Owner Jeff Records and the Security Pacific Bank building

The owner of one of the most historic buildings on Hollywood Boulevard has put the property up for sale, nearly a decade after attempts at converting the building to a boutique hotel fell through.

Jeffrey Records, CEO of Oklahoma-based MidFirst Bank, has put the former Security Pacific Bank building on the market, The Real Deal confirmed. He’s also selling a surface lot that is adjacent to the building.

Bids are expected to reach $60 million.

Located at 6381 Hollywood Boulevard, the building spans 68,000 square feet across seven stories. It’s currently about 50 percent leased to five tenants, most of which are on a month-to-month lease.

The 1922-built building has been on the National Register of Historic Places since 1983. Rumor has it that Howard Hughes, Charlie Chaplin and Cecil B. DeMille frequented the bank back in the day. The building was also featured in Raymond Chandler’s novel, “The Long Goodbye.”

Records owns the building, and the adjacent land at 1716 Cahuenga Boulevard, through an entity named Spbb LLC, property records show.

A decade ago, he filed plans to convert the property to a 80-room boutique hotel that would feature a restaurant, nightclub, spa, rooftop bar and swimming pool. Construction was initially scheduled for 2011 but then pushed back to 2014. Ultimately, the adaptive reuse project fell through.

Marketing materials from Cushman & Wakefield suggest the next owner could attempt to convert the building once again, maybe to a private club or co-working space.

Real Estate Alert first reported the listing.

Softbank CEO Masayoshi Son (Credit: Getty Images and iStock)

SoftBank has outdone itself, announcing a mega-fund that tops its initial $100 billion Vision Fund at $108 billion gathered from a dozen investors. Vision Fund 2 will target the technology sector, with a focus on artificial intelligence. Of that $108 billion, nearly $40 billion will come from Masa Son’s own SoftBank Group.

The investors include Apple, Microsoft, and Kazakhstan’s sovereign wealth fund, according to SoftBank. With other investors including Goldman Sachs, the fund is expected to continue growing, Wall Street Journal reported.

Real estate companies that have received billions from the original Vision Fund include WeWork, Compass, Katerra and OpenDoor.

Questions still remain about when the fund will start operating — with some of the investors who were named in SoftBank’s press release saying they are waiting to see the fund’s term sheet before they decide how much they will invest. The minimum amount investors have to ante up is $100 million, and some firms voiced concerns over the fund’s transparency.

In the second iteration of the Vision Fund, SoftBank was able to keep two investors, Apple and Foxconn Technology Group, while attracting investors who are usually more skittish: pension firms, banks and insurance companies. Other Vision Fund investors who are likely to join Vision Fund 2 include Saudi Arabia’s sovereign wealth fund and the United Arab Emirates. [WSJ] – Georgia Kromrei

From left: London, Shanghai and Paris

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

United Kingdom
Taxpayers covered the €62 million payment needed in London to induce WeWork to lease 280,000 square feet of office space vacated by a UK government agency in a Brexit-driven relocation. As a result of the UK’s pending exit from the European Union, all EU agencies based in the UK must relocate to another member state. [The Guardian]

One private equity group found another to buy control of the iconic Liberty department store in London for £309 million. BlueGem Capital expects to sell for 12 times its equity investment in a 40 percent share of Liberty in a deal with Glendower Capital, formerly part of Deutsche Bank. [FT]

Homes still sell near record prices in London, but land values are sagging, as one developer’s experience illustrates. UK-based property investor and developer Capital & Counties Properties Plc owns land in London’s Earls Court district that has lost half its value since peaking in 2015. [Bloomberg]

Israel
The Israeli government started demolishing the first of 10 Palestinian apartment developments because they are too close to its security barrier in a Palestinian area next to East Jerusalem. Israel’s High Court rejected efforts to prevent demolition of the mostly unfinished apartment buildings, which had been approved by the Palestinian Authority. [NYT]

China
China’s economy grew at the slowest quarterly pace since the early 1990s, yet investment in commercial real estate remains robust, especially in Shanghai. Commercial property sales in China increased 14 percent in the first quarter to a record $17 billion. Shanghai accounted for more than a third of the mainland sales volume. [SCMP]

New Zealand
A ban on foreign buyers has put pressure on home prices in Queenstown, a mountain-ringed winter resort that had been popular with home buyers from the United States, Australia and Asia. Home prices in Queenstown nudged down in June from the same month last year, the first annual drop since 2011. [Bloomberg]

United Arab Emirates
The newest expansion of the financial district in Dubai is largely vacant. Dubai International Financial Centre spent 1 billion dirham ($272 million) to build its Gate Avenue expansion, a subterranean promenade that opened in January, but just two dozen tenants have leased space in the marble-lined, kilometer long promenade. [Bloomberg]

Qatar

Three luxury hotels in London and Paris valued at about $869 million combined hit the market as a former Qatari prime minister prepares to divest. The family office of Sheikh Hamad bin Jassim Al Thani, who was prime minister of Qatar from 2007 to 2013, is set to sell two London hotels, the Sanderson in the Soho district and the St Martins Lane in Covent Garden; and one in Paris, the Hyatt Regency Paris Etoile. [Bloomberg]

Spain

The richest man in Europe boosted the value of his commercial property portfolio by 11.5 percent last year to nearly 10 billion euros ($11 billion). Amancio Ortega, founder of fashion retailer Inditex, is using his dividends from the company to acquire properties that include prime retail space in London and New York and office buildings in Madrid. [Reuters]

Poland
The luxury housing market in the capital Warsaw is on the upswing — thanks to the nation’s strong economy — with listings 20 percent above what they were last year and an increase in new construction and rehabs. While U.S. housing prices have dipped, the overall housing market in Warsaw climbed 6.7 percent in 2018. [WSJ]

From left: Ellen DeGeneres, Rihanna, Tom Brady, Gisele Bündchen, Kanye West & Kim Kardashian (Credit: Getty Images) 

When Rihanna, Ellen DeGeneres, Tom and Giselle and J.Lo and A-Rod need to offload a pad, there are only a trusted few to whom they award the privilege of selling it. And the brokers lucky enough to list those properties are well attuned to the special considerations necessary when catering to superstar athletes and Hollywood royalty.

