Memphis earns the top spot as the best city for saving (Credit: iStock)

Experts say you should squirrel away six months’ worth of expenses as a contingency for losing a job or a medical emergency. But in New York, it would take someone half a lifetime to save that much, according to a new study.

The average New Yorker would have to save for 521 months – or more than 43 years – to save up a roughly $30,000 six-month emergency fund, according to the personal finance site Bankrate.

That puts the Big Apple among the worst cities for those looking to save.

Bankrate ranked U.S. cities by the amount of time required to save a six-month emergency fund, based on housing costs and other expenses including groceries, medical care, utilities and transportation.

The best city for saving is Memphis, where a six-month emergency fund would require 11.6 months of saving, followed by Cincinnati (12.6 months), Cleveland (12.8 months), Pittsburgh (13.1 months) and Detroit (13.3 months).

In four California cities – Los Angeles, San Diego, San Francisco and San Jose – the time required to build a six-month emergency fund is immeasurable.

Bankrate used data from ATTOM Data Solutions, the Cost of Living Index compiled by the Council for Community and Economic Research and the U.S. Census Bureau. [CNBC] – Mike Seemuth

Ohio SERS is moving money from real estate to infrastructure (Credit: iStock)

Ohio’s school cafeteria workers, principals, and school bus drivers are bullish on infrastructure investment. Real estate, not so much.

The Columbus-based School Employees Retirement System of Ohio pension fund pans to invest $100 million in the 2019-2020 fiscal year and all of that will go toward infrastructure, according to IPE Real Assets.

Over the next 12 months the $14.3 billion pension fund plans to increase the share of infrastructure investments in its real assets portfolio from 17 to 21 percent. The rest of that portfolio is made up of real estate investments.

Ohio SERS membership is open to people working in education apart from teachers, including school administrators, teaching assistants, and bus drivers. The fund has over 239,000 members.

Ohio SERS has been moving capital from real estate to infrastructure over the last three years. A recent report by the pension fund’s board says it expects infrastructure investments to generate 8 to 10 percent returns.

Pension funds are constantly tweaking their portfolios. In April, the Los Angeles County Employees Retirement Association announced it would shed $1 billion in real estate as part of a restructuring of its portfolio.

The pension fund will maintain its current mix of real estate investments, which is heavier on industrial and specialty types like student and senior housing and light on office and retail, according to IPE. [IPE Real Assets] – Dennis Lynch 

LA County Assessor Jeff Prang and the future NFL stadium in Inglewood in June 2018 (Credit: Ron Reiring/Flickr)

Los Angeles County property assessments hit a record $1.6 trillion this year thanks to a super-active real estate market and healthy levels of construction across the county.

The tax roll for 2019 grew by $94.4 billion over last year, marking the ninth consecutive year of growth, according to the Los Angeles Times. The growth in property values is expected to generate $1 billion more in tax revenue for the county and L.A.’s cities.

More than half of the growth in taxable value came from reassessments of properties upon sale. California’s 40-year-old Proposition 13 caps the reassessments of unsold properties at 2 percent. The measure protects longtime property owners from spikes in property taxes. Sold properties are reassessed at sales price, typically much higher than the cap.

Construction added $11.1 billion in value. Inglewood’s massive new L.A. Stadium and Entertainment District — the 300-acre complex anchored by the future home of the L.A. Rams and L.A. Chargers football teams — saw its assessment jump $2 billion, the largest of any property in the county.

It’s one of L.A.’s largest projects under construction. The reassessment boosted Inglewood’s tax base by more than 25 percent, fueling the strongest percentage growth in values than any other city in the county.

The industrial city of Vernon saw a 13.2 percent boost in values thanks to the industrial sector’s strong performance. West Hollywood’s 11.6 percent growth was the third strongest of any city in the county.

The city of L.A. saw a 6.8 increase in values, just above the county average, but accounted for 44 percent of the county’s overall growth. [LAT] ­— Dennis Lynch

Kelsey Grammer and his former Malibu home (Credit: Getty Images and The Agency)

A Mediterranean-style Malibu mansion with a celebrity pedigree is on the market for $20 million.
The home in the gated Serra Retreat community was formerly owned by actor Kelsey Grammer, former start of “Frasier,” and Camille Grammer, star of “Real Housewives of Beverly Hills.” The now-divorced couple sold the property in 2015 for $13 million.

The main home measures in at 6,650 square feet with seven bedrooms and 13 bathrooms, according to listing agents Sandro Dazzan and Cooper Mount of the Agency, and would suit nicely Kelsey Grammer’s erudite TV persona Dr. Frasier Crane. The home’s kitchen was designed by celebrity chef Wolfgang Puck, and there’s a wine cellar, library and a two-story “ballroom,” according to the Agency’s marketing materials.

