An aerial view of the property in the Billionaires Row area (Credit: Google Maps, iStock)

A wealthy Chinese woman sued the local government in Vancouver after the city charged her an “empty homes tax” of $249,000 for vacating her mansion in its “Billionaires Row” area.

The vacancy tax is part of a larger effort to address the lofty cost of housing in Vancouver. But He Yiju claimed exemption from the tax in her lawsuit because she applied for permits to redevelop her Vancouver mansion, which she bought in 2015.

Yiju’s husband is multimillionaire and Chinese parliament member Zheng Jianjiang and her estate sits in Point Grey, an exclusive neighborhood known for waterfront estates that rank among the city’s most expensive homes.

The mansion’s taxable value is $24.9 million, which served as the basis for calculating the $249,000 vacancy tax, the Vancouver Sun reported. The British Columbia Assessment Authority says the property is worth $26.7 million.

Vancouver’s vacancy tax applies to homes vacated for more than six months. The city charges the tax to encourage the rental of homes not occupied by owners.

Enactment of the vacancy tax prompted some mansion owners to rapidly rent their empty properties to avoid paying the tax. As a result, some college students rented rooms in luxurious Vancouver residences for as little as $825 USD in monthly rent.

Implemented in 2017, the “empty homes tax” is part of Vancouver’s response to high housing costs amid an influx of foreign investment in recent years and rapid gentrification of neighborhoods.

“The city is in the midst of a severe housing crisis, with one of the lowest rental vacancy rates and highest rental costs in Canada,” according to a statement by the city of Vancouver on its website. [Insider] – Mike Seemuth

WeWork CEO Adam Neumann (Credit: Getty Images)

UPDATED July 19, 9:00 pm: Startups are valued by their potential to grow, and trust in the business model. In the We Company’s case, its $47 billion valuation is set to be tested by the confidence of public markets ahead of an upcoming IPO.

But the flexible office space company’s freewheeling founder and chief executive, Adam Neumann, has polarized investors, some of whom have puzzled over company decisions in recent years — the purchase of a wave pool company, launching an elementary school, and a questionable arrangement in which he acquired buildings under a personal LLC and then leased them to WeWork, the co-working arm of The We Company.

Again this week, the debate over the company’s prospects was reignited over revelations that Neumann has in recent years sold $700 million worth of WeWork debt and stock.

Since Neumann founded WeWork nine years ago, the company’s core business model — renting office space and subletting it to users at a premium — is yet to turn a profit. Last year, the company took in $1.8 billion revenue, but lost $1.9 billion.

“It’s unseemly at best for a founder executive to be walking off with all this money when the business isn’t profitable,” said R. Christopher Whalen, an investment banker and chairman of Whalen Associates. “It’s really bad optics.”

Neumann’s transactions, which were reported Thursday by the Wall Street Journal, were a combination of stocks sold and debt taken out against his holdings in the company (which were subsequently invested into real estate and startups). Axios reported Friday that $300 million was in stock sales, and $400 million in loans.

The We Company declined to comment.

Neumann’s exact stake in WeWork is unclear, but he is widely reported as the company’s largest single shareholder. The Journal reported that he controls an entity that owns about one-third of the We Company’s stock, which gives him full voting power over the company’s decisions.

Following the report, some investors told The Real Deal that Neumann’s transactions fueled uncertainty about the company’s future.

“It’s either going to be the best bet of all time, or the worst bet of all time,” one investor, who requested anonymity, said of their investment in the company.

But others said they continue to have high confidence in the business. Scott Plank, an early investor in WeWork, said he remained bullish on the startup, in part because of its support from institutional investors. “I trust SoftBank has done a great job working with Adam, and trust Adam is working in the interest of shareholders,” he said.

Plank, who was an executive at Under Armour, the clothing giant founded by his billionaire brother Kevin, added that having a financially secure chief executive is key to running a business. “Adam is bonkers for sure, but he cares about the members, and he cares tremendously about the investors,” he said.

While some critics suggested that Neumann’s sale of company stock signaled a lack of confidence by the founder in the company’s future, Kevin McNeil, of Fitch Ratings, said that Neumann’s borrowing of debt on stock demonstrated the opposite. McNeil added that the $700 million in transactions “seem in context to the overall value of the company.”

Neumann’s transactions are unusual, but it is not unprecedented for a founder to cash out ahead of an IPO. Ahead of discount marketplace Groupon’s IPO in November 2011, founder Eric Lefkofsky cashed out $300 million, against a $16 billion valuation. And Mark Pincus, the founder of social-media gaming firm Zynga, sold $100 million worth of stock ahead of an IPO that valued the company at $8.9 billion. But many investors pointed to those moves when the stocks declined.

In the meantime, another We Company executive appears to be spending big ahead of the IPO. According to Variety, the firm’s vice chairman Michael Gross recently forked out $28 million for a Brentwood tennis court estate.

Atlas Hospitality Group president Alan X. Reay and Downtown Los Angeles, with construction development rising above the L.A. Convention Center at the right (Credit: Wikimedia)

Despite earlier signs this year of a slowdown relative to historical data, the hotel industry is still booming, and Los Angeles is still dominating the state in construction.

A report from Atlas Hospitality Group shows 36 new hotels opened in California this year — 10 more than the same point in 2018 — the Los Angeles Business Journal reported. The amount of new hotels in the pipeline statewide also jumped 19 percent from last year.

Four hotels opened so far in 2019 in Los Angeles County: the 271-room Proper Hotel; a 176-room AC Hotel; a 49-room Palihotel; and the smaller nine-room Arts District Firehouse Hotel.

But there are also 45 projects with 7,500 rooms under construction, and 268 projects with 40,190 rooms in the planning stage. The largest project under construction is Lightstone Groups’s 744-room hotel near the L.A. Convention Center.

Many of the projects are set for Downtown. Lawmakers set a goal of adding 8,000 more rooms within walking distance of the soon-to-be expanded Convention Center, and they have awarded millions of dollars in extra tax incentives to developers in order to make it a reality.

For example, Sandstone Properties is planning a 730-room tower near the Convention Center, and last November, AEG filed plans for an 850-room expansion, which could get $100 million in tax incentives.

Other big projects are set for Hollywood. The city recently approved KOAR’s 191-key hotel shortly after Relevant Group earned approval for one of its four projects set in a two-block radius. [LABJ] — Gregory Cornfield

The trend could reverse as younger people start to enter the real estate market (Credit: iStock)

About 37 percent of households in the U.S. are living without mortgages.

The share of homeowners paying off their mortgages has increased by 5.5 percentage points over the past decade, according to Bloomberg, citing data from Zillow. This is in part due to an aging population of homeowners, as younger Americans tend to wait longer to buy property thanks to factors like student debt and increasing living costs. The trend could reverse as younger people start to enter the real estate market.

States with cheaper houses generally have higher rates of mortgages that are fully paid. West Virginia had the highest amount of mortgage free homes as of 2017 at 54 percent, while Maryland had just 27 percent and Washington D.C. had just 24 percent.

