The Real Deal is hosting its annual Los Angeles Residential Showcase and Forum on Friday, June 21, at The London West Hollywood. This year’s forum will focus on how social media and guerrilla marketing play into securing exclusive listings and the impact of new trends and challenges in L.A.’s hottest neighborhoods. Just recently added to the programming is a third discussion that will focus on the trending topic of diversity in real estate.

Our powerhouse lineup of speakers include, Ivan Estrada, Douglas Elliman; Sally Forster Jones, Compass; Joyce Rey, Coldwell Banker; Aaron Kirman, Compass; Michael Williamson, Sotheby’s International; George Penner, Deasy Penner Podley; Ernie Carswell, Douglas Elliman; Yvonne Arias, The Property Lab; Kofi Nartey, Compass; Jennifer Berman, Berman & Pollinger; Alexandra Tieu, Forbes Real Estate Council; Louisette Geiss, Real Women in Real Estate.

Moderating these panels will be Jennifer Berman, Berman & Pollinger; Don Peebles, Peebles Corporation and Stuart Elliott, The Real Deal.

Our full programming for the event includes:

8:00 – 8:30 AM: Registration, showcase, networking and a light breakfast

8:30 – 9:30 AM: Panel and Q&A The residential state of the market: Analyzing the impact of new trends and challenges in LA’s hottest neighborhoods

9:30 – 9:45 AM: Networking and coffee break

9:45 – 10:45 AM: Panel and Q&A The art of securing a listing: How social media and guerrilla marketing tactics have changed the game when it comes to securing the most elusive property listings.

10:45 AM – 11:00 AM: Networking and coffee break

11:00 AM – 11:45 AM: The Diversity dilemma: how to create a more inclusive industry

11:45 AM – 12:30 PM: Showcase, networking and light lunch

Sponsors for this event include 5 Arch Funding, Agent Image, Bosch, Gaggenau, Greater Los Angeles REALTORS, Kay Properties and Investment, Nadel Architects Inc., Side Inc, Real Estate Innovation Network, Smith & Berg Partners and Thermador and Veeve.

Check out our event page daily for the latest forum updates and to get your tickets today!

Hudson’s Bay chairman Richard Baker and Saks Off 5th (Credit: Getty Images and iStock)

The global retail industry’s identity crisis is taking a heavy toll on Hudson’s Bay Company.

The Canadian parent company of Saks Fifth Avenue and Lord & Taylor announced Thursday it will close 15 of its Saks Off 5th discount stores and four Lord & Taylor locations, part of an effort to cut fat ahead of its $1.3 billion move to take the company private, according to the Wall Street Journal.

Hudson’s Bay shareholders including Richard Baker, Rhone Capital LLC and WeWork Property Advisers will fund their buyout in part by selling the German operations the company acquired in 2015 and 2016. Shares of the company rose by about 42 percent on the Toronto Stock Exchange after the deal was announced Monday.

But the smaller pool of shareholders might not do much to reverse the company’s tepid sales numbers, which pushed down the company’s stock value by almost 50 percent during the year leading up to Monday. The company’s revenue fell by 3.3 percent during the quarter ending May 4, as losses at Lord & Taylor and Hudson’s Bay stores outweighed growth at Saks, the company said Thursday.

Shares of rival department store chains Macy’s and Nordstrom have declined in tandem with Hudson’s Bay since 2015.

Last month, the Journal reported Hudson’s Bay is considering selling off the entire Lord & Taylor brand. [WSJ] — Alex Nitkin

The home on Caribeth Drive and Eli Taban

An Encino estate with ties to the Taban family, which runs Jade Enterprises development firm, has hit the market for nearly $20 million, The Real Deal has learned.

If sold at that price, it would nearly double the current record for a sale in the neighborhood.

The massive gated compound on Caribeth Drive includes a 13,000-square-foot mansion and a sprawling backyard with a tennis court and pool, according to the listing.

Designed by the late architect Ronald Firestone, the main house includes seven bedrooms and 11 bathrooms. Amenities include several fireplaces, 4,000 square feet of patio space, a gym, indoor basketball court and stone countertops.

Property records reveal the 1.4-acre property was owned by Asher and Manij Taban until 2012, when they transferred ownership to an LLC named Amrek. That LLC is controlled by Eli Taban, who worked for his family’s real estate development firm, Jade Enterprises, before starting his own law firm.

Jade, an active investor in the Downtown Los Angeles market, is run by brothers David, Albert, and Benny Taban. The firm most recently secured approvals to build a 30-story apartment building in the Fashion District, set to bring 363 units to the area.

Eli Taban did not respond to requests for comment. A representative for the listing agents, Jade Mills and Alexis La Montagna of Coldwell Banker Residential Brokerage, declined to comment.

The current record for a residential sale in Encino was set by Jimmy Rollins, a one-time L.A. Dodger, who paid $10.65 million for his home last year. He recently listed that 15,000-square-foot mansion for nearly $12 million.

6033 N. De Soto Avenue (Credit: Google Maps)

Development doesn’t appear to be slowing down soon at Warner Center, where the latest proposed project is a 190-unit senior living facility.

