Donald Trump and the home at 809 N. Canon Drive. (Credit: Getty Images, and Google Maps)

The Trump Organization has sold one of its last remaining properties in Los Angeles, a home on North Canon Drive in Beverly Hills.

The company, now controlled by President Trump’s son Donald J. Trump Jr., sold the home at 809 N. Canon Drive for $13.5 million, property records show. It was an off-market sale.

The buyer was an entity named Hillcrest Asia Limited, according to L.A. County records.

In 2007, the Trump Organization paid $7 million for the home. The company also once briefly owned the mansion next door on 806 North Canon Drive. The Trump Organization did not immediately return requests for comment.

The five-bedroom, 5,400-square-foot home at 809 North Canon sits at the top of Rodeo and Canon drives, where the two roads meet Sunset Boulevard.

Donald Trump reportedly didn’t often stay at the home, but he made an impression. The neighborhood was the only precinct on the Westside where a majority of voters cast their ballots for Trump in the 2016 presidential election. He won the precinct with 54 percent, to Hilary Clinton’s 42 percent, according to election data.

Trump also has maintained high-powered friends in the area. Last March, Tampa Bay Buccaneers owner Ed Glazer held a 2020 campaign fundraiser for the president at Glazer’s Beverly Park mansion.

The 809 North Canon home also stands directly across from the Beverly Hills Hotel. As has been widely reported, that was the location where now President Trump is alleged to have had affairs with former Playboy Playmate Karen McDougal and porn star Stormy Daniels. It was also where a third woman, Summer Zervos, alleged he assaulted her. President Trump has denied the claims by all three women.

The home has been something of a thorn in Trump Organization’s side since his presidential term began. Shortly after his election, the city of Beverly Hills began issuing fines on the property because its six-foot-tall hedges violated city code. Trump’s representatives contended that the hedges were necessary to protect the president if he ever stayed there. The Trump Organization paid at least $1,128 in fines over the course of 2017 related to that violation, records show.

The sale leaves the 250-acre Trump National Golf Club Los Angeles in Rancho Palos Verdes as the New York-based firm’s only L.A.-area property.

New York Life Ted Mathas
and 5161 Lankershim

New York Life Insurance Company has paid $102.7 million to acquire a recently renovated WeWork-leased office building in North Hollywood, The Real Deal has learned.

Boston-based Beacon Capital Partners sold the four-story property at 5161 Lankershim Boulevard. The company bought the building for $69 million in late 2017, and recently completed the upgrades.

The Class A office spans 205,286 square feet, pegging the sale at $500 per square foot. The building is located in the heart of booming North Hollywood’s Arts District. Its location has made it an attractive spot for tenants like WeWork, which recently leased 40,000 square feet at the property, and animation studio Bento Box Entertainment. Endemol Shine North America, a TV production company, also leases space at the site.

New York Life bought the property through an LLC named Madison OFC 5161 CA. In 2016, the insurance giant’s real estate arm — New York Life Real Estate Investors — bought a Hollywood multifamily complex on behalf of the Madison Core Property Fund. New York Life would only confirm it had purchased the Lankershim Boulevard property “on behalf of an institutional client.”

A spokesperson for Beacon declined to comment.

North Hollywood has become increasingly popular, drawing more investors to the San Fernando Valley neighborhood. Earlier this month, Strategic Legacy Investment Group and Tokyo-based Sanei Architecture Planning Company filed plans to build an 84-unit apartment complex on Burbank Boulevard. Investor Alan Kleinman is also planning a 119-unit project at the site of what had been Debbie Reynolds’ dance studio on Lankershim Boulevard.

A rendering of Krispy Kreme’s Time Square flagship

Times Square, a dizzying maze of lights, colors and sounds, is about to get even more extra.

Donut company Krispy Kreme announced plans Monday for a 4,500-square-foot flagship store at Vornado Realty Trust’s 1601 Broadway, Crain’s reported.

The shop will feature the “world’s largest Hot Light,” and give customers the chance to witness donut making in action from seats inside the “world’s largest donut box.”

At the tail end of the donut-making process, a conveyor belt will move donuts through a “glaze waterfall,” the company said.

The property, which sits on 48th Street, was previously occupied by Hershey’s Chocolate World.

