The We Company’s Adam Neumann (Credit: Getty Images)

Adam Neumann has cashed out more than $700 million from the We Company in advance of the company’s initial public offering.

It’s not often that private companies publicize such deals ahead of going public, according to the Wall Street Journal, and Neumann’s is one of the largest known such transactions.

Startup investors generally do not like it when founders cash out before an IPO, as it can raise questions about how confident they are in the company. But sources told the Journal that Neumann’s borrowings against some of the shares he has in the We Company could show that he is still confident about the company’s future.

The We Company, which has been bankrolled by SoftBank’s Vision Fund, was valued at $47 billion at the time of its last investment round. It’s expected to move forward with an IPO late this year or early next year.

Neumann, who co-founded WeWork nine years ago, has cashed out over the years through a mix of debt and stock sales, according to the Journal. The size of his current ownership in the company is unknown, and he’s set up a family office to invest the proceeds.

The We Company’s vice chairman Michael Gross has been spending money as well, recently paying $28 million for a Brentwood tennis court estate, according to Variety.

Other company leaders who have cashed out prior to IPOs include Zynga CEO Mark Pincus, who cashed out more than $109 million, and Groupon co-founder Eric Lefkofsky, who sold more than $300 million worth of stock in the company. [WSJ] – Eddie Small

GID’s property at 321 West Olympic Boulevard, where Rock House Sliders was to open.

A popular fast-casual hamburger chain in Kuwait that now has two locations in Los Angeles is being sued by its landlord as it seeks to open a third spot Downtown, in a case that involves the USA Patriot Act.

The landlord, GID Development, is suing the company that owns Rock House Sliders for failing to provide necessary documents, including one that complies with the USA Patriot Act anti-terrorism law.

Run by Nasser and Mishari Marafie, Rock House Sliders opened its first U.S. location on Sunset Boulevard last July, then another in Century City, expanding from its 11-restaurant operation in the Persian Gulf country of Kuwait.

Rock House Sliders was planning to move into an 1,853-square-foot store for its third location in Downtown at 321 West Olympic Boulevard. But in a lawsuit filed in L.A. County Superior Court, GID Development claims the Marafies failed to produce insurance policy certifications, final plans for the space and building permits.

The lawsuit also alleges the owners did not produce the necessary “certification related to the USA Patriot Act,” which requires the tenant to sign under affidavit that their business has no ties to terrorism or “corrupt” foreign individuals.

It also stipulates that the tenants attest they are not listed on U.S. government-denied or blocked persons list, and that they are not terrorists or narcotics traffickers. It requires the property owners and tenants adhere to a 2001 executive order blocking property and prohibiting transactions from people who committ, threaten to committ or support terrorism.

Seth Stodder is an attorney with Holland & Knight who previously served as assistant secretary of Homeland Security for border and immigration policy. He also teaches counter terrorism law at USC Law School. He said the Patriot Act doesn’t require tenants to sign any such certification, and that it wouldn’t immunize someone from terrorist acts, either.

The Marafies’ RHS USA Inc. had agreed to pay $1.32 million over the 10-year lease period that started in August 2018, according to the lawsuit. The lease required they provide plans and specifications for the property to be approved.

GID is suing for damages, including $1.32 million for loss of future rent and maintenance costs, as well as $103,200 for the cost of preparing the site and attorneys fees.

In February, GID served RHS with a 30-day notice, then a notice of termination of lease in March.
GID purchased the building at 321 W. Olympic Boulevard through Olive Street Development Holding LLC for $14 million in 2014, records show. The multi-story residential property includes 14,886 square feet of leasable space, according to a listing.

Through RHS USA Inc., the Marafies could not be reached for comment. Frank Coughlin and Steven Bolanos, attorneys who represent GID and Olive Street Development, did not return requests for comment.

George Gleason (Credit: iStock)

Bank OZK, one of the country’s most aggressive condo construction lenders, signaled in its most recent earnings report that its real estate lending growth is slowing down.

The bank’s organic loan portfolio increased 11 percent in the second quarter of 2019, year-over-year. That’s after increasing 28.6 percent in the second quarter of 2018, compared to the previous year. The Little Rock-based regional bank said in a conference call with analysts that its future loan growth is expected to slow down due to an increased amount of repayments on its real estate loans.

During the conference call, Bank OZK CEO George Gleason said the bank was surprised by how quickly some of the projects were getting repaid. In the second quarter, the bank reported repayments of $1.54 billion in its real estate lending division, up from $1.1 billion in the first quarter.