The 188,100-square-foot complex would replace an existing commercial building at 6033 N. De Soto Avenue, according to property records.

Mahmoud Malakafzali, a commercial real estate agent, is the owner and developer. Malakafzali paid $2.2 million for the 1.5-acre property in 2014, records show. He owns the property through Ram Property Management LLC, and is an agent at Told Partners, also based in Warner Center,.

Warner Center has benefited from a city rezoning effort a few years ago. A number of large projects are in the works there. The biggest is Westfield’s $1.5 billion redevelopment of the Westfield Promenade mall. The firm is now working through the environmental review process for a 320,000-square-foot arena that is part of that plan.

Westfield’s redevelopment also includes 1,430 residential units, more than 600,000 square feet of office space, and almost 600 hotel rooms.

Developers are building smaller projects as well. In December, Bolour & Associates picked up a three-acre development site near the De Soto property with designs in hand for a 380-unit residential project.

The 190-unit proposed complex is the second large retirement home planned in the area. South Bay Partners and LAMB Properties are collaborating on a 420,000-square-foot senior living complex at a Variel Avenue development site up the street.

Alejandro Andrade and 1290 North Ocean Boulevard (Credit: Realtor)

UPDATED, June 14, 12:48 p.m.: The federal government sold a high-end Palm Beach home that belonged to former Venezuelan treasurer and convicted money launderer Alejandro Andrade for $11 million.

Property records show U.S. Customs and Border Protection sold the six-bedroom, 6,416-square-foot home at 1290 North Ocean Boulevard to Matthew and Astrid Womble of EverWatch, a family office in the Northeast.

The Palm Beach Daily News first reported the sale.

The government put the property on the market with Cristina Condon, Todd Peter and Frances Peter of Sotheby’s International Realty in February for $14.45 million. Among its features are an open floor plan, a summer kitchen, pool and water features, a cabana, 126 feet of ocean frontage, and a gated entrance with a two-car garage, according to the listing.

Through an LLC, Andrade paid $8 million for the property in 2013.

Andrade was sentenced to a decade in prison for his role in a money laundering scheme involving South Florida real estate. Andrade, the former national treasurer of Venezuela under the Hugo Chavez regime, admitted in a guilty plea that he received over $1 billion worth of bribes from his co-conspirator, Venezuelan TV mogul Raul Gorrín, and other co-conspirators in exchange for allowing them to tap into Venezuela’s special fixed currency exchange rate, according to the U.S. Department of Justice.

Andrade received cash, as well as private jets, yachts, cars, homes, champion horses and high-end watches from his co-conspirators. As part of his guilty plea, he agreed to forfeit his assets, which included 17 champion show horses and several real estate properties in Palm Beach County, including a house in Delray Beach and three homes in Wellington.

He pleaded guilty in December 2017 to one count of conspiracy to commit money laundering.

U.S. authorities also seized 24 of Gorrín’s properties, including two waterfront homes in Coral Gables, a condo at Porsche Design Tower in Sunny Isles Beach, and apartments on Manhattan’s East Side.

In May, the Wall Street Journal reported that Gorrín played a major role in a failed attempt to push out Venezuela’s current president, Nicolás Maduro. Maduro is a suspect in a separate $1.2 billion money laundering ring involving former executives of PDVSA, the national oil company in Venezuela.

Amazon CEO Jeff Bezos (Credit: iStock and Getty Images)

Jeff Bezos hunted for the perfect New York City apartment for months. But in the end, he opted to go a DIY route that’s increasingly popular among the superrich.

Months after the Amazon chief’s people checked out HFZ Capital Group’s The XI in West Chelsea and Vornado Realty Trust’s 220 Central Park South, Bezos finalized a deal this month to buy three apartments at 212 Fifth Avenue — including the top penthouse and two other condos — for around $80 million. In all, he’ll own 17,000 square feet spread over four floors at the project, developed by Madison Equities, Building and Land Technology and Thor Equities.

Though developers often hold back a building’s prime penthouse in order to get top dollar for it, they’re now increasingly willing to cater to trophy buyers like Bezos who want to combine units, or redraw floor plans altogether. Brokers said that few developers these days would dream of dismissing the whims of VIP buyers, a sign of the times in which ultra-luxury product is plentiful, but buyers are not.

“It’s so much a question of ‘where is the balance of power?’” said Jeremy Stein of Sotheby’s International Realty, whose clients have bought at 520 Park Avenue and the Puck Penthouses. In a buyer’s market, Stein said, “if someone wants to buy the most expensive apartment in the building, the developer will probably have to make some changes.”

Buyers, the thinking went, want the perfect home designed for them by an expert development team. Now, however, an ethos that’s growing in popularity is that some buyers – call them captains-of-the-universe types – want to call the shots on everything from how big the space is to its layout. Getting them to bite requires a developer to get far more creative.

Tessler Development, for example, this week listed a 19,815-square-foot “white box” penthouse at 172 Madison Avenue for $98 million. The listing promises buyers a luxurious home outfitted with “nearly anything that money can buy and the mind can imagine.” At Madison Square Park Tower at 45 East 22nd Street, Ian Bruce Eichner is asking $77.7 million for a penthouse combination with “spectacular customized interior space that literally cannot be replicated.”