Krispy Kreme’s flagship is expected to open in 2020. [Crain’s] — Sylvia Varnham O’Regan

From left: Brian Wilson, and Steve Poulos with the property

Bridge Development Partners is growing its already massive industrial portfolio with a new development that will rise just south of Downtown Los Angeles, in what remains the most active industrial market in the country.

The 117,400-square-foot project is under construction at 4224 District Boulevard in the city of Vernon, the company announced. The property, called Bridge Point Vernon, was designed by Herdman Architecture + Design, and it is being built by Houston-based general contractor Arch-Con Corporation.

The development also calls for 5,000 square feet of office space and a 145-foot secured truck court. It is expected to be complete by the fall. A seven-story cold storage building from the 1920s was demolished to make way for the new project.

The leasing agents are Scott A. Heaton and Connor McRae with Colliers International.

Bridge Development Partners was founded in Chicago in 2000, and developer Brian Wilson opened the firm’s L.A. wing in 2015. Since then, the company has undertaken nearly two dozen projects with more than 11 million square feet in L.A.

In February, the firm purchased a 12-acre property for $19 million in the industrial capital of the country, the Inland Empire. In January, Bridge Development paid $68 million for a warehouse with 286,000 square feet of space in the Arts District. And last year, the firm sold a 512,490-square-foot warehouse that it built in Torrance for $102.5 million to Morgan Stanley’s Prime Property Fund.

L.A.’s industrial market continues to reign supreme, both among U.S. investors and those from outside the country.

Vernon is the smallest city in California, with fewer than 125 residents, and about six square miles of space that’s mostly industrial. Last year, Pima Alameda Partners received permits for a 248,700-square-foot project there.

FHFA director Mark Calabria (Credit: Federal Housing Finance Agency and Getty Images)

A decade after Fannie Mae and Freddie Mac were put under government control, a Trump administration-appointed regulator is stepping in to try again to hand the mortgage finance companies back to the private sector.

“If I do nothing and don’t push, then I’m fairly certain Congress will do nothing,” Mark Calabria, the Trump-appointed head of the Federal Housing Finance Agency, said, according to the Wall Street Journal. “They have a lot of priorities, so how do I knock this up a few levels in the priority chain for Congress?”

The push follows multiple failed attempts to do privatize the lenders. Together, Freddie and Fannie buy low cost housing loans and repackage them as securities, and guarantee almost half of the $10 trillion housing market.

Ahead of the financial crisis, both companies took on more risk than they could take, and were bailed out by the government after loans went sour during the crisis.
In March, the Trump administration said it was finalizing a plan to hand over the companies to the private sector. If that happens, those low cost mortgages could become more expensive unless additional legislation is also introduced, Calabria said. [WSJ] — David Jeans 

President Donald Trump with 1290 Sixth Avenue in New York (left) and 555 California Street in San Francisco (right) (Credit: Getty Images)

President Trump’s stake in two Vornado Realty Trust properties surged in value over the past year, pushing his net worth to $3 billion, Bloomberg reports.

His 30 percent stake in a tower at 1290 Sixth Avenue, and an office building at 555 California Street in San Francisco increased by 33 percent on the previous year to $765 million.

The lucrative deal now makes up a quarter of his fortune.

Trump’s net worth, which increased by 5 percent on the previous year, was calculated by the Bloomberg Billionaires Index, drawing on property records, securities filings, a recent financial disclosure and other sources.

The rise comes despite problems in other areas of his family business. The Trump Organization’s golf courses and resorts, for example, have reportedly dropped in value to $525 million, due to a decline in demand.

In February, the company abandoned plans to build two nationwide hotel chains, blaming the political climate.

The leasehold the Trump Organization holds on the retail property at 6 East 53rd Street – the former home of Niketown – fell in value by 9 percent to $420 million.

However the company’s office buildings, including the Vornado properties, stood out as an area of growth. In New York, an office tower at 40 Wall Street increased by 13 percent in the past year. It’s now valued at $480 million. [Bloomberg] — Sylvia Varnham O’Regan

From left: Compass CEO Robert Reffkin, Eytan Seidman, Max Henderson, Khurrum Malik and Compass COO Maëlle Gavet

Three of Compass’ top executives in marketing and product have resigned or been forced out of their roles in recent weeks, becoming the latest casualties of a turbulent C-suite.

