, Felix Sater, and Donald Trump (Credit: The Dominick Hotel and Getty Images)

According to Felix Sater, who built the Trump Soho condominium tower in Lower Manhattan and partnered with President Trump on several other projects, Trump didn’t lose sleep over where the money to build his branded properties came from.

“I would show him a deal and he’d say ‘let’s go,’” recalled Sater, who once occupied an office down the hall from the future president in Trump Tower. “The due diligence part was kind of light.”

At a panel hosted by The New Yorker magazine on Saturday, where he shared the stage with attorney Michael Avenatti and journalists Adam Davidson, Ruth Marcus and David Barstow, Sater shared some insights into the president’s relationship with Russia.

Trump has been under scrutiny for his ties to Russia’s President Putin and for his lukewarm response to Russian government’s efforts to influence the 2016 U.S. presidential election. Sater acknowledged that Trump has an affinity for Russian investors, but according to him the reason is mundane. “Donald Trump loved Russian buyers for one very simple reason: their checks cleared, and quickly,” Sater said.

Wealthy Russians, meanwhile, were drawn to Trump properties because of their “opulence,” “over-the-top” design, and the president’s celebrity. Buying at a Trump property “became a status symbol: I have arrived,” Sater said.

Asked if money was laundered through Trump properties, Sater replied “yes and no,” pointing to his Trump Soho co-developer Tamir Sapir as an example. “He made his money, when the Soviet Union collapsed, in the oil business. Rightly, wrongly, stole it, deserved it, didn’t deserve it… he took all that money and invested it in New York real estate,” Sater said of the late Sapir. “By the time he invested with us — he put $300 million into the building — the concept of ‘was this money dirty or not’… If we go back the Roosevelts made all of their money in the drug business, in China, in opium. So I mean how far back do you go to look at the money?”

Sater’s Bayrock Group built Trump Soho in partnership with the Sapir Organization and leased the Trump name for the property. Trump hired him as a “senior adviser” in 2010 and gave him a Trump Organization business card. That year, the three companies were sued for allegedly lying about sales at trump SoHo. Sater tried to broker a Trump-branded real estate development in Moscow in 2015, while Trump was running for president.

A 2017 New Yorker investigation by Davidson unearthed evidence of potential money laundering at another Trump-name property, in Azerbaijan, but Sater dismissed the suggestion that the president was in on the game. “There were some pretty hairy characters involved. Did they use laundered money? I would guess yes,” Sater said. “Was Donald Trump involved with helping them launder the money? I don’t think he was involved, I think he just didn’t care.”

(Credit: iStock)

Would-be homebuyers have another reason to be concerned: mortgage rates rose to nearly 5 percent, the highest in more than seven years and the biggest weekly increase in two years.

Rising mortgage rates slow the housing market, which is an indicator of the overall economy. Long-term rates are now up nearly a full percentage point from the start of 2018, the Wall Street Journal reported.

According to Freddie Mac, the average 30-year fixed-rate mortgage is 4.9 percent. Although rates have been rising for months, 5 percent isn’t that high compared to the decade before the financial crisis.

“There’s almost a generation that has been used to seeing 3 percent or 4 percent rates that’s now seeing 5 percent rates,” Vishal Garg, founder and CEO of Better Mortgage, told the Journal.

In recent months, both Wells Fargo and JP Morgan announced significant layoffs to the consumer mortgage divisions, which they attribute to rising interest rates and slowing sales.

Sellers may be forced to reduce their prices if financing continues to become more expensive for buyers, market pros said. [WSJ] — Katherine Kallergis

The property at 21555 Oxnard Street

A bulky office tower in the Warner Center, occupied by Anthem Blue Cross for over two decades, is now being marketed for sale as a redevelopment opportunity, The Real Deal has learned.

Brokers familiar with the 415,000-square-foot property say it could fetch bids between $110 to $125 million.

A group of private individuals currently own the building, which was formerly held by Anthem.