Hedge-fund mogul Ken Griffin closed in January on a $238 million spread at 220 CPS, setting a record for the country’s priciest home purchase. Some may recall that in 2016, the developer, Vornado, amended the building’s floor plans and assembled the 23,000-square-foot spread by combining an 11,000-square-foot duplex asking $150 million with three smaller apartments priced between $26.2 million and $43 million.

“These buyers are looking to be in the quality buildings and need more square footage than is offered,” said Shaun Osher, founder of CORE Real Estate. “A lot of the buyers in these ranges want something that’s unique”

Griffin and Bezos’ buys aren’t entirely a new trend. More than a decade ago, Harry Macklowe and his ex-wife, Linda, paid around $60 million for seven contiguous apartments at the Plaza Hotel, which they turned into a 14,000-square-foot abode with 54 windows. In 2014, Rupert Murdoch shelled out $57.3 million to buy a triplex plus a full-floor unit at Related Companies and HFZ’s One Madison. (In 2015, Murdoch decided not to combine the units and briefly listed the 6,850-square-foot triplex for $72 million; it did not sell.) And Taylor Swift has spent nearly $50 million on a townhouse at 153 Franklin Street, a penthouse at 155 Franklin and a second-floor condo at 155 Franklin, where the star reportedly punched through walls to create passage between the two buildings.

But the demand for complete customization is growing at the very top of the market. And knowing that, developers have taken to working up multiple contingencies for new buildings.

At 520 West 28th Street, the 39-unit boutique condo designed by the late Zaha Hadid, Related intentionally placed risers and plumbing in a central location to accommodate combinations.

“We tucked all of the plumbing up against the columns, with horizontal distribution, so if you wanted to demolish anything, there was no ducting anywhere,” said Greg Gushee, an executive vice president at Related.

Last year, after buyers who toured the top penthouse expressed a desire for more space, Related drew up plans to combine two penthouses into an 11,000-square-foot residence with 4,000 square feet of outdoor space. (It is now offering Penthouse 37, with 6,853 square feet, for $29.75 million, or Penthouse 37 and 39 for $48.75 million.) “This combination is currently the largest penthouse Downtown if you combine indoor and outdoor space,” Gushee said. “Buildings like this are extremely special and can attract the person who’s willing to spend that kind of money.”

He added that the need for maximum flexibility rises when it comes to larger apartments at higher price points.

“People come in and say, ‘I don’t need four bedrooms, I only need three, but I want an amazing closet,’” he said. “We can literally remove a bathroom with no trace of if ever being there.”

At Quay Tower in Brooklyn Heights, an unknown buyer is set to set a new borough record with the $20 million purchase of a penthouse combination spanning about 7,400 square feet.

“The two units were designed with adjacent private elevator foyers with just a sheet rock wall that needed to be omitted, creating a grand foyer for entry,” said David Wine of Oliver’s Realty Group, who developed the property with Robert Levine’s RAL. “At certain price points, the buyer wants the ability to create their own residence to suit their individual taste and needs.”

Daniel Lobitz, a partner at Robert A.M. Stern Architects, said the firm will often plan for multiple scenarios, and has also been called upon to revisit plans based on buyer demand.

At Silverstein Properties’ 30 Park Place, for example, RAMSA revised its original plans — which were drawn up before the Financial Crisis — and redesigned each unit so that they could be combined when the market recovered and buyers were willing to spend more on bigger apartments.

In the top penthouse, RAMSA designed a floor slab in the living room that could be removed if someone decided to also purchase the floor below and wanted to create a double-height living room. The architects also identified a location where someone could add stairs.

“It ended up not getting combined,” Lobitz said. “But we were ready in case it did.”

Acres Capital CEO Mark Fogel with a rendering of project

Developer Chateau Group USA scored a $43.5 million bridge loan to complete the construction of a new four-star hotel in Arcadia, The Real Deal has learned.

Acres Capital provided the financing, which carries a term of two years. The borrowers were Chateau’s Eric Chen and Wen Fei Shen, according to Acres.

Once completed, the Le Meridien by Marriott International hotel will have 233 guest rooms, a 5,000-square-foot ballroom, a rooftop pool with bar and several lounges.

The hotel, at 130 West Huntington Drive, is expected to open in July 2020. Architects Orange is designing the development, which will sit on a 6-acre property near the historic Santa Anita Race Track.

In a statement, the borrowers said they chose Acres because of its “national experience with hospitality projects.”

Mark Fogel, CEO of Acres, said the deal falls in line with the firm’s strategy of lending to the “middle market.” The New York-based firm specializes in bridge and mezzanine loans.

Hotel construction has remained one of the strongest real estate sectors in L.A. County for several years, fueled in part by a robust tourism industry. Last year, a record 50 million visitors to the county helped pump $36.6 billion into the economy. While the pace of development has slowed a bit, L.A. is still adding more hotel rooms than any other part of the state.

FHFA director Mark Calabria is ready to set Fannie and Freddie free, while Wall Street worries about potential risks.

As the Trump administration gears up to end the decade-long conservatorship of Fannie Mae and Freddie Mac, some voices on Wall Street are warning against doing so without congressional support.

