President Donald Trump (Credit: Getty Images and Mango Map)

The Trump administration released new rules governing the EB-5 cash-for-visas program. And many in the real estate industry believe the changes will tighten the spigot on a source of cheap capital that’s partly fueled the post-recession development boom.

The Department of Homeland Security on Tuesday released much-anticipated new rules that raise the minimum an investor has to put into a project in high-unemployment areas from $500,000 to $900,000.

The new rules also make it more difficult for developers and state governments to gerrymander census tracts together in order to qualify real estate developments located in areas that may not otherwise meet the program’s unemployment requirements.

The new rules go into effect Nov. 21.

The federal government created the EB-5 program in 1990 as a way to create jobs by offering foreigners visas in exchange for job-creating investments. The minimum investment was set in 1990 at $1 million – or $500,000 in high unemployment areas.

But those figures haven’t moved with inflation, which was ostensibly the Department of Homeland Security’s reason for considering raising the limit.

The Obama administration in its waning days first proposed revisions to the rules. And President Trump – reportedly caught between the agendas of limiting foreign immigration and spurring new economic activity – carried them through despite objections from the real estate industry.

Trump did, however, slightly soften the impact.

Homeland Security had considered raising the minimum investment for high-unemployment areas to $1.35 million, but chose to go with the lesser figure of $900,000.

And in another blow to the industry, DHS will no longer let state governments string together long chains of contiguous census tracts to connect development sites with high-unemployment areas.

In New York, the Empire State Development economic development corporation used the process to connect Hudson Yards to West Harlem via a thin strip along the Hudson River. And New Jersey approved a district to qualify a Kushner Companies project in Jersey City.

DHS said that it will now take on the responsibility of qualifying targeted areas, and will be less permissive than states have been.

“Under this final rule, DHS will generally limit the number of census tracts that could be combined for this purpose,” it wrote in its rules.

In June, the Wall Street Journal reported that Chinese investors had pulled back on the program largely due to visa wait times that span well over a decade. Investors from India and Vietnam now make up a larger pool of EB-5 investors, but they demand higher returns on investment, which has caused trouble for developers accustomed to finding cheap sources of capital.

Illustration by Daniel Gray-Barnett (Click to enlarge)

The rubber is finally hitting the road in Los Angeles’ Opportunity Zones. When looking at the biggest commercial sales in the L.A.’s zones over the past six months, evidence of the federal program’s power is showing up in the bottom line: sale prices that are double or triple what commercial sellers originally paid for those properties just one or two years ago.

Take 550 South Palos Verdes Street in San Pedro. Starwood Capital Group announced a joint venture with Holland Partners to complete a 375-unit multifamily apartment building on the property in May. Starwood paid Holland $109.97 million in the transaction. Holland originally bought the 2.5-acre site in 2017 for $24.5 million, according to TRD research.

And there’s 3318 La Cienega Place in West Adams, an industrial property that Carmel Properties bought for $14 million in 2017 and sold for $29 million this year.

These deals aren’t outliers. A recent report from Reonomy found that price appreciation of Opportunity Zone assets in the Los Angeles-Anaheim metro area has accelerated, while prices have remained steady for non-Opportunity Zone assets, “suggesting that the legislation has begun to function as designed in LA.”

Created as a part of the federal Tax Cuts and Jobs Act of 2017, the Opportunity Zone program offers tax incentives to funds that invest in specific low-income Census tracts, based on 2010 Census data. The U.S. Treasury Department issued a round of clarifications on the law in April 2018, sparking a recent increase in interest among investors, according to experts.

There’s a big tax benefit. Individuals who make investments within Opportunity Zones through “Qualified Opportunity Funds” can defer taxes on capital gains or avoid them entirely if they meet specific criteria.

Many buyers and sellers are jumping into the action in the Los Angeles metro area, which has more than 250 Opportunity Zones.

“Q3 will be pretty telling,” said Sam Viskovich, vice president of marketing for Reonomy. “To get the full write-off, you have to invest this year. That is why we should see a degree of activity this year.”

In the Los Angeles-Anaheim metro area, 11.2 percent of commercial assets are within Opportunity Zones, according to Reonomy. The largest portion of the commercial stock in local opportunity zones — about 60 percent — consists of multifamily properties; 17 percent of the properties are industrial and 12 percent are retail, Reonomy found.

In The Real Deal’s list of the priciest Opportunity Zone deals in the last six months, five of the 10 sales were for industrial properties, three were for multifamily properties, one was for an office building and one was for a vacant lot.

All of the sales took place in areas with two overlapping incentives: Opportunity Zones and Transit Oriented Communities, a program that allows multifamily developers to build bigger around transportation hubs if they set aside some units to be affordable. A project could potentially make use of both sets of incentives if it qualifies for both programs.

And of course some of the areas designated as Opportunity Zones in Los Angeles — among them the Arts District and Hollywood— are in areas that probably would have had investors flocking anyway, because their fortunes have risen since the 2010 Census.

“These Opportunity Zone projects are piggybacking on the success of other developments going on in that area,” said Loryn Arkow, a partner in the real estate law practice group at Stroock.

Here is a look at the 10 top sales.

777 South Santa Fe Avenue
Closing price: $193.5M

In April, Access Industries, Warner Music Group’s parent company, spent $193.5 million to acquire the roughly 259,000-square foot building from Shorenstein Properties. Warner will relocate its West Coast headquarters to the building, exercising an option it had secured, along with the space, two years ago. Bank of America provided a $135 million mortgage.

“The Opportunity Zone designation and potential benefits are a factor, but not the sole determining reason for making an acquisition,” said Jonah Sonnenborn, head of global real estate for Access Industries. “We like buying well-located real estate in an area where we have strong conviction for its growth.”

Built in 1912, the building was renovated and restored by Rockefeller Kempel Architects and Rockwell Group. Warner Music Group moved its West Coast HQ into the building shortly before the acquisition. “It’s a long-term investment for the company,” said Sonnenborn.

550 South Palos Verdes Street
Closing price: $109.97M

Starwood Capital tapped its $500 million Opportunity Zone fund to get involved with this property, which Holland Partners purchased in 2017.  Holland had been working a different capital partner before Starwood became involved, according to a source close to the project. “Starwood ultimately came in and purchased it prior to the completion of construction because of the recent designation of the Opportunity Zone,” the source said.

Completion of a planned seven-story multifamily building, located at the intersection of the waterfront and San Pedro’s commercial district, is slated for the spring of 2020, according to Starwood. Offering views of Long Beach, it will include residences from studios to four-bedrooms as well as a two-story fitness center, a pool deck and a rooftop lounge with outdoor kitchens.

Anthony Balestrieri, senior vice president and head of Starwood’s Opportunity Zone investment business, pointed to San Pedro’s “favorable” supply and demand fundamentals.

“San Pedro’s Opportunity Zone designation has accelerated investment into the neighborhood, which we expect to grow,” Balestrieri said in a statement.

5242 West Adams Boulevard

1241 Vine Street and 1665 North Sycamore Avenue
Closing price: $39.25M

As its first Purchase in Los Angeles, Slate Property Group, based in New York City, scored these two multifamily properties for $39.25 million from a family trust. They’re not far from the planned Netflix complex Academy on Vine, slated to open in 2020.

“There’s been a huge rejuvenation of Hollywood,” said Strook’s Arkow, who added that it’s not the Opportunity Zone status but the streaming service’s presence that’s driving investment in this area: “The Netflix expansion has had a huge impact on that area of Los Angeles.”

Slate Managing Director Steve Figari seconded the notion. “[The purchase] was just focused around Slate’s desire to expand our business outside of New York,” he said.