The healthcare giant will be vacating the 14-story building, located at 21555 Oxnard Street, by the end of 2019. It inked a deal to occupy 169,000 square feet, or four floors, at the Campus @ Warner Center in late July.

Roughly a year before signing the recent deal, Anthem hinted at a possible departure when it listed a massive plot of land surrounding its office building for sale. The 25.6-acre parking lot, where five parcels sit, is still on the market.

A buyer would be able to develop more than 5.5 million square feet of office, residential, retail or hospitality buildings on the site owned by Anthem alone, TRD previously reported.

Kevin Shannon at Newmark Knight Frank has the listing on Oxnard Street.

Warner Center, located in the Woodland Hills neighborhood in the San Fernando Valley, is comprised mostly of office buildings and parking lots. The city adopted the Warner Center 2035 master plan in 2013 in an effort to encourage new, especially residential, development in the neighborhood.

So far, it’s worked. A number of multifamily developers, including Hanover Co. and California Home Builders, have been proposing large residential projects in the area. The owner of the Mall of America is also in the process of buying one of the largest redevelopment sites in the area — a 47-acre former rocket engine manufacturing complex.

Gulfstream Park, Belinda Stronach and Frank Stronach (Credit: Getty Images, 401(K) 2012 via Flickr)

A Canadian billionaire’s dispute with his daughter over his fortune involves valuable horse-racing tracks in Los Angeles and South Florida.

Frank Stronach, who built the Magna International car-parts empire, is suing his daughter, Belinda Stronach, and other family members, for about $400 million, claiming they mismanaged the family’s assets and worked to limit his control over the fortune he created.

Stronach, who now lives in his native Austria, filed a 73-page suit in a Toronto court earlier this month, alleging “a complete breakdown” within the Stronach family, the Globe and Mail reported.

The Stronach Group, a Magna-related company, owns a sprawling collection of real estate, including top race tracks such as Santa Anita Park in Arcadia, Calif., Gulfstream Racing Park and Casino in Hallandale Beach, and Pimlico in Baltimore. His daughter Belinda, the company’s president, had been taking a leading role in running the race tracks in recent years.

Under her leadership, Stronach Group had been exploring ways to better monetize the 250-acre Santa Anita park. The racing course is worth at least $500 million, the Pasadena Star-News reported. But the company is facing challenges from declining U.S. racing attendance and off-site and online wagering.

A Magna subsidiary purchased Gulfstream in 1999 for $95 million. The area near the track and casino complex has attracted new development, including Alan Waserstein’s Nine Hundred, a 23-story mixed-used tower.

In 2006 Gulfstream and Santa Anita cohosted the Sunshine Millions, a competition day with $3.6 million in stakes races between horses bred in California and Florida.

After selling his Magna shares in 2010, Stronach stepped down as chairman a year later. Lately, he has been working to put together farmland in north-central Florida and now owns about 90,000 acres devoted to raising grass-fed cattle, the Globe and Mail reported.

He is thought to be the seller of more than 1,200 acres in the Ocala area that came on the market last month after a country club on the property closed.

Back in Europe, Stronach served in the Austrian parliament as the leader of Team Stronach for Austria, a pro-business, Euro-skeptic populist party that enjoyed moderate success in the 2013 election. He famously stripped off his shirt during a media interview. “I don’t have to be ashamed of my body,” he said, then 80 years old.

Richard Coles and Gary Tischler

Vanbarton Group has picked up another property in Hollywood, underscoring its commitment to the booming neighborhood.

The New York-based developer paid seller Wood Partners $148 million, or $490,000 per residential unit, to acquire a newly built multifamily complex in Hollywood, The Real Deal has learned.

Dubbed Fifty Five Fifty, the apartment complex at 5550 Hollywood Boulevard includes 280 residential units and 12,000 square feet of retail space. There are also 437 parking spaces.

Amenities at the Class A property include two outdoor courtyards, a swimming pool with jacuzzi, co-working space, gym and private theater.