Only Congress has the ability to provide an explicit government guarantee for the $4.7 trillion in bonds backed by the two mortgage companies, and the lack of such a backstop may dissuade some financial firms from buying those bonds, driving up costs and hurting homebuyers, Bloomberg reported.

“Keeping Fannie and Freddie as they are and privatizing them is a dangerous experiment,” Michael Bright, a former acting president of Ginnie Mae, told Bloomberg.

Federal Housing Finance Agency Director Mark Calabria, who is responsible for regulating the mortgage guarantors, recently suggested that a guarantee would not be necessary as long as Fannie and Freddie built up larger buffers of capital. But Wall Street remains unconvinced.

“There’s a whole host of buyers that currently buy these mortgage-backed securities that may not be able to, or may not want to” without an explicit guarantee, Vanguard Group’s Brian Quigley said.

Larger capital buffers are also likely to push up mortgage costs because companies charge higher fees to meet those requirements. Tampering with the economy in the run-up to 2020’s elections could prove risky for President Trump, who supports privatization.

Prior to the housing crisis in 2008, despite any such law or regulation, investors regarded Fannie Mae and Freddie Mac as having an “implicit guarantee” from the government. Critics say this fed excessive risk-taking that led to the crisis. [Bloomberg] — Kevin Sun

From left: Dario Svidler, Rayni Williams, and Kurt Rappaport (Credit: Getty Images and Jeff Newton)

When Rayni Williams, one-half of the power duo at the Williams & Williams Estates Group in Beverly Hills, began selling homes with her husband Branden Williams in 2006, she had trouble convincing her clients to put down big money for what she felt were imperfect abodes.

“Many of the speculators were men and not thinking with a woman’s [point of view],” she recalled. “There wasn’t proper lighting for makeup mirrors, or the skylights in the closets weren’t protecting expensive clothing. We were seeing little finite details like this and getting frustrated, because we only had a certain amount of product to sell, but we had a surplus of buyers with needs.”

Realizing there was a void in the market, the husband-and-wife team took matters into their own hands. The couple decided they would buy a house in the same area they were selling in — the tony Trousdale Estates — and remodel it. What started as a renovation turned into a four-year redevelopment, an initial foray into what became a new line of business for the high-powered brokers.

The development side of the residential real estate business is now calling other top brokers beside the Williamses. While the scope of such endeavors can vary greatly, brokers said their deal-making expertise has helped them broaden their horizons, perhaps by engaging in a passion project, or even bolstered their own bottom lines.

“Stanley House” built by the Williamses (Credit: Redfin)

Kurt Rappaport, co-founder of the Westside Estate Agency, is among the select group of brokers juggling sales and development. He is currently building a three-acre residential compound in Brentwood Park, in addition to opening a private club in West Hollywood and revitalizing a commercial property in Beverly Hills.

“I think the key to any field is ownership,” Rappaport said. “When you’re the owner of a property, you bear the risk, but also the reward. It’s just something I knew instinctively.”

Dabbling in development

Rappaport got involved in development, which he prefers to call the “ownership side” of the real estate business, early in his career. He claims that both jobs are “just different facets of the same thing,” and contends that being a broker has helped his development projects by putting him “in the forefront of the most interesting properties and deals.”

“Some of the best deals I’ve made are deals that have been on the market for a long time and no one wanted them,” he said. “Knowing the timing and having the vision have been key components to making great deals.” (Rappaport recently bought one of his own listings for the Brentwood estate he is amassing.)

Dario Svidler, a commercial broker at Compass who also develops apartments and small lot-homes, agrees that both sides of the businesses “complement each other.”

“It’s important for sellers to know that I’m not just trying to sell them a property — I’m on the front lines,” he said. “I’m trying to explain to them the process of building in one area over another because I’ve done it.”

Unlike brokers lured by the profits they see developers making on their deals, Svidler got into brokerage after getting his feet wet in development. Coming from a construction family — Svidler Construction is based in Woodland Hills — Svidler grew up around builders and often worked on the back-end or financial side of the business. Svidler said he got into brokerage because he was attracted to the transactional aspect of buying and selling land for his family.

“It just kind pulled me in that direction,” he said. “Most people romanticize the construction project, but for me, construction moves really slow.”

Today, Svidler mostly works independently of his family, developing mid-tier residential projects in North Hollywood.

The nature of the real estate business allows brokers to balance their building pursuits.

On the development side, an individual might only need a weekly status call or an early 8 a.m. visit to a construction site to make sure that a project is running smoothly. Doing deals, on the other hand, offers a bit more flexibility, as such work can be done remotely or after-hours.

Still, balancing both jobs can still result in a tug of war, one that has to be delicately maintained so as not to upset the boss, such as the owner of a brokerage.

Michael Nourmand, president of the family-run Nourmand & Associates, said he has dabbled with a few residential projects, having worked on a pair of house flips in 2014 and 2015. In the end, however, Nourmand decided it would be more profitable for him to stick with his brokerage duties.

“It is very time consuming in general,” he said. “There’s a fair amount of stress and you’re also tying up capital. I looked and thought, ‘Am I making more money brokering deals or am I making more money doing development?’”