A 55-unit residential complex, which was built in 1926, occupies about 38,523 square feet of floor space at 1665 North Sycamore Avenue, according to Trulia. The other property, at 1241-1249 Vine Street, is the site of the historic Villa Elaine apartments, with more than 100 units, said Figari. Both of the buildings are rent-controlled.

5837 West Sunset Boulevard
Closing price: $38M

Cypress Real Estate Group purchased this multifamily property for $38 million from Cornerstone Holdings and Harridge Development Group in April. The 12-story apartment tower at the intersection of Highway 101 and Sunset Boulevard includes 79 units that are a mix of studio, one-bedroom and two-bedroom apartments.

Cornerstone, based in Aspen, Colorado, originally acquired this property in February 2011 in a partnership with Harridge, with Cornerstone owning 58 percent of the development through Bay Area firm Urban Green Investments, according to Cornerstone’s website.

Neither the sellers  nor the buyer could immediately be reached for comment.

2020 East 7th Place and 2045 Violet Street
Closing price: $32M

Located next door to Warner Music Group’s headquarters at 777 South Santa Fe Avenue, these industrial properties, spanning roughly two acres, were a natural acquisition for Access Industries.

“We were a logical buyer because of the proximity to the larger transaction,” said Access’ Sonnenborn. “The fact that they are in an Opportunity Zone is attractive, should we one day redevelop the property.”

A cold storage building currently occupies 2020 East 7th Place, and 2045 Violet Street is currently being leased to tenants such as Bow Truss Coffee.

Lion Real Estate Group, an investor in more than 10 office properties in Opportunity Zones in Los Angeles County, was the seller of both properties.

“We have a good relationship with them,” said Jeff Weller, a co-founder and partner at the firm. “We knew they wanted it. We’re not really ground-up developers. We will reposition properties and spend money re-tenanting them.”

Lion, in tandem with Ensyd apparel manufacturer Dalton Gerlach, made an Opportunity Zone acquisition in late June — a new office building at 5242 West Adams Boulevard. (See our deep dive into the West Adams neighborhood on page 40.) With office tenants able to take advantage of the tax benefits of investing in Opportunity Zone buildings by adding furniture and fixtures, “we have a ton of tenants looking to lease it,” Weller said. “We’ve got incredible activity.”

6629 Independence Avenue and 6636 Variel Avenue
Closing price: $31M

Natalie Levy Sarraf, an executive at Andwin Scientific, sold these properties in Canoga Park to the Hanover Company for $31 million in March. A private real estate company based in Houston, Hanover plans to build a 394-unit residential complex. Andwin, a medical supply company, is the current occupant of most of the land.

Hanover has gotten city approvals to tear down three industrial buildings occupying 72,000 square feet and replace them with residential buildings. TCA Architects will design the 378,000-square-foot development. The project is slated for completion in 2021, according to TCA’s website.

3318 La Cienega Place
Closing price: $29M

An LLC controlled by Jim Jacobsen, CEO and chair of Redcar Properties, acquired this industrial property in April for $29 million, according to TRD’s research. The 1.3-acre property, originally acquired by Carmel Properties in 2017 for $14 million, includes a 30,400-square-foot warehouse. The $17.4 million acquisition loan came from Deutsche Bank. Carmel Properties, through a spokesperson, declined to comment.

The warehouse is next to Cumulus, a mixed-use project under construction that spans more than 1.15 million square feet. It will bring 1,210 residential units to the area.

Redcar specializes in commercial real estate in Los Angeles, with a focus on “underperforming properties in high growth urban neighborhoods,” according to its website.

2020 East 7th Place and 2045 Violet Street

1515 East 15th Street
Closing price: $28.1M

Rexford Industrial Realty, a real estate investment trust focused on industrial properties in Southern California, purchased this property in an “UPREIT” transaction, where the seller contributed the property to the company’s operating partnership and, in exchange, got equity in newly issued cumulative redeemable convertible operating units, according to an announcement from Rexford. The purchase price was
$28.1 million.

“We were able to provide a tax-efficient solution to the seller by structuring the sale as an UPREIT contribution,” said Howard Schwimmer and Michael Frankel, co-chief executive officers of Rexford, in a statement.

The seller was Graff California Wear, a sportswear company founded by a husband-and-wife team in 1933 that was known for making women’s sportswear such as slacks and “slacksuits.”

Rexford bought the property in an off-market transaction. It aims to complete minor renovations and lease to a single tenant or pursue full industrial-use redevelopment.

405 North San Fernando Road and 400 North Avenue 19
Closing price: $23.8M

Fifteen Group, a private investment group focused on real estate, was listed as both the buyer and seller for this property, which sold for $23.8 million in February. It was sold for $11.66 million in 2016 and assessed at $12.1 million last year. Fifteen Group did not respond to requests for comment.

This type of sale, in which the same party is named as buyer and seller, while not common, is not unheard of for affiliates. In Opportunity Zones, to get the tax benefits, a fund must acquire the property via a sale to a party in which the original seller has no more than a 20 percent interest, said attorney Eric Requenez, a partner at Stroock.

Sometimes, the owners will sell some of their original interest to get the tax benefits because they cannot simply transfer their ownership to a new LLC.

“What we have seen is some entities where they had a Qualified Opportunity Zone investment and were willing to divest themselves of at least part,” said Requenez.

1600 & 1614 North Hudson Avenue
Closing price: $20M

KOAR Institutional Advisors sold this Hollywood parking lot for $20 million to an affordable housing developer linked to CRA Investments, based in Dexter, Missouri. It is next to a property where KOAR plans to build the 191-room Schrader Hotel.

Surrounded by the boutique hotel Mama Shelter, the Dream Hollywood Hotel and the 287-unit Camden Property Trust/SBE mixed-use development, the parcel is zoned for hotel, mixed-use or apartment development. Located six blocks from the Hollywood/Highland Red Line station, the property has been leased to the parking lot operator until March 2021, but there is no option to renew. Neither KOAR nor CRA Investments responded to requests for comment.

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

UPDATED, July 24, 2019, 8:30 a.m.: Realogy has jumped into bed with Amazon to roll out a new program it hopes will simplify homebuying — and it’s paying for the privilege.

The company on Tuesday unveiled “TurnKey,” a program that offers homebuyers support in finding a new home using Realogy-affiliated brokers, and provides incentives in the form of up to $5,000 worth of Amazon products and home services.

Realogy’s head of strategy, Eric Chesin, would not reveal how long TurnKey had been in development but said a pilot was quietly tested in Orlando, Florida, some months ago. On its website, Realogy claims TurnKey agents will help close a transaction in “15 percent fewer days.”

It’s not Amazon’s first foray into residential real estate. Last summer, the e-tailer teamed up with Realogy-owner brokerage the Corcoran Group to set up a brokerage-curated page on Amazon that also fed referrals to agents. The previous year, Amazon briefly launched an initiative called “Hire a Realtor.”

But for Realogy — which has been hemorrhaging money — it’s a step in a new direction. When Ryan Schneider was tapped as CEO more than a year ago, the former banking exec was tasked with reassessing the company’s financial priorities.

Realogy will be paying for the Amazon partnership through the commissions it earns from the home sales, according to the company. The news of the partnership already gave a boost to its stock and market cap, which in May dropped below $1 billion — a first since the company went public. Amazon declined to comment on its financial investment in TurnKey.

Here’s what you need to know about the terms of Amazon and Realogy’s new program.

How it works

— Homebuyers sign up for the TurnKey program on Amazon’s website and get partnered with pre-vetted agents affiliated with Realogy’s participating brokerages: Sotheby’s International Realty, Coldwell Banker, Century 21, Better Homes and Gardens and ERA Real Estate.

