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Oakmont Capital developing another resi complex near hot Culver City

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The project site, looking toward Downtown Culver City (Credit: Google Maps)

Oakmont Capital is developing a 119-unit mixed-use project in Palms, about a block from a similar project he started last year.

The latest one, a seven-story development at 3565 Overland Avenue, would have 2,000 square feet of ground-floor retail space. It would also include 11 affordable units. The construction would cover six property parcels — an entire block — totaling about 29,500 square feet.

Simon Lazar, who runs Oakmont, is requesting density bonuses and other incentives as part of the Los Angeles’ Transit Oriented Communities program. It provides those incentives to market-rate developers include affordable units in their projects that are located near mass transit.

Oakmont took advantage of available TOC incentives with a 187-unit project a block south on Overland Avenue. They are about a mile from downtown Culver City, which is a hotbed of media and tech-related commercial and residential development.

In July, Oakmont Capital sold a 27-unit new construction building nearby on McLaughlin Avenue to Feit Electric Company for $9.5 million.

Oakmont only owns two of the six parcels it needs to develop the project. It has an option agreement with the Kossof Living Trust to buy two of the other parcels. The last two are owned by the Nickcevic Living Trust. The project site currently has low-density commercial buildings there.


National Cheat Sheet: Developers among 50 charged in college admissions scandal, Ben Carson wants to boost affordable housing in Opportunity Zones … & more

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Clockwise from top left: Real estate developers among 50 charged in college admissions fraud scheme, HUD will give preference to affordable housing in Opportunity Zones, Ben Carson says, New York congresswoman presents bill that would expose LLCs’ beneficial owners, and CoStar Group sues two NY firms claiming copyright infringement.

Real estate developers among 50 charged in college admissions fraud scheme
Fifty people have been charged in a college admissions fraud scheme that allegedly involved parents handing out bribes to secure acceptance letters for their children, including three real estate developers and investors. Miami developer Robert Zangrillo and Los Angeles developers Bruce Isackson of WP Investments  and Robert Flaxman of Crown Realty were among the 50 individuals ultimately charged in the scandal.  William E. McGlashan Jr., a partner at private equity firm TPG, has also been charged. The scandal marks the Justice department’s largest-ever college admissions investigation. [TRD]

HUD wants to boost affordable housing in Opportunity Zones
Developers and investors looking to take advantage of the federal Opportunity Zone program may want to consider building affordable housing. In an interview with The Real Deal, Housing and Urban Development Secretary Ben Carson said preference for certain grants will be given to proposed affordable developments, though he noted the agency can’t require developers to build affordable housing. Carson also said he would consider staying with HUD for a second four-year term. “My preference would be to go back to the private sector, that would be my preference now,” he said. “But there are some very important things that need to be done.” [TRD]

New York Rep. presents bill that would expose LLCs’ true owners
New York Congresswoman Carolyn Maloney has reintroduced a bill that would force anonymous LLCs to disclose their beneficial owners to the Financial Crimes Enforcement Network, which would in turn disclose the info to law enforcement and financial institutions. The bill, known as the Corporate Transparency Act of 2019, aims to solve a “very simple” problem, Maloney said. “Criminals and terrorists have always used anonymous shell companies to finance their operations, because they never have to disclose who actually owns these shell companies,” she said, adding that law enforcement investigations often “hit a dead end at an anonymous shell company.” [TRD]

CoStar Group sues two NY firms claiming copyright infringement
CoStar Group has hit two different firms with copyright infringement lawsuits. The suit filed against New York-based Baron Realty Group claims the firm didn’t pay to use its service, “stole tens of millions of data points” and subsequently compiled its own database for employees. Another suit filed against New York-based Realty Insight claims that firm did buy CoStar subscriptions, but “secretly” resold them to other commercial real estate firms. CoStar said it hopes the lawsuits “send the message to would-be thieves that [it] will pursue legal action.” The firms didn’t immediately respond to requests for comment. [TRD]

MAJOR MARKET HIGHLIGHTS

The Chrysler Building’s new owner is considering a hotel conversion
Aby Rosen’s RFR Holding and Austrian real estate firm Signa Holding GmbH may have big plans for their latest purchase. In an email, Rosen told Bloomberg he would consider a hotel conversion for the Chrysler Building, which he and his partner are buying from Tishman Speyer and an Abu Dhabi government fund for $151 millionNewmark Knight Frank’s Lawrence Wolf noted that a conversion of the 1930 Art Deco building could be difficult for the new owners. “It’s a magnificent building… but changing use is not without issues,” he told the outlet. [TRD]

Chicago City Council approves $6B riverfront development plan
Sterling Bay’s $6 billion plan for a development along the North Branch of the Chicago River has secured the Chicago City Council’s approval. The council approved the developer’s plan to build 14.5 million square feet of office, retail and residential space on the Lincoln Yards site along the river by a vote of 33-15, following months of debate. While one Alderman had hoped to delay approval, describing the project in its current iteration as “the rich getting richer,” another Alderman said the Windy City needs the project to compete with cities like New York. Sterling Bay still needs the council to approve a new $1.3 billion tax increment financing district. [TRD]

