The Montecito estate

Bill Asher, who owns adult film production company Vivid Entertainment, snagged an estate in Montecito, his second home in the area. A nearby home he owns was severely damaged in last year’s mudslides.

Asher paid $14.5 million for the Hot Springs Road home, according to Yolanda’s Little Black Book. That was $1 million less than the list price, and $5.5 million off the original asking price from 2016, according to the report.

Laurel Beebe Barrack was the seller. The ex-wife of Colony Capital CEO Tom Barrack, she listed the home for $20 million in 2016.

The Spanish Colonial was designed in 1920. The home on 3.3 acres is walled off and features three-gated access points. The main home includes 9,800 square feet of space, with six bedrooms and eight bathrooms. The property also features a guesthouse, pool, pool house, tennis court, and spa.

Asher also owns a 3.5-acre estate down the street, according to Yolanda. That home, which he paid $8 million for, was damaged in the January 2018 mudslides.

The acquisition adds to a string of recent home purchases in the area by celebrities. Rob Lowe and Ellen DeGeneres have all purchased pricey homes in the area. [Yolanda] — Gregory Cornfield

Howard Lutnick and Larry Silverstein (Credit: Getty Images and iStock)

Silverstein Properties and Cantor Fitzgerald are looking to raise almost $2 billion for an Opportunity Zone fund.

The joint venture will target primary metropolitan markets for mostly ground-up developments, including retail, office, industrial and hospitality buildings, the firms announced. It is not clear which markets the firms plan to target.

“The joint venture targets investments in Opportunity Zones with third-party developers, as well as large-scale projects where Silverstein Properties is the developer,” the firms said in a statement.

A source with knowledge of the companies plans said the initial goal is to raise about $1.8 billion for the fund — one of the most ambitious funds launched to date.

CIM Group has a planned $5 billion fund, and Anthony Scaramucci‘s hedge fund, SkyBridge Capital, and its development partner Westport Capital are looking to raise $3 billion.

Opportunity Zones, a hallmark clause of the 2017 tax overhaul, incentivizes development in low-income areas by offering tax deferments and relief. An impending deadline at the end of the year to gain the largest benefit, 15 percent, has prompted a rush of firms to set up funds in recent months.

However, the real estate and finance industries are still holding their breath for more regulatory language to iron-out uncertainties in the program, a process that was delayed significantly by the government shutdown over the winter.

The pairing of developers and financial firms to raise is a common thread among Opportunity Zone funds, whereby financial firms can locate and fundraise capital, and developers hold the expertise to deploy it. For example, developer Youngwoo & Associates has partnered with crowdfunding startup EquityMultiple to raise a $500 million Opportunity Zone fund.

Common CEO Brad Hargreaves and Proper Development-built Common Melrose in Hollywood

Co-living company Common and Los Angeles developer Proper Development are planning a $100 million expansion in L.A.

Proper Development will build seven apartment buildings with 600 beds over the next two or three years in L.A., and Common will operate and manage them, according to the Los Angeles Times.

Common already operates two co-living buildings in the city — in Echo Park and Hollywood. Its units come fully furnished and include utilities as part of the monthly rent. Tenants share some spaces like kitchens, and there is also regular housekeeping services.

The co-living model has its detractors, but investors have poured money into the space. Through last August, Common had collected about $60 million since its founding in 2015. New York-based Ollie has raised $15 million to fuel its own Los Angeles expansion, while British-based Collective had raised $400 million. The Real Deal talked to Hargreaves and other figures in co-living last year about how the model has evolved in the last several years.

The co-living model is billed as a convenient and more affordable alternative to traditional renting.

Rents at Common’s Hollywood location, a Proper Development-built 24-unit complex called Common Melrose, are around $1,550 per person.

Common founder Brad Hargreaves said the company received 9,000 applications for Common Melrose, according to the Times. Rates were around 20 percent cheaper than competing studio-style units nearby, he said.

Proper Development is led by Daniel Pourbaba, son of 4D Development & Investments CEO David Pourbaba. The firm’s latest project to get moving is a 21-unit development in Hollywood. [LAT] — Dennis Lynch 

The Chrysler Building at 405 Lexington Avenue and Aby Rosen, co-founder and principal of RFR Holding (Credit: iStock)

Aby Rosen’s RFR Holding is in advanced talks to purchase the Chrysler Building, one of the world’s most recognizable skyscrapers, The Real Deal has learned.

A purchase-sale agreement between RFR and the sellers, Tishman Speyer and an Abu Dhabi government fund, has been drafted but not yet signed, a source familiar with the deal said.

The sale price was not immediately clear, but one source with knowledge of the talks said that figure was higher “but not much higher” than the bids in the $100 million-range the Commercial Observer reported Friday morning. The price would be several notches lower than the $800 million the Abu Dhabi fund paid Tishman Speyer for a 90-percent stake in the tower in 2008.

Since then, the cost of the ground lease, paid to the owner of the land, Cooper Union, has skyrocketed, while the rents at the building haven’t kept up. The annual ground lease rent increased by $32.5 million from $7.75 million last year, and is due for another reset to $41 million in 2028. And iconic though the 77-story, 1.2 million-square-foot Art Deco property is, it’s difficult for it to compete in the leasing market with the new crop of towers boasting oversized windows and the latest amenities. Current tenants include Creative Arts Agency, coworking firm Spaces and law firm Moses & Singer. Asking rents are between $50 and $60 per square foot.