Over the years, brokers have told The Real Deal about the many advantages and obstacles of finding homes for celebrity clients. Below we highlight what they’ve shared about the trials and travails of star-studded selling.

‘Stranger’ needs
L.A.-based Compass agent Lee Mintz, who has a roster that includes professional athletes and pop stars like Rihanna, befriends her clients, “with an arm’s distance, of course.”

“If they need me to pick them up when they’re landing at LAX, I’ll be there,” Mintz told TRD. “I’ll find them a car, housekeepers, dry cleaning. They call me for everything and I always pick up the phone. And then they start trusting me.”

But sometimes things can get out of hand.

“One of the stranger requests I got was from Ty Lawson, of the Sacramento Kings,” she said. “Some time ago, he was staying on Mulholland Drive with his brother, and I got a call in the middle of the night. He said, ‘Lee, there’s a seven-foot snake in front of my house, what do I do?’ and I said, ‘You need to hang up the phone right now and call the police,’ and then I hear this dup-dup-dup sound, and it turned out that they started shooting at the snake with a gun.”

Mintz added, “I get all kinds of stupid stuff. I get, ‘Lee, there’s something dripping under my sink!’ at 2 in the morning. ‘Lee, my girlfriend left, I need you to pack up the house.’ The scariest was the call I got from Rihanna about the stalker. This was at like 5 a.m. I jumped in the car, and drove to the house, where the alarm was going off and the S.W.A.T. team had come.”

Other celebrities have made their share of odd requests. Tom Brady and his wife, supermodel Gisele Bündchen, asked developer Related if they could move up to the 12th floor of 70 Vestry Street in New York, in order to match his number 12 Patriots jersey.

24-hour accessibility is a must for any broker dealing with a high-wattage client.

“Movie stars and entertainers, you really have to be at their beck and call, and you have to make appointments from 9 a.m. to 4 p.m., and they might not show up until 1 p.m.,” said New York-based broker Dolly Lenz, of Dolly Lenz Real Estate. “And so how do you deal with that and not get angry at them? It can be very challenging.”

Need for privacy
Privacy is paramount when it comes to a celebrity sale.

“We make every effort to keep real estate transactions private,” said Marc Shevin, an L.A.-based agent with Berkshire Hathaway who represents dozens of celebrity clients, including Kanye West and the Kardashians, Simpson, and Lopez.

“It absolutely bothers us and we find it an intrusion on their privacy when someone somehow obtains information on those transactions and publishes it,” he added.

One of the most important aspects of Shevin’s job is ensuring he finds his clients the homes that are out of reach from the paparazzi.

The privacy afforded in the gated community of Hidden Hills helped attract several past celebrity owners like Jessica Simpson who would regularly walk her children to a neighbor’s house to pet and feed the ponies, and Jennifer Lopez would wear sweatpants and a bandanna and push a stroller down the street, he said.

In 2005, when “Friends” was winding down, actor Matt LeBlanc complained to Shevin about how the paparazzi stalked him outside his gated house in Encino, often following him to the TV studio and back. When he learned that Hidden Hills had three guard gates, he bought a home there for $9 million.

Celebrity-owned properties are nearly always under a threat of intrusion, brokers said. Nick Segal, the president for Southern California for Compass, and other brokers told TRD that thieves can find homes on the multiple listing service and sites like Zillow, and then track a celebrity’s social media postings “and realize they are having a fabulous time in Italy.”

In response, famous sellers turn to pocket or off-market listings to limit access to information, Segal said.

And while most agents keep a tight lid on the deals their celeb clients are making, it’s inevitable that some fan-girling occurs at showings.

Lenz once took Barbra Streisand for a second look at a penthouse. When Streisand entered the house, a doorman fell to his knees and began singing “People Who Need People.”

“I can only tell you that she did not buy that apartment,” said Lenz. “It was not a good idea.”

Sometimes the brokers themselves can get drawn into the spotlight, despite efforts to keep it discreet. Broker Adam Modlin of New York-based Modlin Group was once caught up in the tabloids with his clients, way back in the day, when it was reported that he played matchmaker for Alex Rodriguez and Kate Hudson.

“I did not set them up,” he said. “And Kate Hudson is not one of my clients. Nobody ever called to ask me about it. It is simply not true.”

Famous friendships
Brokers can become close with celebrities through the business relationship.

Kurt Rappaport, co-founder and CEO of Westside Estate Agency, told TRD that celebrity home flipper Ellen DeGeneres gave him good real estate advice.

“Ellen DeGeneres used to tell me that you can put one $70 scarf from Banana Republic and another scarf from Loro Piana that’s many times more expensive next to it, and they look the same to most people,” he said. “But once you know the feel, stitching and how it falls around your neck, you can’t do the cheaper one. So for me, my philosophy is always to spend more because it’s worth more.”

Luxury real estate agent Valerie Fitzgerald said celebrities are mostly like anybody else, and are plenty relatable. In other words: stars, they’re just like us!

“With Ben Affleck, we were showing a lot of houses to him, and I always brought my daughter along, and one time, he saw her and said, ‘Come over here and give Uncle Ben a big hug!’ and I thought that was just so sweet.”

Fabio Conti and the retail centers (Credit: Facebook)

Restaurateur Fabio Conti is getting into the real estate game.

Through two LLCs, Conti sold his Italian restaurant in Hollywood then purchased a pair of retail shopping centers in Inland Empire for $35.6 million. The Riverside County sites total more than 157,800 square feet of space.

Conti sold the restaurant, Fabiolus Cucina at 6266 W. Sunset Boulevard, earlier this month for $18.6 million to Atlanta-based Invesco, property records show.

He then acquired the retail centers from two different sellers. CBRE’s Fred Aframian represented the buyer. The deal was part of a 1031 exchange, which allows investors to defer capital gains taxes by using funds from a sale to buy new property.

The retail properties include the 124,431-square-foot Menifee Town Center at 30121-30187 Antelope Road in Menifee. It is anchored by a Ralph’s grocery store. The property also features two acres of developable land. The seller was Weingarten Realty, which was represented by Reza Investment Group’s Ramez Barsoum and Aaron Bettencourt.