The country’s median home price has gone up by more than 60 percent over the past 10 years. [Bloomberg] – Eddie Small

New on The Real Deal: Read our new daily digest for a roundup of all the news and deals, big or small, in New York City. Updated three times a day. 

The Agency’s Mauricio Umansky (left) and Billy Rose (Illustration by Zach Meyer)

When Leonard Rabinowitz and Jack Friedkin left the Agency in September to join Hilton & Hyland, and Jay Harris took the same route two months later, the moves didn’t raise many eyebrows. Rabinowitz and Friedkin had been at the Agency four years, and Harris seven, but jumping ship has become more common in an era of brokerage consolidation.

But then Danny Brown, a partner at the time, left in December, setting off a chain of events more akin to an exodus.

In March, the Agency lost Cindy Ambuehl, a longtime partner, as well as David Kelmenson, a former partner at Partners Trust. The following month, managing director Don Heller left, followed by Stephen Sigoloff, director of residential estates, and most recently, top producer Dan Urbach.

Mauricio Umansky, Billy Rose and Blair Chang launched the Agency in 2011 to much fanfare. Its charismatic leaders sought to shake up the brokerage landscape with sleek branding and a star-studded approach to marketing — it was real estate, Hollywood style. “Nobody had come in to disrupt it [the business], to revolutionize it, to innovate it,” Umansky had said of the decision. The firm became emblematic of boomtown L.A. and was involved in some of the city’s priciest deals. Yet nowadays, even as the Agency celebrates new offices and throws $100,000 open-house events, a grim scene is playing out behind closed doors.

Between January 2018 and June of this year, the firm lost 45 agents in L.A. County, many of them big producers. That’s about 15 percent of the 303 agents it had in June, according to data on licensed employees from the California Department of Real Estate.

The company has been quick to fill the vacancies, adding 140 new agents in the same period. Still, that turnover is about double the number seen at Hilton & Hyland. Compass, which is around five times bigger in L.A., saw 55 agents leave during the same time.

The departures come as the Agency and Umansky fight a legal battle with the vice president of an authoritarian Central African nation over Umansky’s sale of his Malibu estate. Meanwhile, co-founder Rose stepped down as the firm’s broker of record weeks before the litigation was filed.

But brokers say it’s not just the legal drama that pushed them out. They criticize the firm’s emphasis on “sharing,” which some see as a euphemism for management piggybacking on agents’ hard-won listings.

For this story, The Real Deal interviewed many former and current Agency agents, as well as several outside industry leaders. Some think the Agency has lost its edge amidst its rapid expansion, which has seen its office count nearly triple over the past two years to 33 and its total agent roster balloon to 585. And while its founders still refer to the company as a “boutique,” it’s no longer got the small-shop feel that set it apart.

“When they had one office, that was when they really blossomed,” said Aaron Kirman, a top luxury broker at Pacific Union International, now part of Compass. “I think where they started the decline is when they started getting multiple offices. Now they have offices all over the place. At that point, it’s hard to protect the brand.”

Coming in hot

The Agency burst onto the scene as the market was bouncing back from a recession. Developers were starting to put multimillion-dollar bets on spec homes, a practice that would transform the Southern California landscape and create scores of high-priced new listings. New agents, hungry for their first million, were flocking to the action.

Umansky had established a stellar track record at Hilton & Hyland, emerging as the firm’s top producer for seven years running, while Rose and Chang were running their own top-ranked team at Prudential. In 2011, the trio created the Agency, setting up shop in a 1,800-square-foot office on Beverly Drive. The space was modest, the ambition anything but. 

“I believed that the brokerage model was sort of broken, and I thought there was an opportunity to start a company that sold real estate differently,” Umansky said. “The mission was to create a boutique firm with global reach.”

Jason Oppenheim, founder of Oppenheim Group, said the Agency was a pioneer in breaking from the “brokerage-centric model,” where the name of the brokerage mattered more than the individual agent. Calling it both “inspirational and risky,” Oppenheim said Umansky was asking people to join an Agency that “didn’t have its bearings under it.”

The gambit worked. Agents and clients were attracted to the firm’s approach, which included the market’s first luxury lifestyle newsletter.

“I remember being really impressed at the time,” said Spencer Krull, general manager at Westside Estate Agency in Beverly Hills. “Their marketing at the time was really different than what anyone else was doing. They came on the stage very strong.”

Not only did the Agency offer full marketing support to its brokers, it would promote those capabilities to potential clients to win business. It also went full-tilt on open houses, which before the firm came along were largely sedate affairs. A 2013 open house for a $29 million listing on Sunset Plaza featured celebrity chef Michael Voltaggio, $3 million worth of Lamborghinis in the driveway, a DJ and an open bar. The parties have since escalated to include champagne-pouring aerialists and pop-up breweries.

Fueled by a strong market, Umansky and other Agency brokers would also often price homes at numbers that appealed to sellers, sources said. Umansky denies such claims.

“When they got in the business, we were on an uptick,” said one broker. “You could get away with a lot of things. And they had that swagger and that hip vibe, so the timing was great.” 

Umansky also wielded a trump card few other agents could hope to: exposure on national television. His wife, Kyle Richards, had been the star of Bravo’s “Real Housewives of Beverly Hills” for a year at the time, giving Umansky and his fledgling company a free platform from which to promote their business. Former agents recall instances where Umansky and now-“Million Dollar Listing Los Angeles” stars David Parnes and James Harris would persuade clients to list with them by luring them with the prospects of being filmed for television.

“We do use television to our advantage, like all the casts of these shows,” Umansky said. “We are lucky enough that people want to pay us to be on TV, not the other way around.”

As for agents, Umansky said he “did zero recruiting.” “We wanted to be a boutique, a high-service firm, and it was more like a club that people wanted to be a part of,” he added.

Sources agree that the Agency did not “recruit aggressively” like companies do today, but said it was common for early agents to attract their friends and other high performers. Heavy hitters like Jeeb O’Reilly, Kofi Nartey, Heller, Sigoloff and Ambuehl were among the first to join.

“The thought of starting a new agency from ground zero was so exciting,” said O’Reilly, who had joined from Hilton & Hyland. “I felt we had the greatest formula. We had fabulous public relations, fabulous marketing and a great vision.”

The Agency started winning — and selling — big listings. In 2014, Umansky sold the palatial Carolwood Estate, once owned by Walt Disney, for $74 million. He was then involved in the record-breaking $100 million sale of the Playboy Mansion two years later. While Umansky was by far the biggest rainmaker at the firm, other agents made bank, too: Santiago Arana, now a partner, sold the home used in “Beverly Hills Cop” for $23 million in July 2015, two years after selling Larry David’s home in Pacific Palisades. Ambuehl landed $20 million for the home of “Full House” creator Jeff Franklin that same year. Rose broke a record in Santa Monica’s Sunset Park when he sold Ryan Phillippe’s home for $15 million.

