Hankey Investment Company’s W. Scott Dobbins and Circa
Developers and owners of Los Angeles’ new class of high-end rental properties have stepped up the amenities arms as they battle to attract and retain wealthy tenants.
Hankey Investment Co. has added custom cabanas to a 2-acre park at Circa, while Cusumano Real Estate Group will deliver groceries from a ground-floor Whole Foods to tenants’ refrigerators, according to the Los Angeles Times.
Richard Green, director of the USC Lusk Center for Real Estate told the Times that the amenities race is fueled by competition for a small pool of well-heeled renters who are willing to pay a premium.
“New luxury stuff is having some trouble leasing up, so they have to compete with one another,” he said. “Their calculus is that it’s more profitable to compete on amenities than by cutting rents.”
Dog parks have become a must-have. Hankey’s W. Scott Dobbins said that a third of all tenants at Circa in Downtown L.A. have dogs. Circa’s dog park has grooming facilities and two separate dog runs for large and small breeds.
Developers are also dressing up the usual amenities, like gyms. Circa’s gym is in its own building and each morning a refrigerator is stocked with eucalyptus oil-scented face cloths.
Rents for a one-bedroom at Circa start at $3,000, but can go much higher for larger units. A penthouse goes for $25,000 per month.
Developer Walter N. Marks is incorporating many high-end amenities into a planned tower in the Miracle Mile District. Marks is planning the usual entertainment amenities like a billiards room, but also a two-lane bowling alley and virtual reality room. [LAT] — Dennis Lynch
Jeffrey Epstein and his home at 9 East 71st Street in New York (Credit: Getty Images)
The fight over Jeffrey Epstein’s estate, which includes one of Manhattan’s most expensive homes, is set to be a new major battleground following his death by apparent suicide on Saturday.
Prosecutors will have to try determining the full scope of Epstein’s fortune, which will be more challenging because of his death. It is not even clear yet where estate proceedings would take place, as it will depend on which home of Epstein’s is considered his main one.
David Ring, a Los Angeles attorney who has represented victims of sexual assault and abuse, told Bloomberg the process will be “incredibly complicated.”
“It’s going to be a lot of different folks who are going to be battling over this estate and these assets, and I hope the victims come out on top. I think they deserve it,” he said. “But I don’t think the estate is just going to hand it over to them.”
Epstein was not married and did not have any known children, and it is unclear whether he left a will. His relatives include a niece and nephew in New York and his brother, Mark Epstein.
Epstein’s holdings included a 40-room mansion on the Upper East Side prosecutors valued at $77 million, the Caribbean island of Little St. James, a ranch in New Mexico and homes in Florida and Paris, according to Bloomberg.
Lawyers for the victims of the sex crimes Epstein was accused of are calling to put a freeze on his estate, meaning the legal process could take years. [Bloomberg] – Eddie Small
Robert Reffkin, Ginger Glass, and 2571 Wallingford Drive (Credit: Zillow)
Another top agent from Coldwell Banker’s Los Angeles team has jumped ship to Compass.
The departure of Ginger Glass — announced Monday — now marks the second big agent that Compass has snagged in less than one week.
Glass, who pulled in $84.5 million in sales volume in 2018, ranked as the top selling and leasing agent in Coldwell’s Beverly Hills “North Office” at 301 North Canon Drive. Last week, Coldwell lost Chris Cortazzo — its biggest producer globally with more than $500 million in sales last year — to Compass. Cortazzo also took with him 16 agents from Coldwell.
Glass, who moved to Compass’ Beverly Hills office, brought her assistant with her.
In an emailed statement, Jamie Duran, president of Coldwell’s Southern California region, said: “Ginger began her real estate career at Coldwell Banker where she has been an important part of our family for many years and we were great partners for her and her clients. We understand in an uncertain and changing market that a short-term singing bonus can be attractive for some agents. Coldwell Banker is a solid and proven long-term company that will continue to expand and evolve to serve its agents and consumers with the best marketing and technology in the industry.”
Glass’ ultra high-end listings include some of the biggest in L.A. She is selling the 43,000-square-foot Wallingford Estate in Beverly Hills, on the market for $135 million; as well as a Holmby Hills spec home that is on the market for $55 million. Previously, she sold a home developed by Gala Asher for $100 million. The buyer was Detroit Pistons’ owner Tom Gores.
Glass’ jump to Compass comes as sources say Coldwell is consolidating its two Beverly Hills offices into the North office, shifting over 150 agents. Duran confirmed discussions were taking place about the move, but stressed that no plans were final.
