Rich Barton and Spencer Rascoff playing musical chairs (Credit: iStock, Getty Images, and Obama White House)

Zillow Group CEO Rich Barton is back in the driver’s seat, and Wall Street likes what it’s seeing.

Shares of the Seattle-based listing giant rose to $42.67 as of noon on Friday, up 22.5 percent from Thursday’s closing price of $34.83 per share. Investors traded 11.3 million shares, compared to 2.7 million shares yesterday.

The pop came a day after Zillow not only announced a C-suite swap, but said it is doubling down on its home-buying business, which it expects to generate $20 billion in annual revenue in five years. As a point of comparison, Zillow Group generated $1.3 billion in 2018 revenue, the bulk of it from advertising programs like Premier Agent, the company reported Thursday.

“We see a compelling long-term TAM (total available market) opportunity in Zillow’s pivot,” Deutsche Bank analyst Lloyd Halmsley wrote in a research note Thursday. “And we think Rich Barton is a good jockey to lead the company on the moonshot opportunity.”

To hit $20 billion in annual revenue, Zillow said Thursday it plans to buy 5,000 homes a month in the next three to five years. During the fourth quarter, Zillow bought 499 homes and sold 141 homes. The segment generated just $41.3 million in revenue during the quarter, but the company said it gets a request for a Zillow Offer every five minutes — which they said represents $100 million in demand daily.

In the hours after Zillow’s pivot, Wall Street analysts endorsed the switch. “The announced CEO change came as a surprise but we expect the market to react positively as we believe investors will have more confidence in Rich Barton managing this massive transition,” said Brad Berning, an analyst at Craig-Hallum Capital Group.

RBC Capital Markets’ Mark Mahaney described outgoing CEO Spencer Rascoff as an “extremely skillful” CEO who led the company for nine years and will remain on the board. But Barton has been consistently viewed “as one of the best entrepreneurs, executives, and investors in the Internet space and are excited to see how he continues to strengthen Zillow’s platform.”

A Stanford graduate, Barton is a serial entrepreneur with a string of fruitful bets.

He joined Microsoft in the 1990s, he convinced Bill Gates to back Expedia.com in 1994. By 2003, Expedia was acquired by IAC and then spun off into its own company. In 2005, Barton — along with Rascoff and Lloyd Frink — launched Zillow, which Barton led for five years. He later teamed up with Robert Hohman and Tim Besse to start Glassdoor in 2007. Between 2005 and 2018, Barton was also a venture partner at the VC firm Benchmark, an investor that backed companies including Netflix, Instagram, WeWork and Zillow.

“You can name people who are richer than Rich, but you can’t name very many people who have his track record,” said Nick Hanauer, a venture capitalist and friend of Barton’s, told the New York Times for a profile of Barton in 2014.

Though Barton’s pursuits have bounced between industries, a common theme among them has been transparent information or what Barton calls “power to the people.” Recalling the genesis of Zillow in a 2016 interview, he said that it emerged from his own home-buying experience.

“We had to hire a professional and get a little drip-drip information,” he told the Seattle Times. Frink was going through the same thing, and the pair had an epiphany, Barton recalled. “We were like, ‘Oh my god this is so hard. It’s 2005 and the web has been around for 10 years. Why isn’t it easier for us to get basic marketplace information?’”

Historically, Barton hasn’t served as the CEO of companies he’s founded. “I’m a big believer that leadership is not granted. It’s earned and it’s earned from the people around and below you and not from above,” he told the Seattle Times in 2016.

But on Thursday, he said Zillow Group is an “an inflection point,” and that the time had come to shuffle leadership seats. “I have a certain penchant for and attraction to big swings,” he said during an earnings call.

In November, Barton bought up $19.2 million worth of Zillow stock after the company took a beating on Wall Street.  In August, after Zillow reported that Premier Agent revenue was lower than expected, the company’s stock tumbled 15 percent overnight and investors bought and sold 18.7 million shares compared to 3.7 million a day earlier.

But Zillow’s bet on iBuying isn’t a sure thing, and it is part of an increasingly crowded field that includes Opendoor, Offerpad and Knock, not to mention brokerages like Redfin, Realogy and Keller Williams. “Listening to Rich Barton on the [Zillow Group] earnings call, I’m just sitting here thinking, ‘They should just acquire Opendoor,” tweeted Rob Hahn, founder of real estate consulting firm 7DS Associates.