The smaller property is the recently-renovated 33,416-square-foot Barn at Wildomar, at 32395 Clinton Keith Road in Wildomar. It includes eateries and entertainment stores. The seller was a trust tied to Paul and Sonia Akian. Lee & Associates’ Mike Hanna and James Nadal advised on the deal.

Inland Empire’s retail landscape has been increasingly active after a spike in demand from a growing worker population and residential base. Asking lease rates are likely to continue to climb with demand as vacancies trickle downward.

Magellan Development Group’s Executive Vice President Sean Linnane and Vista Tower

Magellan Development is blaming an unexpected drop in Chinese investment in American real estate for draining some momentum from condo sales at Vista Tower.

More than a year before the 93-story tower is scheduled to open, just under half of its 393 condos are sold, according to Crain’s. Only about a dozen units were bought by Chinese nationals, a number Magellan executive Sean Linnane called “disappointing” given China-based Dalian Wanda Group’s stake in the project.

Magellan and Dalian Wanda have stopped advertising the Jeanne Gang-designed tower amid a nationwide evaporation of Chinese investment. Citizens of the world’s largest nation spent about $13.4 billion on residential real estate during the year leading up to March 2019, compared to $30.4 billion the year before, according to a recent National Association of Realtors report.

Chinese investment was skyrocketing in 2014, when Vista Tower was in its planning phase. Dalian Wanda and Magellan set up “multiple sales channels” in China to market the tower, but they have since dried up, according to Linnane, who is overseeing its condo sales.

During the 12 months ending in March, Illinois was the third-ranked target in the United States for Chinese homebuyers, behind California and New Jersey.

Dalian Wanda has been trying to sell its stake in Vista Tower since early 2018. The company reportedly was close to a deal with Canadian shopping mall developer Triple Five, but the sale never materialized.

[Crain’s] — Alex Nitkin

There are some new real estate events on the way next week.

Host: ULI Los Angeles & Ticco
Date: July 30
Time: 6 p.m. to 9 p.m.

ULI Los Angeles and Ticco are teaming up to hold their Young Leaders Group Summer Social at Santa Monica Brew Works, 1920 Colorado Avenue from 6 p.m. to 9 p.m. Come to this event for a free evening of networking, food and drinks.

Host: Bisnow
Date: July 31
Time: 8 a.m. to noon

Bisnow is hosting its Future of Los Angeles Office event at 555 Aviation, 555 South Aviation Boulevard from 8 a.m. to noon. Attend to network and hear discussions on the evolution of office development in Los Angeles. Speakers include Timothy Haskin of AECOM Capital and John Barganski of Brookfield Properties.

To search for future industry events or browse past ones, click here. And to submit more industry events, please reach out to events@therealdeal.com.

Luol Deng and his Brentwood home (Credit: Getty Images, Realtor)

NBA forward Luol Deng has carved out a second career as a successful real estate investor, and sometimes that means having to lower your price.

Deng has sliced the asking on his 1.2-acre hillside property in Brentwood to $6.9 million from its original $7.5 million, according to the Los Angeles Times. He listed it earlier this year.

But the 34-year-old league veteran probably won’t sweat it. Over the years he’s amassed $125 million worth of commercial, hotel, and residential properties, according to Forbes. He’s currently working on a $25.6 million deal for 23 multifamily buildings in Chicago, where he played for the Bulls. His former teammate, Derrick Rose, is also involved.

Deng is also a leading backer of an Opportunity Zone fund called “Our Opportunity,” which is looking to raise $300 million this year. At least a half dozen other NBA players are also involved in the fund, which is working on at least one project in L.A., according to reports.

Deng, a two-time NBA All-Star who is from Sudan, paid $6.2 million for the Brentwood property in 2016 after signing a four-year, $72 million contract with the Lakers. In 2018, he joined the Minnesota Timberwolves.

The property’s three-story home spans 6,500 square feet with seven bedrooms and 7.5 bathrooms. Compass’ Cynthia Ann Festa and Elana Fullmer have the listing. [LAT] — Dennis Lynch

Donald Trump and Kathy Kraninger (Credit: Getty Images and iStock)

Borrowers who are deep in debt could find it even harder to get home loans under a new Trump Administration proposal.

Leaders of the Consumer Financial Protection Bureau said Thursday they plan to allow the expiration of the so-called “qualified mortgage patch,” a loophole in post-recession lending rules that lets deeply indebted homeowners take out loans, according to the Wall Street Journal.

The patch allowed Fannie Mae and Freddie Mac to back some home loans whose debt payments exceed 43 percent of the borrower’s income, which was the cap broadly set by the bureau in 2013.

The Urban Institute estimates lenders exploited the patch to extend some 3.3 million mortgages between 2014 and 2018, adding up to more than $250 billion in loans that would not have been allowed otherwise.

At a press conference Thursday, Consumer Financial Protection Bureau director Kathy Kraninger said her agency has not decided whether to adjust the rule’s debt-to-income cap once the patch expires in 2021.

Tightening the mortgage requirements is part of the Trump Administration’s larger effort to distance the federal government from home lending, in part by privatizing Fannie and Freddie. [WSJ] — Alex Nitkin

From top left, clockwise: 11400 Sunshine Terrace, 1166 Corsica Drive, 932 Rivas Canyon Road, and 619 S. June Street

The top five homes that hit the market this week in Los Angeles County combined for more than $76.8 million, and are in places like Pacific Palisades, Bel Air and Hancock Park.

Despite the stalling high-end market that has been defined by major price cuts, all five properties are listed at more than the most expensive property at the start of the month.

The data and information are pulled from the Multiple Listings Service and Redfin.

932 Rivas Canyon Road | Pacific Palisades | $18 million
This home in the Pacific Palisades is located off Sunset Boulevard at the southern tip of Will Rogers State Historic Park. It was built in 2009, and it includes six bedrooms and seven bathrooms with about 9,600 square feet of space. It last sold for $11.2 million in 2016. The property spans more than 32,000 square feet and features views of the canyon with patio space, a pool and spa, and a rooftop deck with a putting green. It’s listed with Jade Mills and Tiffany Mills at Coldwell Banker.