Wood Partners, a multifamily developer based in Atlanta, completed the project in April.

Vanbarton’s most recent purchase is the firm’s third big investment in the neighborhood in the last two years.

The firm made waves in the Hollywood market last year when it paid $42 million, or about $500 per square foot, to acquire the WeWork-anchored property at 7083 Hollywood Boulevard. Then in June it then picked up another office building on Sunset Boulevard for $38 million.

Combined, Vanbarton owns more than 6 million square feet of office, multifamily, retail and hospitality properties throughout New York, San Francisco, L.A. and Chicago.

A closed Sears retail store, located at Crossroads Center mall, sits vacant. The building is stained with the Sears logo (Credit: iStock)

A possible Sears bankruptcy could mean the end for the 125-year-old retail legend and yet another headache for the nation’s shopping mall owners.

A Sears bankruptcy could leave malls already dealing with the loss of major tenants like Carson’s with massive amounts of additional vacant space. Even worse, the malls would be losing an anchor tenant that for decades has successfully drawn shoppers to malls, according to a report in Crain’s.

Sears is just the latest retail giant that’s struggled to adapt to the rise in e-commerce. With the company in debt more than $5 billion, Sears executives this week began preparing for a possible bankruptcy filing, leaving the future of its 900 remaining stores in doubt.

A bankruptcy could lead to liquidation, meaning Sears would join Carson’s and Toys ’R’ Us among the bix-box retailers forced to shutter thanks to changing consumer habits.

Malls are already feeling the crunch. The vacancy rate at malls nationwide hit a seven-year-high in the third quarter, and average mall rents slid for the first time since 2011. The closing of certain Sears stores was cited as one of the reasons for the high vacancy rate.

The combined loss of Carson’s and Sears is leaving gaping holes at some shopping malls, which are having to get creative in order to fill the space.

A mall in suburban Chicago, for example, is considering adding apartments, a hotel or medical offices. Some malls in markets like Chicago and Los Angeles have turned to co-working spaces and business parks to fill former anchor spaces.

Complicating the redevelopment of shuttered Sears locations is that the retailer owns many of its stores, including in malls. Sears’ real estate arm, Seritage Growth Properties, has generated billions for the company by selling off Sears real estate assets, but it’ unclear what would happen to Seritage under a bankruptcy filing, Crain’s reported. [Crain’s] — Joe Ward

City Council member Mitchell Englander and City Hall

Los Angeles City Council member Mitchell Englander is stepping down from his role in politics to join a development firm that is currently working on a $1 billion project at the Belmont Racetrack.

Englander, who represents the northwest San Fernando Valley, will join L.A.-based Oak View Group in January as its new executive vice president of government affairs, the Los Angeles Times reported. He had two years left in his term.

Oak View, led by CEO Tim Leiweke and backed by Irving Azoff’s MSG Entertainment, builds, manages and books entertainment shows for dozens of areas across the country. Part consultancy, part venture capital firm, the company is currently working on a sports and entertainment development at the Belmont Racetrack that includes a new arena for the New York Islanders hockey team.

In Los Angeles, the firm tried securing a contract to manage the Greek Theatre in Griffith Park this year, but the city ultimately chose to go with another firm.

Critics of Englander had been upset with his handling of the troubling Aliso Canyon gas leak, and they said the council member had exhibited a pro-development stance.

““He’s just sided with the money people, big developers, for a long time over the wishes of the people,” Jim Summers, a former president of the Granada Hills South Neighborhood Council, told the Times.

Englander said in a statement that he did not seek the job, but that it was a “once-in-a-lifetime opportunity.”

Following Felipe Fuentes, Englander is the second council member in the past two years to quit before his term was completed. First elected in 2011, he was reelected in 2015.