Bank OZK reported second quarter net income of $110.5 million, down 3.7 percent from the same period of 2018, partly due to these repayments.

The bank had $18.2 billion in deposits at June 30, a 1.6 percent increase from $17.9 billion at June 30, 2018.

Gleason said on the conference call that the bank is seeing fewer opportunities for construction loans in New York City since there are fewer new projects and competition from banks and debt funds is increasing.

“Lenders in certain markets are very aggressive on price,” Gleason told analysts. “We’ve been clear without exception that we are not going to sacrifice our credit standards.”

With just under $23 billion in assets, Bank OZK is one of the largest and most aggressive condo construction lenders in Miami, Los Angeles and New York City, lending at a time when other banks are pulling back.

The bank reported no major write-offs on its real estate loans in its most recent quarter. In the third quarter of 2018, the bank had to write down two real estate loans it had made about a decade ago which caused its stock to plummet that day by more than 24 percent.

Critics worry Bank OZK is being overly aggressive at a time when condo sales have slowed down in New York and Miami.

The bank’s stock was up 3 percent to $29.57 at 1:30 p.m. on Friday.

[video_embed][/video_embed]

Every year, MetaProp’s Zach Aarons breaks out his crystal ball, likely an app, and makes proptech predictions for the next year — and b e y o n d !

Already, it’s been a big year for proptech: Some $12.9 billion was invested in real estate tech startups, according to research firm CREtech. Having beat out record-breaking 2017, which saw $12.7 billion for the whole year, big tech changes could be coming real estate’s way.

Aarons, the co-founder and partner of the venture capital fund, has a wide and far-reaching vision for proptech from smart contracts to drones to artificial intelligence to space travel. And it might just be the year real estate fully embraces tech.

“Every other industry’s adopted it,” Aarons said. “Why not ours?”

Watch the video above to hear Aaron’s take on how proptech will transform real estate dealmaking and how — and where — developers can build.

(Credit: iStock)

The affordable housing crisis in Los Angeles may have reached a breaking point with the emergence of the “vanlord.”

People in Venice have been resorting to renting space in vans for weeks at a time at a cost of $300 a month, according to the Santa Monica Daily Press. The owner, or landlord or vanlord is Gary Gallerie, who has been renting out 14 vans — most of which don’t run, according to the report. Some have been parked in front of multimillion-dollar mansions.

In L.A. County, an estimated 30 percent of the 59,000 people living on the streets stay in vehicles, tents and makeshift shelters, according to the L.A. Homeless Services Authority.

The region has been strapped with a crushing lack of affordable housing, with renters having to earn triple the minimum wage to afford the median monthly rent of $2,500. The county needs more than a half million more units of affordable housing to meet current demand, according to the California Housing Partnership.

Gary Painter, director of USC’s Homeless Policy Research Institute, told the Daily Press, “it’s not shocking that people are thinking about these makeshift solutions.”

L.A. Mayor Eric Garcetti last year committed to building emergency shelters across the city. The program, which has a $20 million budget this year and is called “A Bridge Home,” has been met with fierce resistance from property owners, developers and residents in different neighborhoods who say the shelters will raise crime and stifle growth. Some of those areas include Koreatown — which has been experiencing a development boom — along with other places like Sherman Oaks and Venice. Painter of USC said many homeowners think if that don’t provide alternatives that are better than living on the streets, those homeless people will leave. But, he added, “we don’t have evidence that actually happens.” [SMDP] — Gregory Cornfield

Blackstone CEO Stephen Schwarzman (Credit: Getty Images, iStock)

The ink isn’t dry on Blackstone Group’s $18 billion buy of a U.S. warehouse portfolio, and it’s already negotiating to sell part of it.

The company, which finished its transition into a corporation this month, is drumming up interest from potential buyers for pieces of the GLP Pte portfolio, Bloomberg reported. Prologis is in private discussions to buy one such portfolio, valued at $1 billion.

Blackstone’s $18.7 billion deal for the Singaporean company’s 179 million-square-foot warehouse portfolio is one of the largest industrial real estate deals ever.

Selling non-core or non-strategic pieces of a recently required purchase isn’t uncommon. Blackstone applied the same strategy in 2007 when it sold off parts of its $40 billion acquisition of Equity Office Properties Trust.