The 4.8-acre grounds are elaborated landscaped with gardens, a pond and a fruit orchard. There’s also a tennis court, pool and equestrian facilities, including a six-stall horse stable and riding ring. Nearby there’s a carriage house for guests.

The Grammers bought the home in 1997 for $4.5 million. They listed it in 2004 for almost $20 million and in 2012 for $17 million, according to the Los Angeles Times.

The latest celebrities to make moves in Malibu include snowboarder Shaun White, who’s selling a two-property beachfront assemblage for $27.3 million, and NBA star Kevin Durant, who sold his home in the city for $12.2 million last month.

(Credit: iStock)

A sluggish housing market is receiving a much needed jolt from Hispanic first-time home buyers.

The homeownership rate for Hispanics grew more during the past several years than for any other race or ethnic group, including whites, according to the Wall Street Journal. Since 2015, overall homeownership rate has risen 3.3 percentage points.

During the past decade, Hispanics made up 63 percent of new U.S. homeownership, despite only accounting for 18 percent of the total U.S. population, according to the National Association of Hispanic Real Estate Professionals.

Homebuilders and brokers are increasingly relying on Hispanic buyers, since housing demand has slowed down considerably due to the rising costs of single-family homes. In April, home price growth slowed to its lowest level since 2012.

Yet these affordability concerns that are hurting the broader housing market are also impacting Hispanic homebuyers. While 4.6 million Hispanic millennials make enough money to buy a home in their neighborhoods, most won’t get past the down payment or a simple lack of inventory, according to a study by the Urban Institute.

At the same time that Hispanics are making up a larger share of the market, the homeownership rate among the African American community has fallen 8.6 percentage points since its peak in 2004.

Some analysts say black communities have struggled to recover financially since the housing crisis, which has made it more difficult to buy a home, according to the Journal. [WSJ] — Keith Larsen

Sterling Organization CEO Brian Kosoy and the two Melrose Avenue properties

Sterling Organization has purchased two retail buildings on Melrose Avenue, which remains one of Los Angeles’ top luxury corridors despite the e-commerce onslaught.

The West Palm Beach, Florida-based real estate investment firm paid $35 million for the portfolio, through its third institutional fund, Sterling Value Add Partners III.

The buildings are located in West Hollywood at the intersection with North Orlando Avenue. The portfolio includes a 21,379-square-foot building at 8378-8384 Melrose Avenue —it is 71-percent occupied, with leases from Rachel Zoe and Electric Feel Management — and a 3,275-square-foot building at 8379 Melrose Avenue. It is fully leased to Casper, the bedding company.

The two-property portfolio is Sterling Organization’s sixth and seventh investments on behalf of the $497-million SVAP III fund. The firm owns 54 properties across the country with more than 10 million square feet of primarily retail space.

Last year, Sterling paid $23.8 million for a Huntington Park Shopping Center, and a shopping center in Westlake Village for $35 million through SVAP III fund. Sterling also sold a storefront on Rodeo Drive last year to Louis Vuitton’s parent company for $110 million.

Brick-and-mortar locations on Melrose Avenue have been thriving despite the dominance of e-commerce. Melrose is the biggest local competition to Rodeo Drive for high-end tenants where they can show off new ways to adapt with a “digital-meets physical” experiences. The strip is home to restaurants and lifestyle and luxury brand retailers, including The Row, Chloe, Fig & Olive, the new Nordstrom Local concept store, Rag & Bone, and the Kardashians’ store.

Construction on the Melrose Triangle complex is slated to open next year on Melrose Avenue with 82,000 square feet of ground-floor retail. And nearby, a 9,000-square-foot AllBright, a private club geared toward women, is opening this summer on Melrose Place.

From left: Jonathan Gray of Blackstone Group, Geoff Palmer of G. H. Palmer Associates, and Jeffrey Gural of Newmark Knight Frank and GFP Real Estate (Credit: Getty Images)

As the campaign season heats up, a preliminary list of second-quarter Federal Election Commission contributions reveal a number of real estate executives and developers made donations of varying amounts.

The Real Deal gathered the data from the FEC’s website and ordered the donations by dollar amount, from highest to lowest. The data does not include state and local contributions, and only captures donations filed before Friday, July 5. The final deadline to file donations is July 15.

Topping our list, Los Angeles developer Geoffrey Palmer of G.H. Palmer Associates donated $106,500 to the Republican National Committee in April. It’s unclear if it was a new donation, however, because the filing indicates it was transferred from Trump Victory, a joint fundraising committee between the Trump campaign and the RNC.