On the council, Englander sits on two committees that handle the city’s budget and police and fire departments. [LAT] — Natalie Hoberman

From left: Carlos Curbelo, Stephen Ross, and Joe Crowley with CityPlace South Tower in Florida and 15 Hudson Yards (Credit: Getty Images and Highrises)

A stalled bill in the House of Representatives would grant luxury condominium developers the same tax benefits homebuilders already receive, saving them millions during construction.

The “Fair Accounting in Condominium Construction Act,” introduced last summer by Miami Republican Carlos Curbelo and co-sponsored by Queens Democrat Joe Crowley, would allow condo developers to defer income tax on condo unit sales until they’ve finished building.

It’s a tale of two tax accounting methods that stretches back decades.

Condo developers are supposed to use the “percentage of completion” accounting method when paying their taxes, meaning they must recognize a portion of their revenues and expenses for each tax year for the duration of the construction contract. But single-family builders get to use the “completed contract method,” under which home sales are not recognized for tax purposes until the construction contract is over.

“You’re busy paying off the bank and the tax man is adding up your theoretic profits even though they’re not real in a cash basis,” said developer Francis Greenburger, founder of Time Equities.

That includes getting taxed on in-contract sales from which the developer is yet to see any money, according to a policy paper by the Real Estate Roundtable lobbying group.

Letting condo developers file their taxes like homebuilders would allow them to not only defer income taxes owed on pre-construction apartment sales for up to five years, but in some cases, also lower their overall tax burdens, said Thomas Castelli, a tax strategist at The Real Estate CPA in New York.

“There may be tax planning scenarios that exist to save stakeholders money in taxes based on the timing around recognizing different sources of income,” Castelli said. Deferred recognition of income could put developers in lower tax brackets during the early years of a development. “But more importantly, deferring these taxes can have a positive effect on cash flow management and reduce the financing costs of a development project.”

For example, deferred taxes can reduce the need to take on as much additional debt, which is common in the late phase of condo construction, when developers sometimes take out “condo inventory loans” backed by unsold units.

So why do Crowley and Curbelo care enough about this obscure tax accounting discrepancy to sponsor a bill? It goes back at least a decade.

After the financial crisis shook the housing market, the Internal Revenue Service proposed accounting changes with the aim of helping builders, according to an article in the Journal of Pass Through Entities. The IRS never made good on the proposed regulatory guidance, however. In 2016, 10 senators signed a letter addressed to then-Treasury Secretary Jack Lew asking for new rules to finally be instituted. Signatories mostly included senators from states with major metro areas, like Democrats Chuck Schumer of New York and Bill Nelson of Florida. Nothing happened.

“Legislation may be the most likely route, in light of all the work ongoing at Treasury, just with tax reform and everything else they’re dealing with right now,” said Ryan McCormick, the tax policy expert for Real Estate Roundtable in Washington, D.C., which has lobbied Congress on the proposed condo bill.

Related Companies, which develops condos in both New York and South Florida, has lobbied Congress on the bill as recently as this summer, federal lobbying records show. Its top executives, Steve Ross and Jeff Blau, are among the top donors to Rep. Crowley’s political action committee, the Crowley Leadership Fund. Blau and Ross each made $10,400 contributions to the fund in December. Related’s lobbyist on this issue, Jon Gans of Polaris Consulting, did not return a request for comment. The penthouse at Related’s new 15 Hudson Yards condo tower in Manhattan hit the market last year asking $32 million.

Other condo developers, including Extell Development’s Gary Barnett and Fetner Properties’ Hal Fetner, also donated to Crowley. Curbelo’s donors include South Florida condo developer Ricardo Vadia and multiple executives from luxury homebuilder Codina-Carr.

A spokesperson for Curbelo did not respond to requests for comment about the bill and a spokesperson for Crowley said they were “going to pass on the opportunity” to discuss the legislation.

Crowley, who is in the lame duck phase of his last term in Congress, recently lost in the Democratic primary to progressive challenger Alexandria Ocasio-Cortez, who criticized Crowley for his ties to developers.

