Elon Musk (Credit: Getty)

Tesla is closing down its dealerships and will sells its cars solely online, the company said this week.

The decision was made to cut costs in order to release its mass-market vehicle, the $35,000 Model 3, according to TechCrunch. The move is among several cost saving measures that will allow the company to lower all of its vehicle prices by 6 percent.

“There’s no other way for us to achieve the savings required to provide this car and be financially sustainable,” CEO Elon Musk said.

Musk did not disclose how many of its dealerships would close, but said that some would remain open as showrooms or information centers. All vehicles will now be sold online, and test drives have been scrapped. Instead the company said customers can return the vehicle within seven days or 1,000 miles for a full refund.

“We’re going to make it super easy to get a refund, like one-clickrefund,” Musk said.

The announcement comes after the company opened 27 new dealerships across the country in the last quarter of 2018, according to The New York Times. [TechCrunch, NYT] — David Jeans

From left: Laurent Opman, KOAR managing member, Bruce Rothman, owner of KOAR and a rendering of the Schrader Hotel

Los Angeles is in the middle of a hotel development boom, and Hollywood is one of the biggest contributors. But those plans have not come without opposition.

Most recently, KOAR Institutional Advisors’ received approval for its 191-room Schrader Hotel project at 1600 Schrader Boulevard, according to Curbed. The project will include a restaurant and cafe, and would also rehab a 12-unit apartment building just north of where the hotel will be located.

The project was challenged by construction advocacy group Coalition for Responsible Equitable Economic Development, which opposes its construction closer to property lines than normally allowed. But the appeal was denied.

KOAR’s hotel plan was given the go-ahead just after a 114-room hotel plan by Relevant Group was approved, which will be located around the block at Selma and Wilcox avenues. The Selma Wilcox hotel is the third of four hotels that Relevant has planned or has recently completed in a two-block radius, just south of Hollywood Boulevard. Each project was approved despite appeals from several groups concerned that the city hadn’t considered the cumulative impact the hotels would have on the area.

The groups accused the city of creating an unofficial entertainment district by approving a series of smaller developments. Relevant Group’s Dream Hotel was recently completed, and the firm has a 212-room Tommie Hotel and 190-room Thompson Hotel set to be built nearby.

Restaurateur Adolfo Suaya is also planning a 134-key hotel nearby on Selma Avenue. [Curbed] — Gregory Cornfield

Realogy CEO Ryan Schneider and CFO Charlotte Simonelli (Credit: LinkedIn)

As it looks to whittle expenses and reduce debt, Realogy has tapped Charlotte Simonelli — a 47-year-old former executive at Johnson & Johnson — as its new chief financial officer and treasurer.

Simonelli, who will report to CEO Ryan Schneider, is set to start March 25, Realogy announced Monday. She replaces longtime CFO Tony Hull, who stepped down abruptly in November. Interim CFO Timothy Gustavson will stay at Realogy as chief accounting officer and controller.

Since 2016, Simonelli has served as CFO of various divisions within Johnson & Johnson, including medical devices and enterprise supply chain. She’s also worked at Reckitt Benckiser, Kraft Foods, PepsiCo and Unilever.

Last month, Realogy disclosed plans to cut $70 million in expenses in 2019. It will also spend the first half of the year focusing on reducing its corporate debt load.

In regulatory filings, Realogy said Simonelli will earn a base salary of $650,000 (though she’ll be eligible for a bonus of $650,000 and an equity award of $1.1 million). In addition to her salary, Simonelli will receive an initial grant of restricted stock valued at $1 million; the stock will vest on the first three anniversaries of her start date.

Although Schneider is spearheading a turnaround at Realogy, the company’s stock plunged 21 percent in late February to a new low of $14.14 per share.

That drop followed Realogy’s 2018 earnings report — in which the company said its profits slid 68 percent to $137 million. For the full year, Realogy reported $6.1 billion in revenues, $35 million less than 2017.

