California saw a 7.1 magnitude quake Friday (Credit: iStock)

The strong earthquakes that rumbled across Southern California last week rekindled concerns about whether property owners, homeowners and landlords are prepared enough for a potential catastrophic quake.

Many owners of at-risk properties in Los Angeles have not completed mandated earthquake retrofits on those buildings, and just 12 percent of Californians have earthquake insurance coverage, according to the Los Angeles Times.

The quakes over the July 4th holiday weekend were centered in a rural area northeast of the city, near Ridgecrest. Thursday’s 6.4 magnitude quake was followed on Friday by one that measured 7.1 magnitude. It was only the second time since 1922 that a quake greater than a magnitude 6 was followed by one even stronger.

As of January, only 1,500 of the nearly 13,000 vulnerable buildings in the city have completed retrofits since officials started mandating them in 2015.

Work has started on around half of all those buildings, but owners of 5,000 properties haven’t submitted retrofitting plans. Property owners have until 2040 to do so.

Property owners in many cities across the metro area say the costs to retrofit are too high to take on by themselves. Some have decided to sell their buildings instead of retrofit. West Hollywood city officials last fall barred landlords from using a rent surcharge to pass the costs along to tenants. [LAT] — Dennis Lynch 

Frank Lloyd Wright and the Hollyhock House

The United Nations has recognized Frank Lloyd Wright’s Hollyhock House in East Hollywood for its “outstanding universal value” to humanity.

UNESCO, the international body’s science and culture agency, named the 1921 home a World Heritage site at a meeting in Azerbaijan on Sunday, according to the Los Feliz Ledger. The designation is one of the highest honors for a human-built site.

The Hollyhock House, now the center of Barnsdall Art Park, was one of eight works by the revered architect that UNESCO recognized together on Sunday. Others include the Solomon R. Guggenheim Museum in New York and the Robie House in Chicago.

Wright designed the Hollyhock House for an oil heiress, Aline Barnsdall, for a property near the corner of Hollywood Boulevard and North Vermont Avenue. She gifted the 11-acre property to the city of L.A. just five years after the main house was completed.

Wright left an extensive legacy in the L.A. area, and many of his homes are protected landmarks on the municipal or state level. Most are privately owned and command high prices when they hit the market.

Financier Ron Burkle listed the 5,500-square-foot Ennis House in Los Feliz, not far from the Hollyhock House, for $23 million last summer.

Wright’s son Lloyd Wright was also active in Southern California, where, like his father, his homes command high prices. The 2,700-square-foot Samuel-Navarro House, also in Los Feliz, is on the market for $4.3 million. [Los Feliz Ledger] — Dennis Lynch

The We Company CEO Adam Neumann (Credit: Getty Images and iStock)

The We Company needs to take care of something before its initial public offering: raising a few billion dollars by selling its considerable debt.

The company, which remains unprofitable, wants to raise up to $3 billion or $4 billion through a debt facility that could eventually increase to $10 billion, according to the Wall Street Journal. The We Company hopes that this will help boost confidence in its business, especially following the IPOs of Lyft and Uber, whose stock prices are below the value of their debuts. The We Company, which rebranded from WeWork earlier this year, lost $1.9 billion last year and has been frequently compared to the two ridesharing companies. It was valued at $47 billion earlier this year, though the Financial Times recently reported that some investors don’t believe the public markets will match that valuation.

JPMorgan Chase and Goldman Sachs are structuring the deal. It would allow the startup to use its cash flows from individual buildings to fund interest payments on the debt.

The transaction could be finalized over the next few weeks, and the We Company hopes to move forward with its IPO late this year or early next year. The We Company would not need to raise as much money from public stockholders if it raises billions in new debt, and the deal also aims to show off the value of WeWork’s leases and its ability to control profitability. [WSJ] – Eddie Small

Residential brokers in Los Angeles — especially those selling high-end homes — usually have no problem boasting about their sales volume. That willingness to share accounts for part of the success of Bravo’s 11-season reality show, “Million Dollar Listing,” where top-producing agents often showcase their jaw-dropping commissions.

But one of those brokers, Tracy Tutor, had some trouble recently in providing numbers during Pat Hiban’s “Real Estate Rockstar” podcast, according to Inman.