Sharing is caring

By many accounts, the Agency’s honeymoon period lasted for just under five years. Serious issues then began cropping up.

“I couldn’t stay because they had stolen a big client from me and lied about it to my face,” O’Reilly, who left the firm in 2015 and is now at Compass, said. “When I brought it up, they just looked at me and said, ‘We didn’t know you were working with her.’’’

Other agents told a similar tale.

“Any time we would try to bring a listing, they would say, ‘You don’t need to work on this listing’ and just take every single deal out of our hands,” recalled one. Another remembers an instance when an agent mentioned an A-list celebrity client at an all-hands meeting, and the owners then went after that client. When the agent complained, they were told it would be made up to them at a later time. It wasn’t, they said.

Agents who joined the company were sold on a notion of “sharing” and “collaboration,” they said. The idea was that founders would pass on listings to rising agents for a small referral fee. For a 50-50 split, agents could also tap into a principal’s expertise to sell a listing.

But those splits didn’t always come to pass, sources said. In one instance, an agent’s commission ended up being much lower because marketing and other expenditures were taken out of the agent’s share.

“My check should have been for $100,000, but I got $5,000,” the agent said. “They were robbing us blind.” 

While Umansky said it’s “sad” people feel that way, he contends that sharing is central to the business model.

“If we were stealing clients, we would not be able to expand our business,” he said.

While the model worked for some younger agents who may not have secured a $20 million listing without Umansky’s clout and public profile, it didn’t sit well with others who now say it was a bait-and-switch structure that mostly benefited the owners.

“Between the [owners], they had tons of business,” said one former agent. “They were saying that everything was going to be a team effort, and that they were not interested in being salespeople. It ended up being complete lies.”

Umansky denied that this is an issue at the company. While he said he has heard “rumblings,” he maintained that the Agency “shares more, gives more than anybody else.” Umansky currently has 43 active listings, valued at more than $1 billion, an Agency spokesperson said. 

“When you are doing incredible stuff,” he said, “you have a target on your back.”

Supporters argue that other firms in L.A. utilize the same tactics. The broker-owner model, Oppenheim said, works because the brokerage has two sources of income: the broker’s listings and its agents’ listings.

“They’re able to leverage the ownership to bolster their own real estate business as agents,” Oppenheim said. His firm and Hilton & Hyland work in a similar way, he added.

“I think that his [Umansky’s] name on listings has actually really helped smaller agents who are looking to catapult to the next level,” said Ambuehl, who left the Agency in March. “Mauricio is not putting himself on everyone’s listings so he could be the big dog.”

Westside woes

The situation appears to be especially fraught in the firm’s Brentwood office.

Several of the firm’s former top producers who were based in that office are out. One broker described it as “an absolute mess.”

Sources cited issues with Arana, who is the managing partner at the office. They said he prioritizes selling over managing, often putting himself on listings or going after major clients.

“A lot of agents felt like the person running it was having practices that were not aligned with their interests,” said a former agent. “It’s become problematic.”

Arana rejects the idea that he is running the show — that job, he said, belongs to Doug Sandler.

“I have a managing partner title, but I wouldn’t call myself a manager because if I was then I wouldn’t be selling,” he said. Arana also develops: Two houses he built in Brentwood have sold to LeBron James and Formula One heiress Petra Ecclestone.

“The only listings that I have my name on with other agents is because they needed me to help get the deal done, or because I brought them in,” he contended.

Arana is the only Agency broker to crack the top 10 in TRD’s ranking of top brokers this year, coming in seventh with nearly $247 million in sales volume between March 2018 and February 2019. Harris and Parnes, also at the Agency, ranked No. 11 with $162 million in sales. Umansky declined to participate in the ranking.

At the Brentwood office, the Agency lost Ambuehl, Kelmenson, Heller, Sigoloff and Brown to Compass.

“I think quite honestly what’s happened to us at the Brentwood office is that Compass has a great recruiter, and they found a hole,” Umansky said. Arana is “an extraordinary leader” who “is doing none of that,” he added.

Ambuehl, who declined to comment on the Brentwood office, said that Compass, backed by SoftBank and valued last year at $4.4 billion,  is “changing the rules of the industry.”

“That’s one of the big things the Agency and other agencies are going to be faced with,” she added.

A spokesperson for Compass said the firm is “humbled” anytime an agent from the Agency chooses to join Compass but declined to comment specifically on the Brentwood hires.

The curious case of Teodoro Obiang

“Did an L.A. real estate broker shortchange the citizens of an African nation out of millions?”

On the morning of Sept. 30, 2018, peering out from the Los Angeles Times’ business section, was the above headline. In a bombshell lawsuit, Umansky was accused of intentionally selling a 15,000-square-foot mansion on Malibu’s Sweetwater Mesa Road for millions less than it was worth, in order to later personally profit from the resale. The suit claimed Umansky had partnered with the buyer in a plot to resell the home for a far greater sum.

Umansky had been tapped to sell the home after the U.S. government accused owner Teodoro Nguema Obiang Mangue, the vice president of Equatorial Guinea, of using stolen funds to purchase the property.

Within seven months of listing, Umansky found a buyer. L.A. real estate investor Mauricio Oberfeld paid $33.5 million for the home in December 2015,  and Umansky partnered with him on the purchase. However, the two resold it a year later for $70 million, more than twice what they paid, leading Obiang to sue Umansky and the Agency for damages and any profits made from the sale. Umansky maintains that he acted in good faith in the sale, which was supervised by the U.S. Department of Justice.

Western World Insurance filed a lawsuit against the Agency last August to protect itself from having to pay any damages to the seller, who was demanding that the Agency cough up $8 million for misrepresenting the value of the home. The Agency countersued, and the suit was dropped in October.

The seller has since taken matters into his own hands. Obiang filed his lawsuit in federal court in March and is suing  Umansky and the Agency for damages and any profits made from the sale. Umansky and the firm maintains that the broker acted in good faith in the sale, which was supervised by the U.S. Department of Justice.

Umansky declined to comment on how the litigation has impacted the business. It’s clear that it was a public relations hit for the firm, but brokers said that such lawsuits are part of the cost of doing business at the top of L.A.’s real estate market.

“You can’t be a successful agent and not be drawn into some type of litigation,” Oppenheim said. “It’s almost a sign of being successful.”

Rather, it’s the actions taken by co-founder Rose around the time of the lawsuit that are more alarming, industry players said.

In the weeks leading up the first lawsuit, Rose stepped down from his role as the firm’s broker of record. He tapped Michael Caruso, who had been at the Agency less than a year at the time, to replace him.

Chang, the third co-founder, has kept a lower profile than his counterparts. He has about 15 active listings ranging from $2 million to $16 million, according to the firm’s website.

While the firm maintains that Rose stepped down in order to focus on “serving his clients,” others claim it was because of the lawsuit. Or worse, they say, the firm’s lack of funds pushed him to spend more time winning business.

“Don’t you think its weird when your managing partner resigns?” said one broker. “All of a sudden he’s back selling real estate, focusing on building the brand. That’s a sign.”