Palmer is one of President Trump’s biggest donors and previously gave millions to Rebuilding America Now, a political action group founded to support Trump’s 2016 campaign.

Earlier this year, a class-action lawsuit was filed against Palmer’s company, accusing it of illegally keeping thousands of security deposits from tenants. TRD reported that more than two dozen tenants had previously sued Palmer for unwarranted charges. Palmer could not be reached for comment.

The second-highest donor was South Florida-based commercial real estate developer Murray Goodman, who donated $58,900 to the RNC. In 2013, Goodman’s daughter, real estate broker Marley Goodman Overman, married husband Brett Overman at Trump’s Mar-a-Lago Club.

In addition to Los Angeles and South Florida real estate heavyweights, the list also shows a number of donations out of New York.

Among them, Blackstone Group president and COO Jonathan Gray donated $35,500 to the Democratic Congressional Campaign Committee. In 2016, The Real Deal reported that Gray, the former head of real estate at Blackstone, met with Trump to discuss joining his administration as treasury secretary, despite supporting Hillary Clinton’s campaign. He later withdrew himself from consideration, telling CNBC: “It was an honor to be considered for Treasury secretary but I still have much work to do at Blackstone.”

Blackstone declined to comment on Gray’s latest donation. Gray has previously donated to Democratic Reps. Seth Moulton and Jared Polis (who is now Colorado’s governor); as well as Sens. Michael Bennet, Cory Booker, Chuck Schumer and Ron Wyden.

Also in New York, Newmark Knight Frank and GFP Real Estate’s Jeffrey Gural donated $35,500 to the Democratic Senatorial Campaign Committee, FEC filings show. Dennis Herman, chairman of the Beekman International Center, donated the same amount to the RNC.

In Chicago, real estate investor Harry Langer made six donations of $2,800 each to the Club for Growth, a fiscally conservative political action group.

Domvs London co-founder Barry Watts and 800 Tortuoso Way (Credit: Linkedin, Dougas Elliman)

When the owners behind the Park Bel Air development site put the spread on the market for $150 million, it presented an opportunity for someone to build three mansions ranging up to 60,000 square feet each. Now, six months later and no takers, the developers are sectioning off a piece of the property for a reduced price.

The so-called “Estate One at Park Bel Air” hit the market July 12 for $45 million, The Real Deal has learned. At nearly 3 acres, it sits on one of the three lots at the 10.5-acre Park Bel Air property, which is still for sale for $150 million.

The Bel Air site is owned by Domvs London and Junius Real Estate Partners, the real estate arm of JP Morgan Chase & Co. The partners bought the property in 2014 — then eight separate lots — and rezoned them into three.

Each of the three lots fits a 60,000-square-foot mansion. Renderings show a modern, two-story estate on the property at 800 Tortuoso Way, which has been already been graded.

Connie Blankenship of Douglas Elliman has both listings. She did not immediately respond to requests for comment.

Land-only listings have become increasingly common recently, often listing at premium prices. Brokers say the recent wave is a result of the spec home building boom of 2014 and 2017, when developers were filing construction permits at record pace. Also, they provide an opportunity for developers to escape the arduous permitting process.

The Mountain of Beverly Hills, now embroiled in a bankruptcy proceeding, is one of the largest development opportunities, spanning 157 acres atop the Beverly Hills Post Office. After listing at a record price of $1 billion, its owners chopped the asking price to $650 million in February.

The development site and a rendering of Choi Bo Sung’s proposed 252-unit project (Credit: Google Maps)

A Koreatown hotelier has sold an Olympic Boulevard assemblage the firm it recently entitled for a 252-unit mixed-use apartment building.

Choi Bo Sung Inc. sold the properties — stretching along West Olympic Boulevard between South Serrano Avenue and Hobart Boulevard — to Bando Dela Corp. for $20.3 million, Los Angeles County property records show. The properties include some retail storefronts and small-lot residential buildings.

Choi Bo Sung Inc. filed for the seven-story 252-unit project in the fall of 2016 and received city approval for the project in April of this year. The firm released renderings of the project last fall.

The firm owns and operates the Rotex Hotel & Condo a few blocks away on Olympic. A representative could not be immediately reached for comment. Bando Dela Corp. has links to a San Diego individual named Dong Chul Shin as well as a Koreatown-based individual Wootaig Lee, who could not be reached for comment.

A market exists in the city of L.A. for shovel-ready development sites with entitlements built in, thanks to the city’s often arduous and archaic entitlement process. Investors buy up property, secure entitlements from the city and flip it at a premium to a new developer who doesn’t want to deal with the risks involved in that process.