In a research note, Goldman Sachs’ Heath Terry noted the significant costs and risks associated with Zillow’s focus on home-buying and mortgages, which are “amplified by the challenging housing and mortgage environment.”

“Zillow Group’s big hairy audacious goal around moving its business down-funnel from advertising to actual real estate transaction is a smart long-term move,” wrote Tom White, an analyst at D.A. Davidson, who said it’s also the sort of challenge Barton is “optimally suited” to oversee. But he cautioned it would take years to play out and may alienate some Premier Agent advertisers.

In an email to Zillow Group employees, Rascoff called the news “bittersweet.” He acknowledged that it is a “transformative time” for the company. “Rich, Lloyd and I worked closely since founding Zillow in 2005, and it feels like the right time to turn the triangle of partnership on its side,” he said.

From left: Home on Haskell Avenue with Jimmy Rollins and Jodie Foster and her home (Credit: Getty Images, JGold Group and David Kramer)

Down on Hollywood Boulevard, workers scrambled all week to set up for Sunday’s Academy Awards. And in the hills and valleys of Southern California, snowflakes actually fell.

But none of that could drown out another week of listings and re-listings of celebrity-worthy real estate, which continued to reflect the challenges some owners are facing in a softening market for high-end properties in Los Angeles.

In Beverly Hills, actress Jodie Foster is looking to sell her hilltop residence in the Coldwater Canyon area for $15.9 million. The 7,500-square-foot residence has five bedrooms, seven bathrooms, a media and theatre room, and a pool in the backyard. Foster paid $11.8 million for the 0.65-acre property in 2012 in an off-market deal. Before she purchased the home, British producer Colin Callender owned the property. Foster, who has starred in films like “The Silence of the Lambs,” is also trying to unload a home in the Bird Streets.

Rockstar Energy Drink founder Russell Weiner also listed his contemporary home in Hermosa Beach for $21 million. Spanning 6,200 square feet, the home includes six bedrooms, two family rooms, an elevator, and a home theater with a 3D projector, the Los Angeles Times reported. Weiner bought the oceanfront home for $10 million in 2013, records show. The energy drink tycoon is also struggling to sell his mansion in Beverly Hills, which he recently re-listed at $36 million — down from $49 million.

In Encino, former baseball player Jimmy Rollins, who played one season for the Los Angeles Dodgers, is looking to downsize. After plunking down nearly $9 million for a new home, the all-star listed his 15,000-square-foot mansion for nearly $12 million. He broke a record in the San Fernando Valley when he paid $10.65 million for the home a year ago. The massive Neoclassical estate sits on over half an acre on Haskell Avenue, and includes a two-story guesthouse, basketball court, swimming pool and cabana. Its main residence features eight bedrooms, 12 bathrooms, a wine cellar, office and home theater.

In Redondo Beach, Jim Keyes, the former CEO of Blockbuster and 7-Eleven, has cut the asking price for his modern residence down to $11.9 million. It originally listed for $17.9 million two years ago. The three-story home features an elevator, five bedrooms, six bathrooms, an eight-car garage, a media room, and a wine cellar. Keyes paid about $6.4 million for the property on Esplanade Drive in 2015.

Farther up the coast, newly elected Gov. Gavin Newsom and his wife are selling their Marin County home for $6 million. The 6,000-square-foot home, built in 1950, includes five bedrooms and five bathrooms. It has a second-story deck with views of San Francisco Bay and Mt. Tamalpais. Newsom purchased the home for $2.2 million in 2011. The couple recently bought a new home in Sacramento for $3.7 million.

(Credit: Sotheby’s)

A Lincoln Park mansion that sat unsold for two years asking $50 million before being pulled off the market is being listed again, this time for $45 million.

The six-bedroom home on North Burling Street was by far the priciest residential listing in the Chicago area while it sat on the market, and is still more than twice as expensive as the second priciest listing, even at the reduced amount, according to the Chicago Tribune.

The home of United Automobile Insurance Company CEO Richard Parillo and his wife, Michaela, was taken off the market Nov. 17 after being listed since December 2016. The couple built the home a decade ago after paying $12.5 million in 2005 for the eight city lots it sits on.

Including land costs, the couple spent $65 million to build the mansion, representatives said previously. The house is marketed as 25,000 square feet, but the Cook County Assessor’s office reports it as being 15,500 square feet. It’s assessor-estimated market value is $19.4 million.