In 2015, Crowley sponsored reform of the Foreign Investment in Real Property Tax Act, or FIRPTA, to encourage more money to come into U.S. real estate from overseas. The bill followed a surge in industry contributions to the congressman, The Real Deal reported at the time.

It’s now been more than a year since condo tax accounting bill was introduced, but it is not currently scheduled for any hearings or markups in the House Ways and Means Committee.

There will be two new real estate events in Los Angeles next week.

From Oct. 16 through Oct. 18, Inman is hosting its Luxury Connect 2018 event at the Beverly Wilshire Hotel, 9500 Wilshire Blvd. Attend and connect with luxury agents and top brokers in the field, while discussing key themes, such as, becoming a real estate wealth advisor, forging and maintaining client connections, using tech and media to your advantage and anticipating market trends. Mauricio Umansky of The Agency, Tami Pardee of Pardee Properties, Diane Ramirez of Halstead Real Estate, among others, will provide speeches at the event.

On Oct. 18, the USC Sol Price School of Public Policy is hosting its Women in Real Estate Luncheon from 11:30 a.m. to 2 p.m. at the USC Town & Gown Ballroom, 665 Exposition Boulevard. Come and network with the brightest female leaders in the space. Amber Berrios of Majestic Realty Company, Mary Lynne Boorn of the USC Price School of Public Policy, Emily Gehlhaus of J.P. Morgan Asset Management, among others, will provide speeches at the event.

To submit more industry events, please reach out to events@therealdeal.com. To search for future industry events or browse past ones, click here.

(Credit: iStock)

The growth of e-commerce has been a boon for industrial landlords and investors across the U.S., fueling demand for warehouse and logistics space that has reached an 18-year high.

The third-quarter industrial availability rate — which measures properties that are vacant or about to be — stood at 7.1 percent, according to a new CBRE tally, the Wall Street Journal reported. That marks 33 straight quarters of falling vacancy rates.

The last time the vacancy rate was lower was at the start of the new century, when it reached 6.6 percent.

Even as nearly 50 million square feet of inventory was delivered across the country from July through September, the shrinking availability rate shows distribution and e-commerce fulfillment operations are occupying space as quickly as it is being built, CBRE said.

“The underlying story is a really strong consumer economy,” Richard Barkham, global chief economist at the firm, told the Journal. “But we’ve also got this big structural shift, which is the growth of e-commerce.”

The impending holiday season has led companies to push more goods through distribution networks, adding to the need for places to store and transfer cargo. Importers rushing to beat U.S. tariffs has contributed to the surge in recent months, with the National Retail Federation reporting soaring import volumes in the past three months.

An earlier report from CBRE showed the Inland Empire area around Los Angeles and the Chicago region were among the go-to places for industrial and logistics lease signings. Southern California tallied 11.6 million square feet of deals signed, followed by Atlanta at 7 million square feet, Chicago at 6.8 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.

In New York, the price per square foot for industrial properties rose as much as 81 percent in some parts of the city this year.

And in Chicago, the demand for industrial properties has approached record levels. Through September, the local industrial market saw $2.8 billion in investment sales, which is $447 million ahead of the total at the end of September 2017, according to a Newmark Knight Frank study. [WSJ] — John O’Brien

John Westerfield is CEO of MFA and a rendering Fig & 8th (Credit: DLANC)

Plans for a 41-story mixed-used tower in Downtown are being scaled back courtesy of the city’s environmental review. But the change isn’t so dramatic.

Mitsui Fudosan America’s Eighth & Figueroa — also known as 8th & Fig — will be 12 percent smaller, and will include 438 residential units and 7,493 square feet of ground-floor commercial space, according to Urbanize.

The project, which will replace a parking lot at 732 South Figueroa Street, will now encompass 425,000 square feet, down from the previous design of 482,000 square feet. The change satisfies environmental requirements.

The actual height of the proposed project will increase from 501 feet to 530 feet to account for mechanical space at the roof level.