Its unclear if Choi Bo Sung Inc. planned to build the 252-unit project on Olympic or planned to sell the entitled property to another party. Choi Bo Sung purchased the development property in 2014 for $7.8 million, which suggests Bando Dela Corp. did pay a premium for the entitlements.
The entitlements for the property allow for around 33,300 square feet of retail space and 261 subterranean parking spaces. The plans call for 46 units set aside for “very low-income” renters, which boosted the number of units allowed from a base of 175.

Zackary Brothers, a Fashion District-based development firm that was part of the development team for the Downtown’s Circa project, is building a large multifamily project next door. The firm is also working on a 60-unit project in Westwood.

Hamid Moghadam of Prologis and Dwight Merriman of Black Creek Group (Credit: iStock, Prologis and Black Creek Group via Twitter)

Prologis is in advanced talks to acquire a $4 billion warehouse portfolio, a month after getting outbid by Blackstone in a far larger industrial deal.

Investors are increasingly drawn to warehouse properties, which attract major e-commerce firms, and are typically shielded from drastic market swings. In the fourth quarter of 2018, warehouse vacancy rates were at 7 percent, the lowest point since 2000, during the dot-com boom.

This portfolio, Industrial Property Trust, spans 37.6 million square feet across industrial properties in 21 states, and houses tenants including Amazon and FedEx, according to Bloomberg.

Black Creek Group listed the portfolio in February, and said it is 96 percent leased, with no occupant accounting for more than 3 percent of annual rents. The outlet reported the deal could be announced as early as this week.

San Francisco-based Prologis, which is one of the largest real estate investment trusts in the U.S. — and valued at $51 billion — has eyed multiple large-volume portfolios in recent years, with limited success. In April last year, it acquired DCT Industrial Trust Inc., a 21 million-square-foot warehouse portfolio, for $8 billion.

Last month, Blackstone outbid it for the U.S. operations of GLP, a Singapore based investment trust. Blackstone ended up paying $18 billion in a deal that amounted to one of the largest real estate transactions in history. [Bloomberg] — David Jeans

Onni Group President Rossano de Cotiis, Decron Properties President & CEO David Nagel and Ocean Plaza

Decron Properties is in the process of shedding its commercial real estate holdings across California, concerned the passage of a ballot question could result in a spike in property taxes.

The latest to be sold is Ocean Plaza, a mixed-use complex on 8.6 acres in Huntington Beach. Onni Group paid $97.3 million for the 300,000-square-foot office tower and retail development. Wilshire-based Decron Properties announced the deal in a release Monday.

Vancouver-based Onni has been building large-scale multifamily units at a rapid pace in Downtown Los Angeles.

Located at 17011 Beach Boulevard, Decron’s Huntington Beach complex includes a 207,645-square-foot office tower and 108,785 square feet of retail space. There is restaurant space included in that retail, as well as a six-level parking garage.

Occupancy at the 14-story office tower was 85 percent, with tenants that include Ocean Media and UFC Gym. The retail portion was 95 percent occupied.

A team led by Marc Renard at Cushman & Wakefield represented Decron.

Decron purchased the mixed-use site in 2006 for an undisclosed amount, records show. The firm then invested $17 million to rehabilitate the 1980s-built structure.

Decron said in a statement that the sale is part of its larger push to unload commercial real estate properties ahead of the Proposition 13 ballot question, which voters will decide on in the 2020 election. Its approval could result in much heavier property taxes for commercial landlords statewide.

Decron has been moving into the multifamily sector instead — its portfolio now includes about 8,000 units across the West Coast.

Onni has also been an active player in multifamily, specifically in Downtown L.A. Over the past few years, the firm has proposed building around 4,000 units. It recently secured a $550 million loan to fund its purchase of the Wilshire Courtyard.

Clockwise from top left: 1141 S. Crenshaw Boulevard, 719 S. Hoover Street, 411 S. Hamel Road, 1721 S. Colby Avenue and 3839 W. Washington Boulevard (Credit: Google Maps)

The top five residential projects of under 50 units proposed in Los Angeles County include four rentals and one condo complex.

The total would 183 units to the county’s housing stock, including at least 56 new units of affordable housing, records show. One of the constructions would be a fully affordable project in Mid-Wilshire.

All five of the projects qualify for incentives from the city’s Transit-Oriented Communities program, which gives bonuses to developers of market-rate projects who add affordable housing near public transportation stops.