619 S. June Street | Hancock Park | $16 million
A recently rebuilt mansion on June Street in the Hancock Park is listed for $15.95 million. It’s just off Sixth Street near Highland Avenue and Wilshire Boulevard. The home includes 11,059 square feet of space with seven bathrooms, 9.5 bathrooms, a theater, a spiral wine cellar and a crossfit gym. The 0.7-acre property also features a guest house and pool. It last sold for $4.5 million in 2014. Sally Forster Jones with Compass has the listing.

10535 Vestone Way | Bel Air | $15.9 million
A newly built home on Vestone Way is the largest of the five listings with almost 14,600 square feet of space. The Bel Air mansion hit the market this week for $15.89 million. It includes six bedrooms and five-and-a-half bathrooms. The two-acre property features three structures and a 70-foot pool and spa. The structures are a 12,786-square-foot main house with three levels, a 1,200-square foot guest house and a 600-square-foot staff quarters. Teena Anderson with Beverly Hills Brokers & Associates has the listing.

1166 Corsica Drive | Pacific Palisades | $14 million
This Cape Cod-style home was built in 2015, and spans 9,000 square feet of space. It has six bedrooms, seven bathrooms, a theater, and a gym room. The 14,000-square-foot property also features a pool and spa. Michelle Schwartz and Corey Kessley of The Agency have the listing.

11400 Sunshine Terrace | Studio City | $13 million
A French-style mansion on Sunshine Terrace in the hills of Studio City hit the mark Thursday. It includes 7,600 square feet of space with five bedrooms and six-and-a-half bathrooms. It also features a movie theater, an office, and a gym room. It was built in 1923 on the three-acre property, which features an infinity pool and spa. It was last purchased for $6.3 million in 2012. It is listed with Hosana Saputra of Surterre Properties Inc.

Sugar Ray Leonard and the Pacific Palisades home, and Ellen DeGeneres and the home (Credit: Getty Images)

The week in celebrity real estate wouldn’t be complete until Ellen DeGeneres got into the action. This week, the talk show host and real serious estate investor sold one of her many homes, nabbing a tidy profit just weeks after listing it. There was also a new record set in Thousand Oaks, as well as a massive $50 million listing in the Palisades from boxing legend Sugar Ray Leonard.

He is looking for a knockout sale in the Pacific Palisades. The former champion has put his 2-acre home on the market for $52 million. He purchased it for less than $10 million in 1993. The estate features a 16,700-square-foot main home with seven bedrooms, a two-story guest house, swimming pool and tennis court. Leonard, who won five world titles, retired in the late 1990s.

In Carpinteria, DeGeneres completed another profitable home flip. The talk show host — and serial home flipper — landed $23 million for her 1-acre beachfront estate, Variety reported. The buyer was Jamie Kern Lima, founder of IT Cosmetics, and her husband Paolo Lima. DeGeneres and her wife, Portia de Rossi, listed the property for $24 million mid-July, a 29 percent hike from the $18.6 million they paid for the home less than two years ago. The residence includes a 6,860-square-foot home, a guest house and tennis court.

Movie producer Thomas Tull has broken his own record in Thousand Oaks. The Legendary Entertainment founder sold his compound for $35 million, which was 60 percent less than its original ask. He first listed the mansion for $85 million last year. Tull set the last Conejo Valley record when he purchased the main 16-parcel part of the estate in 2011 for $19.2 million. The property includes a 32,000-square-foot chateau, an 11,000-square-foot guest house, a two-story studio and auto museum, and 10 other structures.

A Culver City-based artist has found new digs in the Trousdale Estates. Ed Ruscha paid $8.4 million for a 3,400-square-foot pad, originally built for a law professor and psychiatrist. The home includes three bedrooms and four bathrooms. The home, originally listed for $9 million, is one of many the artist holds in his portfolio. Ruscha and his wife own another home in the same neighborhood, two properties in Malibu, and a property near Marina Del Rey. In total, his trust is listed as the owner of 11 properties in the L.A. area, according to county records.

(Credit: iStock)

GNC plans to close as many as 700 more of its vitamin stores in the second half of the year.

The struggling Pittsburgh-based retailer – which already closed 200 stores in the first half of the year – confirmed Monday that its store closures in 2019 will total as many as 900, Bisnow reported.

“The negative trends in traffic that we’ve seen in mall stores over the past several years accelerated during the past few quarters,” GNC CEO and chairman Ken Martindale said Monday during the company’s second-quarter earnings call.

GNC has about 4,100 U.S. locations selling vitamins and supplements, about 800 of them in malls.

In the long term, GNC could lower the number of mall locations to between 400 and 500, Tricia Tolivar, chief financial officer, said during Monday’s call.

GNC estimated earlier this year that it would close 700 to 900 stores by year-end, blaming a reduced number of shoppers at malls. So, the actual number of 2019 closures will be near the top of the projected range.

GNC’s revenue fell 13.5 percent to $534 million in the second quarter from $617.9 million in the same period last year. [Bisnow] – Mike Seemuth

Nancy Magoon and her Aspen home (Credit: Getty Images, Douglas Elliman)

Avid art collector Nancy Magoon listed her three-story house near scenic Aspen, Colorado, for $16.9 million — sculpture garden not included.

Much of her art, from prehistoric pottery to postmodern installations, may be destined for museums or new owners.

But the view of the Elk Mountains from her Aspen-area home is “my best art,” Magoon, 78, told the Wall Street Journal.

The bulk of the art will be sold or given away as donations, she said. Her husband died last year, and part of the reason she wants to sell her Colorado house is to downsize.

Magoon has ample connections in the art world that will likely help her find new homes for the pieces. She is a board member of the Aspen Art Museum and honorary trustee of the Pérez Art Museum Miami.

She is also a daughter of New York real estate developer Jack Parker, whose family once owned the old Le Parker Meridien hotel in Midtown Manhattan.

Magoon has resided in the six-bedroom house in Starwood since 1984. She and her late husband substantially rebuilt the residence in the 1990s, adding space to display their art and entertain guests.

Dozens of competing Aspen-area properties are on the market, according to Douglas Elliman, which counted 73 listings priced from $10 million to $20 million.

So far this year, the highest price paid for a home in the Starwood area has been $11.4 million for a house with 14,500 square feet of space and a 2.26-acre lot. [Wall Street Journal]

Phil Kessel’s Pittsburgh home is on the market (Credit: Getty Images, Realtor)

No stranger to stopovers in new cities, professional athletes can often have large, if sparsely-furnished, homes.