Potential risks

Agents who dabble in building and brokerage can run into additional liability issues as the matter of dual agency arises. Dual agency — which is illegal in some states — occurs when an agent represents both sides on a deal.

Another concern is in the actual product an agent may be selling under the brokerage banner, said Jeff Hyland, co-founder of Hilton & Hyland.

“What happens if the agent didn’t do a good job or hired the wrong subcontractor and [upset clients] look to the brokerage firm because the brokerage has deep pockets?” Hyland asked. “You have to be very sensitive to what you’re doing because these things don’t expire when the escrow closes. A lot could go wrong there.”

While Nourmand is “O.K. with agents doing [development deals],” as president of a brokerage himself, his “biggest concern is from a liability standpoint.” As a precaution, Nourman has made it a rule that agents who are representing themselves as owners are also not allowed to represent a potential home buyer.

Rappaport said he never “co-mingles” his businesses, and always prioritizes the client if his brokerage and development operations were ever to conflict.

Williams echoed that sentiment, noting that she “always puts client needs” first.

After taking four years to complete their first project in Trousdale, one that she and her husband kept for personal use, Williams said the duo has learned to build homes “with less emotion” and “more calculated moves.” In the last eight years, the Williamses have worked on a handful of other ground-up projects, including a $33 million home designed in part by Lenny Kravitz.

They are now building another ground-up development, which Williams said will be a “grand slam based on size, view and style.”

For many brokers, including the Williamses, building seems to be in their plans for the foreseeable future.

“I couldn’t do one without the other,” Williams said. “If I just look at myself as a realtor, it might be unfulfilling, but I look at myself as an adviser with a design and realtor background. I like to sell and build.”

There are a few real estate events worth attending next week, including The Real Deal’s Showcase & Forum.

On June 20, Connect Media is holding its Connect Apartments event at the JW Marriott Los Angeles LA Live from 11:30 a.m. to 7 p.m. This event will provide chances to network, along with discussions on the current trends in the multifamily market. Ted Fentin of AECOM Capital and Seth Grossman of Meridian Capital Group will be among the speakers at the event.

On June 20, Bisnow is hosting its National Healthcare West event at the JW Marriott Los Angeles LA Live, 900 West Olympic Boulevard from 7:30 a.m. to 5 p.m. This event will feature networking opportunities, along with a discussion on new developments and the evolution of healthcare facilities. Speakers include Angie Weber of CBRE and Evan Kovac of HFF.

On June 21, The Real Deal will hold its Los Angeles County Residential Real Estate Showcase & Forum at The London West Hollywood, 1020 North San Vicente Boulevard, from 8 a.m. to 12 p.m. Come to this event to network, as well as hear discussions on the state of the residential market in Los Angeles and the use of marketing tactics to secure listings. Among the discussion panelists will be: Joyce Rey of Coldwell Banker, Ernie Carswell of Douglas Elliman, Sally Forster Jones and Aaron Kirman, both of Compass; Don Peebles of Peebles Corporation, Jennifer Berman of Berman & Pollinger, and more.

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.

From left: Jason Segel, Donald Trump, Shaun White White, and Dr. Dre (Credit: Getty Images)

Actors, media moguls and even — indirectly — the president of the United States all made deals in Los Angeles this week. While Donald Trump’s L.A. portfolio is shrinking, Dr. Dre’s continues to grow.

The Trump Organization parted with one of its last remaining properties in L.A., selling a 5,400-square-foot home on Canon Drive in Beverly Hills for $13.5 million, The Real Deal reported earlier this week. Indonesian media executive Hary Tanoesoedibjo was the buyer, according to the Washington Post. Tanoesoedibjo has partnered with Trump on two resort developments in Indonesia. The Trump Organization purchased the house in 2007 for $7 million. It hasn’t got much use lately, Trump Organization Executive Vice President Eric Trump said, in a statement to TRD.

Music producer, artist and entertainment mogul Dr. Dre added a 3,100-square-foot home in Pacific Palisades to his growing portfolio. The 22-year-old home sits on a ridge overlooking the mountains and Pacific Ocean. Last year the billionaire — real name Andre Young — picked up a 9,400-square-foot home in Calabasas for $4.9 million. His biggest recent deal in the area came in 2015, when he sold a mansion in the Hollywood Hills for $32 million, which the new owner promptly tore down and replaced.

To the east in Pasadena, actor Jason Segal picked up a 100-year-old home for $4.3 million, according to the Los Angeles Times. Segal, best known for his roles in “How I Met Your Mother” and a slew of Judd Apatow-produced films, paid a premium for the home — it’s been listed since April for $4 million. The gabled-roofed home sits on around a half-acre and was recently renovated. It has five bedrooms, five bathrooms, and spans 5,600 square feet in total.

In Malibu, Olympic gold medal-winning snowboarder Shaun White put two neighboring properties on the market asking a combined $27.3 million. They’re both about the same size and each have three bedrooms. The slightly larger of the two, which White purchased in 2013 for $9 million, is now asking $14.5 million. White recently rented it out to musician Frank Ocean. The other is a two-story home that White is listing for $12.8 million. He paid $10.8 million for the house in 2016.