On the whole, the warehouse sector has seen little supply, high demand and high prices, with available industrial and logistics real estate rising slightly for the first time in 34 quarters, according to a CBRE report. Demand for warehouse and distribution reached an 18-year high in 2018.

Large owners are optimistic that there will continue to be institutional investment in industrial real estate. As Prologis negotiates for a piece of Blackstone’s new holdings, it’s also in advanced talks to buy another $4 billion portfolio from Black Creek Group which spans 37.6 million square feet.

Colony Capital is weighing the sale of its $5 billion industrial in holdings on the heels of selling another warehouse portfolio for $104.6 million. [Bloomberg] — Georgia Kromrei

Barneys at 660 Madison Avenue (Credit: Getty Images)

Barneys, a symbol of New York City luxury fashion, is reportedly weighing a second bankruptcy, after the retailer’s $16 million annual rent jumped to $30 million at its Madison Avenue flagship. The move comes after a city arbitrator decided last year to allow Ben Ashkenazy to nearly double the rent on the 275,000-square-foot flagship store at 660 Madison Avenue. About one-third of Barneys’ revenues comes from that store.

Ben Ashkenazy

The company has hired law firm Kirkland & Ellis, consultants MII Partners and investment bank Houlihan Lokey, to consider either bankruptcy, renegotiating leases, or bringing in a strategic advisor, the New York Times reported.

“Our board and management are actively evaluating opportunities to strengthen our balance sheet and ensure the sustainable, long-term growth and success of our business,” Barneys said in a statement.

Barneys has been planning to open its first flagship store in the Southeast at Bal Harbour Shops in South Florida, which is undergoing a $400 million expansion.

Barneys’ 20-year commercial lease on Madison Avenue, which expired in January, contained a clause that allowed Ashkenazy to raise the rent to fair market value. While Barneys balks at the new sum, things could have been worse. Ashkenazy, who acquired 660 Madison in the previous Barneys bankruptcy, had originally asked for $60 million.

In March, Barneys was reportedly in talks to give up several of its floors in order to cut back on the $30 million in rent. Barneys claimed the story was false.

Peter Marino, the architect behind the Madison Avenue flagship, said that a new tenant is not likely to replace Barneys. “It’s crazy to double the rent; half of Madison Avenue is empty,” he told the Times.

The news comes at a difficult time for brick-and-mortar retail: Lord & Taylor, Calvin Klein and Saks Fifth Avenue have also closed stores. [NYT] — Georgia Kromrei

LBA Realty co-founder and principal Phil Belling and LaSalle Investment Management CEO Jeff Jacobson with USC Tower

UPDATED, July 19, 2:37 p.m.: A joint venture between LBA Realty and LaSalle Investment Management has put the landmark USC Tower on the market for sale, The Real Deal has learned.

The 32-story tower is part of the South Park Center, a two-building complex designed
by renowned architect William Pereira. The owners are shopping the entire 1 million-square-foot complex.

Sources said the property could fetch bids of $400 per square foot, or $400 million.

A spokesperson for LaSalle confirmed the USC Tower is on the market but declined to comment on specifics. A representative for LBA did not respond to requests for comment.

Eastdil Secured has the listing.

The trophy USC Tower at 1150 S. Olive Street spans 591,100 square feet. Formerly known as the AT&T Center, the Class A office building was renamed “USC Tower” three years ago when the university expanded its footprint at the complex. The institution now holds around 260,000 square feet in the building. Other tenants include WeWork, Transamerica and Steelcase, an office furniture manufacturer.

Also in the South Park Center is an 11-story tower, known as 1149 Olive, and two parking garages. Amenities at the campus include a 500-seat theater, several cafes, a gym and retail space.

LBA purchased the entire complex for $130 million in 2005. The Irvine-based firm then tapped Gensler to lead a $35 million renovation of the 1960s-built campus the following year.

LBA sold a stake in the property to LaSalle in 2012, property records show.

The offering presents a rare opportunity to purchase one of Downtown’s Class A skyscrapers. Over the past 12 months, office trades amounted to $5.8 billion in total sales volume, a year-over-year decline of nearly $3 billion, according to a second-quarter report from Marcus & Millichap. Much of the decrease in deal flow is due to fewer trophy properties hitting the market.

LBA has also been making a bigger push into the industrial space. In April, the firm paid $58 million to acquire an 11-acre industrial site in Vernon, the most expensive deal that month. Industrial properties make up around three quarters of its portfolio and make up around 56 percent of its value.