Enter Phil Kessel, a star wingman for the National Hockey League’s Pittsburgh Penguins, who recently put his 8,000-square-foot home in the city’s northern suburb of Marshall, Pennsylvania, on the market for $2.1 million following a June trade to the Arizona Coyotes.

There are few visual signs Kessel ever lived in the Steel City, despite his four years with the Penguins. His home went viral this week thanks to a cavernous home theater that exudes emptiness, a room occupied solely by a large teddy bear and a hallway with two casually dressed mannequins standing sentry.

But before you judge Kessel for his quirky taste, or lump him in with other pro athletes that leave behind relatively empty homes as they move from city to city, TheWrap reports that not everything is as it seems.

Dave Tumpa and his wife, Wendy, of Pittsburgh-based Berkshire Hathaway HomeSerivces affiliate Preferred Realty, have the listing for Kessel’s five-bedroom, seven-and-a-half bathroom home. He told TheWrap that he and his wife staged the interior of the home for dramatic effect. It turns out Kessel never even used his home theater, or, presumably, made much use of the sole chair that sits before a mammoth screen.

“You’re the only reporter that called me,” Tumpa said, when asked by TheWrap whether he was surprised that the internet went wild with speculation as to whether Kessel was a recluse who preferred to watch movies alone, presumably in the company of stuffed animals and creepy mannequins. [TheWrap] – Mike Seemuth

Tim Tebow and his home in South Jacksonville’s Glen Kernan Golf & Country Club (Credit: Getty Images, Estately)

Former football star Tim Tebow picked up a new mansion within a gated Jacksonville community where he’s owned a house for five years.

The philanthropist, minor-league baseball player and former University of Florida quarterback paid $3 million for a two-story, nearly 8,300-square-foot house on 1.5 acres in the Glen Kernan Golf & Country Club in South Jacksonville, according to the Jacksonville Daily Record.

Built in 2016, the five-bedroom house has an entertainment room, home theater, wine room, saltwater swimming pool and five-car garage. Tebow mortgaged the house with a Bank of America loan just under $2.4 million.

In 2014, he bought a smaller house in the Glen Kernan development for $1.4 million, and county records show he still owns it.

Tebow, 31, was a star football player at a high school just south of Jacksonville, where his non-profit Tim Tebow Foundation is now based.

He was a two-time national champion and winner of the Heisman Trophy as a player for the University of Florida Gators.

Tebow had a three-year career in the NFL with the New England Patriots, Denver Broncos and New York Jets, and has been in the minor league baseball system of the New York Mets since 2016.

Tebow is engaged to Demi-Leigh Nel-Peters, a South African model and the 2017 winner of the Miss Universe pageant. [Jacksonville Daily Record] – Mike Seemuth

(Illustration by Brian Stauffer)

Working behind the scenes of almost every development project — both large and small — in the city of Los Angeles, there is one constant: the lobbyist.

Call them the hired guns developers need to guide them through L.A.’s archaic zoning code, to act as go-betweens with community groups and bend the ears of local Council City members, who have near-complete sway over what gets built (and what never sees the light of day) in their districts.

Developers — who have billions of dollars on the line with their high-stakes projects — clearly recognize how indispensable these dealmakers are. That is evidenced by the tens of millions of dollars a year they pay them to win special zoning variances and cut through red tape to get projects green-lit.

Vanessa Delgado, managing partner at affordable housing developer Azure Development, said that “there are almost no projects” her firm would pursue without a lobbyist and team of consultants.

The company, for example, tapped the law firm Sheppard, Mullin, Richter & Hampton to secure land-use approvals needed for a 44-unit project east of Downtown L.A., in Boyle Heights. Earlier this year, Azure secured the approvals it needed and is now scheduled to break ground next month.

“Our projects already take up to three years, but the difference can be a year if you don’t have someone correctly navigating the system,” said Delgado, noting that a missed deadline can be costly. “That’s why I hire a lobbyist.”

And she is not the only one.

Last year, lobbying firms raked in $65.6 million in L.A. And that’s not including adjoining municipalities like Beverly Hills, Santa Monica and Inglewood.

While that figure includes cash from all industries, the majority of it came from real estate firms, according to an analysis by The Real Deal of data provided by L.A.’s City Ethics Commission.

Arnie Berghoff, a long-time L.A. lobbyist, put it simply: “We can save developers a lot of heartache and money.” (Berghoff’s eponymous three-person firm counts controversial home-sharing giant Airbnb and the multinational software company Oracle as clients.)

He added: “Our buildings and planning departments are good, but they’re overwhelmed, and one of the jobs of the lobbyist is to get it further toward the head of the line. Usually that happens if there’s a call from an elected official who says, ‘We need this in my district, and I’d appreciate if you could expedite it.”

At the end of 2018, Berghoff — who is also representing Lightstone Group in its Fig + Pico megaproject in DTLA — was one of 451 individuals at 135 firms registered as lobbyists with the Ethics Commission. That includes land-use attorneys, consultants and others who qualify as lobbyists under the commission’s definition.

But the entire lobbying industry in L.A. has been in the spotlight since late last year. That’s when the news broke that the FBI was investigating City Council member José Huizar for allegedly accepting donations to his pet charities and his wife’s Council campaign from developers in exchange for backing their projects.

As part of that case, the FBI subpoenaed prominent lobbyist Morrie Goldman, who was allegedly involved in those donations.

In response to the Huizar scandal, the Council is developing an ordinance that would ban developers from making donations to elected officials who are voting on their projects. That ordinance is expected to come to a full Council vote this fall.

Still, sources say that even if it passes it won’t change the core function of real estate lobbyists in L.A.

And most in the industry are just going about their business — continuing to solidify their connections.

“We deal with the same audience over and over again, so you can’t help but build relationships with people,” said Dave Rand, a land-use attorney and a partner at Armbruster Goldsmith & Delvac.

“We’re lawyers first, but we absolutely have relationships and function as lobbyists,” said Rand, who has worked for development and investment firms LaTerra Development and Bolour Associates.

One top lobbyist, who asked to remain anonymous, said the industry trades on its credibility.