The video interview started off friendly enough, as Hiban — a former agent — asked Tutor to talk about herself and her career. Tutor made a point of mentioning that she is the first woman to appear on “Million Dollar Listing Los Angeles,” in which she stars alongside Josh Flagg, Josh Altman, David Parnes and James Harris.

But she seemed caught off guard when Hiban asked how many houses she’s sold in the past 12 months. Tutor, who works at Douglas Elliman’s Beverly Hills office, took a few seconds then replied that she’s sold “over $150 million” worth of homes.

When Hiban then asked about her average sales price, Tutor told him to “hold one second,” then cut the video feed on her computer screen, but not the microphone.

“Who the fuck is this?” Tutor can be heard asking. “He doesn’t know who I am,” she added.

Tutor then got back on the line, and told Hiban she does “a different podcast every day but the questions aren’t usually what’s my sales price. I don’t know where you’re operating from but I usually don’t shoot out information about what I’m doing.”

She then cut the interview short after Hiban asked a couple of followup questions. Tutor did not respond to requests for comment. [Inman] — Natalie Hoberman

Arthur Rasmussen, Jr., Senior Vice President at CBRE

The rise of online grocery shopping is bringing with it increasing demand for warehouse space in Southern California.

Those changes in the way people shop for food have created a growing market for refrigerated space within the red-hot industrial landscape in Los Angeles and throughout California. The state remains the biggest user of cold storage with 16.5 million square feet, according to the Los Angeles Times, and the ports of Los Angeles and Long Beach have more than doubled their refrigerated container capacity in recent years.

Space in a typical 100,000-square-foot cold warehouse is about $150 a square foot per year, according to CBRE, which is triple the rent for a standard warehouse. Firms like United States Cold Storage and Lineage Logistics, the biggest player in the cold storage game, have warehouses in Los Angeles County and plans to expand.

Cold storage space currently makes up a small portion of the total industrial space, but it’s set for a jolt, and is expected to help keep the industrial market going strong. The U.S. will need to add 100 million square feet of new cold storage space over the next five years to keep up with demand, CBRE said.

That projection stemmed from the Food Marketing Institute and Nielsen forecast that groceries ordered online will account for 13 percent of total grocery sales by 2022, up from 3 percent last year. That spike would amount to an additional $100 billion in annual grocery sales online. [LAT] — Gregory Cornfield

Jeffrey Epstein (Credit: Daily Beast | Getty)

Billionaire Jeffrey Epstein — who more than a decade ago reached a plea deal for the molestation of minors — was arrested in New York on Saturday and charged with sex trafficking, according to the New York Times.

The hedge funder will appear in Manhattan federal court on Monday, reportedly facing one count of sex trafficking involving minors and one count of conspiring to engage in such trafficking, the Times reported, citing CBS Miami. That could result in a prison sentence as long as 45 years.

The new indictment reportedly accuses Epstein of sexual molestation of underage girls, paying them for “massages” and then molesting them in his Palm Beach residence or his Herbert N. Straus mansion on Manhattan’s Upper East Side, according to the Daily Beast. Epstein also owns homes in Paris, the Virgin Islands and Stanley, New Mexico. His legal representative declined to comment to the publication.

It’s a similar scheme to what Epstein was charged of in Florida in 2008. At the time, he reached a controversial plea deal on charges of soliciting prostitution. He served 13 months in county jail, but was allowed to leave six days a week to work out of his office, according to the Times.

A three-part series in the Miami Herald detailed how Epstein used his wealth, power and influence to shield himself from prosecution in 2007 and 2008.

The new charges come at a time when industries are facing a heightened level of scrutiny over harassment, discrimination and more because of the national #MeToo movement. The Public Corruption Unit of the Southern District of New York is handling the case against Epstein with help from the district’s human-trafficking personnel and the FBI. [NYT, Daily Beast] – Mike Seemuth

READ MORE:

Donald Trump accused of raping a 13-year-old girl at Jeffrey Epstein’s UES mansion: lawsuit

Has #MeToo changed the real estate industry?

Downtown Los Angeles (Credit: iStock)

Content creators like Netflix and Apple continued to absorb much of the available office space in the second quarter, proving the battle for office space is quickly becoming as contentious as the battle for the best content.

Leasing activity reached a three-year high of 5.3 million square feet in the second quarter, according to a recent office report from commercial brokerage Savills. Much of that activity was driven by the so-called FAANG companies: Facebook, Amazon, Apple, Netflix and Google.