CBRE’s Darcy Stacom and Bill Shanahan are marketing the property on behalf of Tishman Speyer and the fund, formerly known as the Abu Dhabi Investment Council but now a division of Mubadala, which controls a vast portfolio of global assets including a large stake in New York’s Park Lane Hotel and the Manchester City soccer club.

Ashkenazy Acquisition was also said to have been interested in the property, according to sources. Representatives for Tishman, RFR, CBRE and Ashkenzy were not immediately available for comment.

For Rosen, landing the Chrysler Building would be akin to adding the Kohinoor Diamond to an already formidable collection of gems. The developer and his partner Michael Fuchs have made a career out of snagging architecturally and historically significant buildings, such as the Mies Van Der Rohe-designed Seagram Building at 375 Park Avenue, the Skidmore, Owings and Merrill-designed Lever House at 390 Park Avenue, and the Church Missions House at 281 Park Avenue South.

But ground-lease complications have plagued RFR before. The company had a long struggle at the Lever House, where it failed to refinance a loan on the building due to a sharply-escalating ground lease. Last July, Brookfield Properties and Waterman Interests took over the property’s ground lease, though it’s unclear if RFR continues to be involved.

Though a deal for the Chrysler Building anywhere near the suggested price range would represent a serious loss for the Abu Dhabi fund, Tishman Speyer has already all but cashed out: In 1997, it bought the property out of foreclosure, along with two other buildings, for just $220 million. It sold a 90-percent stake in the Chrysler to Abu Dhabi, right before the market turned in 2008, for $800 million.

New home construction (Credit: iStock)

Single-family housing starts posted a big gain in January amid continuing signs of a larger housing market slowdown across the U.S.

New home construction jumped 25.1 percent from December, and overall residential starts increased 18.6 percent, according to U.S. Housing and Urban Development and Commerce Department data first reported by Bloomberg. The jump in new home starts marked the biggest one-month gain in 40 years, attributed in part to a rise in demand from homebuyers now that mortgage rates have dropped.

If the January rate for residential home starts remained constant through the year, construction would begin on 1.23 million homes. That would be an increase from the government’s projections using December numbers. That showed only 1.04 million new homes would be built in 2019.

The positive signs for the housing market happened to arrive on the same day that the Labor Department reported dismal monthly job gains. The U.S. economy added just 20,000 new jobs in February, far below analyst expectations of 185,000.

And despite the January housing start figures, data has shown the U.S. housing market has been steadily slowing over the past year, with homeowners struggling to sell existing homes. In the third quarter of 2018, home flipping had dropped to its lowest levels in three years, and home affordability has been at its lowest levels in a decade. [Bloomberg] — Keith Larsen

Sares-Regis principals John Hagestad, Geoffrey Stack, and William Thormahlen and a rendering of Paseo Marina (Credit: TCA Architects)

Sares-Regis’ redevelopment of the Marina Marketplace mall is now one step closer to reality.

The Irvine-based firm has completed its draft environmental impact report for the Paseo Marina project, two-and-a-half years after first filing plans for it, according to Urbanize. Without further delay, Sares-Regis is on track to break ground on it next year.

The Paseo Marina project would redevelop 6 acres where the mall now stands along Maxella Avenue at Lincoln Boulevard and Mindanao Way, creating 658 apartments and 27,300 square feet of retail space. There would be 66 units set aside for low-income renters. Three buildings are planned and walkways, or paseos, will cross the property.

London & Regional Properties bought the Hotel MdR next door to the Marina Marketplace last May for $127 million, citing steady demand from the tech sector. The hotel essentially shares a parking lot with the future Paseo Marina.

The project is just across Lincoln Boulevard from Pier 44, where Golden West Properties is developing a commercial and boating complex. Supermarket chain Trader Joe’s plans to open a 13,400-square-foot outpost there.

The project is subject to a public comment period, after which it will go the L.A. City Council for approval. Lawmakers could create conditions for approval, which means the project could change. [Urbanize] — Dennis Lynch 

Clockwise from top left: Dollar Tree to shutter or rebrand hundreds of Family Dollar stores, the richest real estate billionaires on an annual Forbes ranking hail from China and Hong Kong, dozens of Gap and Victoria’s Secret stores prepare to close amid low sales and real estate investment trusts are benefiting from the Federal Reserve’s decision to keep interest rates where they are.

China, Hong Kong real estate billionaires top Forbes richest ranking
Forbes has released its annual ranking of the world’s wealthiest people, and the real estate moguls who placed highest on its list are all from either China or Hong Kong. Evergrande Group’s Hui Ka Yan took the 22nd spot with a net worth exceeding $36 billion, while Dalian Wanda chairman Wang Jianlin placed 36th with a net worth of $22.6 billion, according to Forbes. Irvine Company chairman Donald Bren was the highest-ranked American property mogul, placing 68th on the list. Related Companies’ Stephen Ross took the 191st spot on the ranking with a net worth of $7.6 billion. Ross, the developer behind New York’s Hudson Yards, was the only major Manhattan real estate billionaire in the top 200. [TRD]

Hundreds of Gap, Family Dollar, Victoria’s Secret stores to close
Around 230 Gap stores and 53 Victoria’s Secret stores will be closing, their respective parent companies have said. Dollar Tree, which owns the Family Dollar chain, also plans to close up to 390 stores and convert another 200 Family Dollar stores into Dollar Tree shops, the Wall Street Journal reported. (Dollar Tree bought Family Dollar for around $9 billion in 2015.) As for Gap, it plans to split off its Old Navy brand into a separate company, as the chain’s “business model and customers have increasingly diverged from our specialty brands over time,” said a statement from board chairman Robert Fisher. Old Navy has been doing better than its sister companies, Gap and Banana Republic, according to USA Today. Meanwhile, Victoria’s Secret, a flagship of retail giant L Brands, has experienced a drop in sales amid an increased desire among shoppers for so-called “comfort lingerie,” according to CNBC. [TRD]