1141 S. Crenshaw Boulevard | Mid-Wilshire | 43 units
Newport Owners filed plans to build a fully affordable housing project with 43 units and eight parking spaces on an empty lot at the eastern edge of Mid-Wilshire. The five-story building would qualify for tier 4 Transit-Oriented Communities incentives, including height increases and open space reductions. Newport Owners purchased the site in September 2018 for $3.5 million

719 S. Hoover Street | MacArthur Park | 38 units
Through Hoover 719 LLC, Albert Ganjian filed plans with the city to build 38 condo units. Four of the units would be for affordable housing, and it would qualify for tier-3 TOC incentives. It is the only location on the list that is in a federally designated Opportunity Zone, which allows long-term investors to delay capital gains taxes. Ganjian purchased the property in 2015 for $1.4 million.

411 S. Hamel Road | Beverly Grove | 37 units
Bob Etebar with Beverly Hills-based Etco Homes filed plans to build a 37-unit project, just south of West Hollywood. The project would combine five lots into one. It qualifies for tier-2 TOC bonuses. The site was purchased in January 2018 for $19.1 million. Last year, the firm also purchased a 12-unit site at 427 N. Palm Drive in Beverly Hills for $23.3 million.

1721 S. Colby Avenue | West Los Angeles | 34 units
The entity 1721 Colby Ave LP filed plans to demolish residential structures to make way for the 34-unit apartment building. With four units restricted for extremely low-income and two units restricted as very low-income, the project qualifies for tier-1 TOC bonuses. That includes a height and space increase. The property at 1721 S. Colby Avenue is owned by Kaveh Bral, who purchased it in December 2017 for $8.3 million.

3839 W. Washington Boulevard | Mid City | 31 units
Heritage Developments LLC, proposed a 31-unit project at an empty lot in the heart of Mid City. The project would include three units for extremely low-income households, and qualify for tier-2 TOC incentives, including a height increase to four stories. The project would also include ground floor retail. The property is owned by Shalabi Enterprises and Farid “Mike” Shalabi, who purchased it in 1994 for $180,000.

Gettleson, Witzer and O’Connor Managing Executive Randal O’Connor and a rendering of the project

Creative offices are still having their moment in Los Angeles with another planned in Santa Monica.

The city is reviewing a proposal for a 26,300-square-foot contemporary industrial design from an Encino-based entity at 1643-1651 Euclid Street, according to Urbanize.

The developer on the books is Untold Sums, managed by members of the Encino-based law firm Gettleson, Witzer & O’Connor, state records show. The firm caters to the entertainment industry. The firm’s managing executive, Randal O’Connor, is listed as CEO of Untold Sums. Entertainment lawyers and agents often act as LLC officers on behalf of clients.

Untold Sums paid $12.5 million for the property last August, according to property records.
The construction would include three levels over a 90-vehicle underground garage. If approved, the project would rise on what is now a parking lot of about a third of an acre. The design by 11kps and Loescher Meachem Architects has a curved “barrel” roof, large windows, and a brick and concrete facade.

The development site sits among other small-lot offices and industrial properties and is around the corner from an office development site Watt Companies sold last fall to Houston-based Friedkin Group for $51.3 million.

Watt entitled that property for a 30,200-square-foot office building. Friedkin Group plans to follow through with that plan and occupy the office itself. [Urbanize] — Dennis Lynch

Disney has a sophisticated system for tracking the data of guests to its theme parks

People’s data is being tracked more closely and in more places than ever before, and it’s no different at the Happiest Place on Earth.
For the last few years, Disney has been gathering reams of data from visitors to Disneyland and Disney World via smartphone apps and its MagicBand wristbands, according to the Los Angeles Times. The company tracks what rides visitors frequent, where they wander in the 85-acre park and what they spend their money on. And it does so at a pretty penny, spending over a billion to enter the data-obsessed world.

What does Mickey Mouse want with all that data? For one, it can help manage crowds. The MagicBand lets visitors reserve spots in line, which Disney said has allowed it to reduce turnstile transaction times by 30 percent and increase park capacity.

It can also inform what attractions are rising or falling in popularity. The data could even inform Disney what films to produce in the future based on the franchises waxing and waning with guests.

Disney’s programs have raised many of the same concerns about privacy that have been raised about data-tracking by tech companies like Facebook and Google. Disney CEO Bob Iger has said that the tracking programs are opt-in.

Disney’s adoption of these methods are part of a wider trend in retail and real estate. Landlords and retailers gather data, mostly from smartphone activity, to discern consumer trends and inform strategies based on those trends.