Aedis Real Estate Group Principal Keith Labus and a rendering of Hope on Hyde Park

Aedis Real Estate Group will build an affordable apartment building in Park Mesa Heights utilizing shipping containers, moving forward with a plan for the low-cost, fast-turnaround construction method. The material has become more popular, particularly as Los Angeles and the state continues to grapple with a shortage of affordable housing.

The Laguna Beach developer filed plans with the city for a 98-unit development at 6501 Crenshaw Boulevard, according to Urbanize. It would replace an existing church.

The project is called Hope on Hyde Park and is one of three developments currently planned as part of its Hope Street Initiative affordable housing program. Each will be completely permanent supportive housing for the chronically homeless, and will include on-site services.

KTGY Architecture + Planning is designing the Hope projects. Their first is slated for Westlake.

Aedis hopes to cut down on development time and costs by using steel modular designs built off-site, such as Hope on Hyde Park’s shipping container construction.

In order to maximize the number of buildable units, Aedis is seeking density bonuses and other incentives through L.A.’s Transit-Oriented Community program, which provides those incentives for building affordable units near transit stations.

With close access to a number of bus lines the under-construction Hyde Park Metro station, part of the future Crenshaw/LAX line, Hope on Hyde Park is eligible for the highest bracket of TOC incentives.

The new light rail line has spurred development near its stations, including office and residential projects. [Urbanize] — Dennis Lynch

The Ashby apartments in Koreatown

Good news for renters — Los Angeles rents are rising at their slowest rate in five years.

Average monthly rent for a one-bedroom apartment is now $1,720, a 2.6 percent increase from a year ago while a two-bedroom apartment is up 2.3 percent, to $2,190, according to CoStar data first reported by Curbed.

The first quarter of 2019 is on pace to see rent growth at below 3 percent year over year for the first time since 2014, according to the report.

Some city around L.A. have already instituted temporary rent-hike freezes to ease pressure on tenants, including leaders in Inglewood, L.A. County, and Glendale. The wave of rent-hike freezes followed the statewide voter rejection of Proposition 10, the ballot initiative that would have allowed for sweeping new rent regulations across California.

The data illustrates how strong the rental market has been over the last several years in the city. That’s been a boon for landlords and investors, who have poured billions of dollars into L.A.’s multifamily market. Around $10 billion worth of apartment buildings traded from June 2017 to June 2018 alone, more than any other period in history.

Rents have even risen along with vacancy, because many of the residential projects that have come online over the last several years are in the highest price bracket.

Growth in home prices is set to cool somewhat this year in the city compared to the U.S. Zillow expects prices in L.A. to grow by 5 percent, behind the 7.7 percent projected nationwide average. [Curbed] — Dennis Lynch 

Hanover Co. founder Murry Bowden and 6636 North Variel Avenue (Credit: Google Maps)

Hanover Company is ready to start on its big apartment building project in Warner Center, which will see a flood of new residential development in the coming decade.

Less than a year after the firm filed plans to build a 395-unit complex on North Variel Avenue, it requested approvals to demolish the existing structures, according to newly-published city documents.

Hanover wants to raze the 72,000-square-foot industrial and office buildings at 6636 North Variel Avenue to clear the way for its apartment development that will span 436,000 square feet. The new seven-story building will include 509 parking spaces.

Houston-based Hanover is also seeking approvals to deviate slightly from zoning requirements, asking to reduce the floor-to-ceiling distance by 20 percent.

The firm acquired the property for an undisclosed amount from Natalie Levy Saraf, an executive at Andwin Scientific, in July 2018, records show.

Hanover’s project is one of many slated for the Warner Center, a neighborhood in Woodland Hills. Change is in store for the quiet community, with an estimated 24,000 residential units and 28 million square feet of office and commercial space expected to be added in the next 15 years. Much of that development is a result of the Warner Center 2035 Specific Plan, adopted in 2013 as a way to spur development in the region.