Assembly Speaker Carl Heastie and Senator Andrea Stewart-Cousins

The New York state legislature passed sweeping rent regulation reform on Friday, dramatically limiting how landlords can increase rents on stabilized apartments and opening the door for rent stabilization to expand outside of New York City. Gov. Andrew Cuomo signed the bill almost immediately.

The bill includes the elimination of vacancy decontrol and new caps on the Major Capital Improvements and Individual Apartment Improvement programs, which respectively allowed landlords to hike rents on regulated apartments when a unit is vacated or renovations performed.

The bill didn’t go as far as tenant advocates had initially wanted. Earlier proposals sought to eliminate MCIs and IAIs altogether. One measure, “Good cause eviction,” which would’ve effectively limited rent increases on market rate apartments, ultimately didn’t make it into the package. Still, Friday’s vote marks the first time in decades that major reforms to the rent laws have been enacted. Though the state Assembly had repeatedly proposed similar changes to the law in the past, these attempts were always curbed by a Republican-led Senate.

The bill also includes a provision that allows municipalities in counties outside the city — that have a vacancy rate of less than 5 percent — to opt into rent stabilization. Also, for the first time, these laws were made permanent, meaning they won’t sunset after four years. This could change the dynamic in the years ahead because proposed changes to rent reform won’t be entangled with the potential expiration of the rent laws.

“We’ll be on offense rather than defense,” one real estate source said.

Real estate groups and landlords have called the changes “devastating” and predict they will result in the decline of the city’s housing stock and the flight of investors to other areas of the state and outside New York. Meanwhile, tenant advocates and state officials have indicated that they view the changes as a beginning to implementing robust tenant protections across the state.

“The construction of future affordable units will slow, if not end altogether, the housing vacancy rate will worsen and nothing will have been done to make it easier for those who struggle to pay their rent,” Real Estate Board of New York President John Banks said in a statement. “There was a path to responsible reform that could have protected tenants as well as owners, jobs and revenue, but Albany chose not to take it.”

The trade group did not immediately respond to requests for comment on what “responsible reform” would look like.

In a victory lap press conference before the vote, elected officials spoke in front of a crowd of tenant activists on the “Million dollar stairs” in the state Capitol. Sen. Michael Gianaris noted that he still supported the full elimination of MCIs and IAIs. Assembly Speaker Carl Heastie, standing in front of tenants who had just weeks earlier protested outside his office calling on him to act, struck a defensive note.

“I feel like people questioned the Assembly’s heart even though we’ve always been in the right place, on the tenants’ side,” he said. “In the dark ages, when there was a Republican governor and a Republican Senate, the Democratic members of the Assembly always stood strong. And I just hope in the future, on the same issues, that all you advocates give the Assembly members the benefit of the doubt. We’ve never failed you and we never will.”

He noted that he and the Assembly had voted in favor of rent reform in the past, when the Republicans controlled the Senate.

After the press conference, Andrea Stewart-Cousins told reporters that she hadn’t spoken to the governor since the Senate and Assembly announced an agreement over the rent reform law earlier this week. She said doesn’t read too much into that.

“We do what we do,” she said.

Throughout the week, we’ve broken down how the rent laws will affect various sectors of real estate. Check out our spotlight on the impact on:

• Brokers
• Lenders
• Multifamily owners
• 421a/Development/condos
• Workers

Jitu Virwani and Adam Neumann (Credit: Getty Images and iStock)

WeWork is reportedly in talks to take a majority stake in its India affiliate as the company powers toward an initial public offering.

The flexible office space giant could take a 70 percent stake priced at $1.9 billion in a cash-and stock deal that could close as soon as August, according to Bloomberg. The terms of the deal, which would reportedly value the India-based affiliate at $2.75 billion, have not been finalized.

WeWork declined to comment.

The discussions come as WeWork’s parent company, The We Company, plans to file for an IPO. Now valued at $47 billion, it would be the second largest IPO this year, and would follow disappointing IPOs of other unicorns, including ride-hailing apps Uber and Lyft.

The company has made other prescient moves as it prepares for the public markets. Last month, it announced the launch of its real estate investment vehicle, ARK, which is backed by a $2.9 billion investment from Ivanhoe Cambridge. Reports also emerged that the company is seeking a $2.75 billion credit line, a move that typically precedes an IPO, and that JPMorgan was leading the discussions.

The company’s India affiliate is owned under a franchise arrangement by real estate tycoon Jitu Virwani, who controls development firm Embassy Group. Virwani’s son, Karan, is currently chief executive of WeWork India.

In August, WeWork India’s general manager, Ryan Bennett, told the Times of India that the company had signed up more than 10,000 customers in the country in three cities. [Bloomberg] — David Jeans 

From left: Paul Habibi and Henry Manoucheri

Henry Manoucheri, who founded Century City-based multifamily builder Universe Holdings Development, is trying to brace his firm against what he considers are looming and harmful rent regulation legislation.

The writing has been on the wall for California to adopt a tougher rent regulation law, he said, just as New York state did today in passing its sweeping statewide rent reform measure.

If similar rent reforms were enacted in California, Manoucheri predicts landlords would either let buildings fall into disrepair, or simply sell off their assets and move to a more “politically conservative” state.