Vella Group’s Zach Vella and the office in El Segundo

An investment firm that just purchased a soon-to-be vacant El Segundo office campus could be looking at the move as a development opportunity in a fast-rising city.

New York-based Vella Group paid $51 million for the 200,000-square-foot office campus, according to the Los Angeles Business Journal.

Boeing’s lease expires at the end of next year on the two-building campus, according to the report. The properties are located on six acres at 650 and 700 Pacific Coast Highway.

The owners, a family trust tied to an individual named John Winters, put the properties on the market in February. The buildings date from the 1950s. The trust’s agents at NFK and CBRE marketed the campus as a development opportunity.

Vella Group, an affiliate of VE Equities, also owns office properties in nearby Hawthorne. Last year it inked leases for space with a New York-based T-shirt maker and high-tech doorbell maker Ring.

The El Segundo properties are near Los Angeles International Airport, as well as the Los Angeles Times’ new office campus on Imperial Highway.

It’s also close to the 120-acre Smoky Hollow area that El Segundo city officials rezoned last year to attract creative and tech companies. The rezoning allows for nearly 3 million square feet of office, industrial, and public building space in the historically industrial area.

The aging El Segundo offices aren’t the only L.A. properties Boeing is vacating. The aerospace giant sold a 93-acre aircraft assembly campus to Goodman Group earlier this month for more than $200 million. Goodman plans to convert the property over to retail and industrial space. [LABJ] – Dennis Lynch 

The 25,000-square-foot home in Bel Air and Ardie Tavangarian (Credit: Hilton & Hyland and Getty Images)

One of Bel Air’s biggest mansions has sold for $75 million, one of the highest prices paid for a home in Los Angeles this year.

Prolific spec builder Ardie Tavangarian unloaded the massive 25,000-square-foot home to a buyer from China, according to the Wall Street Journal.

The Arya Group founder listed the behemoth abode in November for $88 million. So the sale actually represented a 15 percent discount on the original asking.

The deal comes just a couple of weeks after the $120 million sale of Petra Ecclestone’s 123-room Spelling Manor estate in Beverly Hills, which set a record in Los Angeles County. Ecclestone originally listed the palatial estate for $200 million in 2016.

The two giant sales might inject some new confidence into the L.A. luxury residential market, which has been in a recent slump. Many sellers have had to shave millions off their asking prices on properties that continue to linger on the market.

The Bel Air home, meanwhile, has all the trappings of luxury. The eight-bedroom mansion includes a movie theater, art studio, car elevator, infinity pool, and a slew of other amenities, according to the Journal. It has 20,000 square feet of additional outdoor decks.

Tavangarian said last fall he designed and built the home for his family, but decided to sell when it grew in size and scope.

Tavangarian fared better on the market than some other spec home builders in Bel Air.

Bruce Makowsky has dropped the price of a 38,000-square-foot mansion from $250 million to $150 million over the last two years. Makowsky’s neighbor, Raj Kanodia, said he’ll take offers around $120 million for a home he listed a year ago for $180 million. A Holmby Hills estate near Spelling Manor also recently hit the market for $70 million. [WSJ] — Dennis Lynch

From left: Loren Judd, Khalif Edwards, Jim Brooks, and Allan Brass

Loren Judd has jumped to Compass, barely three months after he left Coldwell Banker — where he spent 15 years — to join Hilton & Hyland. Judd spent his last five years at Coldwell Banker as manager at the firm’s Beverly Hills North office before going to Hilton & Hyland to work as an agent. He told The Real Deal in April he wanted to get back to what he was passionate about. Hilton & Hyland founder Jeff Hyland said he wished Judd well on his move to Compass.

It’s not just the residential brokerages that go on the poaching expeditions. Los Angeles commercial real estate firms are also mining each other’s ranks for new hires. Century City-based developer Cityview has hired Khalif Edwards as managing director of capital raising and investor relations. Edwards joins the firm from Clarion Partners, where he had a similar position raising capital in West Coast markets. One of Cityview’s recent notable acquisitions was for a small development property in Westlake last fall.

BH Properties has hired a new president, Jim Brooks, who spent the last seven years as president of Topa Management Company. The investment firm’s founder, Steve Gozini, said the appointment will allow him to shift more time “on the growth and performance” of the firm’s portfolio. The firm is active around the country and made waves in 2016 when it broke into the New York market with a $300 million deal for the land beneath three Manhattan hotels.