Jameson Sotheby’s International Realty’s Tim Salm has the listing.

The next most expensive listing is a 130-year-old Gold Coast mansion owned by Pete’s Fresh Market owner Jimmy Dremonas, who is seeking $22 million. A few homes down from the Parillo home, an 8,000-square-foot mansion at 1950 North Burling sold for $11.9 million last year. [Chicago Tribune] — John O’Brien

(Credit: Property Guru, Pixabay)

Singapore’s most appealing homes, known as Good Class Bungalows (yes, really), are reaching record prices thanks to exclusivity, of course.

Good Class Bungalows, or GCBs, are only available to locals, so the combination of the supply scarcity and buyer exclusivity has led prices to soar even as the broader market has slowed, according to a Bloomberg report.

“The super rich want to buy the best diamond, the best car, so in Singapore residential, the Good Class Bungalow is the best you can get,” KH Tan at Newsman Realty told Bloomberg.

Singapore has about 2,500 GCBs and recent sales are setting records. One bungalow just transacted at $78 million (though another GCB in the area could soon top that) despite home values declining 0.1 percent in the final three months of 2018. Sammi Lim, director of capital markets at CBRE, called GCBs “a resilient asset class.”

Citizenship is just one of the restrictions tied to GCBs. The plot must be at least 1,400 square meters, or about one-third of an acre — plus the house can’t take up more than 35 percent of the land or be more than two stories high.

Such luxurious use of space is another status symbol in one of the world’s most densely-populated countries, where about 7,900 people are crammed into each square kilometer. Buyers are typically super-wealthy locals and foreigners who have gotten citizenship. [Bloomberg] — Meenal Vamburkar

(Credit: Getty)

The real-life inspiration for part of the plot of “Crazy Rich Asians” is proving how crazy rich one would have to be able to afford a piece of property in the world’s most expensive city.

A swath of land spreading about 52 acres in the former Tyersall Park in Singapore could be worth an estimated $3.5 billion, Bloomberg reported. The fictional Young family from the Hollywood blockbuster lived in the park.

The real property is owned by the Crown Prince of Johor, Tunku Ismail Sultan Ibrahim. The remains of an abandoned palace, known as Istana Woodneuk, built for his ancestors can still be found on the site.

It sits near the Botanic Gardens, a Unesco World Heritage Site. For decades, the Malaysian government has been acquiring part of the land owned by the Sultans of Johor as it expands the gardens.

If the Crown Prince were to sell off his esteemed property, it’s unlikely a new buyer could build much on the site. The undeveloped area is zoned for “special use of green space,’’ barring any form of residential or commercial development. Should that zoning ever change, the land could be worth at least $4.7 billion, according to a broker from Savills Plc. [Bloomberg] – Natalie Hoberman

Manny Friedman, Moxy hotel (Credit: Getty, Lowney Architecture)

Marriott International is set to build one of the first new hotels that downtown Oakland has seen in years thanks to tax incentives stemming from the federal Opportunity Zone program.

The 173-room Moxy hotel is set to open in 2021 and will be marketed to millennial travelers. The new hotel will replace a gas station at 2225 Telegraph Avenue in the Uptown neighborhood, which is a designated Opportunity Zone , a program created under President Donald Trump’s tax overhaul.

Opportunity Zones creates significant tax benefits and deferrals for investors who park money in projects located in low-income areas. Developers and investors have been so enamored with the year-old program that many have launched funds in hopes of cashing in.

Indeed, EJF Capital, a hedge fund run by veteran investor Manny Friedman, invested $50 million in the Moxy project via its Opportunity Zone fund, which launched last fall with a fundraising target for $500 million. EJF was previously partnered with Anthony Scaramucci’s hedge fund, SkyBridge Capital, to manage what the partners claimed would be a $3 billion Opportunity Zone fund, but the arrangement fell apart last month.

San Francisco-based real estate manager and developer Tidewater Capital led the entitlement process and will manage construction. Graves Hospitality, which is headquartered in Minneapolis, will manage the Moxy while Lowney Architecture is designing the property. There are currently 14 Moxy hotels in the U.S.

The Uptown neighborhood has recently attracted entertainment firms and retail projects such as the Fox Oakland Theater and Paramount Theater. Jack Dorsey also recently announced that Square Inc. will lease the entire 350,000 square-foot Uptown Station redevelopment located three blocks from the new Moxy location.