It is unclear exactly how the space was reduced, but a 2016 version of the plans called for 11,000 square feet of retail. 

The current mixed-use tower will have 80 studios, 264 one-bedroom apartments and 94 two-bedroom units. It will also include parking for 517 vehicles on seven levels, four of them underground.

The boxy glass-and-steel look of the project, being designed by Johnson Fain, will remain mostly the same as the project presented in March of 2018, Urbanize reported.

The project is expected to be completed in 2022.

Mitsui has owned the project site for more than 30 years, and also owns a parking garage one block away, where another high-rise project is underway. 

Brookfield Properties is building an even more massive 64-story mixed-use tower about a block away, at 945 W. Eighth Street, that will have 781 condos and 6,700 square feet of retail space. [Urbanize] — Alexei Barrionuevo

CoStar Group CEO Andrew Florance and Realla’s Andrew Miles (Credit: LinkedIn and Benjamin Davies via Unsplash)

CoStar Group is expanding its European footprint with its acquisition of a UK-based commercial real estate online marketplace.

The publicly-traded commercial real estate data giant announced Friday that it had acquired startup Realla for an undisclosed sum.

“When combined with the CoStar information solution it is expected to offer the best of tools for marketing properties, valuations and facilitating transactions,” Andrew Florance, CoStar’s CEO, said in a statement.

Realla is a two-year-old startup currently holds 90,000 listings. Florance told the Financial Times that CoStar will double or triple its investment in Realla to expand the firm into continental Europe. It would also reportedly share CoStar’s business-to-business listings service.

CoStar’s stock price, which dropped recently to $373 from a high of $446 in September, spiked following the acquisition announcement to $386. On Friday, the company was valued at $14.01 billion.

The Realla acquisition marks further geographic expansion by CoStar. In a September article, The Real Deal detailed how data giant’s expansion in recent years. The company entered the residential space with the acquisitions of Apartments.com and ForRent.com. In February, the company’s $385 million acquisition of ForRent, which it would use to expand Apartments.com, was approved by the Federal Trade Commission. [FT] —David Jeans 

Property at 6301 De Soto Avenue and 6300 Variel Avenue, with executive from MG Properties Group)

IMT Capital’s $167 million purchase of a Santa Clarita apartment building topped the list of the five biggest Los Angeles County multifamily investment sales in September. But there were other significant acquisitions. Clarion Partners paid $118 million for a 198-unit apartment in Playa Vista and MG Properties paid $93 million for a property in the Woodland Hills-Warner Center area.

For the month, the top five totaled $505 million, far outpacing the August total of $81.3 million. That low amount was in part a reaction to increased interest rates and uncertainty over the outcome of a November ballot initiative, which could lead to expanded rent control measures, market pros said at the time.

The September figures were compiled from property records on Property Shark.

1. 25399 The Old Road | IMT Capital | $166.8M

IMT Capital paid nearly $167 million to acquire a sprawling apartment complex in Santa Clarita. The seller was Goldman Sachs, which had owned the property since 2013. Located at 25399 The Old Road, and called the Stevenson Ranch, it has 510 apartments, 722 parking spaces, a gym, tennis court and volleyball court. The 418,000-square-foot complex was built in 1992.

2. 5710 Crescent Park East | Clarion Partners | $117.5M

An LLC tied to New York-based developer Clarion Partners paid $118 million to acquire the 198-unit multifamily property at 5710 Crescent Park East, in Playa Vista. The seller was Crescent Park Corp., a real estate development firm based in Connecticut. Dubbed Crescent Park at Playa Vista, the complex features a swimming pool, fitness center and business center.

3. 6301 De Soto Avenue | MG Properties | $93M

MG Properties Group spent $93 million to acquire the Carillon Apartment Homes, a 264-unit complex at 6301 De Soto Avenue in the Woodland Hills and Warner Center area. The purchase price worked out to roughly $352,300 per unit. The seller was Fairfield Residential Company, based in San Diego. Built in 2008, the complex sits on five acres near the intersection of El Rancho Drive. It has one- and two-bedroom units with a pool and gym. The residence is near the Westfield Group-owned Westfield Topanga mall.