Amazon pulls plug on 87 pop-up stores, plans new grocery store chain
Fresh off ditching Long Island City for its so-called H2Q, Amazon is now preparing to shutter 87 pop-up retail stores throughout the country, according to the Wall Street Journal. The e-commerce giant, which launched the small store concept in 2014, is reportedly reevaluating its physical retail plans. The purported move comes as Amazon prepares to launch a new grocery store line, one whose first outpost will open in Los Angeles, the Wall Street Journal reported. The Los Angeles store could open before the end of the year, and two other stores are expected to open at the beginning of 2020, according to the outlet. Amazon’s new chain isn’t being billed as a competitor to Whole Foods, which the company acquired in 2017 and reportedly has plans to expand, but will instead offer a broader range of products. The new stores will be about 35,000 square feet, although its plans aren’t set in stone, as Amazon could back out of its existing contracts, the outlet reported. [TRD]

We Company sheds 300 staffers, or 3 percent of its workforce
The co-working giant formerly known as WeWork, most recently valued at $47 billion ahead of a January rebranding as the We Company, let go of 300 employees last week, according to The Real Deal‘s exclusive reporting. The layoffs, which sources said took place globally in its WeWork, WeLive and WeGrow divisions, are the largest by the company since its formation in 2010. A We Company spokesperson said the company has plans to hire 6,000 employees this year, or about 500 per month, to bolster its current head count of roughly 10,000. The SoftBank Group-backed firm, whose CEO Adam Neumann has come under scrutiny for personal investments that mirror those made by the We Company, last made major cutbacks in 2016. Sources told TRD that the latest force reductions have been positioned as being for performance-related reasons. [TRD]

Keller Williams credits tech expansion for 2018 deal surge
A week after Douglas Elliman and Realogy disclosed less-than-stellar financials for 2018, franchise brokerage rival Keller Williams has unveiled some key financial metrics that it hit last year. The Austin-based real estate company said that its agents in the U.S. and Canada closed $332.4 billion in sales volume during its most recent fiscal year, up 5.7 percent from 2017, as contract volume jumped 5.5 percent year-over-year, to $365 billion. Keller Williams declined, however, to disclose its net income or address a decline in franchisee profits. The company, whose CEO Gary Keller returned to its leadership ranks earlier this year, claimed that key investments in technology were paying off. Official agent count remained steady at 159,447, although Keller Williams is in the midst of purging potentially thousands of inactive agents. [TRD]

REITs benefit from Fed’s decision to keep interest rates steady
The Federal Reserve’s recent decision to keep interest rates where they are has been good for real estate investment trusts. Real estate stocks on the S&P 500 fell 5.6 percent in 2018, but have jumped by 12 percent since the beginning of this year as investors set their sights on REIT shares, the Wall Street Journal reported. “The surprising drop in yields and the drop in mortgage rates could potentially be another positive for housing and housing-related stocks going forward,” LPL Financial senior market strategist Ryan Detrick told the outlet. The Fed raised interest rates four times in 2018, but held off on another rate hike in January. [TRD]

MAJOR MARKET HIGHLIGHTS

New York’s Chrysler Building nears potential $100M sale
Aby Rosen, principal and co-founder of Manhattan-based real estate firm RFR Holding, is nearing a deal to acquire the iconic Chrysler Building, according to The Real Deal‘s exclusive reporting. A source with knowledge of the negotiations told TRD that the purchase price is “not much higher” than the $100 million estimate that the Commercial Observer reported the building could trade for, in part due to a ground lease on the landmarked property. The Chrysler Building’s current owners, an Abu Dhabi government fund and the developer Tishman Speyer, put the Art Deco-style office tower up for sale in January. CBRE Group is marketing the building, which saw the Abu Dhabi Investment Council cough up $800 million in 2008 for what would become a 90 percent stake in the tower. [TRD]

Silverstein Properties, Cantor Fitzgerald to raise nearly $2B OZ fund
In one of the largest funds so far to target the Trump administration’s increasingly popular Opportunity Zone program, financial services firm Cantor Fitzgerald and real estate developer Silverstein Properties announced on March 7 that they had joined forces on a fund that they hope will raise $2 billion. The duo, which are both based in Manhattan, said they will target ground-up developments in primary metropolitan markets with a focus on industrial, hospitality, office and retail projects. The partnership between Silverstein and Cantor Fitzgerald is the latest in a series of moves by real estate firms and other investors seeking to capitalize on the OZ program. Earlier this week, Greenwich, Connecticut-based Belpointe Capital announced its plans for an OZ-focused real estate investment trust that it hopes will raise $3 billion within eight years. [TRD]

Michael Cohen sues Trump Org over $2M in unpaid legal fees
President Donald Trump’s former personal lawyer, fresh off testifying on Capitol Hill and suing two Chicago-based taxi medallion moguls over a $6 million condo loan in Miami, is back in court again. Michael Cohen has sued the Trump Organization for breach of contract over its alleged nonpayment on roughly $1.9 million in legal fees. Cohen claims the president’s namesake real estate company must reimburse him for legal costs he incurred as a result of investigations into Trump’s 2016 presidential campaign. Cohen’s lawsuit, filed in Manhattan by lawyers from Binder & Schwartz and Gilbert LLP, states that at various times he has been represented by the Blakely Law Group, Davis Goldberg & Galper, McDermott Will & Emery, Monico & Spevack and Petrillo Klein & Boxer. Cohen, who was disbarred in New York State last month, claims that the Trump Organization cut him off after he began cooperating with federal prosecutors. [TRD]