“What is he so afraid is going to happen that he’s removing himself from it?” another broker said. “It raised a lot of red flags.”

Built to sell

The Agency closed $4 billion in sales volume in L.A. County in 2018, ranking fifth on Los Angeles Business Journal’s list of top residential brokerage firms. That’s about 14.2 percent higher than its volume in 2017, when it closed $3.5 billion.The firm ranked behind Compass and Rodeo Realty, but beat Hilton & Hyland and Westside Estate Agency in the ranking. A spokesperson for the Agency added that the firm closed more than 2,000 transactions last year. 

As of July 8, the Agency had 237 listings in L.A. County, according to an analysis of single-family and townhouse listings on the Multiple Listing Service. That’s nearly $1.6 billion in sales volume, which is roughly 40 percent less than Hilton & Hyland and Compass. The figure does not include off-market listings.

The Agency is actively expanding, pushing for more offices in Northern California as well as several others on the West Coast. This is at a time when luxury real estate markets are softening: In March, home prices in Southern California fell year over year for the first time in seven years, and a Douglas Elliman first-quarter report revealed that the number of luxury home sales in L.A. County dropped 31 percent year over year. Discounts on top-end estates have become standard.

Those in the business wonder whether the Agency’s flashy approach will serve it well during a slowdown.

“It’s going to be rough for them,” said one brokerage executive. “This is the first time they see a down market. I wouldn’t be surprised if they start to scale back a bit, or consolidate.”

Yet Umansky welcomes the challenge. He stressed that losing many talented agents hasn’t hurt the business, with offices running at capacity and new recruits replacing those who’ve moved on. For example, Sandro Dazzan, a former top producer at Coldwell Banker, joined to lead the firm’s Malibu office in February 2018.

“In my eyes, we haven’t lost anybody, because we have maintained the number of agents per office,” Umansky said. “Having said that, you usually see a lot of change in life during the time when markets are down.”

The firm began a franchising push a few years ago, expanding into international markets like Mexico and the Caribbean. It also has franchises in Turks and Caicos; Punta de Mita, Mexico; Victoria and Nanaimo, British Columbia; Park City, Utah; and Boca Raton and Jupiter, Florida. And it’s looking to enter markets in Tennessee and Texas, with an eye, when the “timing is right,” on the richest market of them all, New York City.

Industry veterans have questions about the firm’s endgame. Aggressive expansion like this is often a sign that the firm is prepping for a sale, they said.

“It appears as though, with all they are doing, they are setting up to sell it,” said Stephen Shapiro, co-founder of Westside Estate Agency. “I think their goal is probably to get as many satellites as they can and maybe they take whoever is ready to jump in instead of taking their time and doing it more slowly.”

Though the founders have long denied such claims, Umansky said he will consider “mergers and acquisitions.” Others point to failed 2016 discussions with New York-based brokerage Town Residential as support for the claim that the founders are looking to cash out.

Town had been in talks to potentially buy or merge the two firms. A source familiar with the deal said Town eventually pulled out after analyzing the Agency’s financials, which showed that the bulk of the business was in the hands of just a few power players. (Town ultimately closed in April 2018.) 

Umansky claims it was the other way around.

“We were in talks to acquire them, not them to acquire us,” he said.

The Agency had made less than $1 million in net income in the 36 months ending December 2014, TRD reported at the time, citing financial statements Rose filed as part of his divorce proceedings. The filings showed that during that period, Rose took home $3.63 million in personal commissions plus nearly $360,000 in net income from his ownership stake in the firm.

“If they left, the company would make no money because none of these brokers would be able to land the business they land,” a source said in reference to Umansky and Rose. “They use their star power and their stature to make them bigger, and in turn sell that back to brokers who lack confidence or a brand name.”

The Agency has also been digging its teeth into new development. In 2017, the firm took over selling condos at Greenland Group’s Metropolis development in Downtown L.A. from Elliman. It then lost that listing to Polaris Pacific this past February, though Umansky hinted there have been “discussions” to potentially revisit selling the luxury units.

Sources questioned the legitimacy of their offices outside the Golden State.

In South Florida, one broker who was involved with the company there said the founders “didn’t do their due diligence” and ended up hiring “nobodies” to run the office.

“Franchises can be difficult because it’s all based on the culture you build, and every culture is different,” said Pacific Union’s Kirman. “I think it just led to a loss of the Agency having their identity.”

But to the face of the Agency, their growth has been “incredibly slow.”

“We’re a boutique,” Umansky said. “I’ve never bought a company. I don’t have $400 million. This is real growth.”

Steve Mnuchin and his family’s Lenox Hill apartment

It’s not surprising that Treasury Secretary Steve Mnuchin has a vast real estate portfolio.

The New York native and Yale graduate was born into a wealthy family and enhanced his fortune working at Goldman Sachs and OneWest, also getting into the financing of Hollywood films like “Avatar.” When he took his position in President Donald Trump’s cabinet, Mnuchin divested some of his interests, but the 56-year-old still owns at least half a dozen properties worth roughly $100 million, according to Forbes.

His most valuable property appears to be a 6,500-square-foot home at 740 Park Avenue in New York City’s tony Lenox Hill neighborhood. That property has been in Mnuchin’s family since the 1960s, when his father worked at his eventual employer, Goldman Sachs.

Mnuchin listed the apartment for $32.5 million last fall, but is now asking $29.5 million. He also owns a property in the Hamptons worth around $13 million.

In Los Angeles, he owns at least two properties — a home on Bel Air Road he purchased in 2009 for $26.5 million and another owned through an entity called “HMBAP LLC,” according to Forbes.

He sold a seven-bedroom home in Beverly Hills for $11 million in 2017, four years after he bought it for $8.9 million.

Mnuchin has also disclosed an interest in residential and commercial real estate in Scotland, where his wife Louise Linton grew up. They now live in a Washington, D.C. home Mnuchin purchased for $13 million two weeks after Trump took office in 2016. [Forbes] — Dennis Lynch 

A rendering of Lowell Farms Cannabis Cafe (Credit: Lowell Farms, iStock)

Diners will soon be able to have a joint alongside their morning coffee in Los Angeles.

The owners behind Lowell Cafe were handed a major victory last Tuesday when the West Hollywood Business License Commission approved their license, paving the way for America’s first cannabis lounge to open.

Flore Flora LLC, the ownership entity, still needs a state cannabis license before they can open, though that’s not expected to be difficult. The cafe is expected to open next month at 1201 N. La Brea Avenue, WeHoville reported.

Lowell Cafe will allow customers to smoke, vape and consume cannabis on its outdoor patio. There will also be sandwiches, coffee and salads on the menu. Per state law, the cafe won’t serve alcohol, nor cannabis products after 10 p.m.

Not everyone is thrilled about Lowell Cafe opening, however. Rabbi Denise Eger of Congregation Kol Ami, which sits across the street from the proposed cafe, has been leading the opposition against it, citing concerns about smoke drifting to the congregation.