Miami WeWork building to sell in cryptocurrency auction
The owners of a Miami office building that’s currently leased to WeWork are expected to sell it for $65.5 million as part of a cryptocurrency real estate auction, marking largest such deal of its kind. Turnbridge Equities founder and managing principal Andrew Joblon and his partners plan to sell the 93,000-square-foot building to New York-based financial and advisory services firm Inveniam Capital Partners, which reportedly made a deposit on the building using Bitcoin back in January. WeWork still has 12 years on its lease at the building. [TRD]

Co-living company plans $100M expansion in LA amid “huge demand”
Los Angeles will be getting seven new co-living buildings over the next few years. Co-living company Common is teaming up with Proper Development on a $100 million project that will include 600 beds, the Los Angeles Times reported. Common’s existing co-living buildings in Echo Park and Hollywood offer housekeeping services and fully-furnished units. Rents are around $1,550 per person at the Hollywood location, and competition for the spaces is fierce: Common founder Brad Hargreaves told the outlet the company got 9,000 applications for the 24 units, and noted that he’s seen “huge demand in Los Angeles.” [TRD]

West Coast housing prices drop after years of “out of reach” prices
Home prices on the West Coast are falling thanks to an increase in inventory, spelling good news for prospective homebuyers, according to Bloomberg. The shift comes after years marked by “out of reach” price tags and heated competition between buyers. In places like Seattle, San Francisco and Denver, “bidding wars are vanishing, time-on-market is climbing and prices are flattening, or even falling,” according to the outlet. “This is what it looks like when the pendulum starts to go the other way,” Trulia housing economist Felipe Chacon told the outlet. [TRD]

Austin-based developer to construct 3-D printed affordable housing
An Austin-based developer is planning to use a 3-D printer to construct affordable homes. Construction-tech startup Icon is selling the printer, known as the Vulcan II, to Cielo Property Group, which plans to start using it this year, according to the Wall Street Journal. The 3,800-pound printer will be able to create a 2,000-square-foot family home within several days by pumping out concrete. Perfecting the technology hasn’t been setback-free, Icon CEO Jason Ballard noted. “We exploded so many pumps,” he said. “I’m talking about liquid concrete on every surface and every human in the room.” [TRD]

Burbank tower occupied by New York Film Academy lists for $40M

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3300 Riverside Drive

3D Investments has listed a Burbank property fully leased to the New York Film Academy for $40 million, or about $720 per square foot, The Real Deal has learned.

Originally built for Warner Bros., the 55,550-square-foot building at 3300 Riverside Drive has served as the Los Angeles home of the film school. The Film Academy recently signed a deal extending its lease at the location through August 2028. It has two campuses in New York and 18 worldwide.

Bob Safai at Madison Partners has the listing.

The four-story building sits on half an acre in the Burbank Media District, near all the major studios.

3D Investments is led by Joseph Daneshgar. The firm, acting behind two LLCs, paid $30 million for the property in 2015, property records show. That works out to $540 per square foot.

Burbank is home to some of the world’s biggest media companies, including Disney and Universal. Last year, Warner Bros. renewed its 456,000-square-foot lease at Douglas Emmett-owned Studio Plaza, which is adjacent to the NYFA property.

Based in Beverly Hills, 3D Investments is also active outside of Los Angeles. Last August, the firm paid $44 million to acquire a 209-unit luxury condo project in Las Vegas. A group led by Daneshgar also paid $33 million for a 333,670-square-foot retail complex there two years earlier.

Saunders Property unloads office complex in La Mirada

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Claus Dieckell, chairman at Milan Capital and the Atrium office building in La Mirada (Credit: CBRE)

Saunders Property Company sold an 84,000-square-foot office building in La Mirada, unloading the property through a 1031 exchange.

The buyer was investment firm Milan Capital Management. Anaheim-based Milan Capital bought the four-story Atrium offices for $13.6 million, according to the Los Angeles Business Journal. The property at 16700 Valley View is 90-percent leased to 24 tenants, according to CBRE, which represented the Newport Beach-based seller. Milan Capital represented itself, the Journal reported.

The deal was part of a 1031-exchange, in which investors can defer capital gains taxes by using funds from a sale to buy new property.

The La Mirada office submarket — known as Mid-Counties — has outperformed the overall region for the past decade, according to CBRE. Strong office demand and low supply in the area kept vacancy rates at 6 percent last year.

CBRE said it expects significant rent increases in that office market, with very little new construction, and growing demand from the surrounding industrial base.

In July, a 6,200- square-foot strip mall in La Mirada sold for $5.1 million; and earlier in the year, Bixby Land Company sold its property in the city for $17.4 million. [LABJ]Gregory Cornfield

Bulls-eye: Target finally gets nod to resume construction in East Hollywood

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A rendering of the project as well as the current site

The East Hollywood Target super-store will be built after all. Or rather, it will be completed.