Coldwell’s parent company, Realogy, has also been struggling to retain market share.
In a second-quarter earnings call last week, company executives revealed its revenue had dropped 5 percent year over year to $1.7 billion. Despite the slip in revenue and net income, its stock jumped to around $6 per share after the call. Last year, Realogy’s stock was trading closer to $22 per share.
Meanwhile, New York-based Compass recently raised another $370 million in a Series G funding, bringing its valuation to $6.4 billion. Its hiring spree of star brokers from competing agencies and capital influx comes as the Softbank-backed company prepares for an initial public offering.
Bill Watanabe, LTCIF’s chairman and president and Little Tokyo
California residents will be able to invest directly into a community-owned and managed real estate fund for development in Little Tokyo, now that it has received final approval from the state.
Through a direct public offering, the Little Tokyo Community Impact Fund (LTCIF) will offer shares directly to local investors, according to Japanese news outlet Rafu Shimpo. The fund will be used to purchase and manage real estate and heritage-based businesses around Little Tokyo in Downtown Los Angeles, and give discretion to its investors.
LTCIF was launched by community advocates in Little Tokyo in response to the rate of gentrification in their neighborhood, as an increasing number of heritage-based businesses have relocated. The rent increases there have forced mom-and-pop shops and Japanese restaurants to leave the area.
Though it isn’t necessarily always based on heritage, similar situations are playing out in other parts of Los Angeles that have seen surges in outside investment. That includes Downtown, Inglewood, Skid Row and South L.A.
More new housing projects are set to rise in Little Tokyo soon. Boulevard Partners is planning a 68-unit project with affordable units and ground-floor retail. And in June, the city council approved a plan by Little Tokyo Service Center and Go For Broke National Education Center to build a mixed-use complex for veterans.
Two public meetings for LTCIF’s offering will be on August 24, at 401 East Third Street — one at 11 a.m. in Japanese and one at 1 p.m. in English. [Rafu Shimpo] — Gregory Cornfield
Blackbird founder Bridgid Coulter and the Culver City space as of August
WeWork is by far the biggest co-working company around, but numerous niche providers have been trying to carve out space in an increasingly cluttered market. Those include wellness-centric Well Work Win, and women-focused The Wing.
The latest entrant, Blackbird, focuses on women of color and will open is first location in Los Angeles next month. More locations are being considered, including one in Oakland, along with others in New York City, Atlanta and eventually London, Paris and South Africa.
Blackbird’s first location is a roughly 12,000-square-foot space at 10600 Virginia Avenue in Culver City. There will be 40 dedicated desks and 10 private offices, as well as floating desk and communal work spaces.
In the works are a podcast studio, a 12-seat classroom, cafe, fitness room, and meditation room. Programming will focus on women of color, said founder and L.A.-based designer Bridgid Coulter. She said other co-working companies have largely ignored that clientele.
Blackbird operates as a collective, and is funded by a small group of investors, who Coulter would not name. If the first location is successful, she said, Coulter plans to seek additional funding and expand in the L.A. area.
Coulter is a former actress whose longtime partner is Oscar-winning actor Don Cheadle. Blackbird’s executive team also includes producer and director Dayna Lynne North, who mostly recently was an executive producer and writer for HBO’s “Insecure.”
Coulter said she was inspired to create Blackbird last summer, when her design firm was looking for a new space. She joined several co-working spaces, including The Wing, which has a location in West Hollywood and where she’s still a member.
“I found that I was drawn to spaces created by women and designed for women,” Coulter said.
Coulter said that while she didn’t feel unwelcome in other co-working spaces, she described an intangible benefit of spaces where women of color aren’t in the minority.
“It’s a place where you get to let your hair down,” she said. “It’s a place where you can go see your tribe, talk about things and there’s understanding.”
Women of color are consistently underrepresented in the workplace, studies have shown and in surveys, have described microaggressions, unconscious bias, and double standards, according to a Harvard Business Review article in March.
The real estate industry — and in particular the commercial real estate industry — has historically been dominated by white men. More than half of women in commercial real estate reported experiencing sexual harassment at one point in their career, according to a survey last year by recruitment firm RETS Associates.
Blackbird is a private club but is open to everyone. Around 10 of the roughly 75 or so people who have already expressed interest in working at Blackbird are not women of color, a point Coulter called “vital.”
“If there’s anyone who wants to be in an inclusive space that is majority diverse and wants to have these conversations, they’re super welcome,” she said. “It’s for women of color and allies.”