[The Corcoran Group is not currently participating in TurnKey, which Chesin said was because the brokerage was not currently operating in the 15 cities where the program was launched. Corcoran declined to comment.]

— On TurnKey’s website, Realogy claims that only 11 percent of its eligible agents qualify to participate in the program. While Chesin declined to detail the exact criteria, he said there were “very stringent standards for how to qualify,” and said all agents must have strong customer service records, and expertise in their local markets.

— Amazon steps in after the home closes. As part of TurnKey, the tech giant is providing buyers with a package of freebies including Amazon Home Services, which offers cleaning and repairs, a series of smart-home products, and gift vouchers for Amazon Move, a service and series of products meant to people relocate. Altogether, the free products and services are worth between $1,000 to $5,000. Realogy will pay for the Amazon benefits from the commissions it earns from the home sale transactions, a spokesperson for Realogy said.

— The size of the package is linked to the price customers spent on their new homes, with a minimum purchase of $150,000. Home sales above $700,000 come with the maximum allowance of Amazon perks, $5,000.

What it means

The new collaboration has been characterized as “a win” for Realogy, due to the “proprietary lead generation” that seems likely to come from Amazon’s “brand and wide-ranging consumer connectivity,” according to an analysis Barclays Capital released Tuesday.

And there’s evidence that this formula can work. Realogy received 88,000 leads from its subsidiary, Cartus, a corporate relocation business, according to Barclays analysts Matthew Bouley and Christina Chiu. Realogy receives a higher split of agent commissions. “The bull case would be this [Amazon] partnership drives something similar or greater,” they noted.

However, they raised questions about how much the new partnership will cut into Realogy’s bottom-line, and questioned whether TurnKey could address the bigger landscape punctuated by traditional and nontraditional competitors, including the likes of Compass and the widespread proliferation of iBuyers. Compass, the rapidly-expanding tech brokerage that Realogy recently sued, is seeking 20 percent market share in the top 20 U.S. cities by next year.

“The question I would ask as an agent is how am I protected?” Leonard Steinberg, chief evangelist and broker at Compass said of the Realogy-Amazon partnership. “How is my future protected? How is my data protected? How is my clientele protected?”

Chesin said that agents’ sales information was not inputted into the program and consumer data was treated no differently to any other part of Realogy’s business. “Our information security is taken very, very seriously,” he said. However, once the consumer inputs their promotional code into Amazon’s website — a necessary step to access their benefits — they enter into a consumer relationship with the tech giant. It was not immediately clear how that data was stored or used.

Steinberg added that TurnKey clearly represents “a tremendous, tremendous value-add for Amazon, who really wants to be in the home of its consumer,” but he wondered “how is Realogy the beneficiary of this?”

Update: This story has been updated to clarify that home prices of $700,000 and above come with $5,000 in Amazon benefits through TurnKey.

Metro CEO Phillip A. Washington and a rendering of a monorail concept along Sepulveda Boulevard in the San Fernando Valley (credit: Metro)

Transit officials say a proposed rail connecting the west San Fernando Valley and the Westside could cost billions more than estimated three years ago.

The Los Angeles County Metropolitan Transportation Authority’s new estimate for the Sepulveda Transit Corridor project is between $9.4 billion and $13.8 billion, up from an 2016 estimate of $7.4 billion to $9.2 billion, according to the L.A. Daily News.

The project will almost certainly cost more than the Measure M sales tax funding of that Metro says the project will receive. So far, only $5.7 billion of that has been committed to the project.

Metro spokesperson Brian Haas said the agency is exploring a potential partnership with a private partner, which could reduce the public dollars needed for the rail. He added state or federal funds could be in the mix too.

And the project will be in flux until December, when Metro will hold a board meeting to present a final plan — or at least a narrowed list — after meeting with the community. At the moment, there are four options for the line, all running east of Interstate 405.

One option is an aerial rail across the Santa Monica Mountains first proposed in January. Some local residents, including the Sherman Oaks Homeowners Association, staunchly opposed that plan, according to the Daily News.

Other options include a mix of underground and aerial sections. The homeowner’s association wants a monorail along the middle of Interstate 405 instead, but Metro has said that plan isn’t feasible.
Metro aims t
o open the first leg of the project between the Valley and Westside by 2033. The line is meant to eventually connect to L.A. International Airport.

Meanwhile, city officials are drafting new transit-oriented zoning plans for parts of the Valley near the line and other transit options. Developers have proposed some transit-oriented projects there, including a 170-unit project and a 174-unit project both on Van Nuys Boulevard. [LADN] — Dennis Lynch

WeWork CEO Adam Neumann (Credit: Getty Images and iStock)

The We Company, the SoftBank-backed flexible-office provider last valued at $47 billion, is planning to go public as soon as September.

The WeWork and WeLive parent company could announce a date as early as next month, as it moves to secure a sizable debt facility that would give a boost to its initial public offering, according to the Wall Street Journal

Following its rebranding as the We Company in January, the company has taken steps to prepare for the public markets. It filed its initial paperwork for an IPO with the U.S. and Securities Exchange Commission in April, and the following month was in talks with JPMorgan for a $2.75 billion line of credit, a typical move by companies planning to go public.

Those discussions have now been reportedly held with other Wall Street banks, at a figure between $5 and $6 billion, according to the Journal. The higher sum would increase the likelihood of a successful IPO because of a reduced amount needed to be raised.

The We Company stands to be the second-largest public listing this year, following Uber, which raised approximately $8 billion. But the ride-sharing giant and its competitor Lyft, which also went public this year, are both trading below their IPO prices.

Still, a cloud hangs over the probability that an IPO will match the We Company’s valuation, particularly because the company is yet to turn a profit. Last year, it recorded losses of $1.9 billion, against $1.8 billion in revenue. Investors last week raised concerns that WeWork’s co-founder and chief executive Adam Neumann has in recent years sold $700 million of debt and equity in the company. [WSJ] — David Jeans

Kyle Richards, Mauricio Umansky and the Sweetwater Mesa property (Credit: Getty Images)

“In Beverly Hills, the truth always has a way of rising to the top.”

The tagline Kyle Richards utters at the start of every episode of this season’s “The Real Housewives of Beverly Hills” may be a bit on the nose if its referencing her husband’s legal troubles.

To be sure, having a wife on national television has been hugely beneficial to the Agency co-founder Mauricio Umansky. The exposure has provided free advertising for the company, while showcasing some of the agent’s pricier listings.

But the limelight was unwanted on Tuesday evening, when the lawsuits surrounding Umansky were brought up during the reunion episode of Bravo’s “Real Housewives of Beverly Hills.”

The drama started when host Andy Cohen said he had a question from a viewer, “Amy from Texas.” “I guess Kyle isn’t going to mention Mauricio scamming someone out of $37 million when she can just talk about Dorit’s [co-star] dog,” Amy asked through Cohen.

“My husband did not scam anyone,” Richards said. “That causes problems because my husband has never made $36 million in a deal in his life. That’s what the property sold for.”

She added: “so your question from, whoever the fuck Monty in Magootville, saying my husband is scamming people $36 million… that’s a misleading question. The way it was worded is damaging and I don’t appreciate that.”

The backstory: Umansky is facing a lawsuit from the vice president of Equatorial Guinea, who is alleging he misrepresented the value of his mansion in Malibu when he sold it in 2015. Umansky and a partner, Mauricio Oberfeld, bought the home for $33.5 million that year. They flipped it for $70 million a year later, raising allegations of impropriety.