James Perse’s home in Point Dume follows the minimalist style he’s known for in the luxury retail world

Almost everything that comes from fashion designer James Perse is focused on minimalism. Almost.

The luxury lifestyle creator has listed one his estates in the Point Dume area of Malibu for $40 million, according to Yolanda’s Little Black Book. Perse paid $16 million for the property on Zumirez Road in 2010, according to the report.

The single-story residence spans 4,200 square feet and includes five bedrooms and six bathrooms on 1.2 acres. The gated property features direct access to Little Dume Beach. The home was built in 2004 by “X-Files” creator Chris Carter, and designed by the firm Nicolas, Budd, Dutton. The design and interior follow the minimalism style that define Perse’s products.

Perse owns a second home on Point Dume that he purchased for $12.5 million in 2016. And two years ago, he sold another home there to oil heiress Aileen Getty for $13 million.

The same cul-de-sac has attracted well-known residents, including Barbra Streisand.

In 2013, he paid $10.9 million for Ellen DeGeneres’ 26-acre equestrian ranch near Thousand Oaks.

Among the dozens of Perse boutique retail stores around the world are those in Malibu, Beverly Hills and Newport Beach. Last year, Perse opened an 11,000-square-foot flagship location on North Roberston Boulevard. [Yolanda] — Gregory Cornfield

David Hashmall, chairman of Goodwin, and Andrew J. Weidhaas, partner co-chair of private equity for Goodwin with 520 Broadway (Credit: Google Maps)

Goodwin law firm has inked a lease for its second office in Los Angeles, this one in the growing tech hub around Silicon Beach.

The new location will occupy more than 20,000 square feet over the entire fifth floor at 520 Broadway in Santa Monica, the company announced. About 20 attorneys will work at the office, focused on technology and private equity law.

L.A.-based Olive Hill Group owns the 113,000-square-foot building, which it purchased from Tishman Speyer for $117 million in 2017.

David Hashmall, chairman of Boston-based Goodwin, said the firm opened the new office to be closer to where more of their clients are doing business, in Silicon Beach which has created a surge of tech investment and big office leases. The firm’s other office is at 601 S. Figueroa Street in DTLA. That location will continue to focus on real estate, private equity, commercial litigation, and defense of financial institutions.

Tech companies have increasingly turned to communities like Santa Monica, Venice, and Playa Vista for office space, driving the markets the past year, and boosting both commercial and residential real estate prices.

The co-working industry has started to take interest as well. In late January, the firm Spaces signed a 10-year lease for 69,200 square feet in Santa Monica’s Water Gardens campus.

Cassey Wasserman and the Foothill Estate

In the $100 million market, add another luxury property to the growing list of discounted mansions.

The Foothill Estate, a modernist residence with ties to Hollywood heavyweights, has re-listed at $97.5 million, a 22 percent drop from its original ask of $125 million, The Real Deal has learned.

Casey Wasserman, grandson of legendary agent and studio executive Lew Wasserman, first listed the 18,500-square-foot mansion the Beverly Hills Flats in October. He is the owner and CEO of Wasserman Media Group, a sports and entertainment marketing and management agency.

Built in 2016, the property features five bedrooms, an art studio, 1,150-square-foot gym, private screening room and automated steel and glass doors. Outside, an 85-foot infinity pool and pool house complete the 3.2-acre spread.

The home, designed by Richard Meier, sits on three lots — one of which was formerly owned by legendary singer Frank Sinatra. Wasserman paid $6.5 million to acquire the lot, while inheriting the other two from his late grandparents, Lew and Edie Wasserman.

Stephen Shapiro of Westside Estate Agency has the listing.