Los Angeles city officials granted approval for Target to resume work on its 200,000-square-foot project on the corner of Sunset Boulevard and Western Avenue, according to Curbed.

The location has been half-built for years amid a battle with neighborhood residents who opposed the project. The issue even made it all the way to the state’s highest court.

The store’s construction has been shelved since 2012, when the La Mirada Association Neighborhood Association sued the city over approving the project. The association charged the development had greater density than what is permitted. The Target complex will stand 74 feet high, more than twice the 35-foot height limit for retail development there.

La Mirada, represented by attorney Robert Silverstein, won that suit. But the City Council soon took matters into its own hands, passing a new law that would allow the Target to be built.

The association followed with another lawsuit, but in December, the state’s highest court affirmed an appeals court’s decision, paving the way for this week’s final approval. [Curbed] — Natalie Hoberman

“Bulk buyers” risk it all by snapping up multiple units in luxury developments

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211 individuals in New York City own between three and 10 units in a single building (Credit: Pixabay)

Conventional wisdom advises real estate investors to spread their risk across a diverse portfolio. But not so for “bulk buyers” who prefer to invest in multiple luxury units in single developments, often against the wishes of their financial advisors.

“Bulk buyers” may use their multiple units to house guests or extended family, to generate rental income, or to cobble together a dream home, the Wall Street Journal reported. But the strategy requires total faith in the specific development, and its management team.

A PropertyShark report shows that 211 individuals in New York City own between three and 10 units in a single building. In Chicago, 342 owners do and in Los Angeles, 181 owners do, the Journal found. The report also shows that many bulk buyers use LLCs to make purchases. (PropertyShark’s report doesn’t track owners with more than 10 units in a building, or whether there was overlap between buying in their own name and also using LLCs.)

As with bulk buying of food or home goods, bulk real estate investment can save buyers money. Neil Johnson, managing director of Ohana Real Estate Investors, a developer of luxury resorts in California, Mexico and Park City, Utah, told the Journal he sometimes offers bulk buyers a 15 percent to 20 percent discount off the listing price. [WSJ] – Decca Muldowney

 

Scott Gillen’s luxury Malibu cliffside community has 1st home in contract

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Scott Gillen and a rendering of The Case

The luxury cliffside residential community in Malibu that developer Scott Gillen is building is in contract on its first home.

One of the five planned homes is in escrow for $40 million, according to the Wall Street Journal. The gated compound will include a fire retardant wall, a 24-hour guard tower, fire hydrant and sprinkler system for the community.

The home is in escrow and expected to be completed next year, according to the Journal. There will also be a fire retardant wall, a 24-hour guard tower, fire hydrant and sprinkler system for the community.

The community is on a 24-acre cliffside site along Pacific Coast Highway. In an interview with The Real Deal in August, Gillen said the homes will be around 11,000 square feet and range between $40 million and $60 million. He called them “five fucking spectacular mid-century modern homes.” That high-end number has jumped to $100 million, according to the Journal.

After the Woolsey Fire that devastated Malibu in November, Gillen said he would offer homeowners at the Case community their own firefighter team.

The land for the Case cost $50 million. The seller was Oaktree Capital and Big Rock Partners — a joint venture that took 11 years to secure coastal development permits for the site.

Gillen and his firm Unvarnished have built spec homes around Malibu with a minimalist style. Earlier this year, his $400-million offer to purchase the 157-acre land called “The Mountain” in Beverly Hills Post Office was denied. [WSJ]Gregory Cornfield

Mark your calendars: These are LA’s top real estate events next week

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There are a couple of real estate events worth checking out next week!

On March 21st, Connect Media is holding its Connect Los Angeles 2019 event at the Hotel Indigo Downtown Los Angeles, 899 Francisco Street from 1 p.m. to 7 p.m. This event will offer networking opportunities, along with a discussion on the market trends shaping the industry. Speakers include Hessam Nadji, CEO of Marcus & Millichap, and Shawn Mobley, CEO of Cushman & Wakefield in the Americas.

Also on March 21st, the Korean Real Estate Brokers Association of Southern California is holding a real estate outlook event at One Banquet Hall at Aroma Complex, 3680 Wilshire Boulevard from 2 p.m. to 6 p.m. This event will include discussions that focus on various changes within the industry, and how to take advantage of these changes moving forward. Bill Ukropina of Colliers International and Josh Niehaus of Elite Group will be among the speakers at the event.

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


An industrial developer sues former tenants over “decades” of contamination

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2200 and 2128 Merced Avenue in South El Monte (Credit: Google Maps)

What do former tenants at an industrial site owe the owner, who says they contaminated the property so thoroughly that it has been rendered unusable?

Art Weiss Industrial Properties is suing Quaker Chemical and half-a-dozen other companies over what it claims was decades worth of environmental contamination at its property in the San Gabriel Valley.