CBRE and JLL have invested heavily into new technologies to track people in office and retail spaces. CBRE buys geolocation data from companies that gather it from consumers’ mobile phones to provide to retailers.
Some co-working and co-living companies inform programming at their spaces based on visitor and resident data. Earlier this year, WeWork bought data platform Euclid to do just that, raising privacy concerns for the many companies that use the co-working giant’s spaces. [LAT] —Dennis Lynch

George Michael and Fadi Fawaz (Credit: Getty Images)

George Michael’s ex- Fadi Fawaz has smashed up the windows of the late singer’s home in London in a supposed attempt to renovate the property.

The 46-year-old has been living in the home, valued at $6.2 million, since finding the singer dead from heart disease in 2016, according to the London Free Press. He has ignored legal letters from Michael’s family and maintains that Michael gave him permission to live in the home before he died.

Fadi has claimed the damage done to the windows was part of a home improvement plan, but a nearby worker said he smashed them in a burst of anger.

Michael’s family is concerned the whole house will end up getting destroyed. [London Free Press] – Eddie Small

Nipsey Hussle and his property at 3420 West Slauson Avenue (Credit: Getty Images, Google Maps, Wikipedia, Pixabay)

After rapper Nipsey Hussle was shot and killed, Los Angeles celebrated him as a hero and his business partners launched an Opportunity Zone fund to spark development and investment in South Los Angeles.

But even though the police chief called him a peacemaker, the police department and the city attorney’s office are investigating Hussle, his property at the corner of Crenshaw Boulevard and Slauson Avenue and his business associates to determine whether his strip mall was a hub for gang activity, the New York Times reported. As the investigation continues, it remains unknown if officials will act against Hussle’s former business partners.

Before he owned the strip mall, the city had been pressuring Hussle’s former landlords to evict him and his associates, and they were given a 30-day notice to leave. Instead, earlier this year, the landlords sold the property to Hussle and investors for $2.5 million.

Hussle had plans to build new apartments and invest more after he learned about the benefits of developing in Opportunity Zones.

“I think everybody in the community will do everything we can to make sure the ventures he started will continue,” said City Councilman Marqueece Harris-Dawson, who represents South Los Angeles. “And this is a very confusing hiccup in this process.” [NYT] — Gregory Cornfield

Honest Buildings CEO Riggs Kubiak and Procore CEO Tooey Courtemanche (Credit: Techstars and Procore)

UPDATED, July 16, 1:50 p.m.: Construction management software company Procore has acquired Honest Buildings, a startup favored among institutional developers, the companies said Tuesday.

The acquisition signals confidence in the growing construction tech sector, where major real estate players are putting their capital. Last year, investment in construction tech companies totaled $6.1 billion, almost double what was invested in 2017 and a stark rise from the $350 million invested in 2016. Already, 2019 is on track for another year of record investment with over $4 billion so far.

Procore, which last year raised $75 million in a round led by Japanese conglomerate Tiger Global Management, sells an app used by developers to track a construction project’s progress.

In a statement, Procore’s chief executive and co-founder Tooey Courtemanche said Honest Buildings’ product — an online platform that uses data to allow developers to oversee projects — will be integrated into the Procore platform to provide transparency and accessibility of information to builders.

The firms would not disclose the acquisition price.

Courtemanche launched Procore in 2002 and has over 1,000 employees. It is now valued over $3 billion and has offices in multiple countries.

Honest Buildings, for its part, has drawn big checks from some of the real estate industry’s largest figures since it launched in 2012. The firm, led by Riggs Kubiak, has raised $47 million, in rounds that included the Durst Organization, Brookfield Asset Management and Oxford Properties. In turn, the firm counts those companies as customers.

Return to this page for updates.

Correction: This story has been updated to reflect that it was Tiger Global Management which led the $75 million funding round, not SoftBank.

From left: Tom Gores and Mark Falcone with the project site

Private equity group Platinum Equity, run by Detroit Pistons owner and billionaire Tom Gores, has purchased a project site in the Arts District from Continuum Partners for $28.9 million.

Continuum had been planning to build a 107,000-square-foot office and retail complex at the site called Produce LA. Earlier this year, the Denver-based developer filed to demolition permit to clear a 71,500-square-foot lot at the site at 640 South Santa Fe Avenue, which currently has a cold storage facility.

Neither Continuum Partners nor Platinum Equity returned calls to comment or confirm the size of the lot sold or if Platinum plans to forward with the Produce LA project. The five-story, mixed-use commercial development was designed by Denver-based ArcS.

The site is near the L.A. River in a mostly industrial area. Across the street, Los Feliz-based developer Koar is building a creative office.

The Arts District is also set to get a new 80,000-square-foot Soho House next month, and Weedmaps’ Ghost Management Group recently signed a lease at Row DTLA complex.