Last year, The Wing got into hot water for not allowing men to join. Earlier this year, The Wing opened membership to men after a Washington, D.C.-area man filed a discrimination lawsuit.
From left: GPI Companies co-founders Cliff Goldstein and Drew Planting, and GPI Cos. partner Lee Wagman
UPDATED, Aug. 13, 9:16 a.m.: Investment and development firm GPI Companies has received a $300 million commitment for its real estate fund, and will use the capital for multifamily, office and industrial properties, and retail conversions.
The commitment came from one of the country’s largest state pension funds, according to Los Angeles-based GPI.
The firm now has $500 million from the state retirement system, which previously allocated the fund $200 million. GPI declined to reveal which retirement system made the commitments.
Other state pension funds have also been making big splashes in L.A. real estate.
Last year, the teachers’ pension fund for California launched a $300 million fund into tech oriented properties; it sold a warehouse in April for $27.7 million through the fund. The Los Angeles County Employees Retirement Association announced earlier this year it would spend $250 million on international investment and pull as much $1 billion in local assets.
Meanwhile, GPI is still trying to overcome renewed opposition to its plan to demolish the Amoeba Records store property in Hollywood and replace it with a 200-unit residential tower.
Earlier this year, GPI and LStar Ventures sold a 10-acre property near San Bernardino to AEW Capital Management for $49.2 million. GPI is also one of the firms behind the redevelopment of the former Westside Pavilion mall with Hudson Pacific Properties.
GPI is managing more than $1 billion in assets and more than 2 million square feet of office, mixed-use and residential space, according to its website. The firm is also developing more than 1 million square feet of commercial and residential real estate.
Correction: A previous version of this story incorrectly stated the pension fund was one of the state’s largest.
From top left, clockwise: 4729 Noeline Avenue, 13565 D Este Drive, 11601 Moraga Lane, and 825 Alma Real Drive.
The top five residential sales in Los Angeles County last week totaled just over $30 million combined, with the priciest home topping out at $7 million.
That’s less than half the total amount from the week before, when the five added up to $62 million in sales.
As has been the case in recent months, four of the homes sold after price cuts, including those in Pacific Palisades, Bel Air and Trousdale Estates in Beverly Hills.
The homes were not without luxury, however; one includes a four-hole putting green.
Price and property details were found using Redfin and records on PropertyShark.
13565 D’Este Drive | Pacific Palisades | $6.9 million
The home, which sold for $1,179 per square foot, was owned by a trust that belongs to Kimberly Eisman, records show. She purchased the property in 2011 for $3.9 million, and according to the listing, it was previously offerd for $7.4 million in June. The Mid-Century Traditional style home was built in 1956. It spans 5,850 feet over a nearly 17,000-square-foot lot. It includes six bathrooms and five-and-a-half bathrooms. The property also includes a detached guest studio and a pool. Dan Urbach with Compass had the listing. Steven Moritz with Sotheby’s International Realty represented the buyer.
11601 Moraga Lane | Bel Air | $6.5 million
The property was owned by a trust that belongs to Francine Sanders. The home was built in 1982, and was available for the first time in nearly four decades. It includes 6,000 square feet, with the sale penciling out to $1,082 per square foot. The two-story, custom English country style home includes five bedrooms and seven bathrooms. It includes a walk-in bar, a library and a staff room. The gated 1-acre lot is located on Moraga Lane near Getty View Park. It also features a pool and spa. According to the property listing, it hit the market for $7.2 million in April. Ron de Salvo with Coldwell Banker had the listing. James Helgager with the same firm represented the buyer.
825 Alma Real Drive | Pacific Palisades | $5.9 million
A recently remodeled property, it sold for $950 per square foot. The home hit the market in May for $6.2 million. It was built in 2005. With 6,220 square feet of space, the home includes six bedrooms, seven bathrooms, a recreation room, and a gym room. The 7,600-square-foot lot also features a pool. The owner was a family trust that belongs to David Greenberg, records show. Ellen McCormick with Berkshire Hathaway and Jonathan Cates with Coldwell Banker shared the listing.
4729 Noeline Avenue | Encino | $5.7 million
Although the home, completed this year, on a half-an-acre of property, it features a four-hole putting green, a pool and spa, cabana, barbecue area, and a sports court. The Cape Cod style “smart” home includes 8,750 square feet of space. The sale came out to $650 per square foot. The home includes six bathrooms, eight bathrooms, a movie theater, a game room, and maid quarters. The seller was David Soferi, who purchased it for $1.75 million last year and completed a renovation. Brian Pane with Wish Sotheby’s International Realty had the listing. Jordan Cohen with Re/Max Olson & Associates represented the buyer.