Art Weiss wants Quaker Chemical and the other firms to pay to clean up the four addresses in South El Monte along Merced Avenue. The firm claims it is missing out on development, leasing and sales opportunities. Most of the potential buyers and tenants wouldn’t want to deal with the contamination, according to the suit.

The same contamination has also stopped Art Weiss from refinancing or getting new loans on the property, according to the federal lawsuit, filed Monday in U.S District Court for Central California. Weiss wants the former tenants to pay for future abatement costs, and for all costs it has already incurred related to contamination of the site.

South El Monte, along with other surrounding communities in the San Gabriel Valley, are heavily polluted from years of industrial activity. The Environmental Protection Agency named several parts of the valley as Superfund sites in 1984.

The threat remains real more than three decades later — EPA officials have installed air treatment systems in homes and commercial buildings in South El Monte as recently as 2017 to combat toxic fumes rising from soil.

In the case of Art Weiss’ South El Monte property, the suit says the contamination originates with Pennsylvania-based Quaker Chemical. Art Weiss claims the company owned Multi-Chemical Products, a firm that leased the site from 1969 until the early 1990s. The other defendants are various tenants that also leased facilities on the properties during that time period.

Art Weiss claims that Quaker agreed in its lease to pay up to $1 million per year for eight years to cover any damage Multi-Chemical incurred at the property. Art Weiss says that money was never paid.

Art Weiss Industrial Properties and Quaker Chemical did not return requests for comment by press time.

Art Weiss has had better luck with other properties. Earlier this week it sold an industrial building in City of Industry to a merchandising company for $11.5 million.

This week in celeb real estate: KimYe expand in Hidden Hills, Casey Wasserman drops price on Foothill Estate… and more

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Kanye West and Kim Kardashian, and Cassey Wasserman and the Foothill Estate (Credit: Getty Images)

Celebrities and makeup moguls breathed new life into the high-end real estate market in Los Angeles this week, interrupting the recent stream of price chop listings with several purchases. Still, the bulk of the activity stemmed from sellers struggling to unload their multimillion-dollar homes.

Media executive Casey Wasserman, grandson of the late studio exec Lew Wasserman, is softening the price on his Foothill Estate. The 18,500-square-foot mansion in the Beverly Hills Flats re-listed at $97.5 million, down from $125 million. Built in 2016, the property features five bedrooms, an art studio, 1,150-square-foot gym, private screening room, an 85-foot infinity pool and pool house. Wasserman acquired the property from his grandparents, and paid $6.5 million to acquire the neighboring lot from legendary singer Frank Sinatra.

There was also another price drop in Bel Air. U.S. Ambassador to Denmark Carla Sands chopped the ask on her 14,700-square-foot home from $37 to nearly $26 million, the Los Angeles Times reported. The Italian villa-style home has six bedrooms, 11 bathrooms and a guest house. Sands and her late husband, real estate investor Fred Sands, purchased the site for about $4 million in 1999. They built the home in 2002.

Kim Kardashian and Kanye West have acquired the house next door to theirs as they continue to build out their massive Hidden Hills estate. The duo paid $2.7 million for the 1.6-acre lot, which has a 1950s-era home that will likely get torn down. The estate of the late Richard Matheson, an author whose work includes “I Am Legend,” sold the property. Combined, the couple now own more than six acres in the gated celebrity enclave, the Times reported.

A cosmetics guru set a new high for L.A. County this week. Toni Ko, founder of NYX Cosmetics, sold her 4,400-square-foot penthouse in Santa Monica for $12.5 million, claiming the county’s biggest condo sale of the year. Bob Brisco, who is CEO of website operator Internet Brands, was the buyer. The sprawling unit, which is made up of two adjoining units, takes up half a floor at the Seychelle, a 10-story luxury tower at 1755 Ocean Avenue.

Farther west, the luxury lifestyle creator James Perse listed one of his estates in the Point Dume area of Malibu for $40 million. Spanning 4,200 square feet, the home features five bedrooms and six bathrooms. Perse paid $16 million for the property on Zumirez Road in 2010. It was built in 2004 by “X-Files” creator Chris Carter, and designed by the firm Nicolas, Budd, Dutton.

WATCH: TRD talks shop with the firm behind country’s largest private development

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After Hudson Yards’ official opening ceremony on Friday — which featured guest speakers including none other than Big Bird — The Real Deal got a hold of the development team behind the $25 billion project.

Ken Himmel, the president and CEO of Related Urban, spoke about opening the seven-story Shops at Hudson Yards amid a troublesome time for retail.

And in light of the controversy surrounding Amazon’s incentive package to come to New York, Related Companies CEO Blau responded to questions regarding public funds pumped into the Hudson Yards neighborhood.

“Subways and parks, aren’t subsidies,” Blau said. “That’s the role of government to encourage economic development.”

Check out the video above to hear more from the developers behind the country’s largest private real estate project.

Interviews by Kathryn Brenzel.