Top Miami broker teams merge at Coldwell Banker, rebrand
One of Miami’s top broker teams has left its home of 16 years to merge with another top team. Judy Zeder’s team has parted ways with Coral Gables-based EWM Realty International and is teaming up with Jill Herzberg and Jill Eber’s group at Coldwell Banker. The new group will be called The Jills Zeder Group with Coldwell Banker. The families that comprise the two groups are longtime friends, Zeder said. “It’s a very unusual situation to have three families get along and like each other,” said Zeder, adding that they would be “working together for the benefit of the clients.” The two teams have closed a combined $5 billion in real estate sales since 2006. Eber and Herzberg, known as “The Jills” in South Florida’s real estate market, saw a former Miami realtor who tried to extort them receive a jail sentence in February. [TRD]

Nashville-based office REIT mulling potential IPO
Priam Properties is thinking about going public in a move that would make the Nashville-based outfit the first real estate investment trust in the U.S. to pursue an initial public offering this year, Bloomberg reported. The office landlord “has held discussions with investment banks about selling shares as soon as this year,” the outlet reported, citing sources familiar with the matter. Priam generally focuses on “high-growth markets” in states such as Florida, Ohio and Tennessee. Its representatives didn’t return requests for comment about the reported IPO. Dallas-based Fathom Realty, a cloud-based brokerage founded in 2010 that operates on a 100 percent commission model, is another real estate firm reportedly considering an IPO this year. [TRD]

Chicago gets priciest resi sale this year as condo trades for $11.3M
Despite some areas along the southern shore of Lake Michigan sinking due to climate change, Chicago had its priciest residential sale of 2019, the Chicago Tribune reported. A 31st floor unit at No. 9 Walton, a luxury condo tower along the Windy City’s Gold Coast that has attracted business magnates and celebrities, sold for $11.3 million to an as-yet-unidentified buyer. Nancy Tassone of Jameson Sotheby’s International Realty had the listing for the four-bedroom, 7,100-square-foot condo unit, while Natasha Motev of Jameson Sotheby’s is advising the buyer. Hedge fund billionaire Ken Griffin, who made headlines earlier this year for a record-setting penthouse purchase in New York, paid $59 million in late 2017 to buy the top four floors of No. 9 Walton. That deal remains the most expensive residential transaction ever in the Chicagoland area. [TRD]

Compass’ Bay Area growth continues with Alain Pinel Realtors acquisition
A week after picking up customer relationship manager Contractually, Compass is expanding again. The New York-based brokerage announced on March 4 that it bolted on Saratoga, California-based Alain Pinel Realtors, which has 1,300 agents in 33 offices across Northern California, Inman first reported. Compass’ expansion in the Bay Area continues an acquisition spree it began in 2017 when the SoftBank Group-backed firm snapped up San Francisco-based Pacific Union International, which reported $14 billion in sales in 2017. The acquisition of Alain Pinel brings Compass’ agent count in the Golden State up to around 4,500. Compass CEO Robert Reffkin said in January that the firm doesn’t plan to expand into any new markets this year. [TRD]

Dennis Quaid unloaded his home in the Palisades for about $6 million. (Credit: The Agency)

Dennis Quaid seems to like the Pacific Palisades, just not enough to stay in one place.

The actor sold his Spanish-style home for just under $6 million, according to the Los Angeles Times. The deal comes six years after he sold another home in the same area for $3.3 million.

For the recent transaction, listed the property for about $6.5 million last summer. Quaid, who has starred movies like “The Parent Trap” and “The Rookie,” paid $5.1 million for the home in 2013.

The 6,200-square-foot home was built in 1929 along Sunset Boulevard near the Riviera Country Club and Will Rogers State Historic Park. It includes six bedrooms, nine bathrooms and a theatre room. The gated property spans more than 16,000 square feet and includes a pool and 10-car motor court.

Chris Hicks of the Agency had the listing.

The Pacific Palisdes neighborhood is filled with celebrity residents, though several are on their way out. Former L.A. Clippers forward and NBA all-star Blake Griffin recently listed his 9,600-square-foot home there for almost $11 million. Whoopi Goldberg also listed her home there early last year for almost $9 million. [LAT] — Gregory Cornfield

Bruce Makowsky and 924 Bel Air Road (Credit: Wikipedia and Zillow)

What may be the first-ever hijacking of an active real-estate listing online — a palatial mansion overlooking the Pacific Ocean in Bel Air, California — has led to a lawsuit seeking $60 million in damages against home-sale marketing company Zillow.

One or more hackers seized control of the mansion’s listing page on Zillow’s popular Zestimates site in February, causing it to display a series of bogus sales that were tens of millions of dollars below the $150 million asking price, according to the complaint filed in federal district court in Los Angeles. The net effect was to inflict financial damage on the seller by “corrupt[ing] the listing price dramatically,” according to the complaint, making it more difficult to obtain anywhere near the price the seller is seeking.