That helped push rents up roughly 9 percent year over year to an average of $3.68 per square foot in the second quarter. Availability across Greater L.A. tightened 10 basis points to 18.7 percent.

Netflix led the largest push among FAANG, adding another 163,770 square feet across two buildings in Hollywood. Apple also added 96,330 square feet at 10000 West Washington Boulevard Culver City.

Despite a number of big leases, Downtown Los Angeles continued to post some of the region’s highest vacancy rates. Vacancy there circles at 24 percent, inching slightly behind South Bay’s vacancy rate of 25.3 percent. L.A. Health Care Plan, Ghost Group, TubeScience are among some of the tenants that recently leased in the submarket.

Inventory was tightest in Santa Monica and Century City, where vacancies for Class A space were at 10.1 and 8.5 percent, respectively. The Westside cities also demanded rents of at least $5.3 per square foot, the most expensive Class A rents in the region.

On the opposite end of the spectrum was the San Gabriel Valley. Low rents of $2.35 per square foot have been lowering the vacancy rate there, now at 15.2 percent.

Dmitry Rybolovlev, Donald Trump, and 525 North Country Road (Credit: Getty Images)

Russian oligarch and billionaire Dmitry Rybolovlev sold the last lot of President Trump’s former waterfront Palm Beach estate for $37.3 million.

Rybolovlev sold the 2-acre lot at 525 North County Road for about $385 per square foot, records show.

Rybolovlev, who reportedly made most of his fortune from a fertilizer business, bought the 6.26-acre estate from Trump in 2008 for $95 million, then razed a mansion on the property and divided the land into three separate lots.

The fertilizer billionaire sold the other two lots for $37 million in 2017 and $34.3 million in 2016. In all, he sold the three lots for a combined $108.2 million, about $13 million more than what he paid for the property more than a decade ago.

Lawrence Moens of Lawrence A. Moens Associates, who brokers a number of high-profile deals in Palm Beach, represented both the buyer and seller of 525 North County Road. He has also brokered the sales of the other two lots, at 515 and 535 North County Road, and represented Trump when he sold the entire estate to Rybolovlev.

Rybolovlev never lived in the home after purchasing the estate, according to published reports.

Trump’s sale to Rybolovlev was the largest residential sale in Palm Beach history until just a few weeks ago when the late Terry Allen Kramer’s estate sold for about $105 million, excluding commissions.

Trump’s sale to Rybolovlev has been subject to scrutiny from politicians and the media over the president’s ties to Russia. In 2018, Senator Ron Wyden requested property records to investigate allegations of money laundering tied to the $95 million sale of the estate. Rybolovlev has denied any wrongdoing.

Rybolovlev recent made headlines in November after he was charged in Monaco for allegedly influencing the country’s law enforcement officials to pursue and arrest a Geneva art dealer. The prolific art dealer, whose collection includes the Salvator Mundi by Leonardo da Vinci, has claimed innocence.

The Palm Beach Daily News first reported the sale of 525 North County Road.

In China, Dalian Wanda Group Co. installed cameras in shopping centers to track shoppers’ movements; pictured is Wang Jianlin, Chairman and President of Dalian Wanda Group

Investment in property technology, which allows its owners to monitor and manage commercial and residential real estate, is soaring and China is leading the way.

Proptech startup investment totaled $7.8 billion between 2013 and 2017, and China accounted for 36 percent of that, according to JLL, as reported in Bloomberg.

Last year, proptech investment jumped to almost $20 billion, and it hasn’t slowed down in 2019, Bloomberg reported.

Property technologies use data to help individuals and companies buy, sell and manage real estate. Landlords and property managers, along with companies across the industry are spending more and more to outfit offices, residential properties and retail with new smart gadgets.

In China, developer Dalian Wanda Group installed cameras that use behavior-recognition technology at Wanda Plazas to track shoppers’ movements, including how long they spend in a store and whether they left with a bag or not.

The shoppers are recognized on their next visit, and the technology allows the group to capture the shoppers’ age, gender and shopping patterns, giving landlords more opportunity to optimize the layout. The technology is used at about 280 Wanda Plazas across China.