(Credit: Wikimedia Commons, Pixabay)

Amid a stagnant economy, a pension crisis and cuts to healthcare, Russian President Vladimir Putin has been planning massive development projects throughout the country to keep people from moving away.

Some 80 percent of Russians live in cities, but they have been increasingly moving to the country’s bigger cities while smaller ones are emptying out, Bloomberg reported. The national redevelopment goal is to modernize smaller cities to make them more attractive to industries and families who are priced out of big cities like Moscow.

Since 2011, Putin has been promoting a multibillion-dollar modernization campaign, and last March he pledged to double spending on infrastructure upgrades. His goal is “the formation of a mass and active middle class” who won’t abandon their home cities for Russian capitals, or abroad.

The Kremlin allocated $31.7 billion over the past four years to urban development in Moscow. Elsewhere, the redevelopment funds are being funneled toward projects spread through 40 smaller cities with a total of 23 million people.

As of last year, multi-city surveys by PwC and Boston Consulting found the efforts were working in Moscow at least with residents reporting a higher level of satisfaction with their city than average. [Bloomberg] – Gregory Cornfield

Reykjavik (Credit: Getty, iStock)

Iceland may have recovered from a debilitating financial crisis, but now it faces a new problem: an increasing number of empty luxury apartments and a need for affordable housing.

A booming housing market and low mortgage rates have pushed up the prices of luxury property in cities like Reykjavik, Bloomberg reported, but now many units are being left empty as the economy cools.

The number of tourists expected to arrive this year is slated to drop nearly 3 percent while the country’s economic growth is forecasted to cool to 1.8 percent, the slowest pace in more than five years.

A recent report by Arion Bank, cited by Bloomberg, suggests the country’s housing market will follow suit with “expectations of increased supply” moderating price growth.

“We have lowered our prices and can’t lower them further, since the price is now lower than the cost of building,” architect Hildigunnur Haraldsdottir told the outlet on trying to move 15 units in her brand new luxury condo that have sat on the market for a year and counting.

The slowdown comes after the price of new luxury apartments in Iceland rose 17 percent between October 2017 and 2018, compared to a rise of 3 percent in general property prices over the same period, according to the report. Meanwhile, the Icelandic government recently released a report saying 8,000 homes are needed to fill the demand for affordable housing in the country.

In 2017, Iceland saw the largest growth in property prices of any country in the world, according to Knight Frank’s Global House Price Index. That year, property prices in the country rose by 15 percent, compared to an average global increase of 4.6 percent. [Bloomberg] – Decca Muldowney

CEO David Tal (Credit: iStock, Agentology)

Startup Agentology has launched a new analytics feature to help agents vet lead sources.

Agentology’s Insights Dashboard analyzes how many leads really want to talk to an agent; what time it came in; and which were disqualified and why, according to Inman. CEO David Tal likened it to Google Analytics, a widely used service that reports data to help evaluate website performance, for marketing listings.

The San Diego company’s standard service is screening leads using human “concierges” and automation to contact and gather useful information about an interested party before passing them off to agents. Agentology reps can also “nurture” leads for up to six months.

A starting package costs about $400 per month for up to 50 leads. The top “Team” package is $800 per month, which includes 150 screened leads, and allows up to three agents to share those leads. If agents reject a lead that ultimately results in a deal, the agent will get a 25 percent referral fee on the commission.

Agentology raised $12 million in a round of funding last year led by venture capital firm Defy.vc. [Inman] – Dennis Lynch

The Guarantor CEO Julien Bonneville (Credit: The French Studio via YouTube and Pixabay)

TheGuarantors, a startup that insures New York renters who don’t meet landlord requirements, has closed on Series B funding.

The $15 million round was led by Global Founders Capital, bringing the company’s total fundraising to $27 million, TheGuarantors said in a statement. The company will use the funds to expand nationwide and launch a new product for the commercial real estate industry.

Global Founders Capital has previously invested in companies including Facebook and LinkedIn. Most of the Series A investors — including White Star Capital, Alven Capital, and Partech Ventures — also participated in the latest round, the company said. Silverstein Properties’ accelerator SilverTech Ventures is also an investor.

TheGuarantors is among companies — including Insurent — aiming to fill a gap in the rental market amid the city’s high prices. Most landlords only accept tenants with an annual income of at least 40 times the monthly rent and who have credit scores greater than 700. Those who can’t meet those requirements, and who don’t have their own guarantors, can turn to these companies instead.