The newly constructed hilltop house is a knockout, even by Hollywood standards: 12 bedrooms, 21 baths, 38,000 square feet of interior space, 17,000 square feet of “entertainment decks,” three kitchens, five bars, fitness spa, four-lane bowling alley, basketball and tennis courts, wine cellars and an 85-foot “glass-tile infinity pool,” to cite just some of the amenities. It is owned by a limited liability company controlled by Los Angeles luxury builder Bruce Makowsky.

The hijacking occurred when someone using a Chinese IP address and a made-up U.S. phone number managed to successfully claim “ownership” of the mansion on Zillow’s Zestimates page. Zillow, which displays pages on 110 million American homes — properties listed for sale and off the market — offers a feature that allows owners to amend descriptions of their homes on the site. The feature is heavily used by legitimate owners to modify information posted about their house — numbers of bedrooms and baths, for example, or a recent remodeling that affects the property’s market value. To successfully make such a claim, owners must answer questions designed to verify their identity.

In this case, according to the suit, hackers figured out how to get past Zillow’s security questions and began manipulating information on the site. They erroneously reported that the house sold for $110 million on Feb. 4, then for $90.5 million on Feb. 9 and $94.3 million Feb. 10. They also listed an open house for the property on Feb. 8, something that would be unusual in the rarified world of super luxury homes, where showings tend to be exclusively by appointment.

The suit alleges that Zillow was negligent in allowing false and harmful information to be posted on the mansion’s page, despite repeated requests for “over a week” from the seller’s lawyers to pull the plug on the hackers. Zillow does not have adequate “safeguards in place to prevent Internet trolls, criminals” and others “to commit illegal acts” by “logging into their system to post the false information,” the suit alleges.

Asked for comment, Kate Downen, a Zillow spokesperson, said that “while we don’t discuss pending litigation, I can tell you that [the company] goes to great lengths to display current and accurate data.” Downen added that Zillow is “in the process of updating” the verification system for access to owner pages on the Zestimate site.

In an exhibit accompanying the complaint, attorneys for the owner included a copy of an email from Kim Nielsen, senior lead counsel for Zillow Group Inc., in which she says, “Unfortunately if someone is able to provide responses to the verification questions, they are able to claim the home … we do not manually check each time someone attempts to claim a home.” The complaint also quotes Nielsen as saying that “any home on our website can be claimed by the homeowner. There are a series of questions … but if someone attempts to claim [the property] enough times, they will know the questions asked and be able to figure out what information they need to verify their identity.”

Ronald Richards, the seller’s attorney, asked “How is it that someone with a fake phone number (bad area code) and Chinese IP address and email can hijack [a] $150 million house?” In an interview, Richards said “it’s impossible to have a site” like the Zestimate owner-claim page if effectively there are “no security protections.”

So what should homeowners whose house is listed on Zillow make of this suit? Even if your home is not a dazzling palazzo on a hill, the secret is out: Though it’s highly unlikely, your Zillow page can be hacked and stolen by online troublemakers. Until Zillow announces verification reforms, it’s probably worth checking your Zestimate page now and then.

Eden Health CEO Matt McCambridge and Convene CEO Ryan Simonetti (Credit: iStock)

Beer on tap, fitness centers, child care…and now doctors? Amenities in co-working spaces have evolved as the concept has grown more popular, and now one firm wants to add onsite health care to the mix.

Co-working firm Convene and Eden Health — a health care company provider — are teaming up to open primary care offices in 25 Convene locations in six cities including New York, Chicago and Los Angeles, according to GlobeSt. The rollout will happen in the next year and a half.

Convene co-founder and CEO Ryan Simonetti said the onsite health care providers will be available to Convene clients, landlords and fellow building tenants. Eden Health CEO Matt McCambridge said partnering with Convene will help his firm quickly scale its model across the country.

New York-based Convene was among investors in Eden’s recent $10 million Series A funding round, according to GlobeSt.

The partnership comes at a time of transition for Convene, which offers space and amenities, and more recently co-working services to mid-sized tenants. Convene co-founder Chris Kelly recently stepped back from his role as president as the company looks for someone to lead a global expansion.

In a bid to keep up with competitors like the We Company, Convene wants to double its number of locations by the end of the year. In Chicago, it has opened or announced plans for four locations in less than a year.

Convene’s most recent funding round in July raised $152 million, pushing its valuation north of $500 million. [GlobeSt.] — John O’Brien

Charles Tourtellotte, president and CEO of LaTerra Development, with Los Feliz I on Hollywood Boulevard

LaTerra Development received approval for its 96-unit apartment complex in East Hollywood, after having already been granted the go-ahead for its 150-unit building across Hollywood Boulevard.

The latest part of the 246-unit project to get the city’s support was Los Feliz I, which will replace a strip mall at 4850 Hollywood Boulevard. The Century City-based purchased the site for $10.4 million, records show.

LaTerra filed a demolition permit to raze the existing 16,000-square-foot mall. In addition to the apartments, Los Feliz I will have 9,500 square of commercial space.

The other part of the development, Los Feliz II, is in pre-construction phase. That building, at 4900 Hollywood Boulevard, will include 150 residential units and 13,800 square feet of retail space.

Both projects are designed by Urban Architecture Lab.

LaTerra’s plan joins other apartment projects recently filed in the East Hollywood area. David Pourbaba, CEO of 4D and Development Investments, is planning a new five-story complex at 3967 Beverly Boulevard. And prolific developer Jamison wants to build a 177-unit project at 4632 Santa Monica Boulevard.

Next week brings a couple of new real estate events to Los Angeles.