“You have to be credible. I learned pretty early on that you’ve got to be honest,” the lobbyist said. “I’ve fired clients because they’ve lied to me. I have to maintain my credibility or there’s no reason for someone to take my word.”

Part of that credibility, sources say, stems from extracting community concessions from developers, which can make a project more politically feasible for a local elected official to support.

But Glenn Gritzner — a partner at the public strategies firm Mercury Public Affairs — said some developers put too much stock in lobbyists’ connections.

“There’s a misnomer that ‘Oh, [this lobbyist] has a good relationship with the Council member and if we hire him the Council member will do what he wants — it doesn’t work like that,” he said. “You still have to make your case.”

Swimming in lobbyists

Because the L.A. metro area is so vast, the team on every development — including the lobbyists who are tapped — often boils down to the project’s location.

“The person you hire in Long Beach is not the same person you hire in Santa Monica,” said Jeff McConnell, a partner at Englander Knabe and Allen, a strategic communications firm that has specialities in government affairs and other areas. That, of course, is because different lobbying firms have connections with different elected officials and experience with different types of projects.

Nonetheless, sources told TRD, despite the fact that L.A. is swimming in lobbyists, just a handful of very well-established firms tend to get the bulk of the work. And the numbers bear that out: The top 10 firms raked in half of the $65.6 million spent last year on lobbying, according to TRD’s analysis.

Counterintuitively, the real estate lobbying world in L.A. is not considered cutthroat. While developers almost always interview multiple firms before putting anyone on retainer, the industry of so-called influencers is clubby. And sources say there’s more than enough work to go around.

DTLA alone has 3 million square feet of office space under construction and another 3.2 million proposed, according to the Downtown L.A. Business Improvement District’s first-quarter market report. In addition, developers are building more than 5,200 residential units in L.A.’s urban core and have proposed nearly 32,600 more.

In addition to Fig + Pico, that includes Greenland USA’s $1 billion Metropolis megaproject, which will ultimately have four towers with 1,500 residential units and a 350-key hotel.

“We can’t handle all the businesses,” said Berghoff, who hosts an annual fundraiser where mayors, Council members and law enforcement officials have all been roasted in the name of charity. “I’ll call to congratulate [another firm if it lands a new client].”

Not only that, but it’s not unheard of to turn away a client — especially for the more established lobbyists. “You spend a lot of time with developers, and some are more difficult, shall we say, to work with than others,” Berghoff said. “We all talk about it. We all have a no-assholes rule.”

Rand said he has one exception: The less-than-genteel developers he worked with early in his career who eventually became his friends.

“Through the years I built a reputation where I don’t have to take on new assholes,” he said. “The old assholes are grandfathered in.”

Below is a rundown of some of the biggest and most influential lobbyists — and law firms that are also registered as lobbyists — representing real estate players in L.A.

DLA Piper
$6.6 million in 2018

The London-based global law firm was paid $6.6 million for its L.A. lobbying in 2018 — more than any other firm registered with the city, according to Ethics Commission data. The firm boosted its L.A. presence in 2017 when it merged with Liner LLP, adding 60 attorneys.

And nearly all of the DLA’s L.A. lobbying clients last year were from the real estate world, according to TRD’s review. The firm’s 10 registered lobbyists counted Champion Real Estate Company, Greenland USA and Jamison Services as clients.

Jamison hired DLA to work on multifamily developments that it’s planning in Westlake and Venice, while Greenland tapped it to represent the Metropolis.

Englander Knabe & Allen and Three6ixty
$4.5 million in 2018

The communications firm EKA launched in 2005, but founder Harvey Englander has been active in PR and lobbying for four decades and has a reputation as one of the most connected and effective players in L.A.

Last fall, the firm merged with the planning and land-use consultancy Three6ixty. While the two racked up $4.5 million in lobbying fees in L.A. last year — roughly a third from real estate — the newly merged firm is on pace to significantly surpass that this year. In 2019’s first quarter it took in $1.7 million, more than any other lobbying firm in the city. In addition, the firm has 16 L.A. lobbyists, second only to Latham & Watkins, the supranational law firm with L.A. roots.

Like many rivals, EKA generally hires former government staffers, said McConnell, who was a legislative deputy to former L.A. City Council member Nick Pacheco in the early 2000s before going to the private sector and then joining EKA in 2012.

In Beverly Hills, the firm has a long history with the high-profile parcel of land at 9900 Wilshire Boulevard.

It represented Chinese developer Dalian Wanda Group, helping to entitle the property and pave the way for a planned $1.2 billion hotel and condo project dubbed One Beverly Hills.

As part of that job, EKA also worked on the “No on HH” campaign — which was bankrolled by Dalian Wanda. That 2016 campaign defeated a referendum proposal that would have green-lit an adjacent condo and hotel by hotelier Beny Alagem and partner Cain International.

But in late 2018, Dalian Wanda sold its property to Alagem and Cain for $450 million, and EKA was hired by the new developers to keep lobbying for One Beverly Hills.

McConnell called the One Beverly Hills situation unique because of the firm’s history with the development site, but said it isn’t unusual to work against someone on one job and with them on another.

He recalled representing a community group negotiating with the Archer School for Girls in Brentwood over the school’s expansion plans. At the time, Archer was represented by Lucinda Starrett, a partner at Latham & Watkins, with whom he worked  on other projects.

“Just because you worked against someone in one place doesn’t mean they aren’t a great person to work with on another project,” he said.

Azure Development’s affordable project in Boyle Heights

Ek, Sunkin & Bai
$4.3 million in 2018

Ek, Sunkin & Bai dissolved its operations, which were based in the 42-story One California Plaza in DTLA, this year. But the firm generated $4.3 million in lobbying fees in 2018 — with about a third coming from real estate interests, according to TRD’s analysis.

The firm’s website — which has yet to be taken down — notes that it was ranked the No. 1 lobbying firm by the Los Angeles Business Journal.

Despite parting ways, all three of the firm’s named partners remain active in L.A., specializing in public affairs and lobbying, and sources say they are on good terms with one another.

Howard Sunkin and Michael Bai each formed their own firms, while John Ek took a position as co-chairman at Mercury — alongside former L.A. Mayor Antonio Villaraigosa —  and brought along many of his former employees.