His firm is already taking precautions.

“We are focused more than ever before to buy in other markets,” he said. “Up to this year, we were purely a California player, but now we have opened it up to the rest of the country. I think anybody today who closes their eyes and keeps growing the way they are growing is making a very big mistake.”

New York’s pending rent reforms come at a time when state lawmakers in California have been struggling to address the statewide housing crisis, which has seen housing costs skyrocket and supply dwindle. L.A. in particular is grappling with a shortage of affordable housing and a rapid rise in its homeless population.

Local tenant advocates and real estate pros interviewed for this story agreed that the changes in New York — which limit how landlords can increase rents on certain apartments, and open the door for those kinds of restrictions on units outside of New York City — could ignite lawmakers in Sacramento to pass a similar measure.

“It’s creating a precedent,” said Brett Lyon, broker and co-founder of El Segundo-based Lyon Stahl Investment Real Estate. “This is a trend and I think New York passing rent control will certainly have an impact on other states as well.”

But the two sides, not surprisingly, differ sharply on whether that reform would be a positive or negative for Los Angeles and the state at large.

Opponents say rent control measures would drive developers and landlords away from affordable housing investment, potentially worsening the state’s housing crisis.

Lyon, whose investment brokerage focuses on multifamily sales, said he’s already seen clients decide “to sell and move their equity of the state preemptively.” In Inglewood, where annual rent increases were just capped at 5 percent, he said landlords are already trying to raise rents before the measures take effect.

“We’re seeing owners that wouldn’t have raised their rents now delivering increases because they’ve been put in a position where they think they’ll be negatively impacted down the line,” Lyon said.

But while the real estate industry may tremble at the possibility of more restrictive rent laws in California, housing advocates are hopeful about the same kind of landmark reform measures.

Larry Gross, executive director of the Coalition for Economic Survival — a nonprofit that advocates for low- and moderate-income residents in L.A. — said he applauds New York for its progressive move.

“I know a lot of legislators think that what California does, the rest of the country follows,” Gross said. “But in this case, it seems like we’re riding in the caboose while New York is in the engine.”

Manoucheri, of Universe Holdings, said New York’s rent reform regulations will set “a very dangerous precedent.” What will it mean for California? He said it was “inevitable that something drastic is going to happen.”

Over the years, California’s powerful real estate industry has successfully opposed statewide efforts at sweeping rent regulations, most recently with last November’s defeat of the Proposition 10 referendum. But in the L.A. area, that loss has also prompted a slew of local municipalities, such as Long Beach and Inglewood, to pass their own temporary rent reform measures aimed at protecting tenants and addressing the rising cost of housing.

Housing advocates applaud those efforts, and say if sweeping reform was passed in California, developers would continue to build, and to make money.

“We’ve been hearing the same story for 40 years,” Gross said, referring to developers who oppose stronger rent regulations. “The fiddles are playing again.”

Paul Habibi, a University of California Los Angeles professor and himself a real estate investor, said he is against rent control. But, he anticipates New York’s new regulations will create momentum.

“I hate to say it but it’s probably going to create more tailwind for these initiatives,” Habibi said. “We’re probably not going to get anything in the next year, but these things don’t have to evolve overnight — they can take a few years and be just as punitive.”

Starwood Capital Group’s Barry Sternlicht and an aerial view of Sydney (Credit: iStock)

Barry Sternlicht’s Starwood Capital has purchased an office complex in northern Sydney for $303 million, in partnership with Australian firm Arrow Capital Partners.

The complex was purchased from global asset manager BlackRock and Australia’s Centuria Property Funds, IPE Real Assets reported.

The companies acquired the complex in 2016 for A$279 million. They decided to sell earlier than planned because of buyer interest.

“These are A-plus buildings on a land-rich site,” Kurt Wilkinson, partner at Arrow Capital Partner, told IPE. “It has 8,000 square meters of landholding.”

In 2018, Starwood landed a $162.5 million loan from a Singapore bank for its hotel at 1414 Sixth Avenue, TRD reported.

The Sydney deal was Starwood’s single largest Australian purchase to date.

In its first quarter office market report, Cushman & Wakefield said Sydney’s Central Business District had a vacancy of just 4.6 percent, with net effective office rent rates at $1,030 a square meter. [IPE] — Sylvia Varnham O’Regan

Propy CEO Natalia Karayaneva (Credit: iStock)

The National Association of Realtors is betting on the blockchain.

NAR’s venture capital arm Second Century Ventures said it was investing in Propy, a San Francisco-based real estate transaction platform startup, according to Inman. The announcement is a substantial, considering NAR is the nation’s most powerful real estate trade organization, with 1.3 million members.

Propy tracks deeds, documents and other details of real estate transactions through metadata on a blockchain, an immutable public ledger. Any user can store a copy of the ledger, which is continually checked against all other copies held by other users. Proponents say this provides a safeguard against fraud.

Propy has three main services: a listings platform; the transaction platform used to exchange documents, payments, and other transaction details; and the registry itself where records of transactions are stored.

Propy’s main client base are government offices and real estate industry professionals. The startup claims its platform can be more efficient and convenient for users than traditional platforms. It also says it can save buyers up to 25 percent in transaction fees compared to traditional platforms. It also can allow transactions in different currencies, including cryptocurrencies.