Home sellers in the upper echelons of the Los Angeles market have been struggling to unload their mansions in recent months, as evidenced by the wave of discounts and re-listings plaguing the market. In one of the more extreme examples, the so-called Mountain of Beverly Hills got a $350 million price chop, now seeking $650 million. On a smaller scale, Rockstar Energy Drink founder Russ Weiner has also slashed the price of his Beverly Hills pad to $36 million.

Stephen Ives and bird’s eye view of home at Somma Way, which he wants to demolish. (Credit: Redfin)

The head of an Oklahoma oil company did some prospecting in Bel Air, and now wants to build a mansion that could rival the ones from Los Angeles developers like Nile Niami and Bruce Makowsky.

Stephen Ives, president of Oklahoma City-based Cheyenne Petroleum Company, has filed plans for a 21,000-square-foot mansion at Somma Way in Bel Air, The Real Deal has learned.

According to documents published with the city, Ives is seeking approvals to demolish the 9,750-square-foot home on the property, formerly owned by the late advertising executive Jack Roth. Ives paid $22.5 million to acquire the existing home last January, property records show.

In its place, he wants to build a two-story residence with garage, swimming pool and spa, landscaping and guard house.

At 20,000 square feet, the proposed mansion would rank among the largest estates in the exclusive area. It would also rise on the same block as an unfinished 40,000-square-foot spec home, on the market for sale for $100 million.

He could not be reached for comment.

David Ellison and Lantana Santa Monica

Skydance Media founder David Ellison is close to purchasing two buildings in the Lantana office complex for about $350 million, The Real Deal has learned. The deal for the Santa Monica location works out to $1,250 per square foot.

The deal is expected to close Friday. The two properties, Lantana Center and Lantana West, are known as the north campus and together, total 278,680 square feet.

The sellers are Artisan Realty Advisors and Brightstone Capital Partners. The joint venture is also gearing up to market the south portion of the campus comprising two buildings and spanning 203,700 square feet. Eastdil Secured is handling the south campus sale, sources said.

Representatives for Skydance and Artisan Realty, both of Santa Monica, declined to comment. New York-based Brightstone could not be reached.

The deal comes on the heels of a big WeWork lease at the property. In late January, the co-working giant — now called We Company — signed a long-term lease to occupy 116,000 square feet at the Lantana Center at 3000 Olympic Boulevard, occupying roughly half of the building.

Skydance currently occupies 25,000 square feet each at offices in Santa Monica, Mid-Wilshire and Marina del Rey. It’s likely the firm will consolidate those offices into Lantana, a source familiar with the deal said.

Artisan Realty teamed up with Brightstone to purchase the entire campus — all four buildings at Olympic and Exposition boulevards — for $400 million from Jamestown in November 2016. The deal worked out to $825 per square foot.

Amenities at the Class A site include recreation areas, outdoor lounges, food trucks, screening room and laundry service.

Skydance, which recently made headlines for hiring disgraced animation guru John Lasseter as head of animation, will be joining Beachbody and Tennis Channel at the campus. Beachbody signed a deal to occupy 200,000 square feet at Lantana south buildings in May 2016. It then subleased about 50,000 square feet to the Tennis Channel in March 2018.

The deal comes nearly three years after Ellison’s father, Larry Ellison, paid $368 million, or $1,165 per square foot, for another office building in Santa Monica. The elder Ellison, who co-founded Oracle, broke a record at the time for the priciest deal on a per square foot basis.

From left: New York Attorney General Letitia James, President Donald Trump, and Deutsche Bank CEO Christian Sewing (Credit: Getty Images)

The fallout from Michael Cohen’s congressional hearing continues.

Two weeks after President Trump’s former “fixer” told lawmakers that his boss inflated the value of his assets to secure loans, the New York attorney general’s office issued subpoenas on Monday to two lenders, Deutsche Bank and Investors Bank, the New York Times reported.

Last week, the New York State Department of Financial Services issued a subpoena to insurance broker Aon, also on the basis of Cohen’s testimony.