Eytan Seidman, head of product, resigned last month, according to people familiar with the situation. Khurrum Malik, chief marketing officer, and Max Henderson, Compass’ vice president of product, were let go.

Sources said the latest departures stemmed from tension between CEO Robert Reffkin and COO Maelle Gavet on how to run the company — on everything from decisions marketing strategy to product development. In April, chief people officer Madan Nagaldinne and general counsel David Carp left their jobs at the firm.

In an email Wednesday afternoon to agents and staff, Reffkin portrayed the departures as part of a larger reorganization that would streamline certain departments and help the company identify new growth opportunities.

“Maëlle and I are splitting our responsibilities more clearly,” he wrote, according to a copy of the email obtained by The Real Deal. Going forward, the email said, Gavet will oversee Compass’ people and culture department, along with marketing and a new team dubbed “New Ventures” that will focus on “aftermarket opportunities” such as a vendor marketplace.

Reffkin said he plans to oversee a streamlined tech team, including product and engineering staff. The application design team will be consolidated under CTO Joseph Sirosh. “We have incredible momentum and a path to success in tech that is more clear than ever,” Reffkin wrote.

But sources challenged Reffkin’s narrative.

While Compass’ management team has endured turnover before — a common phenomenon for fast-growing startups — people familiar with the executive team said in recent months that Reffkin and Gavet have locked horns on issues big and small, making it difficult for top executives to know whose direction to take.

Gavet, for example, was committed to building Compass’ ancillary businesses related to mortgage, title and escrow, and she hired Henderson in January to execute that vision. But without Reffkin’s buy-in, Henderson was let go this month.

Sources also said Reffkin and Gavet disagreed on Compass’ marketing strategy — with Reffkin determined to lean on agents and Gavet arguing for more direct-to-consumer marketing.

Sources said the new leadership structure is meant to prevent execs from having two bosses to report to; instead, everyone will be a direct report to either Reffkin or Gavet.

In the email Wednesday, Reffkin also announced a series of promotions. He said Matt Spangler, Compass’ chief creative officer, would now be chief brand and communications officer, while Christa Patrylak, who is vice president of media, will be vice president of digital marketing, media and measurement. Rory Golod, general manager of New York, will run the “New Ventures” group with Ashton Alexander.

Compass, which was valued at $4.4 billion after raising money from Softbank and the Qatar Investment Authority last year, was the third-largest firm on TRD‘s recent ranking of residential firms in the city, with $2.01 billion in sales last year.
Nationwide, Compass was also No. 3 on a ranking published by the research firm Real Trends, which credited the New York-based firm with $45.5 billion in 2018 sales volume. The company has more than 12,000 agents and 2,500 employees.

The latest string of departures come just three months after Carp and Nagaldinne left their respective roles at the brokerage. Carp is now working as a tech advisor, according to his LinkedIn profile. Nagaldinne, who previously worked at Amazon and Facebook, joined Blink Health, a pharmacy app, as chief people officer.

This past November, Compass hired Kristen Ankerbrandt as chief financial officer, its third CFO since 2017.

From left: Avison Young’s Martin Dockrill , Dan Urbach and Grant Alexander

A top-producing agent at the Agency has left the firm to join Compass. Dan Urbach and his longtime associate Candace Fengler will be based in Compass’ Pacific Palisades office. He most recently served as partner and managing director at the Agency, where he joined after spending nearly 13 years at Berkshire Hathaway HomeServices. Urbach closed $127 million in sales volume last year, according to the Agency. Urbach will be joining Cindy Ambuehl and Danny Brown, who also left the Agency for Compass in March.

Avison Young promoted Martin Dockrill to chief operating officer of global operations. Dockrill has been with the commercial real estate services firm for 24 years, and most recently worked as managing director of the Ontario, Canada, region. In his new role, he’ll oversee company operations and will manage day-to-day service aspects of the firm. He will continue to serve as a member of Avison Young’s global executive committee. Over his career, he has brokered more than 10 million square feet of industrial and office space, and has sold more than $1 billion worth of investment properties.