On March 12, from 11:30 a.m. to 1:30 p.m., the Los Angeles County Bar Association is holding an event on the Top 10 Cases in Real Estate for 2018 at their headquarters,  at 1055 West 7th Street, Suite 2700. Attend and hear from a cast of guest speakers that includes O’Malley Miller of Allen Matkins, Ryan Squire of Garrett & Tully, Zi Lin of Garrett & Tully and Melissa Zonne of Allen Matkins. They will lead an in-depth explanation of the cases and their impact on the real estate industry.

On March 14, from 8 a.m. to 11 a.m., Bisnow is hosting its Los Angeles Hotel Summit at the Omni Los Angeles Hotel at California Plaza, 251 South Olive Street. This event will offer networking opportunities, along with discussions on the tourism boom in Los Angeles. Speakers include CEO of Pacifica Hotels, Matt Marquis, and president of Chartres Lodging Group, Maki Bara.

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

Miami’s downtown WeWork building

A downtown Miami office building leased to WeWork is expected to sell for $65.5 million in a deal that will be financed through one of the largest known cryptocurrency real estate auctions of its kind.

Andrew Joblon, founder and managing principal of Turnbridge Equities, and his partners, Daniel Gohari, Rory Greenberg and Ricky Weisfisch, are selling the nearly 93,000-square-foot building at 117 Northeast First Avenue. The buyer is Inveniam Capital Partners, a New York-based financial and advisory services firm that focuses on raising capital for small and medium-sized businesses.

The Miami building, also known as the Capital Lofts building, was built in 1926 and designated historic by the U.S. National Register of Historic Places in 1989. Joblon and his partners bought a majority interest in the former condo building in 2015 for $25.5 million and converted it to office space. Joblon’s Turnbridge, an investment and development firm, also owns property in Miami Beach.

WeWork has 12 years remaining on the triple-net lease in downtown Miami, according to a press release.

Inveniam made a deposit on the building using an undisclosed amount of Bitcoin in January, according to CoinGeek, a cryptocurrency news site.

The sale will happen through a “dutch auction” — expected to close this month — in which investors make bids in cryptocurrency based on what they think the asset is worth. Essentially, they are buying shares in the property. To participate, investors must have at least $10 million in cryptocurrency. Bids for shares of the property start at $500,000. The auction will only accept the top 50 cryptocurrencies, which include Bitcoin, Etherium and XRP.

If it closes at the expected price, the sale would mark the largest cryptocurrency deal of its kind in South Florida.

Investors will also be able to bid on three other real estate partnerships at the auction, including a 500-unit apartment complex in southwest Florida, three student housing developments at North Dakota State University and a North Dakota water pipeline project.

Together, all of the properties including the downtown Miami building, are valued at $260 million.

Digital currency remains highly volatile, and while smaller real estate deals have used it, it has yet to become an industry-accepted form of payment. Bitcoin investor Michael Komaransky sold his Miami home nearly entirely in cryptocurrency last year, for about $6 million. At the time, each coin was worth around $13,000. The value of the currency has since plummeted, with each coin now worth around $3,800. At the time, it marked the most expensive Bitcoin-to-Bitcoin real estate sale to close.

The proceeds of the WeWork-leased building auction would be converted back into dollars for Inveniam to close on the building. If less than the purchase price is raised at auction, the buyer plans to secure financing to fund the rest, said Pat O’Meara, Inveniam’s chairman and CEO.

Investors would receive returns, either in cryptocurrency or cash, from the income that the property generates, O’Meara said. If the investor decides on cash, the payout would essentially work like stock dividends.

Manuel L. Crespo and Frank Whitaker of the law firm Greenspoon Marder are representing Inveniam in the deal; and Jay Koenigsberg of Carlton Fields is representing the seller.

Former Woodbridge CEO Robert Shapiro and 800 Stradella Road

More than two years after Woodbridge Group of Companies filed for bankruptcy, charged with operating a $1.2 billion Ponzi scheme, the former luxury real estate developer’s properties are still being liquidated.

The latest is a prime development site at 800 Stradella Road in Bel Air, which Hard Rock Cafe founder Peter Morton sold to Woodbridge in 2017.

That 82,000-square-foot lot was just sold for $37.5 million. The buyer is a Delaware-based LLC controlled by a New York-based trust. The title changed hands late last month, from an entity controlled by Frederick Chin. He was appointed last year to liquidate Woodbridge assets, in order to pay back investors defrauded in the scheme.

The Stradella Road property was most recently listed with Hilton & Hyland’s Tyrone McKillen for $36 million. McKillen declined to comment.

Woodbridge paid Morton $36 million for the Stradella Road property in January 2017, according to records. It was one of many pricey residential properties that Woodbridge purchased before the Securities and Exchange Commission uncovered the fraud.

The firm released renderings of a spec home it planned to build there, and listed the property shortly after that for $45 million.

The property is now shovel-ready, according to a land-use consultant who has worked at the property. In 2015, preliminary work began at the site.

“It’s been through all of its approvals at this point,” said the consultant, Penny Flynn. “It went on a slow track because they were selling the property.”

In June 2018, Woodbridge asked a federal bankruptcy court to allow a $44 million sale of the Stradella Road property, but that sale never closed. Court records show the prospective buyer was Elite Investment Management Group, a development company with an office on Wilshire Boulevard.

In the SEC’s suit against Woodbridge CEO Robert Shapiro, it claimed he promised investors high returns on investments in mostly luxury spec homes. But authorities said he actually moved their cash into accounts he controlled, and used it to pay off older investors, perpetrating a classic Ponzi scheme.