Shui On Land Ltd. uses facial recognition technology for an app that allows access control to its Shanghai office buildings. Through its use, Shui On Land discovered 70 percent of workers were female, so it renovated one of its shopping malls below the office area to dedicate five floors for women. [Bloomberg] — Gregory Cornfield

Metlife Investment Management President Steven Goulart and Colony at the Lakes

MetLife Investment Advisors has purchased a 450-unit apartment complex in West Covina, marking one of its largest residential purchases in the area in recent years, The Real Deal has learned.
The institutional investment giant paid $171.5 million for the five-story Colony at the Lakes complex at 301 S. Glendora Avenue, Los Angeles County records show.

The seller, UBS Group, owned the property through a real estate investment trust based at one of its offices in Hartford, Connecticut, according to records.

Homebuilding giant Lennar Corp. was involved in developing the complex. The parties paid $35.5 million for the development site in 2013.

The complex includes two parking garages totaling 961 spaces; there is 20,000 square feet of retail space. The units are one- and two-bedrooms, and amenities include a large courtyard, swimming pool and interior lounge areas.

The last major multifamily deal in West Covina was San Diego-based MG Properties Group’s $34 million purchase of the Atrium Apartments, a 138-complex, in October.

Benedict Canyon Equities and Goldrich & Kest both made plays there last year as well. Benedict Canyon picked up the Lafayette Parc Apartments, also on Glendora Avenue, and Goldrich nabbed the 182-unit Sunset Plaza apartments.

When Jeffrey Epstein landed at Teterboro Airport after a long vacation in Paris, the FBI was waiting on the tarmac. An hour later, federal agents broke down the massive oak front door to his palatial townhouse in Manhattan and found what they said were hundreds of lewd pictures of underage girls.

Epstein, a financier with a private Boeing 747 and six homes across the globe, faces up to 45 years in prison for allegedly operating an underage sex trafficking operation that exploited girls as young as 14, allegations that have dogged him for decades.

In many ways, real estate is at the heart of a scandal that could sweep up some of the world’s most rich and powerful people.

In an indictment that was unsealed on Monday, U.S. Attorney for the Southern District of New York Geoffrey Berman said that from 2002 to 2005, Epstein and confidants brought underage girls to his Manhattan home as well as his mansion in Palm Beach to engage in illegal sex acts.

Both homes will likely be seized by federal prosecutors.

Here are the known properties Epstein owns:

A Manhattan home like no other

The Manhattan property at 9 East 71st Street, spanning 21,000 square feet, is among the largest private residences in New York City. The federal government claims the townhouse — which a 2007 lawsuit against Epstein described as having “a huge crystal staircase with a huge crystal ball by the railing, ceiling chandeliers, a room with red chairs, a statue of a dog and a statue of dog feces next to it” — is worth $77 million.

If it sold at that price, it would be the second-most expensive townhouse to trade in New York City history. Just last month, financier Philip Falcone parted with a double-wide mansion on East 67th Street for $80 million. After a massive renovation, that home now spans 30,000 square feet.

Though the federal government values Epstein’s Manhattan townhouse at $77 million, the city doesn’t think it’s worth that much. Earlier this year, the city’s Department of Finance appraised Epstein’s Manhattan townhouse at $56 million, with a $347,000 property tax bill. The home was commissioned in the late 1920s by Macy’s heir Herbert Strauss, who died before it was completed. After his death, it was donated to the Catholic Church before becoming a preparatory school. Retail magnate Leslie Wexner paid $13.2 million for the home and is said to have spent tens of millions renovating it. He never lived in the seven-story mansion, which Epstein would take over.  The 2011 deed recorded the document amount as $10.

Though it wasn’t listed in the unsealed indictment on Monday, a 2010 deposition obtained by the Miami Herald claimed that Epstein also had units at 301 East 66th Street. In the 16-story residential building — which appears to be connected to his brother Mark’s real estate company, Osso Properties — Epstein allegedly housed his victims four at a time in individual apartments, charging them $1,000 a month through his business partner Jean-Luc Brunel, who owned the modeling agency Mc2. According to the 2010 deposition, Epstein invested $1 million in Mc2. Those allegations against Epstein never went to trial.

Down the road from Mar-a-Lago

The two-story Palm Beach home which sits at the end of El Brillo Way with a pool behind high hedges and palm trees, was acquired in 1990 for $2.5 million, and is currently assessed at $12.4 million. The 14,000 square foot residence shares the neighborhood with Donald Trump’s Mar-a-Lago. Sales in the Palm Beach neighborhood range from under $7 million up to $36 million.