In the real estate law world, Grant Alexander was hired as labor and employment partner at Allen Matkins. Alexander, who will be based in the firm’s Los Angeles office, has experience working on a variety of employment litigation cases, including discrimination, harassment and wrongful termination matters. Allen Matkins ranked second on The Real Deal’s ranking of top L.A. law firms last year with 45 L.A. County real estate lawyers and 185 lawyers globally.

Tishman Speyer CEO Rob Speyer and IMCO Ceo Bert Clark with New York and Los Angeles (Credit: Getty Images and IMCO)

Tishman Speyer has entered into a joint venture with a Canadian asset manager to invest $500 million into projects in gateway cities across the U.S.

As one of the nation’s largest landlords, Tishman said Wednesday it is partnering with Investment Management Corporation of Ontario, a government affiliated body that manages $63 billion in assets.

The companies said IMCO had committed to an initial $500 million investment, with options to increase by $250 million increments.

Despite signs of slowing in the housing and commercial real estate markets, Tishman CEO Rob Speyer said demand still remains high for “office space and multifamily housing in U.S. gateway cities, and we believe that will be the case for the foreseeable future.”

The two firms will target multifamily and office building projects in New York, Washington, Boston, Los Angeles, San Francisco, Chicago and Seattle.

In recent months, Tishman Speyer has had a constant stream of real estate activity. In New York, the firm sold its 10 percent stake in the Chrysler Building to RFR Realty, and then listed a building across the street, 666 Third Avenue, for sale. Its tower in Hudson Yards, the Spiral, is fast rising from the ground, and is expected to be completed in 2020.

From left: Saeed Nourmand, Michael Nourmand, Grant King and Richard Heyman

The Relevant Group has spent several years building a boutique hotel empire in Hollywood. But in a lawsuit filed in federal court, the developer claims the founder of one of Los Angeles’ best-known brokerages extorted it out of millions of dollars, nearly sabotaging the projects in the process.

Relevant is accusing broker and developer Saeed Nourmand of “extorting” the firm for millions of dollars, and allegedly claiming he said: “it’s going to take a check to make this go away.”

As part of suit, the company said that Nourmand collected money from Relevant through frivolous environmental complaints issues against its hotel projects. Relevant is also alleging that Nourmand has extorted competing developers for the same purposes. It alleges Nourmand pursued similar litigation against KOAR Institutional Advisors over its Schrader Hotel project, which is near Relevant Group’s Hollywood properties.

Relevant filed the suit in U.S. District Court for California’s Central District, claiming violations of the Racketeer Influenced and Corrupt Organizations Act, commonly called the RICO Act.

The suit also names Saeed’s son, Michael Nourmand, and the brokerage that Saeed founded in 1976, Nourmand & Associates. Michael Nourmand is now president of the brokerage.

Nourmand’s challenges to the Relevant projects were filed through Sunset Landmark Investment LLC, according to the suit. Sunset is an entity controlled by Saeed Nourmand, and headquartered at Nourmand & Associates’ Sunset Boulevard office. Saeed Nourmand was not available for comment.

In a text response to questions, Michael Nourmand said he is not involved with Sunset Landmark Investment LLC and that “there is no reason I or Nourmand & Associates should be mentioned in [a] lawsuit.”

He added, “I am not an owner or involved in Sunset Landmark, though I understand that Relevant is in a legal dispute with Sunset. They seem to have named me and Nourmand & Associates without basis, to try to damage our reputation.”

Nourmand & Associates’ Chief Financial Officer Mohamad Iravani is listed as a property manager at Sunset, according to statements filed with the California Secretary of State in May. Irvani is not as a defendant in the suit, and did not respond to a request for comment.

Starting in 2016, Saeed Nourmand “directly or indirectly” initiated challenges to three of Relevant’s proposed hotel projects in Hollywood: the Thompson Hotel, Tommie Hotel and Selma Hotel, according to the suit. Those were allegedly made through lawsuits and challenges within L.A.’s development appeals system.

The suit claims that Saeed Nourmand’s actions had nothing to do with environmental impact issues, and were instead designed to delay Relevant’s projects and extract payments in exchange for dropping the complaints.

Relevant claims that in early 2018 it paid what it called a “ransom” totaling $5.5 million to Sunset Landmark Investment to drop challenges to its Thompson Hotel and Tommie Hotel projects.