4. 6300 Variel Avenue | PMI Carabella LLC $82.5M

A Palo Alto-based private investor using the LLC PMI Carabella acquired a 224-unit complex in the San Fernando Valley. Fairfield Residential was the seller. The property, Carabella at Warner Center, is located at 6300 Variel Avenue. The complex includes a fitness center, swimming pool, spa and 300 parking spaces. Institutional Property Advisors brokered the deal.

5. 12000 Idaho Avenue | Gillis family | $45.2M

A Gillis family partnership paid $45.2 million to acquire the Adler Apartments at 12000 Idaho Avenue, near Sawtelle. The selling entity was an LLC tied to Bed Bath & Beyond. The complex includes 34 units, a pool, resident lounges, cabanas and a pet park.

Richelieu Dennis and the home, Justin Bieber and Hailey Baldwin (Credit: Getty Images, Ricky Vigil M/GC Images)

Entrepreneurs and executives poured tens of millions of dollars into the high-end real estate market in Los Angeles this week, purchasing homes in both the Hollywood Hills and Beverly Hills — not to mention one eye-raising home rental in the Valley by a YouTube legend.

Eric Baker, founder of online ticket marketplace Viagogo, spent $23.5 million to acquire a 10,300-square-foot mansion in the Beverly Hills Flats. The executive paid all-cash for the home, which was asking just $50,000 more than what Baker paid. Lawyer Andrew White and his wife, doctor Elisa Newman, were the sellers. The Mediterranean-style home has seven bedrooms and seven bathrooms. Amenities at the sprawling property include an expansive backyard, screening room and a gym with private bath and sauna. Before he founded Viagogo, Baker co-founded Stubhub, another online ticket resale firm.

Another executive, Richelieu Dennis, who heads New York-based Sundial Brands, also purchased a new home recently. The CEO bought a 12,100-square-foot home in the Hollywood Hills from a spec developer for $15.7 million. Though the deal closed in August, he was just revealed as the buyer this week. The glassy contemporary home has six bedrooms and seven bathrooms, and features a 2,500 square-foot living room, a Tuscan-style garden with mature olive trees, as well as a boomerang-shaped swimming pool overlooking the Sunset Strip of West Hollywood.

In the Valley, newly married Justin Bieber signed a deal to rent a Toluca Lake pad for almost $100,000 per month. Spanning 7,000 square feet, the recently remodeled home has five bedrooms and seven baths. More importantly for the singer and YouTube legend, it has a professional recording studio, along with a pool, spa and private dock with two paddle boats. Bieber agreed to rent the home, which is listed off-market for $8.5 million, in a short-term arrangement that pushed up the monthly fee. The home’s owners, Kathleen McIntyre and Howard Atkins — a former CFO of Wells Fargo & Co. — bought it for $4.9 million in 2009, according to property records.

Here’s hoping Bieber’s new neighbors are more welcoming this time around.

Last but not least, a unit rich in Old Hollywood history came on the market this week asking $15 milion. The 8,000-square-foot penthouse unit, which boasts five bedrooms, is in a residential building on Santa Monica’s Ocean Avenue formerly owned by the late actor William Holden. There’s also a 2,300-square-foot rooftop deck with hot tub, six parking spaces, and sweeping ocean views. Howard Murad, a dermatologist and beauty entrepreneur, and his wife, Loralee, are the sellers. They purchased the property in 2011 for $10.5 million, property records show.

(Credit: Jeff Turner via Flickr)

Foreclosed home values are soaring.

Homes that were foreclosed on during the recession are appreciating at a faster rate than typical homes, MarketWatch reported. The median foreclosed home from that period rose 10.3 percent in value over the last year — compared with a 6.5 percent increase for the median home overall.