It’s possible the lawsuit could drag in Richard’s fellow “Housewives” on the show. In May, the man suing Umansky filed court documents to seek “communications with any of the performers, producers, directors, writers, or any other persons affiliated” with the television show. The request was made because Umansky and Richards hosted a “Great Gatsby”-themed party at the Malibu property during filming of the show’s seventh season.

A spokesperson for the Agency declined to comment.

Justin Stewart, president and co-founder of Industrious

Co-working firm Industrious is continuing to expand in Los Angeles County, this time with ShopCore Properties.

The two companies are developing a 27,000-square-foot co-working office at the One Colorado mixed-use development in Pasadena at 24 E. Union Street, the Los Angeles Business Journal reported. The Industrious Old Pasadena site is expected to open in the third quarter of 2020 and will include private offices and event space.

New York-based Industrious is also planning a 22,275-square-foot location at 444 S. Flower Street in Downtown Los Angeles and just opened a 24,000 square feet in Glendale.

The firm also has other locations around Los Angeles County, including one in West Hollywood; an 18,900-square-foot office Downtown; an agreement with Blackstone’s Equity Office to run at least 100,000 square feet at the Howard Hughes Center campus near Playa Vista; and 40,000 square feet in Century City.

Co-working companies took over the Los Angeles office market the past few years, spurring a spike in supply. Prices for a desk in at co-working offices in L.A. last year dropped 11 percent.

Overall, co-working companies continue to lead office leasing in Los Angeles. Industrious, Spaces and market giant WeWork all leased new spaces in the first quarter. WeWork alone signed leases for 319,000 square feet in the first four months. [LABJ] — Gregory Cornfield

Robert Mueller and President Donald Trump (Credit: Getty Images)

During testimony before the House Intelligence Committee, former special counsel Robert Mueller acknowledged that a conversation between Russian officials and a Trump Organization associate about a $1 billion Trump-branded condo tower in Moscow could’ve compromised Donald Trump had it been recorded. The reason: At the time, then-candidate Trump repeatedly stated that he had no business ties with Russia.

In a line of questioning about foreign entities gaining potential material to blackmail U.S. officials, Democratic Rep. Adam Schiff asked if the fact that Trump’s former attorney Michael Cohen discussed Trump Tower Moscow with a Kremlin spokesperson posed a risk to the presidential candidate of being exposed. Mueller agreed with a simple: “Yes.”

“If you are lying about something, you can be exposed, you can be blackmailed,” Schiff said. He later added, “That’s the stuff of counterintelligence nightmares, is it not?”

The two hearings on Wednesday focused on Russia’s interference in the 2016 presidential election. When asked if such interference, including offering negative information on an opposing candidate, was the “new normal” in U.S. elections, Mueller responded, “I hope it’s not the new normal, but I fear it is.”

The seven hours of testimony — during back-to-back hearings held by the House Judiciary Committee, followed by another hosted by the House Intelligence Committee — largely stuck to the contents of Mueller’s April report. Occasionally, however, the former special counsel offered additional —albeit minimal — commentary. While Mueller agreed that the tower in Moscow represented a business interest, from which Trump stood to potentially make millions, he didn’t weigh in on whether the president specifically lied about the timing of his business dealings.

“I think there is some question about when this was accomplished,” he said.

Later on, however, when asked if the president’s written responses to Mueller’s investigation were incomplete and untruthful — Mueller said “generally.” He wouldn’t, however, comment on Trump’s credibility.

What Trump said

Around 3:30, at the end of the second hearing, the president tweeted: “TRUTH IS A FORCE OF NATURE.”

“This morning’s testimony exposed the troubling deficiencies of the Special Counsel’s investigation,” Jay Sekulow, Trump’s legal counsel, said in a statement. “The testimony revealed that this probe was conducted by a small group of politically-biased prosecutors who, as hard as they tried, were unable to establish either obstruction, conspiracy, or collusion between the Trump campaign and Russia.”

During a July 2016 press conference, Trump denied having any business dealings with Russia, saying “the closest [he] came to Russia” was that he probably sold some condos to Russians. Mueller’s report notes that Trump’s former attorney Michael Cohen approached his boss after the press conference, believing the remarks to be untrue. According to Cohen, Trump responded that Trump Tower Moscow was not a full-fledged deal yet and said, “Why mention it if it is not a deal?” Cohen has also said that he lied about the tower’s timeline at Trump’s direction, telling Congress that talks about the tower halted in January 2016, when they persisted through June 2016. Mueller’s report was unable to conclude whether this was the case.

Questions about Kushner meetings

Jared Kushner, Trump’s son-in-law and senior advisor, came up a couple of times during the two hearings, though Mueller didn’t offer new details on two key meetings. In the second hearing, representatives cited Kushner’s presence at a meeting in Trump Tower on June 9, 2016, with a Kremlin-linked attorney. The meeting followed an email exchange between Donald Trump Jr. and a publicist for a Russian popstar, in which the publicist promised “dirt” on the Hillary Clinton. The Mueller report cites a text message Kushner sent to Paul Manafort during the meeting, which referred to the gathering as a “waste of time.” He ended up leaving the meeting before it ended, according to the report.

As noted in Mueller’s report, Kushner also met with and Sergey Gorkov, head of the Russian government owned bank Vnesheconombank (VEB), 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.

Not “exonerated”

During the first hearing, Mueller indicated that the only reason he didn’t charge the president with obstruction of justice was due to a Justice Department policy that bars indicting a sitting president. He noted that the president could be charged after leaving office. However, he backtracked this statement during the second hearing.

“We did not reach a determination as to whether the president committed a crime,” Mueller said.

Republican representatives repeatedly questioned why Mueller included language in his report — and has since said himself — that the findings of his investigation didn’t “exonerate” Trump. They said doing so went beyond Mueller’s prosecutorial authority, since the president should be presumed innocent until proven otherwise.

“You have no more power to declare him exonerated as you do to declare him Anderson Cooper,” said Republican Rep. Mike Turner, who also presented what he said were “textbooks” from Mueller’s law school, the University of Virginia to see if he’d been instructed differently.

The hearings concluded with Schiff, who said it will be up to the Justice Department to decide whether Trump should be indicted on obstruction of justice and campaign finance fraud charges when he leaves office. It will be up to Congress, he said, to look into other questions left unanswered by Mueller’s report.

“You would not tell us whether the president should be impeached, nor did we ask you, since it is our responsibility to determine the proper remedy for the conduct outlined in your report,” he said. “Whether we decide to impeach the house or we do not, we must take any necessary action to protect the country while he is in office.”

Mohamed hadid and the home (Credit: Getty Images)

There’s a new wrinkle in the ongoing demolition of the so-called Starship Enterprise, built by spec home developer Mohamed Hadid.

The four Bel Air neighbors who are suing Hadid for his half-built mansion are now claiming the property has moved an inch during the demolition process, further endangering their own homes.

That’s according to the latest court filings in the drawn out case involving Hadid and the Bel Air home, which has become the subject of civil, criminal and FBI cases. In the most recent civil case, brought by the neighbors, Hadid has been ordered to tear down the portions of the home that were built in violation of city codes. That includes the third floor of the 30,000-square-foot home, as well as the pool deck.

According to a recent status report, filed July 16 in Los Angeles Superior Court by Hadid’s lawyers, the third floor is now 98 percent demolished. The pool deck is roughly 20 percent torn down.

As part of the court mandate, Hadid was ordered to hire a surveyor who would monitor any movement of the property that could result from the construction work. “The survey did not show any movement that concerned the design team,” the report said.

But the neighbors disagreed and filed their own response to Hadid’s declaration three days later. In their response, they claim survey data and photographs of the site by the engineer revealed the home had moved an inch in 10 days. Surveys should be conducted every seven days, not 14 as the court had ordered, to monitor this, they added.