Savills has hired Allan Brass as director of cross-border tenant advisory for the Americas, working with clients with multinational footprints. He returns to Savills from Cushman & Wakefield. Brass will work out of L.A., and be responsible for the Savills’ Western region. He started his real estate career as a general practice surveyor in Savills’ Edinburgh, Scotland, office.

Here are two real estate events coming to LA next week.

Host: Bisnow
Date: July 23
Time: 8 a.m. to 11 a.m.

Bisnow is hosting its Long Beach Boom event at the Westin Long Beach, 333 East Ocean Boulevard from 8 a.m. to 11 a.m. Attend to network and hear discussions on how upcoming market surges could impact the Long Beach region. Shane Young of Marcus and Millichap and Glenn Rudy of Newmark Knight Frank are among the speakers attending the event.

Host: NAIOP Southern California
Date: July 24
Time: 7:30 a.m. to 9 a.m.

NAIOP Southern California is holding an event on Tech in Commercial Real Estate at ORION Property Partners, 2010 Main Street from 7:30 a.m. to 9 a.m. Come to this event to discuss how the real estate industry interacts with technology. Speakers include Rudy Caamano of WindWater Real Estate and Naomi Rizkowsky of Nomes CRE.

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: London, Shanghai and Paris

Every week, The Real Deal rounds up the biggest real estate news from around the globe.

United Kingdom

The future of the Tulip Tower has wilted. London Mayor Sadiq Khan denied approval for the controversial structure, which would have been nearly 1,000 feet tall. Starchitect Norman Foster and his firm, Foster + Partners, designed the bulbous building, which New York magazine derided as “Instagram architecture at its emptiest.” In Manhattan, two Foster-designed tower projects — JPMorgan’s 270 Park Avenue and L&L Holding’s 425 Park Avenue — are under way. [Surface]

London landlords are aghast at Mayor Sadiq Khan’s call for rent controls. It was part of a series of proposals that included ending “no-fault” evictions, as well as incentives for building rentals. But the real estate industry says it will discourage investment and development in the rental sector, which has seen strong demand because many Londoners can’t afford to buy homes. [Evening Standard] 

Home prices are still headed for the bottom. The average sale price of detached homes in London was down 6.1 percent in May from the same month last year, according to Land Registry data. Sale prices for other types of London homes also fell, though not as sharply. Average sale prices dropped 5 percent for maisonettes and flats, 4 percent for semi-detached houses and 2.9 percent for terraced homes. But the average value of a London home still about twice the amount of a U.K. home. Meanwhile, the number of London homes listed for sale is 18 percent lower this year than last year because of a “protracted political hiatus.” A report by property portal Rightmove showed that the latest data on London home sales signal the market is “bottoming out.” [BBC, Homes & Property]

The Brexit-bludgeoned London office market can thank Parliament for a big new lease. As many as 1,000 administrative staff of the House of Commons will occupy 10 floors and 100,000 square feet in a building owned by the City of Westminster, a centrally located borough of London. Parliament will take the temporary office space near St. James’s Park station while a multibillion-dollar restoration of the Palace of Westminster unfolds through the mid-2020s. [The Standard]

Brazil

Brazil just saw its first real estate blockchain deal. Brazilian construction company Cyrela and a startup called Growth Tech completed a property sale via blockchain technology in 20 minutes. The process of selling a property typically takes about a month. Some developers and real estate groups have moved to adopt or invest in blockchain and other new technologies. The National Association of Realtors last month said it was investing in Propy, a real estate transaction platform. [ZDNet.com]

Canada

Toronto is about to see the largest mixed-use development in its history. The architecture firm behind Salesforce Tower in San Francisco has designed the 4.3 million-square-foot Union Park project in Toronto. Oxford Properties Group recently revealed the initial architectural designs for Union Park by Pelli Clarke Pelli Architects, led by Cesar Pelli, best known for Salesforce Tower and the International Finance Centre in Hong Kong.