TheGuarantors launched their residential lease guarantee business in 2016 and has since guaranteed more than $200 million in leases, according to the company. The startup insures tenants who earn just 27 times the monthly rent and have credit scores as low as 630. It takes into account savings and other liquid assets, as well as income earned overseas. Landlords and property owners across 40 states have used the platform, according to the firm.

The company is also making a foray into the commercial market with Securiti, a program that allows office tenants to replace their security deposit for an annual fee while offering landlords insurance. Insurer giant Chubb is backing the policies. The program, the company argues, allows tenants to free up cash.

“Security deposits are often a point of friction in lease negotiations,” Tal Kerret, president of Silverstein Properties, said in the statement.

TheGuarantors estimates that more than $150 billion of applicable security deposits are tied up in commercial leases in the U.S.

Oceanwide Holdings CEO Thomas Feng and Oceanwide Plaza

Late last month, the Chinese company developing the $1 billion Oceanwide Plaza project in Downtown halted work, but said construction would resume in a couple of weeks.

But despite assurances, work never started back up, renewing questions about the financial viability of the massive mixed-use project — set to be completed sometime this year — and the embattled firm, Oceanwide Holdings.

Work ground to a halt at the three-tower project, which was expected to include 500 condos, a hotel and 166,000 square feet of retail space.

As an explanation, Beijing-based Oceanwide Holdings said at the time it was recapitalizing the project. But as of Friday work had not restarted, and Oceanwide Holdings would not comment on its status, according to the Los Angeles Times.

The company is also facing a number of other setbacks. Contractors claim Oceanwide failed to pay them more than $62.5 million over the last six months on Oceanwide Plaza constructions.

And earlier this month, Oceanwide Holdings listed a development site in Manhattan’s Financial District for $300 million, another sign that the firm is facing financial troubles.

Regarding the Oceanwide Plaza project, which was financed entirely in-house, the company could have trouble getting funds out of China because of the country’s restrictions on moving capital abroad.

Major Chinese international investors including HNA, Fosun International, and Dalian Wanda Group have all sold off major assets since the capital controls were enacted in 2017. [LAT] — Dennis Lynch 

AECOM CEO Michael Burke and Canyon Partners’ co-CEOs Joshua Friedman and Mitchell Julis 

AECOM Capital and Canyon Partners will invest $4 billion into a joint venture for developing “large-scale, institutional quality” commercial real estate projects across the country.

AECOM Capital — the investment arm of AECOM — and asset management firm Canyon will focus on developing core assets in the top 25 U.S. markets, according to a joint release. That includes in the Los Angeles area, where both companies are headquartered.

The partnership will develop on all property types, including residential, office and mixed-use complexes, and sell to institutional buyers.

The joint venture has so far invested $65 million into three projects. Those include a mixed-use development in L.A.’s Culver City, called Ivy Station; a 250-key hotel in Silicon Valley’s Menlo Park; and a 525-unit project in Washington, D.C.

Both firms are heavily active in Los Angeles. AECOM is developing a 51-story tower in Downtown’s South Park neighborhood. The project was one of the largest proposed last year. It’s also managing construction on Related Companies’ and CORE’s $1 billion Grand Avenue development, executing a Frank Gehry design that includes two large towers.

Canyon manages a number of assets around L.A. and has provided financing on new construction as well.

Reach and Rise (Top left), W Residences Fort Lauderdale (Top right) and Hyde Beach House (Bottom)

Luxury condo developers in South Florida are now dangling cash rebates and zero maintenance fees at buyers — and the potential for huge commissions at brokers — in an effort to unload remaining units amid the ongoing sales slowdown.

Incentives are increasingly aimed at new developments, including the W Residences Fort Lauderdale — 64 of 171 units haven’t been sold — and Reach and Rise at Brickell City Centre, which has 150 condos of 800 still on the market. Developers and brokers say they are trying to close the books on the completed projects.

Condo sales locally have slowed along with the housing market nationwide. South Florida’s newly-developed condominiums have seen sluggish sales for at least the last two years, as foreign investment, particularly from South America, has diminished.

According to Douglas Elliman’s latest residential market report, the number of luxury condos sold in Miami Beach and the barrier islands during the fourth quarter fell 15 percent year over year. Condo sales in January dipped more than 11 percent in Miami-Dade and Broward counties compared to the same period the year before, according to the Miami Association of Realtors. In Palm Beach County, the dropoff was more than 18 percent.