Authorities charged that Shapiro personally spent $21 million on private jets, at luxury country clubs, and other extravagances. He claimed no wrongdoing, but in November, agreed to pay a $120 million settlement for running the alleged fraud. He, his wife, and others involved in the scheme will pay a total of $892 million to the SEC to compensate victims.

Woodbridge moved to offload its sizeable portfolio following the bankruptcy and in March 2018 was on the hunt for a broker to sell all of its Los Angeles properties.

At the time, that portfolio included the Owlwood and Mount Olympus estates, and numerous properties in Hidden Hills, Bel Air, and Beverly Hills. Three properties were reportedly in escrow for a total of $10 million at the time.

Stradella Road might have a new owner, but the story isn’t over for Woodbridge. Charges continue to roll in. In December, 13 individuals were charged for selling bad Woodbridge securities to investors in Florida.

From top left clockwise: Mel B and her Hollywood Hills home, Mel Gibson and his Carbon Mesa Road home, and 7310 Mulholland Drive, with Michael Chow and Katy Perry. (Credit: Getty Images) 

In the Hollywood Hills, restaurateur Michael Chow scooped up a Spanish-style house from pop star Katy Perry. Chow bought the 7,400-square-foot property for $9.4 million. It has five bedrooms, six bathrooms, a guest house, pool and fitness building, and sits near the entrance to the Runyon Canyon trail. Perry, the Grammy-nominated singer, picked up the 2.3-acre property and a smaller one next door to it from oil heiress Aileen Getty in 2013 for $11.2 million. She owns a $19 million estate in the Beverly Hills Post office enclave. Chow, the founder of the Mr. Chow restaurant chain, also has a mansion in Holmby Hills that listed in October for $78 million.

Also in the Hollywood Hills, Melanie Brown, a.k.a. Mel B, took the edge off off her four-story home, dropping the list price to $5.9 million, a $3 million discount from its original listing, the Los Angeles Times reported. The former Spice Girl put the home on the market after her divorce in 2017 from producer Stephen Belafonte. They bought the 5,200-square-foot home together in 2014 for $4.3 million and renovated it extensively in 2016. It has four bedrooms and 5.5 bathrooms. The couple added a recording studio, home theater, and gym. The backyard includes a pool, spa, and patio with a large outdoor grilling area with a built in beer tap and ice cream maker.

Out by the beach, actor-director Mel Gibson also took down the price of his Malibu estate. The Academy Award-winner sliced another 9 percent off the five-acre property, bringing it to $15 million, and hired new agents to market it, the Los Angeles Times reported. The 6,600-square-foot home has five bedrooms and four bathrooms, large fireplaces, and is reportedly filled with religious artwork. A buyer would receive rights to a membership at the La Costa Beach and Tennis Club, which costs $100,000 in addition to annual dues. Gibson first listed the home in 2017 for $17.5 million, and then trimmed the price to $16.5 million last February. The Agency’s Sandro Dazzan and Hilton & Hyland’s Branden Williams now have the listing.

In the heart of the Westside, actor Bruce Willis made a return to California by buying a mansion in Brentwood, where more established entertainment figures seem to congregate, according to Variety. The action hero star and his former fashion model wife, Emma Heming, picked up a 13,000-square-foot home for $9.8 million atop Sunset Boulevard. The gated property sits on a half-acre of land and features a full indoor spa, movie theater, elevator, gym, and yoga studio. Willis has been unloading his New York properties the past few years, and recently said he was planning a move back to the West Coast. He listed an apartment at 271 Central Park West last year for $17.75 million, and the couple also listed a home in Bedford, New York, in January for just under $13 million.

Adult film production company owner Bill Asher bought an estate in Montecito, his second home in the area. Asher, who owns Vivid Entertainment, paid $14.5 million for the Hot Springs Road estate, according to Yolanda’s Little Black Book. The Spanish Colonial was designed in 1920, and the main home includes 9,800 square feet of space, with six bedrooms and eight bathrooms. Asher’s other Montecito home was damaged in the January 2018 mudslides.

John Hughes and 263 North Mayflower Road (Credit: Wikipedia)

The widow of filmmaker John Hughes is shopping a Lake Forest mansion after buying another big estate in the North Shore town for $12 million.

Nancy Hughes broke the record for most expensive residential sale in Lake Forest when she bought the 12,500-square-foot Cape Cod last year, according to the Chicago Tribune.

Now, she’s asking $4.5 million for the Lake Forest home, a six-bedroom, 7,000-square-foot English country-style mansion that she bought for $5.2 million shortly after her husband’s death in 2009. It features a theater room with a poster on its wall for “The Breakfast Club,” according to the Tribune.

Northbrook native John Hughes’ films include that classic teen film, along with “Ferris Bueller’s Day Off,” “Sixteen Candles,” “Home Alone” and others that were all set and filmed around the north suburbs.

He and his wife owned a seven-bedroom, 11,000-square-foot mansion in Lake Forest that Nancy Hughes in 2014 donated to Northwestern Lake Forest Hospital for a fundraiser. The hospital sold the mansion for $4 million, according to the Tribune.

The Chicago area set a record for luxury home sales in 2018 even as the greater residential market had its struggles. [Chicago Tribune] — John O’Brien

Gerald Forsythe and 344 Old Sutton Road (Credit: JG-TC)

The owner of a massive Barrington mansion that’s gone unsold for more than 11 years cut the asking price by another $1 million this week in hopes of finally finding a buyer.