1675 Carla Ridge | Trousdale Estates | $5.1 million
Billed as a potential remodel, the home in Beverly Hills sold was originally listed for $5.73 million. It includes three bedrooms and five bathrooms over 3,644 square feet of space. That measures out to almost $1,400 per square foot. The gated property includes 25,100 square feet of space. It was last purchased in 2014 for $1.46 million by Hamid Banafsheha. Roger Perry and Odelia Asher with Rodeo Realty had the listing. Sayo Haraishi represented the buyer.
Every day, The Real Deal rounds up Los Angeles’ biggest real estate news. We update this page at 9 a.m. and 4 p.m. PT. Please send any tips or deals to tips@therealdeal.com
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Culver City has capped its rents. Elected officials in the Westside city voted 4-1 to cap annual rent hikes at 3 percent in buildings built before 1995. The measure expires in one year. They also adopted just-cause eviction protections, which means landlords need to prove a tenant violated certain terms in order to evict them, such as failure to pay rent. [LAT]
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Mike Trout (credit: Keith Allison)
Angels slugger Mike Trout snags Newport Beach manse. Trout paid $9.2 million for the 9,000-square-foot home in the Harbor Ridge gated community. The 28-year-old New Jersey-born outfielder has good reason to settle down and celebrate. Earlier this year, Trout signed a 12-year, $426 million deal that could see him play the rest of his career for the franchise. [Variety]
Majordomo rebels against investor Stephen Ross. David Chang’s Chinatown restaurant donated all of its profits on Friday to a number of charities, including progressive organizations, in response to Ross’ highly publicized fundraiser for President Donald Trump at his Hamptons estate. Ross’ investment firm RSE Ventures backs the restaurant, and last week, Chang publicly called on Ross to cancel the fundraiser. [LAT]
Drawbridge Realty buys Santa Ana office complex for $98 million. The San Francisco firm bought the nearly 400,000-square-foot Pacific Center property from Pacific Coast Capital Partners and Brookhollow, which are based in L.A. and Costa Mesa, respectively. Drawbridge owns a neighboring property leased by Johnson & Johnson. [CO]
A $200 million artificial wave park is planned in Palm Desert. Desert Wave Ventures LLC wants to build a 5.5-acre surf pool, a hotel with up to 350 rooms, dozens of single-family homes, and retail. The firm aims to break ground sometime next. The wave pool will be pricey: its set to start at $135 per hour. [WSJ]
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From left: GPI Companies co-founders Cliff Goldstein and Drew Planting, and GPI Cos. partner Lee Wagman
GPI Companies secures $300 million from California pension fund. The L.A. firm intends to use the money for multifamily, office and industrial properties, along with retail conversions. [TRD]
Luxury student housing is pushing low-income students away from campus. An analysis by Bloomberg of census data near UT Austin and the University of Michigan found a correlation between luxury student housing development and rising rents. Students from lower-income families are increasingly finding housing as far as an hour away from campus, resulting in a disconnect from campus life. [Bloomberg]
FROM THE CITY’S RECORDS:
An application was filed to make a 1939 home in Silver Lake a Historic-Cultural Monument. The home was designed by architect Harwell Hamilton Harris and sold in July 2018 for $1.5 million. [LADCP]
Culver City Mayor Meghan Sahli-Wells and Culver City (credit: Antonio Wu via Flickr)
Culver City has become the latest Los Angeles-area city to adopt new rent control measures.
The city council voted 4-1 to adopt a temporary 3 percent annual cap on rent hikes and tenant protections in the early morning hours on Tuesday after a five-hour discussion, according to the L.A. Times.
The rent cap will be in effect for one year and applies to buildings built before February 1995. That cutoff was determined by the state’s Costa Hawkins Rental Housing Act of 1995, which bars rent control on any buildings built after that year.
The city also adopted just-cause eviction measures, requiring landlords to prove tenants meet certain criteria in order to lawfully evict them, such as nonpayment of rent.
The measure is likely a precursor to a permanent measure. Lawmakers said the temporary measures ensure that landlords can’t clear out their buildings or hike rents while the city debates a permanent measure.
“We need to have the freeze in order to have the conversation because the conversation causes displacement,” Mayor Meghan Sahli-Wells told the Times before the vote.