At a court hearing Tuesday, the judge overseeing the case sided with the neighbors. He ordered a survey report to be conducted weekly, as well as for another declaration on the status of the demolition by Aug. 9.

The next court hearing is set for Aug. 13.

SCI paid $32 million for 28 acres next to its Groman Eden Mortuary and Eden Memorial Park (Credit: iStock)

Don’t fear the reaper — just sell him the land he wants to buy.

Service Corporation International — North America’s largest provider of funeral and cemetery services — last week closed a $32 million deal for a 28-acre property in the north San Fernando Valley.

The property 11630 Indian Hills Road in Mission Hills hit the market a year ago. The owner, Melrose-based entity Arrowtail LLC, purchased the property in 2006 for $13 million and had leased the land out to farmers.

SCI runs a cemetery next door, but initially wasn’t in the pool of prospective buyers. Instead there were four senior living developers competing to close, according to IREA Partner William Everitt, who’s firm repped both parties in the eventual deal.

SCI wooed Arrowtail with its ability to close a deal quicker than the developers, which needed time to consider development potential. Everitt said SCI plans to build a new cemetery on the land.

Cemeteries are big business, particularly in urban areas where undeveloped land is scarce. Plots in New York City’s many cemeteries can go for between $4,500 and $19,000 before maintenance and other fees.

Former New York City Mayor Ed Koch paid $20,000 to arrange his burial at Manhattan’s Trinity Church. Some coveted cemeteries have completely ended new burials. Others are seeing declining revenue as they run out of land to sell.

SCI is a public company that has at least 2,000 funeral homes and cemeteries in operation in North America. In 2013 it acquired its main competitor Stewart Enterprises, Inc. in a $1.4 billion deal. The company mostly expands via acquisitions of smaller and independent funeral homes and cemeteries.

The largely flat property is near the junction of Interstate 5 and Interstate 405. Next door is SCI’s Groman Eden Mortuary and Eden Memorial Park, the resting place of numerous Jewish figures in show business, including comedians Lenny Bruce and Groucho Marx.

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

UPDATE, Wednesday, July 25, 11:00 a.m.: After months of damning headlines, Realogy chief Ryan Schneider finally has something positive to talk about.

The firm’s blockbuster partnership with Amazon, announced Tuesday, sent the ailing conglomerate’s stock price up a whopping 19 percent. But Jeff Bezos isn’t the white knight that can save the massive brokerage from its many woes, industry insiders say.

Realogy is covering the costs for the new program, “TurnKey,” which offers homebuyers access to its agents in 15 U.S. cities and up to $5,000 in Amazon home services and products if they close. In exchange, Realogy would benefit by the leads generated through its partnership with the ubiquitous e-retailer.

Analysts have been quick to perform a cost-benefit analysis on the program, and conclude that Realogy is on the losing side of a deal in which they eat the cost of the Amazon products by deducting it from their split of a commission.

Brad Berning, a senior brokerage analyst at Craig-Hallum Capital Group, cast doubt on the value of the leads TurnKey could generated for Realogy in a research note published Tuesday. “We estimate the cost of the program should pretty much wipe out Realogy’s commissions on these homes and net them close to zero,” said the analyst, who follows Zillow Group and RE/MAX.

“For Amazon, this is a free way to experiment with attracting customers,” Berning wrote. “For Realogy, we believe this is desperation to improve their broker platform which has structural headwinds and a levered balance sheet.”

Schneider, who has worked to modernize Realogy since joining as CEO in 2018, said the costs wouldn’t hurt the brokerage’s bottom line. “We like the economics of this. It’s not going to change the margins in our business in a negative way,” he said.

Credit: Craig-Hallum Capital Group, reported sources: Amazon, Realogy, Wall Street Journal, Craig-Hallum

Barclays’ analyst Matthew Bouley praised Schneider for TurnKey.

“He’s been trying to do different things to right the ship,” he said, noting Realogy’s change to commission splits in a few markets and its new “a la carte” suite of agent services. “[TurnKey] is probably the biggest step in the offensive direction.”

But Bouley also saw some flaws. He described Realogy’s allocation of its commission split into Amazon services and products as “probably not sustainable,” and said TurnKey’s lead generation through Amazon was unlikely to reel in the clients “that matter the most to Realogy.”

Realogy’s brokerages, he said, historically pursue higher-end transactions, which dwarf the program’s apparent target audience, stated on its website, of $150,000 to $700,000. (TurnKey’s Amazon benefits grow until the home price hits $700,000 and then they stay fixed for all higher sales. Realogy’s participating brokerages include Sotheby’s International Realty, Coldwell Banker, Century 21, Better Homes and Gardens and ERA Real Estate.)

“[High-end buyers] are not out shopping on Amazon for Alexa and someone to put their furniture together,” he said.

In response, Realogy’s head of strategy, Eric Chesin said the company was confident that TurnKey would have broad appeal.

Other analysts following Realogy weighed in with expectations that TurnKey would boost leads and potentially transactions.

Schneider has high hopes. “I’m not going to put numbers on those today but we can’t think of many opportunities that could be bigger than this,” he said.

But, as Berning noted in his report, Amazon’s investment in TurnKey doesn’t come with guarantees.

“Amazon is notorious for throwing ‘spaghetti at the wall and seeing what sticks,’” he said. Berning pointed to the eCommerce giant’s short-lived “Hire a Realtor” initiative as an example.

Barclays’ analyst Bouley also noted that generating more leads and teaming up with Amazon would not change the ultra-competitive brokerage landscape that Realogy is up against.

As commission splits are pushed higher for agents, and aggressive competitors like Compass continue to scale up, Bouley said it would take market acceleration, or competition subsiding, to ease these challenges.

“I don’t know if there’s a great endgame,” he said. “It’s hard to say that this model as it stands is a sustainable model.”

Clarification: The companies Craig-Hallum Capital Group analyst Brad Berning covers were added.

If there was any doubt that investor enthusiasm for proptech is stronger than ever, let this statistic put it to rest: In the first half of 2019 alone, investment in proptech hit $12.9 billion — eclipsing the previous record of $12.7 billion invested for the entirety of 2017, according to CRETech. With the cash infusion comes an influx of fresh tech talent into the growing space, according to Peter Belisle, Southwest director at JLL.

“People from the tech industry have realized it’s such a huge space that’s been untapped,” said Belisle. “It’s not just capital, it’s tech. That’s a huge change that a lot of people are not really aware of.”

As a result, Belisle expects big changes in the way the local commercial real estate industry functions in the next year and a half. As the software improves, more members of the industry will be relying on tech tools in the course of their everyday business, whether it’s the app a landlord uses to engage tenants or virtual tours that a broker uses to show a space, he said.

Being familiar with proptech software is no longer a bonus, but a necessity, said Sandy Sigal, president and chief executive of Woodland Hills-based shopping center developer NewMark Merrill Companies.

“Brokers have to have tapped into this stuff and be prepared to use it, or be left behind,” said Sigal.

Although iBuying platforms, such as L.A.-based Open Listings and REX, have effectively sought to replace residential brokers, commercial agents for their part aren’t worried about going extinct. Evaluating a restaurant as a potential tenant could include taking into account things like what kind of food it serves and Yelp reviews, said Gabe Kadosh, vice president of retail services at Colliers International.

“You could have all the software in the world, but you still need people on the ground,” said Kadosh.

Belisle believes that the software will increase productivity for commercial leasing brokers.

“Successful brokers who use technology efficiently may be handling more transactions per person than less,” he said.