The commission decided to grant Flore Flora the license regardless. The restaurant will have air purification systems as well as odor-absorbing plants to ensure that the smell is not detectable outside the cafe.

The license comes roughly six months after city officials granted preliminary licenses for cannabis consumption lounges to 20 out of 122 applicants.

Last week, the commission also approved a license for Pleasure Med LLC. The owner, Brian Robinson, is planning on opening PleasureMed at 7715 Santa Monica Boulevard, adjacent to his Pleasure Chest adult store. [Wehoville] — Natalie Hoberman

Northwestern Mutual CEO John E. Schlifske and the building

Southern California’s industrial market hasn’t cooled down a bit this summer.

Alere, a pension fund advisor, has purchased the Los Alamitos Corporate Center for $128.5 million.

Northwestern Mutual was the seller of the 17-building industrial park along Cerritos Avenue and Corporate Center Drive in Los Alamitos, according to CBRE. The property is 98-percent leased to 82 tenants.

The corporate center spans 37 acres with 685,588 square feet of industrial space. It’s located three miles from the I-405/I-605 freeway interchange.

Los Alamitos is at the northwest border of Orange County near Long Beach in a submarket referred to as the Mid-Counties. Earlier this year, printing company Epson signed a lease for 150,000 square feet in Los Alamitos for its new U.S. headquarters.

Industrial vacancy in Orange County stayed at an all-time low in the first part of the year, driven by steady demand, despite occupancy challenges, according to CBRE research.

Meanwhile, Northwestern Mutual recently purchased a 1.5-million-square-foot warehouse for $213.5 million in the Inland Empire, which is one of the hottest industrial markets in the country.

Southern California has been the most active spot in the country for industrial real estate and investment, and the market is expected to perform well with both rent growth and absorption expected to outpace last year.

CBRE’s Darla Longo, Barbara Perrier, Brett Hartzell, Rebecca Perlmutter Finkel, Eric Cox and Laird Perkins represented the seller.

Thomas Tull and his 33-acre compound (Credit: RedFin, Wikimedia Commons)

Closing for almost 60 percent less than his original asking price, movie producer Thomas Tull has sold a massive compound in Thousand Oaks for $35 million.

Despite a $50 million reduction on the $85 million price tag the home had when it was listed in January 2018, this was the highest-priced residential sale ever in the Conejo Valley and Ventura County, the Los Angeles Times reported. Tull set the last Conejo Valley record when he purchased the main 16-parcel part of the estate in 2011 for $19.2 million.

This wasn’t the only mega listing to close with a major reduction lately. In Los Angeles County, the Spelling Manor set a record for priciest sale ever at $120 million despite an $80 million price cut. The price cuts are emblematic of the overall sluggish luxury market in Southern California.

The Thousand Oaks compound was designed by Brian Biglin of Biglin Architectural Group. It includes a 32,000-square-foot chateau, an 11,000-square-foot guest house, a two-story studio and auto museum, and ten other structures.

The property includes 12 bedrooms and 32 bathrooms with 50,000 total square feet of space. The main property features three levels, a sports collectables museum, a theater, two infinity-edge pools, a sports court, a stocked pond, and more.

Tull founded Legendary Entertainment and is part owner of the Pittsburgh Steelers. The producer of films like “The Dark Knight” and “The Hangover” is moving his family to the Pittsburgh area.

Thousand Oaks, the second largest city in Ventura County, was devastated by wildfires in 2018, but along with a rebuilding effort, several projects are in its residential pipeline. [LAT] — Gregory Cornfield

Relevant Group Managing Partner Richard Heyman and a rendering of the project on 5th Street

A salacious legal spat with a rival investor hasn’t slowed prolific hotel builder Relevant Group.

The Hollywood firm’s latest project isn’t another boutique hotel though, it’s the near opposite — a 150-unit affordable modular complex in the heart of Downtown Los Angeles’ Skid Row.
Relevant Group is seeking city approval to replace a parking lot and a small commercial building at 407-413 E. 5th Street that for years was owned by a church and operated as a homeless shelter and food pantry. Relevant purchased the property from the church last fall for $4.4 million.

The firm is building the complex to replace affordable single-room occupancy rooms it is converting to market-rate rentals at the Morrison Hotel in South Park, according to a June story in the L.A. Business Journal.

The city of L.A. requires developers to replace any SRO units they demolish with affordable units on-site or nearby. SROs are a key class of affordable housing for L.A.’s unsheltered and low-income residents.

Relevant Group is planning 473 hotel rooms and 100 apartments at the Morrison Hotel and a new construction building next door.

It’s one of two projects Relevant is building outside Hollywood, where its developing four projects — three hotels and an event space — around the intersection of Selma and Wilcox avenues. The city greenlit the latest of those projects in March.

Relevant’s Hollywood pursuits took a dramatic turn last month when the firm filed a federal suit against broker and developer Saeed Nourmand and his eponymous brokerage, alleging they extorted the firm for millions of dollars with costly and frivolous environmental challenges to Relevant Group’s Hollywood hotels.

The Skid Row project joins a handful of new construction affordable projects in the neighborhood, long the center of L.A.’s homeless community. The project is down the street from two others — a 95-unit project by the Coalition for Responsible Community Development and the Weingart Center’s two-building project on San Pedro Street.
Market-rate development in Skid Row is rare, but more could be built in the coming decades if a planned rezoning of Downtown L.A. is carried out. The rezoning would allow market-rate development near the edges of the roughly 50-block-wide neighborhood.

Relevant Group is developing through an affiliate, RMOD, and hopes to keep down costs using modular construction and an accelerated permitting process required for affordable projects through SB 35, a state law that came into effect in early 2018. A representative for the developer said estimated cost per unit is around $200,000.

City officials are encouraging developers to use the typically more cost-effective method. Modular construction usually involves building individual units off-site and then assembling them at the project site.

A handful of modular projects are in the works around L.A., including Aedis Real Estate’s shipping container-based 98-unit project in Park Mesa Heights.

Relevant Group is seeking significant density bonuses through city programs for the Skid Row project, including the Transit-Oriented Communities program and an affordable housing incentive program specific to Downtown L.A. that boosts buildable floor area and reduces open space for such projects.

The TOC program is applicable for projects located near mass transit citywide. Developers can build more market-rate units and receive and other incentives if they include affordable units in eligible projects under the program, which came into effect in the fall of 2017.

Developers tend to include the minimum required affordable units to receive bonuses or use the program to significantly boost unit counts for 100 percent affordable projects. As of March 2019, developers had built or filed for 3,300 affordable units and 13,100 market-rate units through the program, according to the Department of City Planning.

Realogy CEO and president Ryan Schneider and Amazon CEO and president Jeff Bezos (Credit: Getty Images)

Real estate conglomerate Realogy, which has seen a steep drop in stock prices and a shrinking market cap, is turning to Amazon for a boost.

Realogy announced Tuesday that it had entered a partnership with Amazon dubbed Turnkey, a new homebuying program through which homebuyers will receive up to $5,000 in complimentary Amazon products and services on move-in, courtesy of the brokerage giant.