State lawmakers are currently weighing their own statewide rent control measures, backed by Governor Gavin Newsom, and a number of jurisdictions in the L.A. area have adopted measures similar to those in Culver City.
Glendale, Pasadena and Long Beach have all adopted new tenant protection measures but left out a rent cap.
Brick & Mortar Ventures’ Darren Bechtel (Credit: LinkedIn and iStock)
A venture capital firm led by a scion of one of the world’s largest construction companies has launched a $100 million fund to invest in construction tech.
The fund, launched by San Francisco-based Brick & Mortar Ventures, is the largest to focus exclusively on construction-technology startups, and will target seed and Series A funding rounds, the firm said Tuesday.
Led by Darren Bechtel, Brick & Mortar Ventures raised $97.2 million from a dozen limited partners, including Autodesk, CEMEX, Ferguson Ventures, FMI, Hilti, Obayashi and Sidewalk Labs, a subsidiary of Google’s parent company Alphabet. A spokesperson for the firm said 10 percent of the money in the fund is Darren’s own personal investment.
The news comes at a time when investment in construction technology is booming. About $6.1 billion was invested in the sector last year, nearly double that of 2017, according to the Wall Street Journal. Institutional lenders are driving much of that growth; Goldman Sachs, for example, has invested in at least five construction tech startups this year, including a $95 million investment in British modular housing firm TopHat.
Darren is the brother of Brendan Bechtel, chairman and chief executive of Bechtel Group, a construction company founded in 1898 by their great-great grandfather Warren. The conglomerate, which generated $25.5 billion in revenue last year, has built a long list of notable projects, including the Hoover Dam, the “Chunnel” connecting France and Britain, and the world’s largest solar-thermal plant in California’s Mojave Desert.
“Bechtel is not an investor in B&M or any of its portfolio companies,” a spokesperson for Bechtel Group said in a statement. “However, due to Darren’s familial and past professional relationship with Bechtel, B&M considers the company a Preferred Industry Partner, along with its anchor investors.”
Darren launched Brick & Mortar Ventures in 2015 with his Stanford roommate, Brendan Wallace. While they both saw real estate as ripe investing ground, the scale of their ambitions differed.
“We were noodling and drafting a pitch deck,” Darren said in an interview. “Brendan said $500 million, I said $50 million.”
Darren realized his interests skewed more toward construction tech, while Wallace was targeting hospitality and commercial real estate innovation.
Wallace, who worked at Blackstone Group, went on to launch Grey Wolf Ventures, the predecessor to Fifth Wall, which he leads today with fellow Blackstone alumnus Brad Greiwe. Fifth Wall has since launched three funds, including a $500 million fund launched in June to focus on real estate technology. Wallace, who declined to comment, remains an advisor to Darren’s firm.
Brick & Mortar has invested in angel rounds for more than 40 startups, including Branch Technology, Canvas, FieldWire, Connect Homes, SafeAI, Timber and SafeSite. Another startup, construction software firm, Plangrid, was backed by Brick & Mortar and later acquired for $875 million in 2018 by Autodesk, a limited partner of Brick & Mortar.
Darren said the latest funding will allow him to “double down on the investment thesis,” and ramp up investments between $1 million and $4 million, a sign of soaring confidence in the sector.
“In 2015,” he said, “if you could cut a $2 million check in construction tech, it was King Kong.”
Drawbridge Realty co-founders Mark Whiting and Mark Pearson with a rendering of the building
Commercial investment firm Drawbridge Realty has acquired the massive Pacific Center office complex in Santa Ana in a nearly nine-figure trade.
Pacific Coast Capital Partners and Brookhollow sold the 390,600-square-foot property for $97.5 million, Commercial Observer reported. The two-building complex is at 1600-1610 E. St. Andrew Place, next door to Drawbridge Realty’s fully leased Johnson & Johnson campus. The two properties combine for 37 acres.
It’s also in a federally designated Opportunity Zone, which will allow San Francisco-based Drawbridge Realty to delay capital gains taxes. The property’s tenants are Nationstar Mortgage, Collectors Universe and Career Networks Institute.
The property was built in 1992. Pacific Coast Capital Partners and Brookhollow paid $4 million for the site in 2015, and spent $3.5 million renovating the property in 2017.
About two miles away, Centennial Real Estate is working on a massive mall redevelopment that calls for 1,900 apartments and 750,000 square feet of office space at the MainPlace Mall.