Nourmand allegedly went after the Selma project in the same manner, according to the suit, and on March 28, 2018, told a Relevant representative: “you know the drill, it’s going to take a check to make this go away,” according to the suit.

The city approved the Selma project in March.

The suit claims that Nourmand hired well-known environmental lawyer Robert Silverstein to pursue challenges through environmental statutes including the California Environmental Quality Act, a law commonly used to appeal development projects. Silverstein did not reply to an email seeking comment.

Relevant Group claims it has suffered “in excess of $100 million” in damages from the scheme because of delays to projects. The firm claims that the Nourmand-led challenge to the Selma project nearly derailed its construction.

Stuart Miller and a rendering of a Lenner development

Lennar Corp.’s multifamily arm closed a $1.3 billion fund that will invest in apartment projects in large U.S. cities.

LMC, a subsidiary of Miami-based Lennar Corp. announced the closing of the equity fund on Tuesday. It said eight institutional investors, including foreign pensions, sovereign wealth funds, banks and insurance companies invested in the fund. Lennar also contributed $381 million to the fund.

The company said the fund, known as LMV II, will develop and acquire apartment communities for the fund’s duration of eight years. LMV II will provide LMC with capital to develop and acquire $2.6 billion in multifamily assets across the United States, according to a release.

Lennar’s multifamily division makes up a small portion of the company’s business. In the first quarter of 2019, it made up just 2.5 percent of its total revenue.

After acquiring CalAtlantic in a deal worth $9.3 billion last year, Lennar became the largest homebuilder in the U.S. The company’s executive chairman Stuart Miller has previously suggested that he wanted to make Lennar a “pure-play” homebuilder to concentrate the company’s focus on building single-family homes.

The company likely still wants to take advantage of the growing number of renters in large U.S. cities, as homeownership in these cities becomes more unaffordable and out of reach for many young people.

Inglewood Mayor James Butts and a rendering of Inglewood

Add Inglewood to the growing list of municipalities taking rent control into their own hands.

The Inglewood City Council on Tuesday unanimously voted in favor of permanent rent control measures to cap rent increases and offer relocation allowances for unfair evictions, according to Curbed. The decision comes as the cost of living in Inglewood continues to rise, thanks to a tight housing stock and series of megadevelopments quickly changing the neighborhood.

The move comes as a growing number of Los Angeles County municipalities have been trying to create initiatives to protect more tenants from rising rents.  The efforts follow the defeat of Proposition 10 last November, which would have opened the door to statewide rent control.

In the last few years, many of Inglewood’s black and Hispanic residents have been priced out of the city, where two-thirds of the residents are renters. Much of the gentrification is due to the $5 billion sports complex set to rise in the area, expected to open next summer. The NFL Stadium has drawn a flurry of developers and investors to the area, driving up prices for residents.

For the most part, Inglewood landlords will now be prohibited from raising rents by more than 5 percent in a year. There are some exceptions where the cap will be 8 percent, such as if a landlord has kept rents far below market rate, or if landlords complete $10,000 or more worth of improvements.

For renters who have lived in a building for at least two years then get evicted, landlords will be required to provide relocation allowances. In Long Beach, a similar measure was recently passed that allows tenants to receive as much as $4,500 in relocation fees if landlords raise rents by 10 percent or higher.

The new law will apply only to rental properties built after February 1995. Single-family homes and condominiums are excluded. [Curbed] — Natalie Hoberman

Linda Figg and the FIU bridge collapse (Credit: Getty Images)

The Occupational Safety and Health Administration found a slew of errors in the design and construction of the Florida International University pedestrian bridge that collapsed in 2018, killing six people.

Among them, Eighth Street should have been shut down, OSHA stated in the report.

Figg Bridge Engineers’ “deficient” design led to structural failure of the bridge, and Figg’s attempt to close the cracks, which triggered the collapse, was a fatal action, according to the report, obtained by the Miami Herald.

OSHA also places blame on the contractor, Munilla Construction Management, for not using “independent judgment with regard to implementing necessary safety measures” after Figg disregarded concerns over growing cracks on the morning that the 930-ton portion of the bridge fell. It collapsed across Southwest Eighth Street, in front of FIU’s main campus, on March 15, 2018.

MCM said earlier this year that it filed for Chapter 11 bankruptcy to reorganize, seeking protection from creditors.