France

One of the world’s most beautiful buildings was almost lost. New details regarding the devastating Notre Dame fire reveal major mistakes made during the first hour. A guard who was instructed to check for the fire first went to the wrong building — ultimately wasting up to a half-hour — and didn’t immediately call the fire department. While authorities have yet to determine how the fire started, the wasted time left firefighters with huge disadvantages. A small group was sent directly into the blaze in the attic in a final attempt to save the 850-year-old cathedral. [NYT]

Hong Kong, China

Unrest is driving away local investment. Affluent residents in Hong Kong are looking to international real estate markets as the U.S. trade war and local unrest continue. According to a new report by Savills, the number of inquiries about Hong Kong homes declined in the second quarter, triggering a 1.5 percent drop in the prices of townhouses. “The extradition bill caused some local money to look beyond Hong Kong, with Singapore favored, followed by the UK and Australia,” said Savills’ Simon Smith. [SCMP]

Hong Kong may see its first real estate IPO since 2013. China Merchants Shekou Industrial Zone Holdings is planning an $800 million initial public offering of shares in Hong Kong. China Merchants Shekou would be the first real estate investment trust to go public in Hong Kong since 2013, when Spring REIT raised $216 million in its IPO. [Bloomberg]

Hong Kong’s commercial property market is seeing a dip. Office rents and investment saw a decline in the second quarter, according to CBRE. Amid lagging demand for space, office rents dropped 0.6 percent in the second quarter compared with the first quarter. It marked the first decline since the second quarter of 2014. Q2 volume of commercial property sales fell to $2.7 billion, down 6.2 percent from the first quarter. That was the smallest quarterly transaction volume in three years. [Reuters]

Germany

Housing-strapped Germany is attracting investment from Chinese executives. In Munich, an executive of Huawei bought four apartments for more than $550,000 each, then rented them to other Chinese employees relocating to Huawei’s Munich research center. Despite its economic prowess, Germany has a worsening scarcity of housing in its seven largest cities, which together have one million fewer flats than they need. Last month, Berlin lawmakers passed a five-year rent freeze, hoping to tamp down the growing discontent among residents. [SCMP]

Netherlands

Deutsche Bank is settling bribery claims brought by an affordable housing company. The German financial giant, which is under investigation by two congressional committees and the New York attorney general for its ties to President Trump — agreed to pay 175 million euros ($197 million) to settle bribery allegations by a Dutch provider of public housing. Stichting Vestia claimed that some of its trading in derivatives through Deutsche Bank was “flawed” because the bank paid fees to a middleman who paid bribes to arrange trades on behalf of the Dutch company. [Bloomberg]

Turkey

The country’s economy could shrink this year for the first time in a decade. That contraction could add to interest in U.S. real estate among Turkish investors. The Turkish government has cut its own 2019 economic forecast to 2.3 percent growth amid the growing budget deficit. The country’s last economic contraction on an annual basis was its 4.7 percent decline in 2009. [Reuters]

Australia

The nation’s largest lender is looking to boost the economy. Commonwealth Bank of Australia is the latest of the country’s financial institutions to ease lending standards, according to Reuters. The bank will introduce a floor rate and interest rate buffer in line with government’s regulatory guidelines meant to stabilize home prices. [Reuters]

From left: Michael Landon and Kelsey Grammar

Celebrity television star Kelsey Grammer and his ex-wife put their home on the market, and the widow of the late television star Michael Landon sold her Malibu home this week. Music mogul Dr. Dre also put his Woodland Hills manor on the market. And for something a little different: Real estate billionaire Richard Lewis bought a very pricey condominium in Beverly West. And though it isn’t celebrity-tied — as yet — spec home developer Ardie Tavangarian sold his newly built home for $75 million. 

The former estate of actor Kelsey Grammer and his ex-wife, Camille, is back on the market for $20 million. The main home spans 6,650 square feet and includes seven bedrooms, 13 bathrooms, a kitchen designed by celebrity chef Wolfgang Puck, wine cellar and two-story ballroom. Outside, the 4.8-acre grounds feature gardens, a pond, tennis court, equestrian facilities and a fruit orchard. The former couple bought the home in 1997 for $4.5 million. They sold it in 2015 for $13 million, following the divorce. 

A real estate billionaire has just bought one of the most expensive condos in L.A. Richard Lewis, president of the California division at the Lewis Group of Companies, spent $21 million for a 7,957-square-foot penthouse at the Beverly West Residences. As part of the deal, Lewis and his wife, Federica Lewis, also gave their half-floor unit at the building back to the developer, Emaar Properties. They had paid $5 million for that space in 2012. Their new pad comes fully furnished and includes three bedrooms. 

The widow of “Little House on the Prairie” star Michael Landon has sold an oceanfront home in Malibu for $15.7 million, nearly double what she paid for it four years ago. Cindy Landon listed the 6,900-square-foot home last year for $18 million. It has five bedrooms and six bathrooms, plus beach access. The buyer was a “well-known entertainer,” but her son and listing agent, Sean Landon of the Agency, declined to name the person.