Here, local professionals nominate the proptech products they’re finding most useful in the line of duty.

Technology: VTS
Who’s it for: Landlords and brokers
What it does: VTS is a leasing and asset management system that allows landlords and brokers to track leasing activity at all their properties in one place. It also develops custom reports that can show, for example, the deal pipeline for a client or availability for a particular property.
User’s experience: Kadosh of Colliers International keeps VTS open on his computer almost all day, using it to keep track of the approximately 25 retail properties — or 2 million square feet — around Los Angeles that he represents, he said.

When using it on behalf of a property owner whose space he’s leasing, Kadosh can enter feedback from a potential tenant after they tour the space that the owner can immediately see. “When paid for by an owner, everything I do they can see word for word, which makes it kind of intense,” said Kadosh.

When using VTS for an asset that he controls, he can generate a PDF report, which he shares with a client ahead of an update call. “Even a few years ago, it used to be Excel. VTS generates fields; it’s very easy to see, for example, when a lease expiration is coming up. It’s very clean.”

He finds it easier to use than Salesforce, which he’s also tried. “Brokers are very good at talking and showing spaces,” Kadosh said. “But when it comes to writing up reports, that’s not our best skill.”

The software isn’t perfect, he notes. Kadosh also represents tenants looking for space, and since VTS is organized by properties, there isn’t a place to keep notes for those transactions. The platform would also benefit from allowing street views of a property and integrating more aspects of a property brochure into its profile in the program, he said.

Tech Support: In May, the valuation of VTS reportedly hit $1 billion thanks to a $90 million investment in the company,  one of the largest venture investments to date in the commercial property software market. The Series D investment round — which was led by landlords that are also VTS customers, Brookfield Asset Management and GLP — will help fund the rollout of an online commercial leasing marketplace called Truva, which will be available in New York this year before expanding to other markets.

Technology: Placer.ai
Who’s it for: Developers, brokers, retail and hospitality tenants
What it does: Placer.ai uses anonymized data from mobile phones to show customer activity within a geographical trade area.
User’s experience: Sigal at NewMark Merrill Companies uses data from
Placer.ai to gather customer foot traffic data in order to entice prospective tenants to lease space at his 80 shopping centers in California, Colorado and Illinois. He also uses it to evaluate potential acquisitions and to pick the ideal locations for shopper-targeted advertising.

Sigal decided to buy the Madison Marketplace shopping center in Sacramento after data from Placer.ai showed that it had the No. 1 grocer in the area. “Some sellers have some sales data, [but] they rarely have foot traffic data,” he said. “It convinced us we should buy the center.”

He’s currently using data to show potential tenants that his shopping center in Orange County has 50 percent more traffic than the competitor across the street. In the past, he would have had to rely on less scientific ways to benchmark a property’s performance, like counting the number of customers or asking a tenant for their impressions of how many people came through the doors.

“In today’s world, the one with the most data wins,” he said. “That’s our goal.”

Placer.ai shows where Sigal’s customers work and live so that he can tailor his advertising accordingly. “If there’s a segment of the trade area that’s not coming to the center, I do marketing to that area, and then I use Placer to see if it made a difference,” he said.

Sigal said he began using Placer about three years ago, when it was geared more toward individual retail tenants. He’s worked with the company to optimize the user experience for shopping centers.

Tech support: Placer.ai, which announced a $4 million funding round last October, plans to keep working with customers to improve its usefulness. “We want to continue leveraging our AI capabilities to bring forecasting into the mix from sales for a new store to trade area projections, cannibalization estimates, ideal tenant combinations and beyond,” a company spokesperson said in an email.

Technology: PadMint
Who’s it for: Brokers, owners and potential investors
What it does: PadMint uses open source data from L.A. County to give real-time estimates of the value of multifamily properties, similar to Zillow, while also showing recent sales of such properties in the area. Users can generate reports for a building showing things like estimated operating expenses and proposed financing amounts, and through the site they can create social-media-like profiles for networking.
User’s experience: Grant Goldman, a broker associate at Lyon Stahl, a real estate brokerage focused on multifamily properties, has used the free software to generate leads. “It’s become a daily tool for me for prospecting and overall knowledge,” said Goldman. “I can hop on the phone and say, ‘Did you know this sold for x?’” Goldman has used the info on the site to create valuations in half the time it ordinarily would take, and mails them out as a form of advertising. He said that PadMint is the only place he can see multifamily property comps for free: “In the office, we use it as a benchmark, a barometer of the market.”

Although Goldman likes being able to generate reports that he can customize with his company’s logo through the site, he wishes he could modify the reports further, for instance by adding more comps (the site selects the ones it includes). He also thinks a mobile app could come in handy.

Tech support: PadMint is currently being beta-tested in Los Angeles County, but the company plans to expand to other major multifamily markets in the next six months. “Zillow and Redfin changed the way people access residential real estate information and the relationships between agents and their clients,” said Elliot Van Nest, PadMint co-chief executive and co-founder, in an email. “PadMint intends to bring the same transparency to the multifamily market.”

Technology: CREXi
Who’s it for: Brokers, buyers and sellers
What it does: CREXi allows users to search commercial properties for sale or lease by use type and location.
User’s experience: Mike James, managing partner at James Capital Advisors, uses CREXi as an alternative to LoopNet. He prefers CREXi’s more specialized search criteria, since his firm specializes in net leases. He also says that the information on CREXi tends to be more accurate and that the brokers using the site are of a higher caliber. 

“The quick ability to look at a property and mentally download the pertinent information quickly — lease terms, guarantee on lease, franchise or corporation, brokerage commission — it’s all in one spot,” he said.

His firm has closed on deals after submitting letters of intent through the website using its pre-made forms.   

James said that doing marketing campaigns on the site allows him to see who has clicked on his listing, so he can then follow up with the buyer if he has a new listing in the same area.

James didn’t have any criticisms of the software, although his associate Nina McGaughy said that occasionally some listings show up on LoopNet that are not on CREXi.
Tech support: The platform has helped facilitate transactions on over 90,000 listings worth more than $450 billion in property value since launching in late 2015, according to the company. CREXi uses machine learning and artificial intelligence to match supply and demand, a spokesperson said in an email. “Essentially, we want to simplify the entire CRE process and arm the brokerage community with a one-stop solution for their business workflow,” the spokesperson said.

Los Angeles homes (Credit: iStock)

July was a big month for the luxury residential market in Los Angeles.

After having been listed for three years, the Spelling Manor in Beverly Hills finally sold for a record $120 million at the beginning of July and last week, developer Ardie Tavanagarian unloaded his Bel Air spec home for $75 million.

From left: Spelling Manor and Ardie Tavangarian’s mega-mansion (Credit: Wikipedia and Hilton & Hyland)

But despite those mega-sales, L.A.’s overall luxury market is still showing signs of softening as inventory keeps piling up and sales keep slowing down, according to Douglas Elliman’s second quarter report. Meanwhile, the non-luxury market has endured much of the same, with rising prices and falling sales.

The luxury breakdown
From April through June, 87 luxury homes sold, a 4.4 percent drop from the same time last year. But the quarter was a significant improvement on the first quarter of this year, when just 57 luxury homes sold.

Still, the second quarter showed other warning signs ahead for the market. The median sales price in the luxury market, which Elliman defines as the upper 10 percent of all its listings, dropped about 6.8 percent year over year to $9.3 million.

Stephen Kotler, CEO of Elliman’s Western region, said the recent big-ticket sales could be attributed to a “summer buying spree.”

“In the high end, it’s a tale of two cities,” he said. “You have realistic prices and houses that are selling, and then you have aspirational prices where houses are still sitting.”