Meanwhile, new condo projects continue to enter the market, adding to the competition.

“Condo developers in South Florida want to sell their inventory this year, so they are offering different incentives all over the place,” said Craig Studnicky, principal of brokerage RelatedISG.

The W Residences Fort Lauderdale, with 37 percent of its condos still for sale, last month added a third year to its previous two-year leaseback offer. Related Companies, which owns the condo-hotel, will place a newly purchased condo in the W’s Starwood hotel rental program, paying the buyer 7 percent per year. For a typical $1 million, two-bedroom unit, that amounts to $70,000 per year or $210,000 over three years, said Studnicky, whose firm is exclusively handling sales and marketing of the W Residences.

Related will also pay the buyer’s condo maintenance fees, which would average $18,000 a year on the same unit, or $54,000 over three years. That means a person who buys that $1 million condo would receive $264,000 back over three years.

The condo owner would be allowed to use the unit for 30 days per year, which would not have to be consecutive, and would still be responsible for real estate taxes of about $20,000 a year, Studnicky said.

“Back in December, Related paid me a visit and said, ‘What can we do to help you make more sales because we would like to sell it out in 2019,’ Studnicky said. So he suggested the third year leaseback, and three years of zero maintenance fees.

Related agreed. “It didn’t take a lot of convincing,” Studnicky said.

Related Companies completed nearly $60 million in renovations last year on the W, which it purchased out of foreclosure in 2014 for $90 million from the Y Group. In November, Related secured $140 million to refinance the 346-room property at 3101 Bayshore Drive, five months after putting the hotel on the market for $275 million. It remains for sale, and latest incentives package could also be an effort to sell out the condo portion to make the hotel more attractive for potential buyers.

Meanwhile, the Related Group is offering big commissions for brokers at its recently-completed projects, like Hyde Beach House in Hollywood and Hyde Midtown in Miami.

This month, the company dangled 10 percent commissions to brokers at Hyde Beach House at 4111 South Ocean Drive. The same 10 percent commission is also offered at Hyde Midtown in Midtown Miami. That’s far above the standard 6 percent fee.

Carlos Rosso, president of the Related Group’s condominium development division, said boosting broker commissions provides the extra incentive to move inventory, and move on.

“There are small quantities of units left at all these projects,” he said. “And we’re trying to close our sales offices and reduce marketing costs by offering incentives.”

But the big push is still aimed at potential buyers, drawing them in with deep discounts.

In Miami, Swire Properties is saying it will give buyers a 10 percent cash rebate at its recently-built Reach and Rise, twin 43-story condo buildings at Brickell City Centre. About 19 percent of the combined units remain unsold.

That means for a $1 million unit, Swire will write a check to the buyer for $100,000, plus pay two years of condo fees, which amounts to about $15,000 per year, according to Studnicky. He is also principal of ISG, which took over sales and marketing of Reach and Rise last April.

And at the 180-unit Echo Brickell in Miami, Property Markets Group is now giving a 10 percent discount to buyers along with a 7 percent commission to brokers. PMG launched the offer in January with just four units in the complex on the market. Two have since been sold, Studnicky said.

“Developers want to close out their portfolio of unsold condos so they can begin the next cycle, and they have an eye to begin the next cycle in 2020,” Studnicky said. “The best way to burn off the portfolio is with these incentives.”

Mayor Eric Garcetti and 1426 Paloma Street (Credit: Twitter and Google Maps)

City officials have approved another emergency homeless shelter in Downtown Los Angeles, the area of the city where homelessness is the most acute and visible.

The new shelter in the Fashion District will include 115 beds and could open within three months, NBC reported.

The City Council approved the property lease at 1426 Paloma Street last Friday. The 14,000-square-foot property formerly housed the Children’s Museum, but has sat vacant since the museum closed in 2000.

L.A. will pay the owner of the Fashion District property $37,000 per month for three years, while the county covers on-site services.

Embattled City Council member Jose Huizar, who is under investigation by the FBI, introduced the motion last month as a part of Mayor Eric Garcetti’s “A Bridge Home” program. The $30 million housing project calls for short-term homeless housing in each Council district.