Music mogul Dr. Dre has put his 16,200-square-foot residence on the market. The mansion-manor, in a gated community in Woodland Hills, is listed for $5.25 million. Dr. Dre, who famously grew up in Compton, purchased the home in 1999 — the year he released “2001” — for $2.35 million. It’s been extensively renovated since and includes eight bedrooms, 13 bathrooms, a movie theater and 150-gallon fish tank.

(Credit: iStock)

The new owner of the Toys R Us brand will open scores of new stores this year, but only two in the United States, where the former owner declared bankruptcy in 2017.

Several former executives of Toys R Us founded Parsippany, New Jersey-based Tru Kids Brands in January, and it now manages the Toys R Us, Babies R Us and Geoffrey brands.

Toys R Us liquidated its U.S. business after its 2017 bankruptcy filing, leaving behind millions of dollars of unpaid debts. Vendors with valid claims recovered roughly 20 cents on the dollar.

But outside the United States, about 800 stores still operate under the Toys R Us brand. Tru Kids is working with partners on licensing deals to open approximately 70 new Toys R Us stores this year in Asia, Europe and India.

This year’s re-launch of Toys R Us in the United States will be limited to two 10,000-square-foot store stores in Houston and Paramus, New Jersey, according to the Associated Press. Future U.S. locations will be about the same size, Tru Kids CEO Richard Barry said.

Both new U.S. stores would have fit comfortably inside Toys R Us’ old big-box locations, which spanned about 30,000 square feet.

Tru Kids formed a partnership with a startup company called b8Ta to initiate what Barry described as a consignment model for store operations, under which toy manufacturers would pay for store space and collect all sales there. [Associated Press] – Mike Seemuth

César Pelli, and from left: Brookfield Place in New York, Salesforce Tower in San Francisco, and the Pacific Design Center in Los Angeles (Credit: Pelli Clarke Pelli Architects)

Acclaimed architect César Pelli, whose firm designed some of the world’s most distinctive buildings, died Friday. He was 92.

La Gaceta, a newspaper in San Miguel de Tucumán, his hometown in northern Argentina, reported the news.

Pelli, who came to the U.S. in 1952 to continue his architecture studies at the University of Illinois, saw most of his success later in life, according to the New York Times. He didn’t open his own architecture firm until he was 50, when he was tapped to renovate and expand the Museum of Modern Art in Manhattan.

He founded Cesar Pelli & Associates Architects with his wife Diana Balmori, a landscape architect, and his former colleague Fred Clarke in 1977. Pelli’s son Rafael joined the firm as a partner in 2005, when the firm’s name changed to Pelli Clarke Pelli Architects.

Pelli, known for his innovative use of glass, and his firm handled design projects ranging from the Adrienne Arsht Center for the Performing Arts in Miami and Salesforce Tower in San Francisco, to the Pacific Design Center in Los Angeles and the World Financial Center in New York City, now known as Brookfield Place.

The tallest design project by his architecture firm was the Petronas Twin Towers in Malaysia, two 88-story buildings connected by a skybridge about 500 feet above ground.

Pelli was dean of the School of Architecture at Yale University from 1977 to 1984, and won the 1995 gold medal from the American Institute of Architects, among hundreds of other awards.

Within the last year, three other acclaimed architects have died. I.M. Pei, Karl Fischer and Constantine “Costas” Kondylis.

Pelli strived to reconcile the influence of modern and classic design, produced designs to satisfy building owners rather than challenging them.

Architects must deliver “what is needed of us,” Pelli once wrote. “This is not a weakness in our discipline, but a source of strength.”

[NYT] – Mike Seemuth

SEE RELATED:

I.M. Pei, who designed monuments of culture, dies at 102

Karl Fischer, known for ubiquitous, controversial designs, dead at 70

Costas Kondylis, the “developer’s architect,” dies at 78

Portland, Maine (Credit: iStock)

Year-round sunshine didn’t help Florida make it to the top of this vacation rental ranking.

The states with the highest percentage of vacation homes are clustered in the Northeast, Bloomberg reported, citing a new study from investment property exchange firm IPX1031.

Maine topped the ranking, with 19.3 percent of its homes being used as vacation rentals. Vermont came in second, at 17.4 percent, followed by New Hampshire, at 11.8 percent, and Alaska clocked in at No. 4 with 10.5 percent. Florida came in sixth place, at 9.7 percent.