New York City apartment building (Credit: iStock)

Here’s a case for New York state’s recently-passed and highly controversial sweeping rent reform law: A new report shows that Manhattanites pay the highest prices for monthly rent in the U.S.

The average monthly rent of a Manhattan apartment totaled $4,190 in June, nearly $500 more than the next highest city, San Francisco, according to a new report from RentCafe. Boston was third at $3,509.

While the Manhattan prices were far and above the priciest, they were actually down ever so slightly — 0.1 percent — from the beginning of the year. It marked the only dip of any of the large cities RentCafe analyzed.

Overall, the U.S. average rent increased by 3.2 percent, to $1,465 in June. The reason: Rent is rising across the country as more people are choosing to rent instead of buy, according to RentCafe.

Los Angeles had the seventh highest rent at $2,508, a rise of 2.2 percent since January 2019. In Chicago, rents jumped to $1,990, an increase of 4.8 percent from the beginning of the year and in Miami, it stood at $1,713. Market pros expect that rent prices for new construction units in Miami will soon fall, amid a glut of supply of condos being rented on the so-called “shadow rental” market.

New York’s historically sky-high rent prices led to statewide legislation passed last month, which eliminated vacancy bonuses that allowed for up to 20 percent rent hikes when a tenant vacated an apartment.

Real estate lobbyists and developers argued that the law would cause developers to stop building new housing in New York City. This week, a company affiliated with J. Wasser & Company and Martin Templer said the new rent laws have made closing on two Bronx apartment buildings impossible and filed a lawsuit to try to back out of the contract.

What was the most affordable place to live, according to RenCafe? Wichita, Kansas, took the title. In June, average rent was $656 a month.

Compass CEO Robert Reffkin and Realogy CEO Ryan Schneider

Compass is no newcomer to courtroom drama.

Since 2014, the SoftBank-backed brokerage has been slapped by 10 separate lawsuits accusing the company of engaging in aggressive tactics to expand in new markets that range from outright law-breaking to unethical behavior.

In the explosive lawsuit filed last week, Realogy accused the $4.4 billion brokerage of using “unfair business practices and illegal schemes” to gain market share and beat out its competitors before colluding to raise prices.

Within the complaint, Realogy underscored the “overwhelming number of lawsuits that have been filed by competitors across the country, all alleging similar patterns of misconduct.”

The Real Deal examined Compass’ legal track record and reached out to antitrust experts, as well as state and federal agencies that enforce anti-competitive behavior, to understand the potential fallout — and pitfalls — of Realogy’s suit.

A laundry list of litigation
Realogy’s suit is the 10th in the past five years — and the third time the national holding company, which owns and franchises traditional real estate brokerages, has initiated litigation against Compass. Here’s how the other nine suits turned out:

1 Avi Dorfman (2014)
Tech entrepreneur Avi Dorfman sued Urban Compass (as it was then known) and Reffkin for building a business using his proprietary software, and then reneging on an agreement to offer him a stake and job at Compass and buy his startup. The suit is ongoing.

2 Citi Habitats (2014)
Citi Habitats, a subsidiary of Realogy, sued Compass for allegedly hacking into its proprietary listing database at least 25 times. A judge granted a temporary restraining order to prevent Compass from entering the database. The case ultimately settled in 2015.

3 The Corcoran Group (2015)
Corcoran, which is also owned by Realogy, sued Compass (and former agents and managers) for “brazenly and intentionally” raiding the firm’s key offices on the heels of the tech brokerage hiring away more than 50 agents. The dispute was settled later that year.

4 Brown Harris Stevens (2015)
BHS sued its former Hamptons manager Ed Reale and Compass. Reale was sued for violating his non-compete agreement for the country of Suffolk, while Compass was sued for hiring Reale in spite of allegedly knowing the terms of his agreement with BHS. The matter settled in 2016.

5 Saunders & Associates (2015)
Andrew Saunders’ eponymous firm sued Compass and former vice president agent Meg Salem, alleging she stole proprietary data and joined the rival firm in a breach of contract. Days after the suit was filed, Compass booted Salem and Saunders eventually dropped charges against Compass. But in May 2016, Compass filed a third-party complaint claiming Saunders was using former agents and staffers to “blunt” Compass’ success in the Hamptons.

6 Douglas Elliman (2016)
The Howard Lorber-led firm sued Compass and then-president, now-chief evangelist Leonard Steinberg, alleging an “unlawful scheme” to poach brokers and strong arm their way into Elliman’s exclusive contracts. The case settled in 2018.