Despite opposition from local residents, two locations have already opened in Downtown’s El Pueblo and Hollywood. City officials are also planning a 100-bed shelter at the Westside VA campus, as well as other locations in Los Feliz, Venice and Koreatown. [NBCLA] — Natalie Hoberman 

LAPD Chief Michel Moore and 1925 North Marianna Avenue (Credit: Google Maps)

Camfield Partners wants to build a large new warehouse and office in El Sereno for storing evidence and equipment for the Los Angeles Police Department.

The Laguna Hills-based firm filed plans with the city for the 80,000-square-foot warehouse earlier this month. It would be built on a vacant 6.8-acre lot at 1925 N. Marianna Avenue.

Camfield, a small firm led by Ken Jackson, purchased the lot in 2015 for $6.5 million. The City Council approved a $28 million purchase and sale agreement with Camfield to develop the warehouse. The City of L.A. will purchase the building upon completion.

The building will be a warehouse for the LAPD’s Commercial Auto Theft Section and Property Division, which handles evidence. The LAPD will use it to store surveillance equipment and bait cars. There will be office space for around two dozen staff, as well as rooftop parking.

The Commercial Auto Theft Section was based in Downtown L.A. until 2011 when its building was demolished. It’s currently sharing space in the San Fernando Valley with the LAPD Bomb Squad.

The El Sereno lot, which is located near interstates 10 and 710, would provide a more accessible location. The auto theft division’s Valley location has been problematic because a lack of close access to freeways, according to a city staff report.

David Egan, CBRE’s head of industrial and logistics research (Credit: Wikipedia)

The Inland Empire area claimed more major warehouse deals than any other market in the country last year.

The submarket west of Los Angeles led all markets with 20 of the top 100 deals in the nation, according to CBRE. It was able to exploit a tight market in the City of L.A. and increasing demand from e-commerce and logistics companies, which signed more major warehouse leasing deals in 2018 than the year before.

The Inland Empire deals totaled almost 19 million square feet. It was followed by a corridor in Pennsylvania, Dallas-Fort Worth, Atlanta and Chicago, CBRE said.

Companies have been more attracted to the Inland Empire lately because it offers cheaper space and less competition compared to Los Angeles’ industrial market. Ivanhoe Cambridge and CapRock Partners, for example, announced plans to develop a $450-million industrial campus in the Inland Empire area last August.

Of the largest 100 industrial leases last year, 61 were signed by e-commerce companies and logistics firms, for a total of 61.5 million square feet. In 2017, those two sectors claimed 52 of the largest leases for a cumulative 43.2 million square feet.

The two types of firms are related in that many logistics companies, specifically third-party logistics providers, handle e-commerce distribution for their clients. But regardless of industry, the largest industrial leases got even bigger last year.

The top 100 deals totaled 19 percent more space than the biggest deals in 2017. Half of the top 100 deals in 2018 were for warehouses with 970,000 square feet or more, reflecting demand for large buildings.

David Egan, CBRE’s head of industrial and logistics research, said the firm expects this type of leasing momentum to continue in 2019. In October, online marketplace Ten-X Commercial predicted that rents in Inland Empire will increase by 6.5 percent through 2022, and that vacancies would almost triple from 3.4 percent to 9.5 percent in the same time frame.

Stephanie Smith, the self-proclaimed largest cannabis landlord in California (Credit: Facebook)

It was a tough week for Stephanie Smith, a real estate developer who claims to be the largest cannabis landlord in California.

San Bernardino city council members denied her bid for a license to manufacture marijuana. And police jailed her after raiding her home in Pacific Palisades and discovering a stash of oxycodone and Norco, along with $200,000 in cash, The San Bernardino Sun reported.

For more than a year, police have been building a case against Smith about her potential involvement with illegal marijuana grows in her buildings in San Bernardino. Six of her buildings have been raided since 2017. At one location, more than 2,600 pounds of marijuana was seized.

Smith manages 50 cannabis properties, according a profile last year on cannabisbusinesstimes.com. She told Los Angeles Times last year that she controls nearly 2 million square feet of industrial property, mostly in Southern California.

Smith advocates for the sale of legalized weed, and is suing several cities over cannabis policies. But she also maintains she is only a landlord and has nothing to do with activities that occur inside her properties.

Smith was released Friday after pleading not guilty. Her attorney Bill Eilenberg said it had “nothing to do with Marijuana.” Eilenberg said the painkillers were left over from a clinic she ran years ago, and the $200,000 was rent from her marijuana-cultivating tenants, which are cash-only businesses.