“When we designed TurnKey, we recognized that ‘closing’ on a home is really just the beginning of the homebuying journey,” Realogy’s senior vice president and head of strategy Eric Chesin said in a press release. “We are proud to team up with Amazon to extend the value we bring to buying a home beyond the moment you first unlock your new front door.”

See the chart below to follow Realogy’s journey so far this year.

The program is currently available in 15 markets across the U.S., including Los Angeles, Chicago, Orlando and Tampa.

The real estate services company, which counts Century 21, Coldwell Banker and Sotheby’s International among its major brands, will match TurnKey agents with buyers “according to the homebuyer’s profile.”

In addition to a selection of Amazon’s smart home products, TurnKey’s Amazon move-in benefit will also include services such as deep cleaning and furniture assembly, and will vary in value between $1,000 and $5,000 according to the purchase price of the new home.

The partnership comes as Realogy, which has long tied its profitability to agent commission splits, looks for a path forward. Its market cap, once more than $7 billion, fell below $1 billion for the first time in May.

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And as its stock tumbles, some analysts have suggested that the company’s issue is now market share. Realogy on July 11 filed an explosive lawsuit against rival Compass, accusing the venture capital-backed firm of “predatory” recruiting tactics as attempts at price-fixing. The next day, Realogy and its executives were hit with a lawsuit in New Jersey alleging securities fraud.

Realogy’s stock hit a new low of $5.74 per share that week, a 75 percent drop from a year earlier. The company’s highest recorded closing price this year was in February, coming in at $18.33, down 65 percent from the company’s highest price ever, $52.92.

Following the news of its partnership with Amazon, the conglomerate’s stock — which closed at $5.18 Monday — reached $6.14 at 9:50 a.m. on Tuesday. Its market cap went up nearly 17 percent to $684 million from roughly $592 million yesterday.

New on The Real Deal: Read our new daily digest for a roundup of all the news and deals, big or small, in New York City. Updated three times a day.

David and Victoria Beckham with a rendering of One Thousand Museum (Credit: Getty Images)

Now that David Beckham’s Major League Soccer team has found a permanent home in Miami, it makes sense that the soccer star is on the hunt for his own abode.

David and Victoria Beckham reportedly checked out a unit at One Thousand Museum this weekend, according to the U.K. publication the Sun. The Beckhams are spending the week in Miami on vacation, and were spotted hanging out with friends Eva Longoria and Marc Anthony.

Beckham is rumored to have viewed other Miami properties in recent years, including a waterfront estate on Star Island in Miami Beach.

Half-floor units at One Thousand Museum start at $5.8 million and full-floor residences go up to more than $24 million. The 62-story tower, known for its scorpion-like curvy columns that wrap around the exterior, was completed earlier this month by developers Louis Birdman, Gilberto Bomeny, Gregg Covin, Kevin Venger and Todd Glaser.

The 84-unit luxury condo building, at 1000 Biscayne Boulevard, was the first and final residential building in the Western Hemisphere to be designed by the late Zaha Hadid.

One Thousand Museum includes a rooftop helipad, a wellness center with a gym and yoga facilities, relaxation pods and spa rooms, a sky lounge, a bank vault, a multimedia theater, an off-site beach club and 8 Juice Bar by Raw Republic.

After years of attempts, Beckham and his partners are moving forward with their plans to build a soccer stadium in Miami, redeveloping the Melreese Country Club property into a $1 billion mega mixed-use soccer complex, home to their Inter Miami CF team. [The Sun] — Katherine Kallergis

28868 Cliffside Drive, listed by Coldwell Banker’s Chris Cortazzo and Kevin Augunas, recently sold for $21.75 million.

California’s wildfire season traditionally starts in midsummer and ends in early fall, but it may soon last much longer: The National Climate Assessment forecasts that the area burned by wildfires will double nationwide in the next 25 years as global warming causes more droughts and longer wildfire seasons. In communities like Malibu, which was hit by the devastating Woolsey Fire in November 2018, that reality is causing homeowners and developers alike to do everything in their power to protect against future blazes.

Though Malibu has survived at least 30 wildfires in the last 90 years — including one in 1996 that claimed 10 homes and another in 2007 that engulfed 53 houses —the Woolsey Fire was unprecedented in terms of its magnitude. A total of 550 homes were destroyed in the city, with an additional 187 properties damaged in some manner.

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In neighborhoods like Malibu Park, where the damage was most severe, more than 25 percent of the housing inventory was destroyed. “It was unprecedented, not only in scale but in how fast it moved,” said Sandro Dazzan, a Realtor with the Agency who was born and raised in Malibu. “To see a fire cover that much ground in a matter of hours was astonishing.”

Home sales naturally slowed in the aftermath of the fire. Sales this June were down 50 percent in both total dollar volume sold and number of units compared with June 2018, according to data provided by the Agency. From January to June of 2018, there were 152 units sold in Malibu. Over first half of 2019, that number dropped to 81, the brokerage found.

Despite the initial slowdown, there have been some significant sales in recent weeks — most were new construction, high-end beach properties or both. A three-bedroom, 2,273-square-foot bluffside property on Point Dume closed for $21.75 million, or nearly $10,000 per square foot. And a 3,800-square-foot fixer-upper on Carbon Beach went for $19.1 million after fielding multiple offers. Around 17 homes have gone into escrow since Jan. 1, including a spec home, listed at $14.25 million, that is still five months from completion.

Though it will take time for the market to recover, these strong sales are evidence the fire has not deterred buyers. “Malibu is still Malibu,” said Ginger Escobar, a Realtor with Pritchett-Rapf. “People were concerned after the fire, but the beauty of the location and the sense of community here continue to draw people back. The land is starting to heal, and people are starting to rebuild.”

The renewal effort

The city of Malibu has taken an active role in the recovery process by hosting town hall meetings and workshops to help homeowners with paperwork. It has also created an expedited permitting process and waived permitting fees for “like for like” rebuilds that are roughly the same footprint and square footage as homes lost in the fire. In its recently passed budget, Malibu’s City Council set public safety as the No. 1 priority and Woolsey Fire recovery as the second priority for the coming year. It is currently working on an ordinance that, if implemented, would prohibit highly flammable nonnative vegetation within Woolsey Fire reconstruction projects.

“Fire and building codes have changed over the years to require fire-resistant glazing, roofing, siding and landscaping,” said Karen Farrer, mayor pro tem for the city. “The code now requires fire sprinklers and fuel modification plans, where homeowners have to show that they have created defensible space and reduced highly flammable materials that could ignite the home.”

The new rules will likely alter the looks of the homes that will rise in the area.

“I think you will see a lot more modern-style homes with stone, brick or stucco exteriors, triple-paned tempered glass windows and no exposed wood,” said Realtor Mike Gardner of Sotheby’s International Realty Malibu. “We’ll see big cement patios and walkways wrapping around the base of the homes instead of planting beds that can accumulate flammable material.”