In the non-luxury market, the median price for single-family sales in Greater L.A. rose 3.8 percent year over year to $1.5 million.

But the number of sales dropped 7.9 percent to 1,566, signaling that sellers may still have an unrealistic sense of the current market. At the same time, the overall residential market inventory jumped 22 percent to 3,355 homes.

Certain pockets of L.A. fared better than others.

In pricey Brentwood and Westwood, the number of sales increased roughly 9 and 33 percent, respectively. Prices for the homes also rose in both areas.

In Brentwood, sales have been especially strong.

Earlier this month, WeWork executive Max Gross paid $28 million for former Fleetwood Mac guitarist Lindsey Buckingham’s custom-built home mansion. Agency partner Santiago Arana also sold one of his development projects in Brentwood to Petra Ecclestone — seller of Spelling Manor — for $23 million.

Meanwhile in Malibu, sales have slipped more than 50 percent, dropping to 29 homes in the quarter.

Los Angeles Dodgers President Stan Katsen and a rendering of Centerfield Plaza (credit: Los Angeles Dodgers)

Dodger Stadium’s $100 million renovation will add a two-acre “entertainment plaza” with plenty of food and drink options, following a trend by developers to boost retail offerings at ground-up and arena renovation projects.

The Dodgers’ Centerfield Plaza is meant as a “front door” for the stadium, according to the Los Angeles Daily News, and will provide some of the amenities that other stadiums already have.

Dodgers President Stan Katsen said the plaza “will encourage people to come early, to leave late if they wish,” according to the report.

The renovation is being led by the team’s senior planner Janet Marie Smith, who led a hugely successful renovation of Boston’s Fenway Park and the construction of the Baltimore Orioles’ Camden Yards park. That stadium, opened in 1992, has been credited with revitalizing the area and beginning the boom of new stadium construction.

The Dodgers, meanwhile, are looking to complete their addition before the start of the next baseball season in late spring. It will also include a new sound system and other stadium upgrades.

While the Dodger Stadium project is relatively small compared to some of the mega-stadiums and arenas in the works around the country, it follows the wider trend of adding retail and entertainment facilities to augment those sports arenas.

The $2.6 billion L.A. Stadium and Entertainment District in Inglewood — the future home of the L.A. Rams and L.A. Chargers NFL teams — is the most ambitious of those projects in the L.A. area. The project has spurred investment and development in the surrounding area, but has also fueled concerns over gentrification.

The owners of the New York Islanders want to build a 43-acre megaproject anchored by a 19,000-seat arena bounded by around 435,000 square feet of retail space and a 250-room hotel. [LADN] — Dennis Lynch 

SoftBank Chief Executive Masayoshi Son (Credit: Getty Images)

SoftBank Group’s board is reportedly planning to meet Thursday to approve a $40 billion investment into its new technology fund.

The investment comes after SoftBank secured backing from an unusual configuration of investors that includes Apple, Goldman Sachs, and the government of Kazakhstan.

The Wall Street Journal reported that an anticipated merger of Sprint Corp. and T-Mobile — poised for approval by regulators — will wipe away billions of dollars in SoftBank debt and make room for it to invest.

The fund is a sequel to its $100 billion Vision Fund, launched in 2016 with money from SoftBank itself and the governments of Saudi Arabia and Abu Dhabi. The Vision Fund has provided gobs of cash to real estate startups such as WeWork, Katerra, OpenDoor and Compass, all of which are valued well over $1 billion.

The Journal reports that Saudi Arabia and Abu Dhabi are likely to invest again in the new fund, as SoftBank seeks further backing. Its current backers include Standard Chartered PLC, the emerging-markets bank, in addition to Apple, Goldman and Kazakhstan’s sovereign-wealth fund. It’s also said to be in discussions with Microsoft. [WSJ] — Sylvia Varnham O’Regan

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.

GPI Companies co-founders Cliff Goldstein and Drew Planting and AIDS Healthcare Foundation CEO Michael Weinstein

GPI Companies’ plan to build a residential tower after demolishing the famed Amoeba Records store in Hollywood hasn’t been scratched, but it may skip past its intended construction timeline.

After Los Angeles officials in June denied an appeal to add more affordable units to the 26-story apartment building project, the Coalition to Preserve L.A. and AIDS Healthcare Foundation have now filed a lawsuit hoping to halt any work, according to Curbed.

Their suit in Los Angeles County Superior Court claims the record store at 6400 Sunset Boulevard has historical significance. The suit contends the property would be eligible for state recognition for its “culturally significant murals associated with significant artists.”

Separately, the two advocate groups have also applied with the city to name the record store a historic-cultural monument. The two groups frequently battle developers and together have filed at least five city appeals of Hollywood development project since 2015, according to Curbed.

The lawsuit and the historical-cultural monument application could further delay GPI’s development plans.

The Brentwood-based firm had intended to demolish Amoeba Records by the end of the year, and complete its 200-unit project by the end of 2021. GPI purchased the property from San Francisco-based Amoeba Records in 2015 for $34 million and first filed plans for the project in 2017.

Amoeba’s Sunset Boulevard store opened in 2001, but its large selection of music and the frequent visits and performances by both major label and up-and-coming artists made it a mainstay in the L.A. music scene.

Amoeba’s lease ends this year and the owners want to open somewhere else in Hollywood, and have also explored selling cannabis at Amoeba’s future location. [Curbed] — Dennis Lynch 

Tami Halton Pardee (Photo by Jeff Newton)

UPDATED: 2:42 p.m., July 22. Tami Halton Pardee may be known as the “Queen of Venice,” but she just as easily fits into the neighborhood’s ‘70s bohemian ethos as the multimillion-dollar homes it’s known for today. The founder and CEO of Halton Pardee + Partners has lived in Venice since 1995 and stresses the importance of radiating calming energy instead of chaos; she’s also sold more than $3.8 billion in real estate since 2004. In July, Halton Pardee + Partners placed second in a Real Trends ranking of brokerage teams throughout California. The group logged more than $605 million in sales in 2018, according to the ranking.

In recent years, Pardee has thrown herself into more than just real estate. She launched Life Change Warriors, a nonprofit that, through mentoring, aims to empower homeless women and underprivileged youth to create tangible plans to get what they want. The program has since expanded to offer a yearly coaching program for working moms as well, a for-profit endeavor that partially subsidizes Life Change Warriors.

As for the recent market softening, Pardee knows she can weather the storm. During the 2008 financial crisis, “we told our clients it was a great opportunity to buy and never put people in houses they couldn’t afford.” As a result, she said that Pardee Partners’ business tripled.

“I’m the person who has plan A, B, C, D and E,” she said. “It’s not like I have to make rent this month, so I want to do what’s right for my clients — it’s more about relationships in the long run.”

Pardee reveals what a typical day is like for her in an interview that was edited and condensed for clarity.

5:30 a.m. I wake up at 5:30 or 6. I live about a mile and a half from the beach, so I walk to the beach every morning with weights in my hands. I get coffee and go to the lifeguard stand on Driftwood. There, I meditate, dance and have my time for 20 to 30 minutes, and I then walk back. I do it religiously every morning. It’s my way of connecting with myself and nature.

7:00 a.m. I’m back and get my four kids ready to go. We are a fast-action family, so I can get them out of the house within 30 minutes. My kids are ages eight to 15, so they’re pretty self-sufficient. We have breakfast together and talk. We do animal spirit cards, where everyone picks one and we read our intention for the day.

8:00 a.m. I take my kids to school or camp. When I’m driving back, I talk to my personal assistant for 10 to 15 minutes and go through the touchpoints for the kids, anything that hasn’t happened that needs to happen.