Federal investigators also said that FIU and the Florida Department of Transportation should have stepped in the morning of the collapse and had independent experts review Figg’s conclusions. [Miami Herald] — Katherine Kallergis

Clockwise from top left: 1333 N. Tamarind Boulevard, 1310 S. St. Andrews Place, 162 N. Douglas Street and 14817 W. Delano Street (Credit: Google Maps)

The five recent multifamily projects proposed in Los Angeles total just under 200 units, and all include affordable housing components through the city’s Transit Oriented Communities Program.

Three of the projects have 40 or more units each. The proposals comes as the city continues to grapple with a housing crisis that has seen an increasing number of market-rate apartment developers include a small percentage of affordable units in exchange for city height and density bonuses.

The list is compiled using planning documents from the Department of City Planning and public records.

1333 N. Tamarind Boulevard | Hollywood | 45 units

Michael and Isaac Cohanzad of Wiseman Residential are planning to replace three single-family dwellings in Hollywood with a five-story, 45-unit project with 55,900 square feet of space. Four of the units will be reserved for very low-income residents, allowing the firm to request tier-3 TOC incentives for an increase in height. It also is located in a designated Opportunity Zone, which provides tax gains for long-term investors who develop in distressed areas. Plans were filed by architect Isaac Cohanzad, who established Wiseman in 1985. The property is owned by Tamarind 1333, LP, which is managed by Michael Cohanzad, records show. They purchased the site last November for $2 million.

1310 S. St. Andrews Place | Mid City | 43 units

The owners of the site at 1310 S. St. Andrews Place are planning to build a 43-unit multi-family development. The site is owned by entities 1310 St Andrews Place Investors LLC and Cabbage 1031 LLC. They are managed by Mark Darwish and Stevenson Ranch attorney Joseph Stark. The applicants are requesting tier-3 TOC incentives for their five-story project. They purchased the site last October for $2.2 million. It’s located in the Harvard Heights section of Mid City just off Pico Boulevard near Western Boulevard.

14817 W. Delano Street | Van Nuys | 40 units

A small home in Van Nuys could be transformed into a 40-unit development. Owners of the property at 14817 W. Delano Street in the San Fernando Valley have applied to demolish the existing three-bedroom home with 850 square feet of space that they purchased in December for $780,000. The owners, Granada Hills-based BCG Delano LLC, which is managed by project applicant Joel Mensch, will construct the four-story building. It will include four affordable units and 36 market-rate units. That allows for tier-3 TOC incentives of a 22-foot height increase and a side-yard reduction. This project is also in a designated Opportunity Zone.

162 N. Douglas Street | El Segundo | 39 units

In El Segundo, an entity named Drona Investments, LLC has filed plans to add 39 units to an empty lot that spans 4,800 square feet. The site at 162 N. Douglas Street was purchased by the managers of the entity, Manish Drona and Gautam Kumar, last September for $1.1 million. The project qualifies for tier-1 TOC bonuses, including height increase and open space decrease, with four units set aside for extremely low-income households. Earlier this year, Drona applied for a 41-unit project in Hyde Park in South L.A.

1332 W. Colorado Boulevard | Eagle Rock | 31 units

The owners of an Eagle Rock property are planning to build a 31-unit development above commercial and parking space. The entity, Santa Ana-based Beverly Drive Holdings LLC, which is managed by Imad Boukai and Janet Carmona, purchased the site at 1332 W. Colorado Boulevard in 2016 for $1.9 million. The new four-story structure will qualify for tier-2 TOC bonuses because it will include three units for extremely low-income households.

Recent renderings of multi-family projects

The massive amount of new housing added in Los Angeles County has done little to slow demand or rising rent prices, which have jumped to $2,320 per month.

Amid a housing shortage, the high demand for units led to the absorption of 16,150 units over the past 12 months, lowering the vacancy rate to 3.7 percent, according to Marcus & Millichap’s 2019 multifamily forecast report.

And despite an overall slowing housing market in Southern California, the first quarter of 2019 represented one of the strongest periods for new development in L.A. County since at least 2000, according to the report.

From January through March, 4,200 rental units were added to the apartment stock. And by the end of the year, the report said, completions will stay on pace, with an expected 13,000 additional units.