The subpoena to Deutsche Bank seeks loan applications, mortgages, lines of credit and other transactions connected to Trump properties in Miami, Chicago, and Washington, D.C., as well his failed attempt to buy the Buffalo Bills in 2014, according to the Times.

The subpoena to New Jersey-based Investors Bank is for documents related to a project it had backed, Trump Park Avenue.

This new inquiry, a civil investigation whose scope and focus is as yet unclear, opens up a additional scrutiny of Deutsche Bank, one of the few large lenders willing to do business with Trump in recent years. The bank is already the subject of two congressional investigations, and previously claimed it could not legally hand over documents related to its loans.

Soon after she was elected in November, attorney general Letitia James promised to investigate Trump’s real estate dealings, as well government subsidies, Russian collusion and possible violations of the emoluments clause. “We will use every area of the law to investigate President Trump and his business transactions and that of his family as well,” James told NBC in December. [NYT] — Kevin Sun

Nelson Business Park (Credit: LoopNet)

The transportation firm Soho Logistics inked a lease for 168,900 square feet in the City of Industry, as Los Angeles’ industrial market continues its hot streak, propelled in part by the rising need for so-called last-mile distribution facilities.

The China-based firm signed an $11.2 million lease over seven years with the building owner, Los Angeles County Employees Retirement Association, according to the Los Angeles Business Journal. The complex is located at 14736 Nelson Avenue, part of Nelson Business Park. It includes 21 loading docks.

CBRE represented Soho Logistics, while Lee & Associates represented the employees retirement association.

The City of Industry is zoned almost completely for industrial use, and a recent influx of manufacturing investment has raised asking prices in the past year. As e-commerce drove L.A.’s hot industrial market, many firms have turned to places like the City of Industry. And during the fourth quarter of last year, 13.6 million square feet of industrial space was sold or leased in Los Angeles, up from 9.3 million square feet the previous quarter.

The employees retirement association has already had a busy 2019. The pension fund announced plans to invest $250 million in the international real estate market this year. Last month, it sold a mixed-use building at 1231 S. Hill Street in South Park to Mack Real Estate for $180.1 million. [LABJ] — Gregory Cornfield

Alex Samoylovich (red) and Jacob Rynar (blue) with a Flats Chicago gym (Credit: Facebook and LinkedIn)

In developing 8,000 apartment units over 15-plus years, Alex Samoylovich learned quite a bit about the demands of renters and the inefficiencies in multifamily property management.

Now the founder of Cedar Street Companies and Flats Chicago is using that knowledge to launch Livly, a property management system that streamlines the apps and technology that renters and landlords use.

Launching Tuesday, Livly is an operating system and smart-phone app that seeks to be a central platform for paying rent, logging maintenance requests, booking amenities and fielding tenant inquiries, among other services.

The product will help landlords reduce property management expenses while unlocking “ancillary” revenue through the more efficient use of building space, Samoylovich said. It also seeks to create a more seamless tenant experience, he said.

The increasing demand for rental units and the corresponding rash of new deliveries have made the multifamily market hyper competitive. A system tying together a building’s amenities and services can be a huge leg up for landlords, Samoylovich said.

“In apartments, people are trying to keep their tenants,” he said. “In the future, it won’t be about the amenity races. It will be about the experiences and services that will help keep and retain tenants. By retaining and increasing your retention slightly, that increases the value of your property significantly.”

Livly already has some big backers and early adopters. The company is backed by $10 million in seed funding from Pritzker Group Venture Capital, Navitas Capital and JLL Spark, the $100 million fund launched last year by JLL to back real estate tech ventures. It is being rolled out at properties controlled by industry giants the Related Companies, Golub & Company and CA Ventures, according to the company.

Related Chief Operating Officer Matt Allen called Livly a “game changer,” and said it will be rolled out at Related’s Miami properties to start.