Earlier this year, Pacific Coast Capital provided $268 million to Daydream Apartments to acquire the Griffin and the Grace luxury apartments on Spring Street in Downtown Los Angeles. And last year, the firm provided a $128 million loan to Lincoln Property Co. and Angelo Gordon & Co. for four office properties in Orange County totaling 540,000 square feet.
Kevin Shannon, Paul Jones, Brunson Howard, Blake Bokosky and Brandon White with Newmark Knight Frank represented Los Angeles-based Pacific Coast Capital Partners and Brookhollow, which is based in Costa Mesa. [Commercial Observer] — Gregory Cornfield
Federal Realty CEO Donald Wood and the Bijou Building
A historic theater repurposed into a retail and office building in Hermosa Beach has sold for $18 million, as the beach town attracts an increasing number of investors.
The seller was Federal Realty Investment Trust, a retail real estate investment trust based in Maryland. An LLC named 1221 Hermosa Ave bought the 23,170-square-foot property. The purchase worked out to roughly $772 per square foot.
Newmark Knight Frank, which brokered both sides of the deal, announced the sale.
Located at 1221 Hermosa Avenue, the Bijou Building is three stories. Originally known as The Metropolitan, it was built in 1923 as a theater. Former owner CIM Group repurposed the shuttered theater into a retail building in the early 2000.
It is currently 94 percent occupied to tenants including Chase Bank, Beach City Capital, Steel Partners and Bar Method.
Last month, an auction for the Federal Aviation Administration’s longtime West Coast headquarters in Hermosa Beach prompted a bidding war that brought its sales price from an $8 million starting bid to nearly $40 million. Designed by Cesar Pelli — who died last month — that six-story at 1500 Aviation Boulevard sits on about 11.5 acres.
From top left, clockwise: 600 Perugia Way, 1435 Tanager Way, 10727 Wilshire Blvd and 1728 Chevy Chase
The top five homes that hit the market last week in Los Angeles County are asking a combined $80 million, and most of them are relistings.
The priciest of the entire lot? That would be a 9,500-square-foot Bel Air mansion, for $25 million.
Several of the relistings had lingered for months before their price was eventually slashed. In the past year, sellers in L.A. have been struggling to unload their luxury homes at original asking, which has prompted a wave of discounts.
The data and information has been pulled from the Multiple Listings Service and Redfin.
600 Perugia Way | Bel Air | $24.9 million
A newly built home in Bel Air, the price was down $2 million from its asking in April. Designed by Joseph Lam and Zen West Design, the property includes five bedrooms and nine bathrooms. A swimming pool, lush landscaping and motor court complete the 9,500-square-foot main residence. The property at 600 Perugia Way last traded for $6.8 million in 2007. Aaron Kirman of Compass and Steve Frankel of Coldwell Banker share the listing.
1435 Tanager Way | Hollywood Hills | $14.9 million
This home in the trophy “Front Row” of the Bird Streets in the Hollywood Hills was chopped to $14.9 million, down from its $19 million ask in January. Lindsay Chambers, founder of an eponymous interior design firm, is selling the 12,700-square-foot pad. Recently remodeled, the property includes four bedrooms and three bathrooms. There’s also a new infinity pool and outdoor lounge area outside. Chambers bought the residence for $10.9 million in 2014, records show. Jayden Chen of Re/Max Advanced Realty now has the listing.
10727 Wilshire Boulevard | Westwood | $14.8 million
Shortly after breaking a Westwood record, a penthouse at The Remington is back on the market for roughly $1 million more than what it sold for in June. Jordana Woodland, founder of lingerie company and ex-wife of Michael Goguen, sold the 6,000-square-foot unit for $13.3 million in June. That buyer, rumored to be a developer, has since put it on the market for $14.8 million. Designed by LM Pagano Design, the penthouse includes three bedrooms and five bathrooms. There’s also a two-story living room, marble fireplace, office and city views. Luke Anderson and Greg Holcomb of Compass have the listing.
1728 Chevy Chase Drive | Beverly Hills | $12.9 million
A Spanish-style home that sits on a 21,000-square-foot lot came on the market for $12.9 million, down roughly 6.4 percent from its listing price in June. Spanning 7,200 square feet, the main two-story residence includes five bedrooms and seven bathrooms. There’s also a yoga studio, tennis court, sprawling backyard and swimming pool on the grounds. Jill Epstein of Nourmand and Associates had the listing.