In Downtown L.A. alone, more than 9,800 new units have been added over the past year, and 9,000 more are set to be finished by the end of 2019. The vacancy there is at 4.6 percent with an average rent of about $2,473.

Construction is underway on 27,600 more units, all of which are set to be completed by the fourth quarter of 2021. This week, Onni Group received city approval for a 700-unit tower in Downtown, which will be one of the tallest planned in the city.

The cities and neighborhoods on the Westside, where the average rent is up to $3,275, are set to add more than 2,800 rentals by the end of the year — the largest annual total since at least 2000. In the next few quarters, at least 16 complexes will be finished there, including the 526-unit Neptune Marina, and the 585-apartment AMLI Marina del Rey.

Aaron Appel (Credit: Catherine Gibbons)

JLL is figuring out the makeup of its debt team amid the company’s acquisition of HFF, multiple sources told The Real Deal.

The brokerage held a meeting Wednesday to discuss how the two debt platforms will integrate in the wake of JLL’s $2 billion acquisition of Dallas-based brokerage HFF, a deal the two companies agreed to in March.

The shakeup could result in the exit of Aaron Appel, who as the head of JLL’s debt-brokerage arm oversees a team that in 2017 handled more than $1.7 billion worth of mortgages, sources told TRD.

Appel, who joined JLL in 2014, denied rumors circulating Wednesday that he had been fired.

HFF is a significantly bigger player in the commercial-mortgage brokerage game. The company advised on $61 billion worth of commercial loans nationwide in 2017, according to data from the Mortgage Bankers’ Association. That’s more than double the $24.1 billion JLL did during that same time.

Owing to HFF’s dominance in the sector, JLL agreed to keep the brokerage’s debt-team leadership in place as the two companies merge. That means Appel would be working under HFF’s leadership team. While widely regarded as a talented broker, Appel has a reputation for being difficult to work with, sources said.

Correction: Citing multiple sources, a previous version of this article reported that JLL had fired the head of its debt brokerage team Wednesday. Representatives for JLL denied this after publication. 

The pace of rent growth is back up in L.A. and Orange counties

The cost of housing in Los Angeles and other major California metros keeps rising, and along with it inflation.

L.A. and Orange counties each recorded 3.1 percent inflation over the last year, according to new U.S. Labor Department statistics cited by the Los Angeles Times. In San Diego County it was even worse, as the increase rose to 3.8 percent, higher than anywhere else in the country. The numbers were from May 2018 through May 2019.

The latest data for the notoriously expensive San Francisco Bay Area — from April — indicated inflation stood at 4 percent.

Federal figures indicate inflation nationwide was 2 percent in May, down from 2.1 percent in April.

Housing costs have a “huge weight in the index,” Lynn Reaser, an economist at Point Loma Nazarene University, told the Times. She said there was not enough new housing being built, a fact that was has helped drive the increases.

The pace of rent growth, meanwhile, rose 5.4 percent in May, a pickup after it had slowed late last year. Despite the slowdown late last year, rents still rose 6.6 percent in L.A. in 2018.

The California Housing Partnership estimates that L.A. County is short more than 500,000 affordable homes.

Pro-development camps often advocate loosening regulations and upzoning low-density residential areas to allow more multifamily construction. Nearly two-thirds of respondents to a recent Public Policy Institute of California survey support statewide upzoning in single-family areas near transit and jobs.

Some in the state prefer requiring developers build more affordable units. A number of cities in the L.A. area have enacted new rent control measures this year, including caps on rent hikes. [LAT] — Dennis Lynch 

Uber CEO Dara Khosrowshahi, a concept Uber Air taxi and Gensler’s skyport design

Uber intends to start its flying taxi service in Los Angeles, complete with “skyport” stations that would include a retail component. Could those skyports be the next big thing in real estate?

New details about the ride-hailing company’s Uber Air service show prototype concepts for the sleek landing stations, according to Curbed.

Uber wants to build those skyports in cities around the country, starting with L.A. and Dallas in 2023, according to the report.

Uber bills Uber Air as an “affordable shared flight” option for consumers, although it estimates that operating each of its four-seat electric-powered vehicles will cost around $700 per flight hour. It’s unclear who would pilot the vehicle, whose price would would likely put a ride far out of reach for most L.A. residents.