7 Zephyr Real Estate (2018)
Zephyr was granted a restraining order against Compass after it alleged Compass tried to recruit its managers as the two companies were in talks for Compass to acquire the San Francisco-based brokerage, which claims to have more than 300 agents and generate more than $2 billion in annual sales.

8 Modern Spaces (2018)
Eric Benaim’s Long Island City brokerage accused Compass of stealing trade secrets (and photos). The case settled in the same year.

9 Zillow (2019)
The Seattle-based listings giant filed two lawsuits against Compass in April 2019, alleging the brokerage poached three technology executives who took confidential company data with them when they left. The suits were settled July 11, the same day the Realogy suit was filed.

“Seriously misguided?”

George Hay, a former director in the U.S. Department of Justice’s Antitrust Division, called Realogy’s complaint “just allegations” at this stage.

“Allegations are not that hard to make,” Hay, now a law professor at Cornell, told TRD. The “real underlying facts” will only come out if the case moves to discovery, he said. In the 10 cases filed against Compass and surveyed by The Real Deal, only one (Saunders) has gone to discovery, so it’s unlikely it reaches that stage.

Realogy says the documented history of allegations makes clear that Compass is competing “unfairly” by encouraging recruits to violate employment agreements or inciting theft.

That history doesn’t bother Eleanor Fox, an antitrust expert and professor at New York University School of Law. She said that a lengthy track record does not infer wrongdoing. (She also noted that one violation is all it takes to make a case legally viable.)

But Harry First, the former chief of the antitrust bureau of the New York Attorney General’s Office, said the string of disputes raises a red flag.

“The fact is there’s a lot of lawsuits and I’m not sure what to make of it,” he said. “Something weird is going on.”

First, who is also the co-director of NYU law school’s antitrust program, also said that accusations related to poaching could present a problem for Realogy and other brokerages.

“I would be afraid that what would be uncovered would be some underlying agreement not to poach,” he said. If an agreement not to hire among companies was uncovered, “that would be a legal problem,” he explained because “no poaching is illegal.”

In 2011, a class-action lawsuit was filed on behalf of about 64,000 employees against Silicon Valley’s biggest companies, including Google, Apple, Adobe and two subsidiaries of Disney, for an illegal no-poaching scheme that operated between 2005 and 2009. The suit sought billions in damages for lost wages due to the anti-competitive agreement. Ultimately, it resulted in a $415 million settlement amongst the companies, who now routinely pick up their opponents’ best talent with massive compensation packages. (It should be noted that the tech workers received about $5,800 apiece; attorneys received $41 million.)

Realogy argues in its complaint that its VC war chest allows Compass “make up for the losses it has incurred by grossly overpaying-and thus poaching-its competitors’ employees and independent real estate agents.”

The complaint goes on to say that Realogy believes that this “illicit growth strategy” is premised on getting competitors’ employees to breach employment agreements and share, or steal, proprietary information.

But the allegation that a company using funds from external investors to pay employees more money is illegitimate could open them up to questioning, or pique the interest of enforcement agencies to investigate what constitutes “inflated” compensation packages, according to NYU’s First.

Realogy could be “blindly tripping into an area that is of intense interest to prosecutors today,” he said. “They may all be seriously misguided in taking this on.”

Hazy enforcement

One of the key allegations underpinning Realogy’s complaint is that Compass is seeking to gain market share with the intent of then colluding to “raise its commission splits and fees and/or otherwise restrain trade.”

Realogy alleges that Compass CEO Robert Reffkin personally solicited participation in a price-fixing scheme “where the two companies would agree to
limit agent compensation and ‘compete on brand,’ but not on price.” Realogy also said that Reffkin has similarly solicited other companies to join similar agreements.

The authorities that investigate and penalize violations of antitrust laws, such as price-fixing, include the Department of Justice, the Federal Trade Commission and state-level agencies and Attorney Generals — in New York, that means the AG’s antitrust bureau.

There’s no question price-fixing, if proven, is a serious charge. But there’s a legal dispute around the attempt to fix prices, according to First. Some lawyers say that the claim that even if there is true evidence that Reffkin really did suggest fixing wages and other terms of employment, it doesn’t constitute breaking the law.

“If the competitor did not agree, it’s not price fixing,” Hay wrote in an email. “It may be evidence of bad motive but standing alone [sic] not a violation of a federal statute.” (Realogy claimed they declined Reffkin’s alleged offer.)

But the FTC could bring a case that requires Compass to “cease and desist from making these kinds of offers,” said First.

No agency has announced any investigation or enforcement action taken against Compass to date.

Both Realogy and Compass declined to elaborate on their respective legal strategies.