Photos of nude girls were also discovered during a 2005 raid on Epstein’s Palm Beach compound, but Epstein did not face trial. Federal prosecutors allowed him to plead guilty in 2008 to a state underage prostitution charge, though this week’s charges in New York could alter parts of that deal. Epstein, a registered sex offender, served 13 months in prison following the plea deal in Florida.

In 2015, a woman named Virginia Roberts accused Epstein of making her a sex slave in the service of the likes of Prince Andrew, Duke of York and the Harvard law professor Alan Dershowitz, who have strenuously denied the allegations. Numerous other women have reached settlements with Epstein outside of court.

Isolation in New Mexico

Though Epstein’s townhouse is gargantuan by Manhattan standards, Epstein reportedly described it as a “shack” compared to his rural “Zorro Ranch” in New Mexico.

That 33,000-square foot mansion on a 7,000-acre ranch in Stanley, New Mexico, with an estimated market value of as much as $16,000,000 in 2018, was sold to Epstein in 1993 by former Gov. Bruce King, who in 2014 received thousands in campaign contributions from LLCs tied to Epstein, according to the Santa Fe New Mexican.

A 1995 report in The New Mexican  said, “The main house will be similar to a Mexican hacienda, with an open-air entry into a courtyard with high-ceiling hallways, stone columns and a central fountain. The living room will measure about 2,100-square-feet, larger than the average house in Santa Fe County. The home will have an elevator, eight bathrooms, four fireplaces and three bedrooms.” Epstein also received a permit to build a small airplane hangar.

A European getaway in Paris

Epstein also has an apartment in Paris on Avenue Foch, where he may have stayed prior to his arrest in New Jersey this weekend. Little is known about the unit, but homes on the posh Parisian street can sell for upwards of $4 million.

“Island of Sin” in the Caribbean

Epstein also has a private island in the U.S. Virgin Islands. The island, which Epstein calls “little St. Jeff” and others have named the “Island of Sin,” is Epstein’s private residence and the home of his Jeffrey Epstein VI Foundation, which gave $30 million to Harvard and $200 million annually to scientists including the late Steven Hawking.

The island spans 78 acres and contains five structures, according to a New York Times article from 2008. It’s unclear what he paid to acquire the island.

DOJ’s real estate arm readies to seize

According to an indictment unsealed on Monday, Epstein must forfeit to the government any property he has that was used to commit any of his alleged crimes, and any property that he acquired with money from sex trafficking.

So far, agents from the FBI have only searched his Manhattan townhouse, CNN reported Monday.

In March 2018, The Real Deal thoroughly examined how the U.S. government seizes property and found that it sometimes bungles sales of forfeited assets, as in the case of a Malibu estate sold by the DOJ for $38 million and flipped for nearly twice that just a year later. The focus on real estate for forfeitures is due to the high risk for money laundering. Colliers International is contracted to sell properties seized by the government. Recent forfeitures include Paul Manafort’s properties in New York City and the Hamptons, which remain unsold.

On Monday, Epstein pleaded not guilty of the charges of one count of sex trafficking of minors and one count of conspiracy to engage in sex trafficking of minors. He faces a bail hearing on Thursday.

4Site Real Estate Chief Principal Todd Wexman and the Lincoln Heights site

4Site Real Estate’s residential and hotel complex in Lincoln Heights is moving ahead more than eight months after it was proposed.

The Westlake-based developer’s project, which would have 100 residential units, a 100-key hotel, and 5,000 square feet of ground-floor commercial space, will go before the East Los Angeles Area Planning Commission Wednesday, according to Urbanize. The six-story complex would rise at 169 N. Avenue 21.

4Site filed plans for the project in October, which if approved would replace 12 existing buildings on a series of lots.

The commission will refer the project to the Department of City Planning.

4Site Real Estate is requesting an exemption from the Cornfield-Arroyo Specific Plan, which is meant to encourage development in the area. The developer wants to forgo a separate environmental study in lieu of an environmental impact report. 4Site also wants approvals related to average floor area across the project site.

The proposal is around the corner from Lincoln Property Company’s mixed-use marketplace project at the site of the former Lincoln Heights Jail.