12071 Crest Court | Beverly Hills | $12.6 million
Located in the gated Summit community, this 6,590-square-foot pad hit the market for $12.6 million last week. The home features five bedrooms and seven bathrooms, plus a swimming pool and tennis court. It last sold for $10.3 million in 2017, records show. Chen of Re/Max also has this listing.
Tom Greubel, Vice President of leasing, with Spectrum Terrace and Discovery Park
Irvine Company has renewed four lease deals for almost 200,000 square feet at two new multibuilding office centers, helping the tenants expand their footprint in Orange County.
The four existing tenants — Kajabi, Hyperice, WeWork and Pacific Rim Capital — signed the deals to take up space at the new Spectrum Terrace and Discovery Park campuses in Irvine. Both properties opened this summer.
WeWork signed the largest lease to occupy an entire 116,261-square-foot building at Spectrum Terrace, 16774 Laguna Canyon Road in Irvine. The nine-building campus includes more than 1 million square feet of space.
Kajabi and Hyperice also signed new leases at Spectrum Terrace. Kajabi, an online business platform, signed for 43,800 square feet, which is more than double their current space at Sand Canyon Business Center. Hyperice, creator of the first portable ice compression device for athletes, signed for 13,740 square feet, which is nearly triple the company’s current workplace at 15440 Laguna Canyon Road.
Pacific Rim Capital signed a lease for 20,161 square feet at the recently completed Discovery Park nearby. The company is moving from its 13,055-square-foot office at 15321 Laguna Canyon Road. The 290,400-square-foot Discovery Park is at 15555 Laguna Canyon Road.
Orange County’s office demand and development have been on the rise the past few years and are set to continue growing. CBRE projected earlier this year that Orange County will see rents grow by more than 30 percent over the next five years due to low vacancy rates and job growth.
HJ Capital Group is working on a 700,000-square-foot project that will include 143,721 square feet of office space, a 258-room hotel, a 33,000-square-foot fitness facility, an open-air entertainment venue and a medical office building. Construction is expected to begin in early 2020.
City of Hope National Medical Center is also planning to open a $200-million main campus in Irvine to open in 2022.
The trade war has created an uncertain environment for construction. (Credit: iStock and Getty Images)
Anthony Rinaldi has learned first-hand what President Donald Trump’s trade war with China can mean for business. One of his eponymous firm’s current projects, backed by a Chinese-government-owned company, has recently stalled. He’s unsure when, or if, it will get back off the ground.
Delays are one among many headaches general contractors are grappling with as the trade war escalates, pushing up the cost of materials and casting uncertainty over planned and existing contracts.
“A number of projects that we have in our pipeline involve Asian developers, banks and investors,” Rinaldi said. “I’m not seeing that it’s going to get better. It’s going to get worse.”
In May, Trump ordered an increase in tariffs from 10 percent to 25 percent on $200 billion in Chinese imports — triggering China to retaliate by increasing tariffs on $60 billion in U.S. goods.
A study from the National Association of Home Builders said the affected goods included more than 400 items commonly used in the construction industry, including steel, bricks and aluminum.
Rinaldi said the tariffs had already raised costs. “The bulk of steel imports here in the States come from Asia — China being the primary marketplace — and the tariffs we’re seeing have had a gross impact on the overall cost of the trades with which we deal with steel,” he said.
“We’ve been seeing an increase of about 5 percent on the overall gross value of their numbers. That we’ve been seeing climbing over the last nine-to-12 months.”
On Tuesday, the government announced it had narrowed the amount of Chinese goods affected by the tariffs coming into effect in September. The tariff on those items will be delayed until December 15; some goods were removed from the list altogether.
The announcement followed pushback from consumer groups and businesses, who argued that everyday consumers stood to be affected.
Speaking to media Tuesday, Trump acknowledged this concern.
“We’re doing this for the Christmas season,” he told reporters. “Just in case some of the tariffs would have an impact on U.S. customers.”
In an uncertain climate, construction firms have been forced to adapt quickly to change.
“It’s a complicated issue because the tariffs are agnostic to the timing of contracts,” said Richard Wood, CEO of Plaza Construction.
“The projects impacted were contracted prior to the tariffs being implemented. They’re now facing additional cost.”
In May, Slate Property Group’s David Schwartz told TRD that the cost would ultimately hit consumers in the form of higher rents and pricier condos. He said Slate was looking to procure steel from other countries given the tariffs.
Similarly, Wood said on Tuesday that his company was now looking at sourcing materials from countries other than China, which was long considered the go-to for many low-cost materials.