“Not only does Livly offer additional revenue streams to property managers, such as affiliate revenue from renter’s insurance and credit card transactions, the company also helps properties gain new revenue from rethinking and transforming shared and dead space in their buildings into monetized spaces,” Allen said in a statement.

In the multifamily market, developers have increasingly turned to amenities and services to attract tenants. Often those services include digital components like smart phone apps. As a result, some renters are juggling multiple apps and accounts for things like package delivery, building access and maintenance requests, Samoylovich said.

Samoylovich sought to streamline the digital experience for renters, and in early 2018 he hired Jacob Rynar to help him out. Rynar previously worked for Microsoft’s big data and cloud solutions efforts, and later worked for WeWork, which has its own tenant-facing app.

“Renters were typically working with a slew of third parties and they were having a really disjointed experience,” Rynar said. “That experience was not great. We really want residents to be able to utilize this app in a seamless way … to enjoy their time in the building.”

The technology also aims to help pad landlords’ bottom lines. Data collected by the app will tell landlords which spaces are being used, and it will help in the “activation of dead spaces,” or repurposing underutilized space to make it more valuable, Samoylovich said. The data collected will be owned by the landlords, he said.

“You’ll have live information to understand what are the things that are working within a building based on utilization and engagement,” he said.

Proptech is a growing field within the technology and real estate industry, with millions being poured into new products. Still, Samoylovich and Rynar said their product is unique. Given the demand for rental units, and the incorporation of high-tech amenities and services, the business partners believe they have a unicorn on their hands.

“It’s not just the growth of the popularity of multifamily, but more of what you’re seeing is the merging of the physical and digital world,” Samoylovich said. “It’s kind of the perfect storm of opportunity.”

From left: Dragon Global CEO Robert Zangrillo, Crown Realty CEO Robert Flaxman, and WP Investments president Bruce Isackson (Credit: Dreagon Global, Getty Images, WP Investments, and iStock)

Three real estate developers and investors were among the 33 parents indicted in the Justice department’s largest-ever college admissions scheme, which federal prosecutors revealed Tuesday.

Miami developer Robert Zangrillo and Los Angeles developers Bruce Isackson of WP Investments and Robert Flaxman of Crown Realty were charged in the scandal, which involved parents allegedly paying bribes to secure their children acceptance into elite schools including Stanford, Georgetown and Yale.

Actresses Felicity Huffman and Lori Loughlin and William E. McGlashan Jr., a partner at the private equity firm TPG, were also among the wealthy parents who were charged by the Department of Justice.

An FBI investigation found that the parents conspired to bribe SAT and ACT exam administrators to allow students to cheat on their college entrance exams, as well as paid off varsity coaches and administrators who could facilitate their kids getting accepted to those universities. A number of parents used charitable organizations to conceal the payments, according to the Justice Department.

The owner of a college admissions company, William Rick Singer, was charged with money laundering, obstruction of justice, racketeering and conspiracy to defraud the U.S. The parents paid Singer about $25 million between 2011 and February of this year, according to the indictment. He’s expected to plead guilty.

The case is the Department of Justice’s largest-ever prosecution of its kind, involving 200 agents, according to the New York Times. Fifty people in six states were charged.

Zangrillo, a main investor in the Magic City Innovation District project in Miami’s Little Haiti neighborhood, was charged with conspiracy to commit mail fraud and honest services mail fraud. According to the complaint, filed in the Southern District of Florida, Zangrillo paid off athletic department officials at the University of Southern California to designate his daughter as an athletic recruit, having someone take classes on her behalf. Zangrillo did not immediately respond to a request for comment.

He is said to have made two donations: $200,000 to the Key Worldwide Foundation and $50,000 to Women’s Athletics at USC. Though USC rejected his daughter’s application in 2017, the complaint states she was accepted after her second application, touting her rowing experience that was absent from the first application was placed on a VIP list of transfers.