Ek told TRD that much of his work involves acting as intermediary between developers and lawmakers.

“We find out what they want to see, take it back to the client to make sure they’re not pushing something their elected [official] doesn’t want, and we move things along as quickly as possible,” Ek said. “It’s also keeping it on the mind of the Council member.”

Among other real estate firms, Ek has represented construction giant AECOM, which in April secured $17.3 million in tax incentives for a 258-room hotel in DTLA.

And last year Sunkin lobbied the Council on behalf of Capri Capital Partners as the firm secured approval to add nearly 1,000 condos, a hotel, retail and office space to the aging Baldwin Hills Crenshaw Plaza mall.

Armbruster Goldsmith & Delvac LLP
$3.6 million in 2018

Like many of the other top firms, Armbruster has a clientele that includes major national firms, like EQ Office — founded by Sam Zell and now owned by the Blackstone Group — and smaller local developers like Reseda-based Skya Ventures, which is working on a 92-unit project in East Hollywood with transit-oriented incentives.

The Westside-based law firm has 13 registered lobbyists who brought in $3.6 million last year, with about 80 percent of that coming from the real estate world.

Rand, who’s been at the firm for about eight years, said it’s not always easier to win approval for smaller projects.

He cited a five-unit subdivision in Silver Lake that his firm worked on, which was met with staunch community opposition versus the “exceedingly smooth” 2016 approval for toymaker MGA Entertainment’s redevelopment of a 24-acre site in Chatsworth as its headquarters.

The developer on the Silver Lake project, which Rand declined to name, eventually hammered out a settlement with the community group and moved forward with construction — but only after opponents challenged the project’s compliance with the California Environmental Quality Act.

Meanwhile, MGA’s project is wrapping up the first phase of its mixed-use development, which will also have 660 rental units and 255,000 square feet of office space.

“[The Silver Lake project] is the reason I don’t have a lot of hair anymore,” he said. “There were appeals, fights, legal letters, tit for tat. It’s really not tied to size, it’s really tied to the amount of controversy and the type of opposition there is to the project.”

Sheppard, Mullin, Richter & Hampton LLP
$3.4 million in 2018

Sheppard, Mullin, Richter & Hampton brought in $3.4 million last year in lobbying fees — around 60 percent of it from real estate interests.

The law firm’s clients include Don Peebles’ eponymous development firm, which is one of three developers partnering on the massive $1.6 billion Angels Landing mixed-use project in DTLA.

The trio won the project through a public RFP in late 2017. The developers were hoping to land an expedited environmental review, a move that would have sped up the timeline, but the city decided that the project required a full review.

Peebles — whose firm paid Sheppard Mullin nearly $130,000 in 2018 to work on behalf of Angels Landing — said the attorneys are negotiating the development agreement and leading contract negotiations with the city as well as ensuring compliance with state and city laws.

He said that given how complicated the process is — the project is currently working its way through the environmental review — the support is mandatory.

“Especially for a project of this scale, it’s critical that we have an experienced law firm making sure we dot our i’s and cross our t’s, because there’s no margin for error,” he said.

Craig Lawson & Company
$2.9 million in 2018

Craig Lawson’s eponymous firm specializes in land use and securing entitlements and variances for development projects.

The firm has worked for some of L.A.’s most active developers, including CIM Group, Jamison Properties and Holland Partner Group, which have built millions of square feet of real estate.

Lawson has been active in the city for 30-plus years. The firm brought in $2.9 million last year, nearly all of which was from real estate developers or entities related to property entitlements in some way.

The entitlement process can take as little as six months if no variances or other zoning waivers are needed, or more than two years if a client is looking to lock in multiple approvals to significantly deviate from existing zoning.

Lawson’s firm worked on CIM Group’s once-embattled 299-unit Sunset Gordon tower in Hollywood.

“Our client asked us to pursue a long list of variances and exceptions from the zoning code in order to build a high-rise residential tower over office and retail space,” he said. “We said we could certainly file the application, but there was no guarantee that it would be approved.”

The city approved the project and CIM built it, but it’s sat vacant since 2015, when L.A. County revoked its permits because the developer had agreed to preserve part of an existing restaurant but failed to do so. (Lawson was not involved in that situation).

The county reissued permits in December, but a lawsuit over the number of affordable units in the tower remains in litigation.

More generally, Lawson said, he typically meets once or twice a week with a client’s development team, depending on how far along the project is. He may speak with a city official once a week — or once a month — about a project. “In each case, even one that fully complies [with zoning], you still have to interact with staff and other city officials,” he said. “So as a result we are lobbying per the city’s definition.”

From left: Scott Durkin, Stephanie Garbarini and Howard Lorber in front of Douglas Elliman’s headquarters at 575 Madison Avenue (Credit: Google Maps, Douglas Elliman)

Douglas Elliman’s got a new chief marketing executive on deck just in time for a companywide rebranding and the launch of a new digital platform for agents.

Stephanie Garbarini, a fashion executive who’s worked at Barneys New York, J.Crew and, currently, Dressbarn, will be joining the brokerage’s corporate leadership team as vice president of marketing in August, according to Elliman’s COO Scott Durkin.

Marketing teams across Elliman’s offices in California, Colorado, Florida and New York will report to her. Garbarini will in turn report to Durkin and work alongside the brokerage’s recently-appointed creative head, Amy Rosenfeld.

According to Durkin, Garbarini was hired after a seven-month search and a signoff from Elliman’s C-suite, including chairman Howard Lorber. Garbarini replaces Samantha Yanks, who resigned last June after just a month on the job.

“[Garbarini] has the gamut of what we were looking for” in terms of experience and tenure, said Durkin. “Most importantly, she has the roll-up-your-sleeves kind of approach.” Though Garbarini doesn’t officially start until August 12, the incoming VP’s already got her work cut out for her.

As Elliman’s chief marketer, she will be in charge of digital strategy, advertising and events. She will be charged with leading the launch of two major initiatives expected to debut this year — a rebranding that’s being created by agency Grey New York and Rosenfeld, and a new proprietary platform called “The DE Studio.”

The rebranding, which Durkin calls “a refresh,” will include a new website and “some fun tag lines.” It is expected to launch this fall.