Abu Dhabi’s ties with Goldman Sachs sour amid 1MDB scandal

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Tim Leissner and and Roger Ng (Credit: Getty Images)

Abu Dhabi’s state investment company has hit pause on new business with Goldman Sachs, which has been embroiled in the multibillion-dollar fraud scandal tied to Malaysian state investment fund 1MDB.

The moves increases pressure on the bank and threatens to affect its broader relationships in the region, the Financial Times reported. Goldman had become a top investment bank in Abu Dhabi and worked on the merger of two major state-owned real estate companies.

“We have suspended any activities with Goldman Sachs pending [the] outcome of the litigation,” Brian Lott, a spokesperson for Mubadala Investment Company, said in a statement. “The only exceptions are engagements signed prior to the litigation, which will continue as per contractual terms.”

Goldman declined to comment to the FT.

The International Petroleum Investment Company, a Mubadala unit and former partner of 1MDB, sued Goldman in November, accusing the U.S. financial institution of bribing its officials during a “massive global conspiracy,” the report said. And Malaysia has filed criminal charges against Goldman subsidiaries and two former bankers — Tim Leissner and Roger Ng — accusing them of helping misappropriate $2.7 billion from 1MDB bonds.

Malaysia’s charges came after the U.S. Department of Justice indicted Leissner and Ng. Leissner has pleaded guilty to two counts of conspiracy to commit money laundering and bribe foreign officials. In 2015, IPIC guaranteed billions of dollars of bonds arranged by Goldman and issued by 1MDB. DOJ alleged that $4.5 billion had gone missing, the report said. After the Malaysian fund defaulted, the government in Kuala Lumpur at the time agreed to repay IPIC in a settlement, which has the new government has since challenged.

For its part, Goldman has disputed all the allegations and said it would defend itself against them, the report said. The bank also said the previous Malaysian lied to the bank about how the bond proceeds would be used.

Meanwhile, Jho Low, the alleged mastermind behind the scandal, is wanted by the Malaysian government and believed to be hiding in China. He allegedly used the funds to finance his lavish lifestyle, and invested in Steve Witkoff’s formerly-owned Park Lane Hotel, where Mubadala owns a stake.

Professional services firm Deloitte has also become embroiled in the scandal. The UK-based firm was fined $535,000 by the Malaysian government after it allegedly failed to report irregularities found in audits of companies linked to the 1MDB fund. [FT] — Meenal Vamburkar

“The beautiful señorita”: Architect David Childs talks inspiration at 35 Hudson Yards

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It’s not all angular glass and steel rising above the old rail yards on the Far West Side.

While the office buildings and vertical mall have garnered the most attention, the condominium building at 35 Hudson Yards is the “beautiful señorita flamenco dancer in the center” of the development, twisting and turning as it rises, said David Childs, the chairman emeritus from Skidmore Owings and Merrill.

The architect, who worked with Related chairman Steve Ross on the design concept, relied on stone between the panes of glass to give the condo tower a residential feel.

“The way you get to a building is part of the experience of architecture,” he said. “Architecture is not just a picture of something like you see in a museum… I will always look at this building and think of it much like a piece of music, to which architecture has often been compared.”

The building, with 143 apartments, opened on Friday with the rest of the eastern portion of Hudson Yards. The developer and its partner Oxford Properties Group is aiming for a $1.53 billion sellout. Units start at $5 million.

Check out our video tour of 35 Hudson Yards and interview with David Childs.

Vancouver mansions are renting at bargain prices amid correction

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Vancouver and college kids (Credit: Wikimedia Commons, Pixabay)

Vancouver’s residential market has become so fraught that hundreds of the city’s multimillion-dollar mansions are renting at prices affordable to local students.

Around 800 mansions in the city are listed for rent on Craigslist — and some are renting for under $1,000 per month per bedroom, according to CTV Vancouver.

For example, a $7.23 million home with eight bedrooms is renting for $7,000 a month or around $875 per room. Many have saunas, pool tables and huge dining rooms.

Some owners are likely speculators left sitting on high-end real estate they bought during Vancouver’s residential boom of the last few years, but who want to weather the ongoing correction instead of selling for a loss.

Home prices in the British Columbia city hit a peak last June and plummeted 8 percent through January. The 4.5 percent drop from January 2018 to January 2019 was the most significant annual fall since May 2013.

Renting helps offset taxes associated with the properties, which for some exceed $100,000. On top of property taxes, the British Columbia government instituted a “speculators tax” last year on homes that aren’t occupied by owners for six months of the year and that aren’t rented for more than three months of the year, prompting many part-time residents to put their homes up for rent to qualify for exemption or pay the tax. [CTV Vancouver] – Dennis Lynch

Crime scene for sale: Appraiser assesses dark side of famous properties

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Tate house at 10050 Cielo Drive and appraiser Randall Bell (Credit: Landmark Research Group, Wikimedia Commons)

While Southern California is used to listings that push every connection to the rich and glamorous, L.A.-based appraiser Randall Bell’s work is high profile, but often deals more with the gory and infamous.