Abeer Sweis, founder and partner at the design and construction firm SweisKloss and one of L.A.’s leading designers of fire-resistant homes, has long explored how materials like concrete, stucco and metal roofs can reduce the risk of fire damage.

“We design a lot of hillside homes, and those are typically in severe high fire zones,” she said. “We use both passive design, like building siting and defensible space, as well as active systems like sprinkler systems, foam and fire curtains and shutters.”

Local developer Scott Gillen took things a step further by incorporating individual water cannons for each house in his 24-acre, five-home project known as the Case. Meanwhile, architect Doug Burdge of Burdge & Associates Architects is lobbying to have some of Malibu’s building codes changed so that more water can be stored on site in underground cisterns or tanks.

“Malibu’s building codes were already strict because it’s in the highest fire severity zone,” said Joseph Lezama, an associate at Burdge & Associates Architects. “Newer homes are more up to code, with features that leave them less vulnerable to fire. It’s hard to say whether there’s a premium on fire-resistant homes, because most of them aren’t on the market yet.”

According to data provided by the city of Malibu, there are currently 93 single-family residences that have been approved by the planning board and a dozen more waiting for approval. Eight building permits have been issued to rebuild homes that were completely destroyed.

“Much of the initial activity involved fire debris removal, an activity that takes up to a few months to complete since it is highly regulated,” said Farrer. With permits granted and debris removed, homeowners are now starting to turn their attention to the actual rebuilding process. “It’s not our first fire, and unfortunately it won’t be our last,” Dazzan said. “[But] we’re already starting to rebuild, and rebuild even stronger.”

Larry Green, Unibail-Rodamco-Westfield’s EVP for US Development, and a drawing of the planned stadium (Credit: Unibail-Rodamco-Westfield)

Los Angeles City Planning officials blessed a stadium planned at the Westfield Promenade site in Warner Center, but only after cutting the number of seats in half.
The zoning administrator approved a 7,500-seat stadium as part of developer Unibail-Rodamco-Westfield’s $1.5 billion mixed-use redevelopment of the 32-acre property on Topanga Canyon Boulevard, according to the L.A. Daily News.

The developer, a French real estate investment trust that purchased Westfield last year, wanted to build a 15,000-seat “entertainment and sports center.” For comparison, the Forum in Inglewood has 18,000 seats.

A project spokesperson said the developer was “disappointed” in the decision but pleased that a stadium was approved. Zoning officials did not shrink the overall footprint of the stadium — its planned to be 320,000 square feet.

Some locals have opposed the project over concerns about traffic, crowds, and crime. Also, some still oppose the smaller stadium. The decision can be appealed and the project still needs approval from the City Planning Commission and L.A. City Council.

The ambitious redevelopment of the aging Westfield Promenade mall dates from 2016, before Unibail-Rodamco purchased Westfield.

The plan calls for 1,430 residential units, 244,000 square feet of retail space, 629,000 square feet of office space, and 572 hotel rooms. It’s the largest development project planned in the 1.5-square-mile Warner Center Specific Plan area.

The city rezoned the commercial area for mixed-use space with the goal of making a walkable downtown hub for the San Fernando Valley. The city expects 24,000 new residential units and 28 million square feet of office and retail space there over the next 14 years.

Other large proposals in the area include Hanover Company’s 394-unit residential complex filed last year and California Home Builders’ office and residential complex on Califa Street. [LADN] – Dennis Lynch 

Wells Fargo’s C. Allen Parker and JPMorgan’s Jamie Dimon (Credit: Wells Fargo and JPMorgan)

Falling interest rates are generally seen as a boon to banks’ mortgage business as borrowers increasingly take out new loans to buy homes or refinance.

But lower interest rates hurt some of the country’s biggest mortgage banks, which reported the size of their mortgage-servicing businesses declined in the second quarter.

Banks that have reported their second-quarter earnings disclosed that the value of the servicing rights fell between 7 percent and 10 percent, the Wall Street Journal reported.

Wells Fargo, the country’s largest holder of those rights, said the value fell 9 percent from the end of the first quarter to $12.1 billion. JPMorgan, the second-largest, reported a drop of 15 percent to $5.1 billion.

Banks usually use derivatives to hedge against volatility in service rights. But some were caught off-guard by how quickly interest rates shifted.

“Mortgage companies do best when rates move steadily in a direction as opposed to rapidly in a direction,” Stephen Lynch, a credit analyst at S&P Global Ratings, told the Journal. “We definitely saw a dislocation.”

Consumer mortgage originations grew at Wells Fargo, JPMorgan and Citigroup during the second quarter thanks to lower interest rates. Fed Chair Jerome Powell earlier this month signaled that the Fed will lower rates in the near future. [WSJ] – Rich Bockmann

Special counsel Robert Mueller and the proposed Trump Tower Moscow (Credit: Getty Images/Trump Tower Moscow via BuzzFeed)

Former special counsel Robert Mueller will testify in back-to-back hearings before Congress on Wednesday to discuss the 400-plus page report that has elicited calls for impeachment from some Democrats and declarations of victory from President Trump and his supporters.

Though it’s unlikely that much new information will be revealed— the Justice Department reportedly instructed Mueller to limit his testimony to the report’s findings — members of the House Judiciary and Intelligence committees are expected to drill Mueller on whether he believes the president obstructed justice. In his report, Mueller indicated that he was abiding by a Justice Department policy that bars the indictment of a sitting president — but in his only public remarks since, he declined to clear Trump of wrongdoing.

“If we had had confidence that the president clearly did not commit a crime, we would have said so,” Mueller said during a press conference in May.

At least a portion of the hearings will likely be dedicated to failed plans for a Trump-branded tower in Moscow, as well as meetings between Jared Kushner and a Russian bank. The report left many questions unanswered, including whether or not Trump instructed his associates to lie about the Russia tower.

Sometime between October and November 2015, the Trump Organization signed a letter of intent with I.C. Expert Investment Company, a Russian development company, to build a large residential, hotel and commercial building in Moscow. Felix Sater, a former associate of the Trump Organization who built Trump Soho, wanted to arrange a public meeting between Vladimir Putin and Trump before the election, an encounter he hoped would not only help boost Trump’s profile internationally but also promote the $1 billion Trump-branded tower.

“I didn’t have access to the president of China, otherwise I would’ve gotten him on stage. I would’ve gotten the president of China onstage and made it a trifecta,” Sater told TRD in April. “They believed, and so did I, that if he was meeting with foreign leaders, and able to conduct business deals with them, it would help him on the foreign policy component. To show that he is capable. That’s what we thought the benefit would be. Nothing else.”