The DE Studio, which has not previously been reported, will contain an internal marketing suite for agents and a new lead generation platform, according to Durkin. He underscored that the platform is not a new business line for Elliman, but simply a new set of tools for agents.

“At the end of the day we sell real estate. We’re not a technology company, period,” he said. (Elliman’s chief technology officer left in June.)

News of Elliman’s forthcoming platform came within days of Realogy’s partnership with Amazon on the TurnKey program, which Durkin said “certainly looked promising.”

Durkin said he’d be keeping an eye on the results TurnKey yields, and noted that Elliman would be interested in discussing a similar partnership with Amazon or other third parties.

“We’re open to all discussions,” he said. “You don’t buy the first Apple phone, you buy the second generation.”

“Amazon doesn’t give exclusives like that forever,” he added.

Durkin declined to comment on whether any discussions about a comparable lead-generation program to TurnKey were currently underway with Amazon or others.

Over the past five years, Elliman has steadily poured millions into marketing campaigns while the department’s top job has seen frequent turnover.

Prior to Garbarini’s predecessor’s short-lived stint last year, Dana DeVito, a former Condé Nast executive, led the department, overseeing the year-long, multimillion-dollar brand campaign “It’s Time for Elliman” in 2017. Elliman’s major marketing budget and emphasis on aligning the brokerage with the trappings of a luxurious lifestyle, kicked into high gear under the leadership of Nicole Oge, a former Mercedes-Benz executive who joined Elliman from Town in 2014.

Amazon CEO Jeff Bezos (Credit: Getty Images)

Amazon’s officially on a spending spree.

After a big week of movement in the world of real estate that included shopping for 1 million square feet of warehouse space in Brooklyn, scoping out the We Company’s historic Lord & Taylor building for office workers , and launching a new partnership with Realogy, the e-Commerce giant’s second quarter earnings report confirmed that the company has cash to burn, stock price be damned.

Thursday’s earnings report marks the first time since Q2 2018 that Amazon hasn’t brought in record-setting quarterly profits. This quarter’s profit rose to $2.6 billion, or $5.22 per share. That’s compared to the same time last year when the company reported a quarterly profit of $2.5 billion, or $5.07 per share. That was a huge increase from a profit of $197 million, or $0.40 per share in Q2 of 2017.

Though Amazon foreshadowed the lower-than-expected numbers, analysts still expected the e-tailer’s earnings to come in $600 million higher at $5.56 per share. Amazon’s shares fell immediately after the release of the earnings report.

Brian Olsavsky, Amazon’s chief financial officer, said the results were due to increased spending on building out the company’s capacity for widespread one-day delivery service and noted that the spending spree is only going to increase.

“We saw some additional transition costs in our warehouses. We saw some lower productivity as we were expanding rather quickly,” Olsavsky said on the call. “We also saw some costs were moving — buying more inventory and moving inventory around in our network to have it be closer to customers.”

“It does create a shock to the system,” he continued. “We’re working through that now. We expect we’ll be working through that for a number of quarters, but when the dust settles, we will regain our cost efficiency over time.”

In the first quarter’s earnings call, Olsavsky had said spending associated with the one-day delivery expansion in Q2 would be around $800 million. In Thursday’s call, he said the company had exceeded that.

When it comes to Amazon’s expansion of one-day delivery, Jack O’Leary, a senior analyst at Edge by Ascential, says real estate is “the underlying track that it all runs on” and the company needs more space. He described Amazon’s strategy when it came to real estate as a “steady trend” of “even-keeled aggressiveness.”

Based on Thursday’s report, quarterly expenses related to property and equipment fell to just over $11 billion, compared to $11.3 billion in Q2 last year.

Though the announcement of the lead-generation partnership “TurnKey” boosted Realogy’s stock performance, it wasn’t discussed during Amazon’s earnings call.

CoreLogic analyst Andrew LePage

The median price of a home in Los Angeles County inched just a little higher last month compared to a year ago, but that uptick was enough to set yet another record. The number of sales also dropped significantly.

The county’s median sales price in June hit $618,000, around $3,000 higher than the same time in 2018, according to CoreLogic numbers cited by Curbed.

The modest year-over-year increase continues a trend of slowing growth that follows years of strong gains.

Coupled with slowing prices growth is slowing sales, despite the county and state’s housing shortage. Sales dropped 12.1 percent year-over-year last month. Home sales across the Southern California region were 21.6 percent below the average for June.

CoreLogic said home prices are growing beyond the reach of prospective buyers, a trend that has led to slowing down sales.

“Southern California home prices have been close to flat all year,” LePage said. “This reflects tepid demand — at least at current prices.”

It was a similar story in May — year-over-year growth was 1.7 percent and sales dropped 3 percent during that period.

Buyers who can afford to make offers at least can take advantage of cheap financing. Mortgage rates have dropped back down to below 4 percent after rates rose steadily from the fall through the spring to a peak of around 5 percent. The drop in rates means more Southern California buyers are qualified for starter home mortgages. [Curbed] — Dennis Lynch 

Credit Karma CEO Kenneth Lin

Consumer finance company Credit Karma is the latest Silicon Valley firm to set up shop in Culver City.

The San Francisco firm will lease an 18,500-square-foot office at LBA Realty’s One Culver project at 10000 Washington Boulevard, according to the Los Angeles Business Journal. Credit Karma joins WeWork and may soon be joined by Apple at the complex.

As of January, Apple was in talks to lease 150,000 square feet of the roughly 363,000-square-foot office building. Early last year Apple signed for all of Lincoln Property Company’s 128,000-square-foot office complex nearby at 8777 Washington Boulevard. The company plans to have 1,000 employees working in Culver City by 2022.

Credit Karma’s lease is for seven years. The company has employed people in the L.A. area since 2016. It now has 50 staffers in L.A., including out of a Venice office and at some WeWork locations. The One Culver location can accommodate up to 115 employees.

The office has an open floor plan. Amenities include a massage room, library and a games area.

Popular fitness club Equinox also has a club at LBA’s building.

The fourth quarter of 2018 saw major tech companies lease 1.6 million square feet of office space in L.A. The rapid pace has some worried that a correction is looming. [LABJ] — Dennis Lynch