Zangrillo is founder and CEO of Dragon Global, a venture capital and real estate investment firm. In Miami, he’s co-developing the controversial $1 billion Magic City project along with Tony Cho and Plaza Equity Partners. The 17-acre development calls for a 30,000-square-foot Magic City Studios and a 15,000-square-foot innovation center with startups, co-working space and other collaborations; an office tower; retail space; workforce housing and possibly a hotel. It’s planned for land between Northeast 60th and 64th streets.

In the Los Angeles area, Isackson and his wife, Davina, were both indicted in the scheme for securing their daughter’s admission, also to USC, as a recruited athlete.

In an email in July 2016, Bruce Isackson wrote: “Thanks for the follow up call regarding the attached Key Worldwide Foundation invoice. Per our discussion can you please send me an email confirming that if [our daughter] is not admitted to UCLA as a freshman for the Fall 2016 class that The Key Worldwide Foundation will refund our $250,000.00 gift. Again, both Davina and I are greatly appreciative of all your efforts on [our daughter]’s behalf!”

Isackson is president of WP Investments, an industrial and office firm in Woodside, California. He could not immediately be reached for comment.

Beverly Hills developer Flaxman, president and CEO of Crown Realty, paid to get his son into the University of San Diego, according to the complaint. Flaxman’s company wired two payments of $125,000 each to the Key Worldwide Foundation in May and June of 2016.

Eric Kroh

A massive piece of land in Bel Air that is entitled for a mansion up to 40,000 square feet is now for sale. The price, $60 million.

Eric Kroh, founder of Sandstone Properties, is selling his 30-acre spread, the latest in a series of pricey land-only listings to come up for sale in Los Angeles.

This one took Kroh over a decade to secure the permits, listing brokerage the Agency announced in a release. The Wall Street Journal reported the story first.

An LLC tied to Kroh paid $6 million for the property in 2005, records show. Kroh told the Journal he’s already begun construction on the home, but wants to leave the final finishes to the future buyer. Kroh’s firm, meanwhile, specializes in multifamily projects. In June, Westwood-based Sandstone proposed building two residential towers — one 25 stories the other 27 stories — and a total of 610 units in Warner Center.

Once completed, the Bel Air mansion could feature elaborate amenities such as a bowling alley, indoor and outdoor pools, security gates and regulation basketball and tennis courts. A private vineyard could also be built on site.

Renderings portray a two-story residence with lush landscaping, a semicircle-shaped infinity pool with two hot tubs, and a lengthy driveway with several water features.

Mauricio Umansky and Lynn Teschner of the Agency have the listing.

Less than two months ago, another empty plot of land in Bel Air hit the market for $150 million. The 10.6-acre spread comes equipped with permits allowing a 60,000-square-foot estate.

Still, both listings pale in comparison to the so-called “Mountain of Beverly Hills.” The Beverly Hills Post Office property spans 157 acres of land and is on the market for $650 million, recently reduced from a record $1 billion.

Houses in Seattle (Credit: iStock)

Buyers looking for homes in cities like Seattle, San Jose and Oakland this spring will have more negotiating power than they did during previous years, thanks to surging inventory tugging prices down across the western United States.

Home sales hit 11-year lows in Southern California and in the San Francisco Bay area in January, and prices in the Denver and Portland areas fell this year for the first time since 2012, according to Bloomberg.

And in King’s County around Seattle, home prices fell by about 3 percent per square foot, the first year-over-year decline since 2012, Redfin data show. And between January 2018 and 2019, Seattle-area sellers cut the prices on about one-sixth of homes, twice the rate of the prior 12-month period, according to Trulia.

Seattle-area home inventory in February more than doubled year over year, forcing sellers to accommodate a buyer pool suddenly replete with options, per Redfin data. During the same period, inventory spiked 82 percent in San Jose, 41 percent in Oakland and 37 percent in Portland and Denver.

Across the country last year, home inventory jumped by 6.4 percent and sales dropped by 11 percent as the national market continues to cool, according to a Re/Max report last month.