Trump’s former attorney, Michael Cohen, was sentenced to three years in prison in late 2018, in part for lying to Congress about his communications with a spokesperson for Putin, whom he contacted seeking help to launch the Trump Tower project in Moscow. Cohen admitted to Mueller that Trump instructed him to lie about the condo project’s timeline by saying negotiations ended several months earlier than they did, Buzzfeed reported in January. Although Cohen initially said discussions about Trump Moscow ended in January 2016, they lasted through June 2016, according to Mueller’s report. The report found that Trump knew Cohen described a false timeline to Congress,but it ultimately concluded that there isn’t enough information to establish that the president directed Cohen to lie. Earlier this month, Sater refused to answer questions from the House Intelligence Committee about whether or not he knew that Cohen planned to lie in his testimony, the Washington Post reported.

Much is still unknown about a meeting between Jared Kushner, Trump’s son-in-law and senior advisor, and Sergey Gorkov, head of the Russian government owned bank Vnesheconombank (VEB), which was under sanctions at the time. According to Mueller’s report, Kushner met with Gorkov on Dec. 13, 2016, at the Madison Avenue offices of Colony Capital. Kushner maintained that the meeting didn’t involve business but focused on improving U.S.-Russia relations. But in a 2017 public statement, VEB described the meeting as one of many business meetings with major U.S. banks and companies. At the time, Kushner Companies was seeking financing for 666 Fifth Avenue, which raised some conflict of interest concerns. In his report, Mueller couldn’t conclude whether or not the meeting dealt with strictly business or diplomacy or both, but noted that there wasn’t significant follow-up between Kushner and Gorkov after the meeting.

Tishman Speyer CEO Rob Speyer and renderings of Collective & Brickyard campuses (Credit: Tishman Speyer)

When you can’t sell… recapitalize instead?

Tishman Speyer is now looking to refinance the Brickyard and Collective office campuses in Playa Vista for a combined $323 million, The Real Deal confirmed. The developer was initially hoping to sell both properties.

Sources said Tishman bought out Northwood Investors’ stake in the portfolio, and will be bringing two new investors in.

In January, Tishman listed both properties, which together span 620,720 square feet. Bids were expected to range from $600 million to $650 million, sources said at the time.

Now, the New York-based developer is seeking to refinance the Brickyard campus for $201 million, and the Collective campus for $122 million. Eastdil Secured still has the listing.

Commercial Mortgage Alert first reported the news. A spoksperson for Tishman declined to comment.

The 425,300-square-foot Brickyard campus is comprised of two office buildings, an 8,000-square-foot retail space and 9,000 square feet of daycare facilities. Facebook is an anchor tenant at the property with 60 percent of the office space (260,000 square feet).

Collective, meanwhile, spans 204,420 square feet across five buildings. Yahoo leases 130,000 square feet at the site.

Blackwelder office campus and LPC’s David Binswanger

Lincoln Property Co. has put its 19-building office campus, known as Blackwelder, in Culver City on the market, The Real Deal has learned.

Sources said the first round of bids closed last week. It could fetch as much as $150 million, they added.

Blackwelder is an adaptive reuse project, comprised of 19 standalone buildings on a 6.4-acre campus. Geared towards media and entertainment tenants, the 157,600-square-foot complex features an industrial look with exposed steel frames and open floor plans.

The campus is located on the corner of La Cienega Boulevard and Fairfax Avenue, less than half-a-mile away from the Culver City Arts District.

Cushman & Wakefield has the listing.

Culver City has become one of the hottest submarkets in Los Angeles, drawing tech and media titans to the area. In the second quarter, HBO inked a deal for 241,205 square feet at Ivy Station, while Apple signed a lease for an additional 96,330 square feet at One Culver on Washington Boulevard.

Rents in the area have been growing as a result. The average asking price reached $3.80 per square foot last quarter, according to a report from Savills. Still, that’s more attractive than the Westside beach cities, which clocked in upwards of $5 per square foot.

Amazon CEO Jeff Bezos and Realogy CEO Ryan Schneider (Credit: Getty Images)

Hey Alexa, can you say bull market?

Amazon and Realogy’s new partnership sent the real estate giant’s stock price and market cap soaring on Tuesday — but some analysts warn that it may be short lived.

After the program, dubbed TurnKey, was announced early Tuesday morning Realogy’s stock prices soared 31 percent in premarket trading. The stock opened at a recent high of $6.44 per share and fluctuated throughout the day before closing at $6.18 — up 19 percent from $5.18 the previous day. Still, it’s a far cry from Realogy’s stock price a year ago, which was $22.61.

The conglomerate’s market cap — which this year fell below $1 billion for the first time — also jumped 19 percent, closing at $705 million on Tuesday.

See the chart below to follow Realogy’s journey so far this year.

Stephens analyst John Campbell described the TurnKey deal to Seeking Alpha as “a highly strategic chess move that strengthens RLGY’s market position amidst an industry that was threatening to leave it behind.”

But Barclays’ Matthew Bouley called the stock price action a “short squeeze” that’s “likely limited” due to the competitive brokerage landscape in a Tuesday report. The financial services company notably downgraded Realogy’s stock to a price target of $5 from $9 after Realogy filed an explosive lawsuit against Compass earlier this month.

Compass Point’s Chris Gamaitoni echoed Bouley calling TurnKey “undoubtedly positive for volume opportunities but economics seem unclear.”

Meanwhile, Jason Deleeuw, an analyst for Piper Jaffray, who maintains the highest price target for the stock at $11 of the four analysts, said TurnKey “could meaningfully boost lead generations” and “ease pressure” on agent recruitment and commissions splits.

Year-to-date, Realogy’s stock has dropped 65 percent compared to the S&P 500’s increase of 19 percent. Realogy’s CEO Ryan Schneider said in an interview late Tuesday he had not yet looked at the company’s stock price.

With additional reporting by Sylvia Varnham O’Regan

Ed Ruscha and his new home in the Trousdale Estates

One of Ed Ruscha’s greatest works of art might be his real estate portfolio.

Many of the artist’s paintings, drawings and books are inspired by or focused on Los Angeles, and his property deals are too. The Culver City-based pop artist — whose works have commanded prices as high as $30.4 million — owns eleven properties in Southern California now that he and his wife Danica purchased a home in Beverly Hills. Variety reported the deal was for $8.4 million, after the property was first listed for just under $9 million in May.

Located on Burk Place in the Trousdale Estates, the property last sold 50 years ago for $65,000. The home includes 3,443 square feet with three beds and three-and-a-half bathrooms. It was built for law professor Jesse Dukeminier and psychiatrist Dr. David Sanders, who lived there until he passed away last year.

Ruscha owns another home in the Trousdale Estates that he purchased for $3.6 million in 2002, a property near Marina Del Rey, and two lots in Morongo Valley. He also owns two properties in Malibu in the celebrity-filled Point Dume, and a third was deeded to their son. In total, his trust is listed as the owner of 11 properties in the L.A. area, according to county records.

They previously owned a bungalow in Los Feliz that was also deeded to their son, an artist studio in Culver City, and several hundred acres of vacant land in the Mojave Desert. Records show Ruscha also previously owned seven properties in Culver City, as well as parcels in Silver Lake, Venice, Hollywood, and another place in Point Dume that sold for $4 million in 2010. [Variety] — Gregory Cornfield