In some markets, foreclosed homes are reaching record values. The homes have climbed 74.5 percent in value since the recession, the report said. Meanwhile, the typical U.S. home increased 46 percent in value.

Still, the foreclosed homes are generally worth less. The median home value for foreclosed homes was $207,000, compared with $216,700 among all homes, the report said.

“When the housing market tripped up a decade ago, homes that went into foreclosure fell hard — their value dropping substantially more than homes that didn’t experience a foreclosure,” Zillow senior economist Aaron Terrazas said in the report. “But markets will never overlook a deal, and for much of the economic recovery, homes with a history of foreclosure have been a deal.”

The rate of investors flipping homes reached a six-year high in the first quarter of the year and the heightened flipping of properties in the aftermath of the 2008 recession has led to the rise of the iBuyer industry, as The Real Deal recently reported. [MarketWatch] — Meenal Vamburkar

Jeffrey Soffer, Fontainebleau, Anthony Enrique Gignac, and a plate of prosciutto

Turnberry Associates developer Jeffrey Soffer thought he had an offer from the prince of Saudi Arabia to buy the Fontainebleau Miami Beach in 2017 for $140 million more than what it was worth.

Negotiations spanned for months, as Soffer allegedly wined and dined the supposed prince and bought him a Cartier bracelet worth $50,000, along with expensive artwork to court his investment, according to Vanity Fair.  In total, he gave the prince $150,000 in gifts.

But the deal ultimately turned out to be an allegedly elaborate scam perpetrated by a Colombian-born convicted con man named named Anthony Enrique Gignac, Vanity Fair reported.

According to the report, Soffer first got a call from a London-based investment banker who said she represented Saudi Prince Khalid bin al-Saud on March 24, 2017. The prince allegedly told Soffer that he was in “a direct line to the throne.”

Soffer later flew the prince to Aspen on his private jet. In Aspen, Gignac stayed at the St. Regis hotel and spent time at Soffer’s Aspen home, once owned by Prince Bandar of Saudi Arabia, that is now on the market for $29.5 million.

The prince’s elaborate hoax was uncovered when Soffer noticed that the prince ordered prosciutto (pork is forbidden under the Koran) as an appetizer while out to dinner with the Soffer family in Aspen, Vanity Fair reported.

The Fontainebleau’s security team then began investigating the prince, and the prince was eventually arrested at JFK airport in New York City in November 2017 when he presented a fake passport. [Vanity Fair] — Keith Larsen

From left: Coldwell Banker agent Tim Smith, Cali Swag District rappers Chante ‘Yung’ Glee and Corey “Smoove Da General” Fowler. (Credit: YouTube, The Smith Group/Coldwell Banker)

Remember last year, when spec home developer Nile Niami, released a video with topless women painted in gold to sell Opus, his 20,500-square-foot mansion in Bel Air?

A similar sort of marketing play has taken hold in Newport Beach. Only this time, the video features twenty-somethings clad in boat shoes and the Cali Swag District, the hip hop group behind the 2010 hit “Teach Me How to Dougie,” instead of naked models.

The spoof video titled “Teach Me How to Duffy” was created by listing agent Tim Smith of Coldwell Banker to garner attention for a newly built, 14,000-square-foot spec home that hit the market this week asking $45 million, the Daily News reported.

Located at 1813 E. Bay Avenue on the Balboa Peninsula, the five-bedroom property features a private beach, underwater speakers, theater and five-car garage with electric plug-ins. There’s also room to park eight Duffy boats, as the rap points out.

The four-minute video cost a cool $50,000 to make and Smith himself makes an appearance, rapping about a few of the home’s finer features.

Developer Craig Atkins purchased the site in 2014. He then demolished the existing house to make room for the new mansion, which was designed by architect Robert Sinclair.

At $45 million, the home is the second most expensive property on the Multiple Listing Service in Newport Beach. The most expensive is a Harbor Island estate asking nearly $60 million. Watch the full video below. [DN]–Natalie Hoberman