He’s known for determining the loss of value at the most iconic crime scenes and disaster sites around the world, Rolling Stone reported. Instead of Frank Sinatra’s old vacation homes, Bell appraised the most “stigmatized” properties in recent history, like the site of the Manson family murders on Cielo Drive, or Michael Jackson’s Neverland Ranch.

He said it’s a “wide spectrum” in terms if how crime scenes decrease values, but typically there’s a 10 to 25 percent loss.

His first such job with was the Brentwood home where Nicole Brown Simpson and Ron Goldman were murdered. Nicole’s father thought the property might be more valuable because it became famous. Bell had to explain the opposite was true. Indeed, the property sold for $737,000 in 1991 and then for $625,000 in 1994.

Although initial reactions are to demolish structures, Bell said that doesn’t always happen because “you have not bulldozed the stigma.”

For example, Sharon Tate’s property was bulldozed, but tourists still go there today. “The stigma is attached to the land,” Bell explained. [Rolling Stone] – Gregory Cornfield


That’s hot: Paris Hilton’s former playpen seeks $30K monthly

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Paris Hilton’s house in the 2000s (Credit: Getty, Realtor.com)

A Hollywood Hills home with as much glam as its former owner, Paris Hilton, has hit the market as a rental for $30,000 monthly.

Though the socialite hasn’t lived in the home for more than a decade, its new owners have retained much of the charm that made the home an infamous playground for Hilton in the early 2000s.

Spanning 2,707 square feet, the residence features a stripper pole, disco balls, an enormous signed portrait of the star herself, a sparkly black chandelier and a mirror-clad bedroom, Inman reported. It includes four bedrooms, a swimming pool and outdoor deck.

The home sold earlier this month to a television and film writer, based in San Francisco, for $3.9 million, records show. That’s close to what Hilton sold it for back in 2007, when she included all her furniture in the deal.

Hilton, who has since made a career out of DJing, starred in the hit reality show, “The Simple Life,” at the time she lived in the house, gaining notoriety in L.A. Her stylist at the time, Kim Kardashian, is among some of the many celebrities to have partied in the home.

Linn Renee Sivertsen of the Agency has the listing. [Inman] – Natalie Hoberman

Related’s Hudson Yards: Smart City or Surveillance City?

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An exterior shot of the Vessel and a kiosk as Hal 9000 at Hudson Yards (Credit: Wikipedia)

In a scene from “Gattaca,” the dystopian 1997 film set in the “not too distant future,” dozens of people are seen entering the Gattaca Aerospace Corporation headquarters using their genetic fingerprint to pass security clearance. It may seem like a far-flung sci-fi reference, but at Hudson Yards, the gargantuan “smart city” that officially opened Friday on the Far West Side, there are elements of art-meets-life.

Related Hudson Yards president Jay Cross (Credit: University of Toronto)

“We said, ‘What should technology be able to do at Hudson Yards if it’s truly a smart city?’’” said Jay Cross, president of Related Hudson Yards, the project’s developer.

Related says its use of technologies will make life better for those who work, live or shop in the 16 buildings planned for the $25 billion development. But the company’s decision to hold user data indefinitely, as well as its partnership with the firm behind the controversial LinkNYC kiosks, has sparked alarm among surveillance and data privacy watchdogs.

Related says it hasn’t yet determined exactly what it will do with data it collects from people in the neighborhood, or movements its cameras record. “But from our point of view, the data is our data for the purposes of allowing us to make Hudson Yards function better,” said Cross.

One example is Related Connect, an app for residents at 15 Hudson Yards that replaces the apartment key with a smart-phone. Another feature is Pass, a system in the office buildings that scans a biometric handprint to allow tenants into the building; their guests are provided access by using a QR code.

“The data is our data for the purposes of allowing us to make Hudson Yards function better” said Jay Cross

A third technology is a yet-to-be-named “content management system” which includes 30 kiosks dotted across the 26-acre site. This is the most visible element of Related’s use of technologies for its smart city, and the one that has sparked the greatest concern from data privacy advocates.

Similar in appearance to LinkNYC towers, these 10-foot tall rectangular figures contain interactive touch screens on either side that can be used to book restaurants, buy tickets for “the Vessel” or get directions, and send alerts to your phone.

Less known is the inclusion of two tiny cameras on each side and sensors that track atmosphere levels. Cross said the cameras will be primarily used to relay pedestrian figures to advertisers.

“We can say how many people looked at this ad, for how long. Did they seem interested, bored, were they smiling?” he said.

But they may have other uses, too. For example, they could track pedestrian traffic from the No. 7 subway. This information would then sit in a “data lake” to be used to enhance the experience for people in Hudson Yards, he said.

Though Related doesn’t currently have any plans to sell user information to third-party companies or government entities, Cross said the private developer could do so in the future.

“We can do with what we want with our data; we’re not averse to using it to help the city map the West Side.”