Few of them are in the Midwest. The study found that states with the five smallest percentages of vacation homes are Indiana (1.7 percent), Iowa (1.6 percent), Kansas (1.4 percent), Ohio (1.1 percent) and Illinois (1 percent).

The report used data from the Census Bureau, which defines vacation homes as residences “vacant for seasonal, recreational or occasional use.” The United States has 5.7 million vacation homes. [Bloomberg] – Mike Seemuth

The Baby Shark crew and West Palm Beach Lake Pavilion (Credit: Google Maps, Nickelodeon)

Apparently inspired by the interrogators at Abu Ghraib prison in Iraq, the government of West Palm Beach is repeatedly playing the song “Baby Shark” on a public address system to discourage homeless people from sleeping at a city-owned waterfront pavilion.

The city also is blaring other irritating children’s songs to keep the homeless away from its Waterfront Lake Pavilion, which generates about $24,000 of annual income from event fees, mainly in connection with weddings.

Leah Rockwell, the municipal parks and recreation director in West Palm Beach, told Vice.com that the city wants to ensure that “people paying this money had a facility that was clean and open, and continue to use it in the future.”

Nearly 1,400 people are homeless in Palm Beach County, and West Palm Beach has the county’s largest homeless population.

A lack of affordable housing has added to the homeless population in West Palm Beach and the rest of tri-county South Florida, including Miami-Dade, Broward and Palm Beach counties.

According to the Miami Urban Future Initiative, the scarcity of affordable housing is more acute in South Florida than in New York City. [Vice.com] – Mike Seemuth

Before demolition. the historic home at 44 Pleasant Avenue was on the market for $10 (Credit: Montclair Township, iStock)

Even when a historic home was priced for less than the cost of one month’s Netflix subscription, it couldn’t find a buyer.

Of course, the true cost of the Montclair, NJ home would have been much higher than its $10 list price, because a buyer would have had to pay to move the mansion off its 2.7-acre site.

Known as the “Aubrey Lewis House,” the mansion was built in 1906 and belonged to an esteemed citizen of Montclair for which the home was named, along with his wife Ann. Aubrey Lewis died in 2001 and his wife subsequently took control of decisions regarding the mansion.

If you want to get in on this deal, we have some bad news: given that no one wanted to buy the super cheap home, it has been demolished.

A group of developers operating as Boddie-Noell Enterprises Inc. oversaw a proposed a subdivision of the site of the mansion to build eight houses there. [NJ.com] — Mike Seemuth

A rendering of Reno’s Neon Line (Credit: Jacobs Entertainment)

A developer is betting $1 billion on the largest development ever in Reno, Nevada, as the city reduces its economic reliance on the gambling industry.

Jacobs Entertainment Corp. plans to transform a 20-block area on the west side of Downtown Reno into a residential and entertainment district called the Neon Line District.

Colorado-based Jacobs Entertainment, led by chairman and CEO Jeffrey Jacobs, is known locally for two gambling properties in Reno, the Gold Dust West Casino and the Sands Regency Casino. According to the company’s website, Jacobs developed a similar district in Cleveland, the Nautica Entertainment Complex, which has 2 million visitors a year.

The developer has already invested more than $100 million on site acquisitions for the megaproject, which will include 2,000 residential units, restaurants, retail stores and a hotel.

The project could take as long as seven years to build. The first phase is under way: Jacobs is building the Neon Line, a walkway that will extend half a mile and will feature rotating art installations.

While the scope of the Neon Line District development might be more appropriate for a city larger than Reno, which has a population of only 249,000, the city is going through some big changes that could have big rewards for such a project.

The employment base in Reno is shifting from low-wage casino jobs to higher-paying positions with technology companies. The median household income in Reno rose 9 percent in the 2012-2017 period to $52,106. But home prices have risen even faster as tech employment expands in the Reno area. According to the Washoe County Assessor, the median home-sale price in the first quarter was $400,000, reflecting a 63 percent rise over five years.

Apple opened a data center in 2014 in downtown Reno, and then Tesla opened a factory east of Reno at a cost of $5 billion. Google recently finished building a data center at the Tahoe Reno Industrial Center.

Jacobs, too, might have plans to relocate closer to the billion-dollar project. The Wall Street Journal reported in May that he listed his nine-bedroom mansion in North Palm Beach in South Florida with an asking price of $42 million. [Wall Street Journal] – Mike Seemuth