[Bloomberg] — Alex Nitkin

LA to cut water and power at illegal weed shops

The cannabis industry continues to make inroads in commercial real estate but in Los Angeles, scores of illegal weed shops have been sprouting up. Los Angeles now has an estimated 178 illegal cannabis businesses, and the city has decided to nip them at their power lines.

The City Council voted unanimously this week to give the water and power agency the authority to cut off illegal marijuana shops’ access to utilities, according to the Hub-LA. There are about seven unlicensed cannabis operations for every licensed operation, officials said, but the L.A. Police Department has struggled to control their growth.

Earlier this year, the Department of Cannabis Regulation announced a push for new enforcement regulations, which would include penalizing landlords with $20,000 daily fines for allowing unlicensed operations. It would also give the city Department of Water and Power the authority to shut off utilities.

There are plenty of law-abiding players in cannabis real estate.

Barneys is opening a luxury cannabis shop at its Beverly Hills store this month, and Innovative Industrial Properties, which owns growing warehouses, made a 117-percent profit [https://therealdeal.com/2018/11/10/a-cannabis-landlord-is-this-years-best-performing-reit/]for its investors last year. [The Hub] — Gregory Cornfield

CoStar CEO Andrew Florance (Credit: iStock)

CoStar Group filed two copyright infringement lawsuits against firms it claims repurposed its data and illegally shared subscriptions.

The $17 billion real estate data giant, which has enjoyed a surge in market cap and share price in recent weeks following strong 2018 financial results, is known to go down the legal route to protect its data, and has filed dozens of lawsuits against firms it has accused of copyright infringement.

In one federal complaint filed Monday against New York-based Baron Realty Group in the Eastern District of New York, CoStar alleged that the commercial real estate firm did not pay for the service and then stole “tens of millions of data points” before making its own database for Baron employees.

A separate complaint also filed Monday against Realty Insight, alleged the New York-based commercial firm purchased CoStar subscriptions and then “secretly” resold them to five other commercial real estate firms.

Both firms could not be reached immediately for comment.

CoStar said in a statement that the lawsuits “continue the company’s long-running efforts” to protect its intellectual property, and end the defendants’ “cycle of theft and send the message to would-be thieves that CoStar will pursue legal action.”

In October, CoStar filed seven federal copyright-infringement lawsuits against firms it accused of stealing its data and illegally obtaining a subscription.

Blackstone REIT CEO Frank Cohen, Praedium Group Founding Principal Russell Appel and the Miro Apartments

Blackstone’s latest Los Angeles play is for a 100-unit complex in the Gateway Cities.

Blackstone Real Estate Investment Trust picked up the Miro Apartments at 12257 Heritage Springs in the city of Santa Fe Springs for $56.7 million, property records show. New York-based private equity investor Praedium Group was the seller.

California Bank and Trust provided BREIT with a $28.2 million acquisition loan for the buy.

Other Blackstone entities have been busy in L.A. lately as well. In mid-February, Blackstone’s EQ Office subsidiary paid $166 million for the Lincoln Heights headquarters of fashion retailer Forever 21. Around the same time, EQ Office had sold off a three-building apartment complex in Echo Park for $25.5 million.

Shortly after, Blackstone Group sold off two L.A. properties — one in Westlake and another in Santa Clarita for a combined $113.6 million.

BREIT’s purchase of the Miro Apartments marks the second time the property has traded hands since developer Fairfield Residential completed it in 2015. Praedium paid Fairfield $47 million for the property in 2016, according to Bisnow.

Miro Apartments is part of the larger 5.8-acre Village at Heritage Springs master-planned community. It has one-, two- and three-bedroom units, all with balconies. Current rents range from $2,470 for a two-bedroom to $3,921 for a three-bedroom, according to the property’s website.

Amenities include a gym, pool, and 24/7 security.