8:30 a.m. I come back and hang out for a minute and do a little work at home — it’s the calm before the storm. I don’t touch my emails until 8:30 or 9. You’ve got to have some space for yourself in the day.

10:00 a.m. I go into the Mar Vista office. I do a lot of meetings in groups. We get together to just jam out things: list of prospects, escrows, people that I need to call. In meetings, I go over things pretty quickly. I’ve trained a lot of my people to say things in one word.

1:00 p.m. I get lunch every day at this Thai place around the corner from the office: Thai spring rolls with peanut sauce wrapped in rice paper — one or two orders, depending on how hungry I am. I always get it to go.

2:00 p.m. I like to swing by the Venice office in the afternoon. I try to keep the middle of the day clear so I’m able to go on listing appointments, showings, caravans, everything that I need to show up at.

3:30 p.m. I pick up my kids, and about once a week, I take them back to the office with me. They love going to the office, but it can be really distracting. We’ll get ice cream, and I’ll work a little more. With four kids, there’s something every day — soccer practice, baseball, basketball.

6:00 p.m. I try to eat dinner with my kids. On Monday nights, I take them to a restaurant that they get to choose. We do Taco Tuesday. I try to stay off my phone in the evening. I do have a quick response team with my clients, so there’s always someone on my team available. If a client escalates something, they’ll let me know.

7:00 p.m. I hang out with my kids. We have a rooftop deck where we play soccer or swim in the pool. I rub their feet every night with lavender oil — it’s our time to connect and talk about the day.

8:00 p.m. The kids head to bed. Sometimes I’ll attend a client thing after they go to bed.

9:00 p.m. I don’t have my kids on Wednesdays and Thursdays; they’re with my ex. So I try to stack the work events when they’re at school and when I don’t have them.

10:00 p.m. I usually go to bed at 10. I like to read. I don’t watch a lot of TV. I read a lot of spiritual books, listen to podcasts like Brené Brown. I’ll also listen to books about how to help kids through things.

A female former executive at Bank OZK claims she was fired days after flagging sexual misconduct in its lending unit (Credit: iStock, Pixabay)

A former executive at Bank OZK’s real-estate lending division alleges that current and former executives within her group engaged in sexual misconduct and age discrimination.

In a lawsuit, Anna Carrillo, a former senior vice president within the Dallas-based Real Estate Specialties Group, claims that in October 2017, she was fired days after complaining that a junior paralegal in the department was underperforming. That paralegal, Carrillo alleges, was engaged in an inappropriate sexual relationship with another executive in the group, Wes Hardin. The suit details an “animal house” culture that enabled heavy drinking and inappropriate fraternizing within the bank’s commercial lending division, which has loaned billions of dollars to New York, Miami and Los Angeles developers over the past few years.

“It is a bank where male executives ran amok pressuring younger females to have sex with their supervisors in total disregard for the #metoo movement,” Carrillo’s suit claims.

The legal action, initially filed against Bank OZK in November 2018 in Dallas County Court, is now in the Northern District of Texas Supreme Court. When reached for comment, a Bank OZK spokesperson pointed to a court filing that denied all allegations in the lawsuit. In the filing, the bank states that Carrillo’s termination was “based on legitimate, non-discriminatory, and non-retaliatory business reasons.”

In one incident detailed in Carrillo’s suit, Hardin, then a managing director in the real-estate lending group, invited the paralegal to an event for bank executives, where they were allegedly seen to be behaving as a couple. The pair also allegedly spent “hours” in Hardin’s office with the door closed on multiple occasions during work hours, despite Hardin having no oversight of her duties. These events were the subject of a separate complaint filed to the bank’s human resources department by another employee, which has been viewed by The Real Deal.

The lawsuit also claims that Hardin, another executive, Brannon Hamblen, who is the current president of the group, and two other men in the unit engaged in inappropriate conduct with a female receptionist earlier in 2017. One episode allegedly involved an inappropriate image sent by Hamblen to the receptionist.

Carrillo, who is 54 and oversaw the closing of more than 250 transactions at the bank, said the company framed her termination as a “re-structuring,” but that many of her duties were later assigned to the paralegal, who is in her 20s. Shortly after, an internal investigation into conduct by Hardin and the paralegal, who TRD has chosen not to name, led to their termination.

“It took me over 30 years to get to that position,” Carrillo said in an interview. “And it was all taken away from me.”

According to an affidavit filed by Dan Thomas, who was then head of the division, he confronted the four men in a meeting about a rumor of inappropriate conduct with the receptionist, but all denied wrongdoing.

Hardin, Hamblen and the other two men are not named as defendants in the lawsuit. They did not respond to requests for comment. Court filings from June indicate the parties are working toward a settlement.

The lawsuit against Bank OZK comes at a time when the real-estate industry is facing a wider reckoning spurred by the #MeToo movement. Major companies in the space have been hit with claims of sexual harrassment and age and gender discrimination, including WeWork, Cushman & Wakefield and Newmark Knight Frank.

John Burns (Credit: iStock)

A new study shows affordability in the single-family markets in Southern California increased and about 257,000 more people can buy a starter home thanks to cheaper mortgage rates — but that doesn’t help the majority.

The study by John Burns Real Estate Consulting found that the number of qualified local residential buyers rose by 15 percent since last November in Los Angeles, Orange, Riverside and San Bernardino counties, according to a report by the Orange County Register. That’s after 30-year fixed-rate mortgages dropped from nearly 5 percent to about 3.8 percent.

The report looked at households with incomes that could comfortably buy a residence at 80 percent of the local median-priced home, which is a standard for starter homes. But even with the cheaper mortgages, home sales have persistently been slowing for nearly a year, and only one third of households in Southern California can afford a starter home.

The cheaper mortgages added about 129,000 more households in Los Angeles County that can now theoretically buy a starter house compared to last November. That’s the fourth lowest affordability rate on the list of 131 major U.S. markets. Just about 27 percent of households can afford 80 percent of the local median-priced home. About 48,250 more households can afford homes in Orange County, where still just 29 percent of households can afford a starter home.

San Francisco still reigns as the least affordable city, where just 11 percent can afford a starter home. [OC Register] — Gregory Cornfield

The 2017 LA Pride march in West Hollywood and West Palm Springs (Credit: United Food and Commercial Workers)

Homes and condominiums in West Hollywood aren’t just expensive because they’re on the Westside.

Properties in areas considered LGBTQ-centric can be worth three times as much as comparable homes in neighboring areas, according to a Zillow study cited by the Los Angeles Times. The study looked at 36 such areas nationwide.

Homes in West Palm Springs carried the highest “gayborhood premium” in California — 233 percent compared to homes in nearby Riverside. Palm Springs has more same-sex couples per household than anywhere in the state.

Cleveland’s Riverside neighborhood has an even higher premium. Homes there were nearly three times as valuable as neighboring areas, the highest in the country. New York City’s “gayborhoods” on Manhattan’s west side carry a 116.9 percent premium.

Homes in West Hollywood, long a gay enclave and popular LGBTQ vacation destination, have a 32.9 percent premium over homes in broader L.A. County. West Hollywood is home to numerous multimillion-dollar houses. Spec builder Nile Niami is asking $55 million for his own home there.

In San Francisco’s Castro District, homes were 8.1 percent cheaper than the rest of the city in the 1970s. By 2000, they grew to be 40 percent higher than the citywide average.

Still, some sectors of the real estate industry haven’t caught up. An Iowa State University study of 30 million mortgages between 1990 and 2015 found same-sex couples were 73 percent more likely to be denied a mortgage than opposite-sex couples. [LAT] — Dennis Lynch