The city said it currently does not have a data sharing agreement with Related, nor are there any city laws regarding data collection that would apply to the real estate company.

“There are regulations regarding information the government collects, but not private businesses,” city spokesperson Jane Meyer said in a statement.

“Red flags” for privacy advocates

To develop the kiosks, Related hired urban technology firm Intersection. The company, which is owned by a subsidiary of Google, provides the content management system for the kiosks, and displays the advertisements and news features that appear on the screens.

Intersection has been criticized over data privacy matters before. It’s the company behind the LinkNYC towers, the kiosks that have replaced phone booths across the city and display advertisements, news alerts and provide wifi access.

In 2017, the firm received blowback from data privacy advocates who learned the towers were storing personal browser history indefinitely and tracking other user data without clear privacy policies in place. The company also initially said the towers “may” contain cameras, before updating its user policy to state that its cameras are active.

Ultimately, Intersection updated its policy for the kiosks and now can only keep footage for seven days. Information including web addresses, device type, device identifiers — data collected when a person signs onto its wifi — is now deleted after 60 days.

With the Hudson Yards kiosks, no such limitations exist, and the data will be collected and stored en-masse. Intersection will be privy to any data collected, but will not be allowed to use it for its own purposes, Cross said.

This has created some concern among data privacy and surveillance watchdogs. The New York Civil Liberties Union, which called out LinkNYC for its previously lax privacy policy, said Hudson Yards’ “embrace of manifold data collection” raised concerns.

NYCLU’s Daniel Schwarz (Credit: Twitter)

“Cameras, microphones, WiFi kiosks and other sensors leave visitors vulnerable to exploitative and invasive data collection methods that allow for the precise tracking of people’s identity, movement, interactions, and behavior,” said Daniel Schwarz, a privacy and technology strategist at the NYCLU. “Prior notice and consent should be a baseline requirement.”

Shahid Buttar, a director at the Electronic Frontier Foundation, an international digital privacy advocacy group that campaigned against LinkNYC, said that infinite data retention periods are a “red flag” for data privacy and the rights of individuals who do not opt-in to the technologies — for example, being filmed.

“This kind of technology, absent community control, can be pernicious,” Buttar said. “It might be a private neighborhood, but it’s still no more respectful of the individuals that are in it.”

In response to these concerns, Cross said that mass data collection is not of interest to the developer and that its capabilities to pool data is dwarfed by the scale of LinkNYC’s network of kiosks, which number almost 2,000.

“Prior notice and consent should be a baseline requirement.” said Daniel Schwarz

“For us it’s about running the campus better, it’s completely different from the world of big data,” he said. “We don’t have enough collection points.”

A lesson in Canada

Intersection’s chairman Dan Doctoroff is considered by many to be the initial mastermind of Hudson Yards — he even came up with the name while serving as deputy mayor of New York City under Michael Bloomberg. Doctoroff also doubles as chairman and CEO of Sidewalk Labs, a “smart city” urban developer that is the majority owner of Intersection and shares an office with the company at 10 Hudson Yards. Sidewalk Labs is owned by Alphabet, the parent company of Google.

Intersection’s chairman Dan Doctoroff (Credit: Wikipedia)

Doctoroff’s vision for a smart city has evolved through his work on a controversial project he’s spearheaded in Canada. Sidewalk Labs secured a tender to develop an 800-acre slice of land on the shore of Lake Ontario in 2017. The first neighborhood of the futuristic site, called Quayside, is expected to include heated sidewalks to melt snow, mostly timber buildings, self-driving cars and climate controlled public spaces that can block rain and snow.

But the project has received intense pushback from the local community who claim that Sidewalk Labs subverted the democratic process to win the tender and secure the site. The former Ontario Privacy Commissioner, Ana Cavoukian, who was hired to consult Sidewalk Labs, resigned from the project in October after she deemed it a “smart city of surveillance.” In December, the Ontario Auditor-General issued a scathing report that found the government body that granted Sidewalk Labs the land bypassed standard processes of awarding a tender and gave advanced time to the developer to prepare its application.

BlackBerry’s former co-chief executive Jim Balsillie (Credit: Centre for International Governance Innovation)

“You don’t have an option to opt out of a surveillance city,” said Jim Balsillie, the former co-chief executive of BlackBerry, who has been a vocal opponent of Sidewalk’s operation in Toronto.

In the past month, the project received negative coverage after a business plan leaked to the Toronto Star, outlining Sidewalk Labs aim to collect city payments for developing the neighborhood — another disclosure that outraged opponents of the project. Sidewalk Labs did not respond to requests for comment for this story. Intersection declined an interview with Doctoroff and directed inquiries to Related.

Hudson Yards, by comparison, has only elements of the technology expected to be deployed in Toronto. It was first mapped out in 2008 — the year after the iPhone was released — and not built from the ground-up with technology in mind. And, unlike Toronto, is built by a pure-play real estate developer, rather than a technology company.