Led by CEO Todd Wexman, 4Site Real Estate mostly works in Silver Lake, Echo Park, and Westlake. It’s currently developing a 54-unit project and a 45-unit project in Westlake. [Urbanize] — Dennis Lynch 

A view from a home at Thermal Club

Southern California has plenty of communities catered to niche crowds, but Thermal Club in Coachella Valley might be SoCal’s first for wealthy motorsport enthusiasts.

The 426-acre community has four racetracks and 268 homes each with 20-car garages, according to the Los Angeles Times. You have to own one of those $2.5 million to $12 million homes to get access to the tracks, which should be within the budgets for many involved in the notoriously expensive hobby.

Amenities work much like other niche planned communities, like equestrian communities and residential golf clubs. Owners get access to a clubhouse, restaurant, tuning shop and Thermal Club’s staff of pros and mechanics. Mechanics will ensure that cars are ready to hit the track and the three full-time instructors coach drivers.

About half of the residential properties are currently available for purchase, and 89 have sold. General manager John Rogers, whose family owns and developed the property, told the Times that current residents include amateurs and pros alike. The latter use the tracks to practice.

Some carmakers have taken notice. BMW purchased one of the 20 commercial spaces on the property and operates one of the race tracks. Porsche rented another space for a recent launch of new vehicles.

Other amenities include two putting greens, a tuning shop and an observation tower that overlooks the tracks. A gym with a tennis court and pickleball court, as well as two pools, are slated to open in November. Guest houses and another track are also in the works, according to the Times. [LAT] – Dennis Lynch 

Deutsche Bank CEO Christian Sewing (Credit: Getty Images and iStock)

It’s business as usual.

That’s the message Deutsche Bank has sent to New York’s real estate industry following the weekend announcement it would shutter its investment banking arm’s equity sales and trading divisions and slash thousands of jobs worldwide.

The German bank has been battered in recent years, enduring losses and a declining reputation in part based on its associations with President Trump. And while news of the company’s restructuring and job cuts sent shockwaves through the banking industry, the reaction from lending pros has so far been muted.

For James Millon, who worked as a director in Deutsche Bank’s commercial real estate loan originations until 2016, said any winding down of the bank’s U.S. real estate operations would come as a shock.

“It’s a sacred cow,” said Millon, who now is an executive vice president of CBRE’s debt and structured finance division. “It’s probably the most profitable division in the bank.”

Adi Chugh, who runs the boutique debt brokerage Maverick Commercial Properties, said that “there’s been no change in messaging from them to us or our clients.” Maverick has done multiple deals with Deutsche’s commercial real estate lending division, including a $164 million loan at 172 Madison Avenue.

Deutsche frequently tops commercial lending rankings, and last year issued two of New York’s top 10 largest construction loans, which included an $800 million loan to Silverstein Properties for the ABC Network’s headquarters, and $750 million in debt to Harry Macklowe for One Wall Street project.

In 2017, Deutsche topped The Real Deal’s ranking of top construction lenders in New York after it provided $2.67 billion to nine projects.

But the bank’s announcement over the weekend has led those in real estate to hold their breath as it reevaluates its future. As part of the “turnaround plan,” the bank will cut 18,000 employees, primarily from the investment banking division in New York, London and Singapore.

Deutsche’s head of investment banking stepped down at the end of last week.

The bank has posted losses for four of the past five years, and is reportedly on track to post a record loss in 2019, according to the New York Times. This activity has followed increased scrutiny in its dealings with Trump and failed real estate projects.

“We lost our compass in the last two decades,” Christian Sewing, the bank’s chief executive, told reporters over the weekend. “It is my personal purpose to connect this bank with what it used to be.”

The announcement comes a year after Deutsche said it would move its U.S. headquarters in New York from 60 Wall Street uptown to One Columbus Circle, where it will take 1 million square feet. The building, which was previously occupied by TimeWarner, will be renamed the Deutsche Bank Center. Those plans are unaffected, according to a Bloomberg report.

The bank declined to comment for this article, but pointed to a press release, which made no mention of its plans for its commercial real estate lending business.

Its commitment to commercial real estate lending has remained consistent, according to other debt brokers in New York who sought direction from the bank in recent days.