A number of design firms are working on skyport concepts, which Uber wants to be capable of handling 1,000 landings per hour. Architecture giant Gensler revealed its CitySpace concept for L.A. on Tuesday.

The modular CitySpace skyports are designed to be quick to build from the ground up or converted from an existing parking garage to “minimize the effect ton the local community and environment.”

Like those of most competitors, Gensler’s concept resembles small airport terminals with multiple landing pads on their rooftops. [Curbed] — Dennis Lynch 

Michael Dell and the Boca Raton Resort & Club

Billionaire Michael Dell’s MSD Partners is planning to invest $75 million into the Boca Raton Resort & Spa, according to a Fitch Ratings report that reveals a financial breakdown of the operations of the oceanfront resort.

The 1,047-room resort, whose real estate sold for $462 million in May, sold for a combined $875 million, according to Fitch Ratings. That price breaks down to $589.7 million for the resort, including furniture, fixtures and equipment, and $285.3 million for the Premier Club. The social club offers its 11,000 members access to all the resort’s amenities and the Boca Country Club. It accounted for about 19 percent of the resort’s revenue in 2018, according to Fitch.

MSD Partners is under the umbrella of MSD Capital, a private investment firm created to manage the assets of the Dell Technologies founder and his family’s assets. The company also owns the Four Seasons Resorts Maui at Wailea, Four Seasons Resort Hualalai, and the Fairmont Miramar hotel in Santa Monica.

Dell’s firm financed the $875 million purchase with a $600 million loan from Goldman Sachs, and put nearly $280 million of buyer equity into the deal. The two-year, floating-rate loan will be sold to investors, according to the Fitch report.

Over the first four years of the loan term, MSD Partners plans to renovate the main resort and its Boca Beach Club through room renovations, redeveloping the public space, and amenity upgrades.

The property includes a full-service spa, three fitness centers, 18 tennis courts, 13 food and beverage outlets, an 18-hole golf course, seven swimming pools with one FlowRider wave simulator, a 32-slip marina and about 116,000 square feet of indoor meeting space.

The Blackstone Group sold the Addison Mizner-designed resort to Dell’s firm. Blackstone invested more than $300 million into renovating the property in the 15 years since it acquired it as part of a $1.25 billion deal that included four additional resorts.

The latest sale marks one of the largest hotel trades in South Florida in recent years. But the property has “historically underperformed its competitive set in terms of room revenue,” according to the report.

About 60 percent of the resort’s room demand in 2018 came from meeting and group business — above the 49 percent average for the overall hotel market. Meeting and group bookings are at lower rates than leisure bookings, which brings down the Boca Resort’s overall room revenue, according to the report.

Hilton’s management agreement to operate the hotel as a Waldorf Astoria began in 2013 and ends in December 2033, according to the Fitch Ratings report. Hilton gets a base management fee of 2 percent of total revenue, as well as a brand services fee equal to 4 percent of room revenue, and an incentive fee.

Fitch Ratings said the appraised value of the property was $906 million as of May with a projected value of more than $1 billion in two years.

Percival Vaz and a rendering of the housing project (Credit: City of Los Angeles)

As Los Angeles continues to struggle with its affordable housing crisis, developers are increasingly turning to the benefits of city, state and federal incentives to fund projects.

AMCAL Multi-housing Company is the latest, with its planned 108-unit project that is aimed at low-income families and people with special needs.

The Agoura Hills-based development firm is seeking $15.1 million in federal funds for the 1.4-acre project near Downtown, at the southeast corner of Washington Boulevard and Los Angeles Street, according to Urbanize. The five-story project would replace three warehouses, a 31-unit apartment building and a former printing facility.

The apartment complex, at 200–224 Washington Boulevard and 1910–1914 Los Angeles Street, would include 7,300 square feet of ground floor retail, community rooms, a gym and an 8,750 square-foot central courtyard, along with additional space for supportive services.

Construction is expected to take more than two years. The project was designed by one of the city’s largest architecture firms, VTBS.

AMCAL filed plans to build a separate 108-unit multifamily project in February. That five-story project is set for Florence Avenue in South Los Angeles. Down the street, the firm is also working on a 109-unit project called Florence Apartments. [Urbanize] — Gregory Cornfield