“It’s taking a long time to find the right buyer,” listing agent George Michael of Chicago Northwest Realty told Crain’s. “We need a Ken Griffin…or a sports figure.”

Ken Griffin (Credit: Wikipedia)

The 22,000-square-foot mansion on more than 14 acres at 344 Old Sutton Road first listed in September 2007 at $17 million. More than a decade later, it’s now listed for $13.9 million.

Owner Gerald Forsythe, CEO of power plant-maker Indeck, bought the property for $1.85 million 2003. He then greatly expanded and renovated it, according to Crain’s.

Griffin, the hedge fund billionaire who runs Citadel, shattered the Chicago record for priciest home sale at No. 9 Walton in 2017. Recently, he bought a $238 million penthouse in New York, along with a London mansion and has assembled a sprawling South Florida compound — to go with his other properties. [Crain’s] — John O’Brien

The portfolio of Awaze brands was previously owned by Wyndham Destinations (Credit: Trip Advisor)

A portfolio of European vacation rental brands, once an Airbnb acquisition target, has unveiled a new corporate identity as it prepares for further consolidation and expansion on the continent.

The new company, Awaze, includes brands like UK-based cottages.com, James Villa Holidays and Hoseasons, as well as Denmark-based Novasol and Netherlands-based Landal GreenParks. The portfolio of brands was previously owned by Wyndham Destinations, who sold it to Beverly Hills-based private equity firm Platinum Equity for $1.3 billion last year.

“By pooling together some resources and building better tech solutions we think we can do things, still keeping the local brand flavor, but the technical solutions behind it will be done more at a group level,” Awaze CEO Henrik Kjellberg told Skift at a trade conference in Berlin. Kjellberg had previously spent 12 years in various roles at travel tech company Expedia.

The company also plans to integrate its brands further by making its full listing inventory available on each brand. “It is crazy that if you go to Cottages.com today and look for Croatia, where we are by a country mile the market leader, you can’t find the properties because they’re on Novasol,” Kjellberg said. Awaze also provides its listings to third party sites such as Booking.com and Expedia.

With a private equity firm in charge, industry observers expect Awaze to pursue an aggressive growth strategy in the coming years. “We’re constantly looking at opportunities,” Kjellberg said. “We have so much left to do in Europe so that will be the main focus, but we’ll look at other things if they come up.”

Awaze currently has over 110,000 homes in 36 countries, and was the largest manager of holiday rentals in Europe at the time of its sale last year. Wyndham sold off the brands prior to spinning off its hotel and timeshare businesses into two separate companies.

Two years ago, Airbnb was reported to be interested in acquiring the portfolio. The short-term rental platform recently announced its biggest acquisition to date, buying HotelTonight for $465 million. In 2017, Airbnb acquired Canadian rival Luxury Retreats for about $200 million.

Though operating in the same general sector, Awaze’s business model differs from Airbnb’s in that most of its properties are exclusive, and the company controls management and pricing. And with most of its properties being vacation homes located outside of cities, it has been able to avoid the kind of controversy Airbnb regularly faces in cities like New York. [Skift] — Kevin Sun

Jelena Janković (Credit: Flickr)

Tennis star Jelena Janković served up her massive spec mansion in San Diego for $13.5 million.

Janković purchased the two-acre property in Rancho Santa Fe for $1.53 million in 2008 – the same year she was the top-ranked women’s player in the world. The 15,100 square-foot custom estate was completed in 2011, Mansion Global reported.

Listing agent Ryan Dalzell with Pacific Sotheby’s International Realty said Janković spent more than $10 million on the three-story home as well as landscaping.

The Mediterranean-style mansion was designed includes a home theater, eight bedrooms and 11 bathrooms. The gated property on Top O Morning Way features a tennis court, infinity pool, private gym, 12-car garage and views of the Crosby Estates golf course community.

Dalzell said Janković plans to buy a slightly smaller home in San Diego. She is from Serbia and primarily lives in Dubai.

Janković held the world No. 1 title in singles in 2008 and is a Wimbledon mixed doubles champion. She has twice been named Sportswoman of the Year by Serbia’s National Olympic Committee.

According to a survey last summer by real estate data firm LendingTree, 11 percent of all homes in San Diego were valued at over $1 million – putting it in the top five cities in that category. But along with the rest of Southern California, it saw some of the slowest periods for home and condo sale in over a decade last year. [Mansion Global] – Gregory Cornfield

Screenshot from Sim City 4 (Credit: Microsoft)

When the city-building game “Sim City” was released in 1989, video games were largely considered a leisure activity at best.

But the groundbreaking city-planning simulator has influenced scores of players to become city planners, transit advocates and to run for office over the years. These professionals told the Los Angeles Times they found their calling through the game franchise, which puts the player in the role of mayor and largely gives them free reign to build a city however they want.

For example: Nicole Payne, who is now a program official with the National Association of City Transportation Officials, said a librarian told her about the game at age 10 after seeing her drawing cities.

“I used to draw maps of cities for fun, I had no idea it was an actual career,” Payne told the Times. “I wouldn’t be where I am today without ‘Sim City.’”

Will Wright, the franchise’s creator originally thought the game would only be popular with urban planners and architects until it received widespread success. Sims popularized the simulation genre and spawned a franchise with four main installments and dozens of spinoff games. (The most recent was released in 2013.)

Sim City’s influence on gaming and culture has also been acknowledged outside the gaming world. The Museum of Modern Art in New York City included the second game in the franchise, Sim City 2000, among its permanent collection of video games for its groundbreaking design. [LAT] – Dennis Lynch