“We are actively working on Deutsche Bank deals,” said Dustin Stolly, a vice chairman of capital markets debt and structured finance at Newmark Knight Frank. “They have been our largest capital provider by a wide margin in the last two years.”

But despite the reassurances, some brokers remain wary.

“You don’t need to be concerned about an earthquake, until there’s an earthquake,” said Chugh, the head of Maverick. “We are all susceptible to it.”

Home on Carla Ridge and Former Woodbridge Group CEO Robert Shapiro

One of the few properties actually built by luxury home developer Woodbridge Group of Companies hit the market, two years after federal authorities charged the firm with orchestrating a $1.2 billion Ponzi scheme.

Dubbed the Carla House, the Trousdale Estates mansion is on the market for $46 million, The Real Deal has learned.

The property traded hands in February to an entity known as “Woodbridge Wind-Down Entity,” managed by Fredrick Chin. A judge appointed him last year to liquidate Woodbridge’s numerous properties and assets, in order to pay back investors authorities say were defrauded in the scheme.

Led by CEO Robert Shapiro, the Sherman Oaks-based company would pay top-dollar to acquire development lots, then pay architects to design ultra high-end spec homes. A Securities and Exchange Commission lawsuit against the company charged that Shapiro would defraud investors by selling them on the prospect enormous returns from a home development deal. But few of those homes were built.

Many of the land-only plots have been sold already, even those garnering price tags in the millions.

Sitting on a 1.2-acre lot, the Trousdale Estates spec mansion on Carla Ridge Road spans 20,000 square feet and includes seven bedrooms. The home has all the trimmings of an exclusive listing, including an elevator, 80-foot swimming pool and movie theater. Designed by architect Noah Walker, it also features expansive decks overlooking the Hollywood Hills.

Tomer Fridman and Sally Forster Jones of Compass have the listing.

Any sale would require approval from a bankruptcy court. But that has happened as several of Woodbridge’s former properties have already been unloaded. In March, Chin oversaw the sale of an 82,000-square-foot lot in Bel Air for $37.5 million.

Still in the Woodbridge portfolio is the tony Owlwood Estate now on the market for $115 million. Woodbridge had sought $180 million for the massive home, formerly owned by Sonny Bono and Cher.

Though Shapiro was arrested on federal charges in April, the legal turmoil is far from over. Also that month, lawyers tasked with recovering funds for defrauded investors filed a suit against Comerica Bank, which held accounts belonging to Woodbridge. The federal lawsuit alleges Comerica turned a “blind eye” to the suspicious activity.

Blackstone President and COO Jonathan Gray and Stearns Lending CEO David Schneider (Credit: Getty Images)

Stearns Holdings, the parent company of residential mortgage lender Stearns Lending, filed for Chapter 11 protection Tuesday morning after agreeing on a debt-restructuring plan with majority owner Blackstone Group.

The restructuring will erase $184 million in outstanding bond debt from the California-based firm’s balance sheet, the Wall Street Journal reported. Stearns is also seeking court authorization to continue normal business operations during the bankruptcy process, including the payment of suppliers and vendors, and salaries and benefits for about 2,700 employees.

Blackstone acquired a majority stake Stearns Holdings in 2015. The financial firm is providing $60 million in new money for the restructuring, as well as a bankruptcy loan of up to $35 million to help the lender continue operations. Warehouse lenders have committed $1.5 billion to the plan.

Stearns’ $184 million in outstanding bonds are due to mature next August. The company paid down some of its bond debt last year by selling off most of its mortgage-servicing rights. In its Chapter 11 filing, it listed assets and liabilities each between $1 billion and $10 billion.

Mortgage rates tumbled in recent months after the Fed held off on raising interest rates further. A preceding period of rising rates had cut into Stearns’ lending business. [WSJ] — Kevin Sun

Bridge Investment Group Chairman Robert Morse and the Willet’s Point neighborhood (Credit: Getty Images)

Bridge Investment Group said it had raised $509 million through its Opportunity Zone fund, becoming one of the few big firms to meet its fund-raise goal for the federal tax incentive program that targets development projects in distressed areas.

The company announced on Tuesday it had pooled money from 500 investors, and will seek real estate projects nationwide, according to Bloomberg. The fund plans to invest in 12 developments across eight cities, including Queens, N.Y., where Willets Point has seen the most Opportunity Zone activity in the five boroughs. Other areas will include developments in Sacramento and Salt Lake City, where Bridge is headquartered, along with California and Nevada.