Last year, Propy executed the first government-recognized real estate deal in the U.S. made entirely on the blockchain. The startup currently has listings in California, Colorado, Utah, and some areas outside the U.S. including Canada.

Second Century Ventures did not disclose the size of its investment. Propy raised $15 million in 2017 with a sale of virtual tokens to investors. [Inman] — Dennis Lynch

(Credit: iStock)

A wave of luxury home sales has swept across London, bringing the total number of deals above $25 million — £20 million — to a five-year high.

In the last year, 38 homes in London have traded above that high-water mark, according to a report from Knight Frank as cited in Mansion Global.

While London has always drawn the ultra-wealthy ready to drop tens of millions on lavish homes, its residential market has recently gained strength thanks to an international pool of buyers looking to take advantage of a weaker British pound.

Meanwhile, the U.S. dollar has gained almost 18 percent in the last three years, due in part to uncertainty over the pending exit of the U.K. from the European Union.

London now has 5,000 ultra-high-net-worth individuals, boosting it above the ranks of New York for people with a net worth of at least $30 million. In January, hedge fund billionaire Ken Griffin made headlines when he bought a Central London mansion for $122 million. Although he soon eclipsed that with his $238 million purchase of a Manhattan penthouse at 220 Central Park South. [MG] — Natalie Hoberman

Robert Downey Jr., the guest cabin at Bouckaert Farm, and (inset) as featured in “Avengers: Endgame” (Credit: Marvel Studios, AirBNB and Getty Images)

For about $335 a night, Marvel fans can make like Robert Downey Jr. and Gwyneth Paltrow and act like they’re in “Avengers: Endgame.”

The lakeside cabin where Tony Stark is shown living with Pepper and his daughter in the film is now available for rental on AirBnB, according to Hypebeast.

The three-bedroom, three-bathroom cabin is located in Fairburn, Georgia., about a 20-minute drive from Hartsfield-Jackson Atlanta International Airport.

It can accommodate up to six guests, and it still has some availabilities this summer, according to the listing.

[Hypebeast] — Alex Nitkin

Gloria Gaynor and 17 Fairway Drive (Credit: Getty Images)

Disco queen Gloria Gaynor is selling her New Jersey mansion for $1.4 million.

The 69-year-old Newark native, known for hits like “I Will Survive,” is getting ready for an international tour. She told Realtor.com that she needs to unload her Somerset County home to be closer to New York City.

“I love it, I really do. But I’m alone now, and it’s just gotten [to be] too much for me,” Gaynor said.

Gaynor and her former husband and manager, Linwood Simon, bought the property in 1999, according to Architectural Digest. The five-bedroom, 8,000-square-foot home at 17 Fairway Drive in Green Brook hit the market earlier this month, per Realtor.com.

Should the home sell at that asking price, the deal would pencil out to $175 per square foot. Joan Davino of Weichert Realtors in Short Hills has the listing.

Gaynor customized the home, designed in a contemporary style, to include a lot of bright light, although Realtor.com noted there are no disco balls on the property.

“We had visited a lot of homes in the area and we had found one we really liked, but I was looking in my handbag when we arrived at this one — and the moment I looked up and saw it, I said, ‘That’s my house,'” the singer told the listing platform.

Gaynor also added a game room, gym, pool and an abundance of closets and storage space — so much space that one room was converted into a movie theater with three rows of four reclining seats.

“Every bedroom has a walk-in closet,” she told Realtor.com. “And there are a couple of walk-in closets that are not connected to any bedroom — the storage is crazy!”

[Realtor.com] — Mary Diduch

Sagrada Familia Cathedral in Barcelona (Credit: iStock)

The city of Barcelona has finally issued a building permit for La Sagrada Família, an architectural landmark in the Spanish city that has been under construction since 1882.

The city licensed a committee to finish the construction of the Roman Catholic basilica and charge a fee of 4.6 million euros ($5.2 million), CNN reported.

License fee proceeds will fund efforts to soften the local impact of the church’s global appeal: 4.5 million people a year visit Sagrada Família, which was designated a UNESCO World Heritage Site in 2005.

Agence France-Presse reported that the prior lack of a building permit for the neo-Gothic church was “a historical anomaly in the city… It was being constructed illegally.”

Antoni Gaudí, the famous Catalan designer of Sagrada Família, had requested a local government permit to build the basilica, but never got a response before construction started 137 years ago. The idiosyncratic building designs across Barcelona are part of the architectural legacy of Gaudí.

Multiple architects have subsequently worked to help finish Sagrada Família in a Gaudí-inspired design.

The newly issued building permit shows that, when the basilica is finished, it will be 172 meters (564 feet) tall, and the final phase of construction is estimated to cost 374 million euros ($420 million), AFP reported. (As a matter of comparison, The Real Deal noted in April a group of French billionaires donating about $339 million to fund the cost of rebuilding the Notre Dame Cathedral in Paris following a disastrous fire.)

The unfinished Sagrada Família should be completed by 2026 — exactly 100 years after Gaudi died. [CNN] — Mike Seemuth