However, it does have capabilities to advance its technological offerings. The cameras built into the kiosks do not currently have software to enable facial recognition, but are capable of supporting the feature — something Cross said there are no immediate plans for.

But also contained within the kiosks are small microphones that, when activated, will have voice recognition and the ability to talk with pedestrians.

“Eventually you’ll be able to talk to this,” said Cross. “It’ll be like HAL 2001.”

GPI Cos. approved for Amoeba Music redevelopment plan, with caveats

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GPI companies founders Cliff Goldstein and Drew Planting, with a rendering of the project (Credit: GPI Companies via Curbed)

GPI Companies’ plan to replace the legendary Amoeba Music store in Hollywood with a 26-story apartment tower was approved with a couple of key caveats.

The Los Angeles City Planning Commission voted to support the firm’s 200-unit plan provided GPI redesign its parking component and designate its affordable units for those most in need, Curbed reported.

Located at 6400 Sunset Boulevard, the proposed tower would include 7,000 square feet of retail space. As it stands, the Johnson Fain-designed building would hold 277 parking spots at an above-ground podium structure.

GPI paid Amoeba’s founders $34 million to acquire the site in October 2015. It is still unclear where in Hollywood the music retail store will relocate.

Last week, commissioners requested GPI comes up with a way to hide some of the parking from view. Commissioners also requested the 10 affordable units already set aside be reserved for extremely low-income residents.

The Planning Commission also unanimously denied an appeal from the Coalition to Preserve L.A., a housing organization connected to the AIDS Healthcare Foundation. The appeal stated that the city incorrectly designated the redevelopment plan a Sustainable Communities Project, and that the 5-percent of units set aside as affordable failed to meet housing mandates. [Curbed]Natalie Hoberman

Safco Capital buys Gelson’s Market WeHo property in leaseback deal

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Gelson’s Market (Credit: WEHOville)

The parent company of upscale grocer Gelson’s Market has sold the West Hollywood property where one of its stores is located.

Safco Capital, led by John Safi, paid $25.3 million for site at 8330 West Santa Monica Boulevard, the company announced in a release. The Los Angeles Business Journal first reported the news. As part of the deal, Gelson’s leased back the 17,830-square-foot retail store.Gelson’s has three locations in L.A.

The seller of the 1.3-acre property was Mayfair Realty, which owns Gelson’s.

CGS3, a commercial real estate law firm, represented Safco, while Mayfair Realty represented itself.

Mayfair, a subsidiary of Arden Group, acquired the Gelson’s chain in 1966. TPG, an investment firm based in Texas, then acquired Arden in February 2014 for $394 million.

The purchase marks a slight shift from Safco’s recent acquisitions, which have been dominated by multifamily projects.

In November, an entity tied to John Safi filed plans to build a six-story apartment building in Westlake with a small retail building nearby. And in May 2018, the Westside-based developer filed plans to demolish a strip mall to make room for a new, 66-unit project in Koreatown.

Safco’s latest purchase will see competition from the 25,000-square-foot Sprouts Farmers Market, set to rise less than half-a-mile away at 8550 Santa Monica Boulevard. The grocery store is part of developer Michael Talla’s new mixed-use project, which will include 16,000 square feet of office space and a cafe.

Real estate teams are rapidly extending their sales lead over individual agents

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(Credit: Pixabay, iStock)

New analysis shows that real estate teams have made dramatic gains in market share since the housing crisis a decade ago.

The sales volume of the best teams increased nine times faster from 2011 to 2017 than the volume of the best individual agents, according to a study by brokerage industry veteran Russ Cofano, host of a real estate podcast called “Gradually … Then, suddenly!”

Based on his analysis of data from REAL Trends, the number of closings by the top 250 teams in the United States grew from 61,000 in 2011 to 133,000 in 2017 – a 115 percent increase.

During the same period, the number of closings by the top 250 individual agents grew 13 percent from 45,000 to 51,000.

The growth rates from 2016 to 2017 were lopsided, too. Team sales increased by 13 percent and individual agent sales by 4 percent.

The faster growth in team sales volume is challenging brokerages because team sales “have significantly better profit margins than brokerage companies do,” Cofano told Inman.

He also said the trend probably applies not only to the best teams and individual agents but across the board.

In a recent survey by the National Association of Realtors, 26 percent of the respondents identified themselves as members of a team.

The proliferation of teams may stem from a brokerage model that RE/MAX introduced. Top agents pay a monthly “desk fee” plus an unusually low share of their commission income to RE/MAX franchisees.

Cofano said that type of business model effectively shifts the ownership of consumer relationships from brokerages to their agents.

Customer-relationship software and other technological advances have led the best agents to seek other ways to improve their performance, and “teams are a natural outgrowth of that,” he said.

By providing sales leads, technology and training, leaders of real estate teams collect large shares of the commission income of less experienced team members that previously went to their brokerages.

As a result, some brokerages now see internal teams as direct competitors but cede control to them, anyway, because they close so many sales, Cofano said. [Inman] Mike Seemuth

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