Bridge, which has $16 billion in assets and 33,500 multifamily units, launched its $500 million Opportunity Zone fund in October. Other firms that launch similar funds include Related Companies, Brookfield Asset Management and Blackstone Group.

Bridge said it plans to roll out another Opportunity Zone fund in the second half of this year, and a third in 2020.

The fund announcement comes after new rules for the program were released in April. The Opportunity Zone program gives long-term investors tax breaks for developing in distressed areas across the U.S. There are 8,700 designated Opportunity Zones. Under the new rules, investors have to invest by the end of 2019 to get the biggest tax break. [Bloomberg] — Georgia Kromrei

CIM Group Founders, Shaul Kuba, Richard Ressler, and Avi Shemesh with a rendering of the project

CIM Group is all set for arts and crafts.

Despite the dominant reign of e-commerce, the retail chain Michaels signed a lease to occupy 19,000 square feet at CIM Groups’s property at 1342 S. La Brea Avenue. It is part of a larger 77,400-square-foot retail development anchored by a Target and a Sprouts grocery store.

The site was purchased in 2016 for $3 million. According to media reports, the two-story site replaced several small auto shops.

CIM Group is one of the most active developers in Los Angeles, and the firm owns several other commercial and residential properties throughout Los Angeles, including other projects in Mid-Wilshire. The firm recently refiled plans to convert an office building 4680 Wilshire Boulevard near its headquarters into an 87-unit residential development. The firm also owns a four-property office campus there, of which it recently put 143,000 square feet on the market.

CIM Group also has an expanding portfolio in the transforming neighborhood West Adams, and it is currently building the final phase of The Lot, a production studio complex in Hollywood.

50.4 percent of the 119 new REIT directors were women (Credit: iStock)

For the second year in a row, public real estate companies added more women than men to their boards.

During the spring proxy season, real estate investment trusts added 60 new female members, meaning 50.4 percent of the 119 new directors were women, according to data from Ferguson Partners. Last year, 52 percent of new directors were women, which was the first time the majority of newly elected members were female, the Wall Street Journal reports. The share of women on REIT boards has more than doubled since 2015, when 25 percent of new members were women.

“Real estate remains an old boys’ club, and it’s been slow to change. But it’s changing,” said Nori Gerardo Lietz, a longtime investor who joined the board of Mack-Cali Realty Corp. last month.

Still, these numbers only represent newly elected members — board’s have a long way to go to achieving parity. According to Ferguson, eight out of every 10 REIT directors are male, and nearly 10 percent of REITs have no female directors.

That 10 percent is likely going to feel increased pressure in the years ahead, from the market and, in some cases, the government. In California, all public companies are required to have at least one woman on their board. By 2021, companies with six or more directors must have at least two female directors.

In a series of stories, The Real Deal has explored how the real estate companies have — and haven’t — addressed gender and race issues in their industry. [WSJ] — Kathryn Brenzel

Anthony Rozic, CEO of Goodman North America and Dennis A. Muilenburg, Boeing CEO

Less than a month after Goodman Group bought a 37-acre manufacturing site from Ralph’s Grocer, the industrial developer acquired a massive Boeing property in Long Beach.

The most recent deal for the 93-acre property — including a 1.1 million-square-foot building — is estimated at more than $200 million, according to the Press Telegram. Australia-based Goodman Group is partnering with the city to convert the space into shopping and industrial development, adding to the booming industrial market in Los Angeles County.

The former manufacturing plant between the Long Beach Airport and Cherry Avenue will be renamed Goodman Commerce Center Long Beach. Goodman Group will meet with city lawmakers over the next several weeks to discuss initial plans.

As an example of what to expect, City Councilwoman Stacy Mungo pointed to nearby Douglas Park with the Long Beach Exchange shopping center, and tenants like Mercedes-Benz USA, United Pacific and Virgin Orbit.

A project like that would require a zoning change and approval from the Planning Commission. The city is currently crafting a specific plan for the area called the “Globemaster Corridor,” named after Boeing’s C-17 aircraft.

Boeing manufactured cargo planes for the U.S. military at the site for about 20 years. UPS made a bid for the site earlier this year, but said in June it was looking elsewhere. [Press Telegram] — Gregory Cornfield