Eilenberg said her arrest wasn’t relevant to her attempt to set up a manufacturing and distribution plant at 4010 N. Georgia Boulevard in San Bernardino.

The city granted licenses to manufacture marijuana to 16 of 39 applicants, with Smith’s application rated at the bottom. [Sun] — Gregory Cornfield

Nile Niami (Credit: the Society Group and YouTube)

In the race to host the most extravagant open house soiree in Los Angeles, spec home developer Nile Niami is running hard for the finish line.

The celebrity developer recently hosted a $100,000 themed party that featured 500 guests, Hollywood A-listers, fire dancers and even a camel — all to generate a buzz for his $55 million home in West Hollywood, according to the Hollywood Reporter.

Inspired by Hieronymus Bosch’s “The Garden of Earthly Delights,” the three floors of the 14,000-square-foot home split into different Heaven, Earth and Hell themes.

Guests were first greeted by a camel at the home’s entrance. Upstairs, a pair of nude actors could be found leading virtual reality experiences. Half-dressed women in mermaid outfits, as well as leather S&M gear, ran amok.

Other amenities included a cannabis edibles bar, violin performance and techno dance floor.

“The idea was to create something that was a combination of Burning Man, [Mexico’s] Ondalinda music festival and Coachella,” Niami told THR.

Niami’s party — thrown with the help of the Society Group — was a marketing effort to sell his personal home on Londonberry Place in the Hollywood Hills. The six-bedroom, 10-bath home, which hit the market last month, features amenities like a sensory deprivation tank and yoga room with plant walls.

The home is just one of the multi-million-dollar properties Niami is selling. He’s also seeking $85 million for Opus, a 20,500-square-foot spec home on Billionaire’s Row in Beverly Hills.

Similarly to the Londonberry party, Niami and his public relations firm employed sex as a key element when they released a racy listing video to market the home in 2017. [THR] — Natalie Hoberman

The Dominick at 246 Spring Street

CIM Group might not own the former Trump Soho Hotel for much longer.

The Los Angeles-based company is considering selling the property at 246 Spring Street, now known as the Dominick, according to Bloomberg. They have already contacted potential buyers for it.

The building stands 46 stories tall and has 391 rooms. CIM took ownership of the hotel after winning a foreclosure auction in 2014 and purchased the management and license agreements from the Trump Organization in 2017 for at least $6 million, although the breakup fee was not disclosed. The company was also a lender for the property when the Sapir Organization and Bayrock Group were developing it.

Bayrock included Felix Sater as one of its leaders, a convicted felon with ties to organized crime groups in the United States and Russia. [Bloomberg] – Eddie Small

Craig Realty founder Steven Craig and the Citadel Outlets (Credit: Wikipedia)

Move over Disneyland, the city of Commerce might get its own monorail…to shuttle passengers through a massive mixed-use project now on the table.

Shopping center developer Craig Realty Group is planning a major expansion of the Citadel Outlets shopping complex in Commerce that would add three hotels, hundreds of thousands of square feet of retail space and a monorail system, according to Urbanize.

The expansion would add 10 acres to the existing 34-acre property, located at 100 Citadel Drive, north of Interstate 5 near Commerce’s southern border.

Newport Beach-based firm Craig Realty wants to add 160,000 square feet of shops and restaurants in two- and three-story buildings, as well as a 174-room hotel and a 96-room hotel to the main Citadel Outlets site. There would also be 1,618 new parking spaces. There is already a DoubleTree by Hilton hotel on-site.

Just to the south, plans also call for building 70,000 square feet of new retail space, as well as 120,000 square feet of “experiential retail,” and a 150,000-square-foot movie theater, according to Urbanize. The third hotel, this one with 500 rooms, would be located in a 13-story building.

A third, separate area would get restaurants and a new 55,000-square-foot warehouse.

The monorail system would link the areas. It would need approval from the National Transportation Safety Board, and Craig Realty — which has developments across the country — expects the system could be completed by 2024.

Craig Realty wants to start the project with the restaurants area, which it said could open by late 2020.

This would be among the largest constructions in Commerce in recent history. But big-ticket deals did take place last year, mostly in the industrial space. Rexford Industrial Realty paid $121 million in May for a 36-acre distribution center. And Blackstone bought a three-building distribution center in the city for $42 million. [Urbanize] — Dennis Lynch