While none of his existing projects had been thrown into jeopardy, Wood acknowledged there was a question mark over what the future holds.
“There isn’t one party negotiating this trade deal. There are two parties negotiating this deal and not knowing the mindset for completing a deal — assuming there’s a deal in the offing — makes it very difficult to plan for tariffs being there, being increased, or not being there at all,” he said.
In April, San Francisco unseated New York to take the title of most expensive city on earth to build, according to the latest Turner & Townsend International Construction Market Survey. The average building cost in New York was $368 per square foot, up from $362 per square foot in 2018. In terms of labour costs, New York still comes out on top — averaging $101.30 per hour.
Every day, The Real Deal rounds up Los Angeles’ biggest real estate news. We update this page at 9 a.m. and 4 p.m. PT. Please send any tips or deals to tips@therealdeal.com
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L.A. homebuilders pick up pace in 2019 amid housing shortage. Developers are on track to complete 9,400 new homes in the second half of 2019, more than both of the last two years. Many of the 28,000 homes now under construction in L.A. County are set to be completed in 2021. But builders are also on pace to permit around 13,000 homes this year, or 3,500 fewer than 2018. [Curbed]
Goldrich Kest plans 106-unit complex in Studio City. The Culver City-based developer will present plans to a local neighborhood council on Wednesday. The project, which includes 1,200-square-feet of retail space would replace a vacant senior living facility on Ventura Boulevard. [Urbanize]
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WeWork CEO Adam Neumann (Credit: Getty Images)
WeWork’s revenues and losses soar ahead of IPO. The co-working company generated $1.54 billion in revenue and posted a net loss of $689.7 million in the first half of the year. The company has most recently been valued at $47 billion and recently cut a $6 billion IPO debt deal. WeWork, which earlier this year rebranded as the We Company, could go public as soon as next month. [TRD]
Emma Stone buys two properties in Westwood and Malibu. The Oscar-winning actress bought the Westwood home for a family member for $2.3 million and paid $3.3 million for the Malibu property. The latter spans 3.2 acres, including a steep hillside that drops down to the Pacific Coast Highway. [Variety]
PG&E struggles amid Chapter 11 bankruptcy. Creditors have asked a California federal judge to let them present their own Chapter 11 exit plan, arguing that the troubled utilities provider has failed to deliver the swift exit plan promised six months ago, when it entered bankruptcy. PG&E has promised to file an exit plan by early September and wants the judge to allow them to retain exclusive rights to steer its exit from bankruptcy protection. [WSJ]
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1652 Tower Grove Drive or “The Mountain” (Credit: Realtor and iStock)
The 157-acre Mountain of Beverly Hills to be auctioned. The massive and troubled hilltop property will go to the highest bidder at an auction on Thursday, at the Civic Center Plaza in Pomona. The property made headlines when it listed for $1 billion last year, but it failed to attract a buyer even after price dropped to a measly $650 million. Its owner, convicted fraudster Victorino Noval, failed to pay creditors, who could take control of the property if it fails to get a bid above $200 million. [TRD]
Gala Asher-developed Beverly Crest mansion listed at $55 million. Asher purchased the property at 145 North Mapleton Drive for $11.9 million in 2017 and redeveloped the site. The result is a 20,000-square-foot, stone-encased estate with seven bedrooms and 14 bathrooms, a guard house, and two guest apartments. Ginger Glass — who recently jumped to Compass — has the listing. [Redfin]
Saota-designed Hollywood Hills estate listed at $44 million. The 20,000-square-foot home is surrounded by a 175-foot linear pool and has a wraparound skyline view of the city. Jason Oppenheim of The Oppenheim Group and David Parnes of The Agency have the listing. [Redfin]
FROM THE CITY’S RECORDS:
A developer submitted plans for a 180-unit affordable housing complex on Broadway and 94th Street in Broadway-Manchester. The applicant requested floor area and density bonuses. The site is home to the Broadway Villas affordable housing complex, developed by AMCAL. [LADCP]
Deliveries are on pace to greatly exceed totals for the last two years
Developers in Los Angeles County are on pace to build more units of housing in the second half of this year than in either of the last two years, but a slowdown could be on the horizon.
A report from Marcus & Millichap found that developers are on pace to deliver 9,400 units in the second half of the year, according to Curbed. Much of that development is concentrated in core L.A. metro area submarkets.
Downtown L.A. is expected to see 1,700 new units in the second half and Hollywood around 1,600. Santa Monica/Marina Del Rey, the San Fernando Valley and Mid-Wilshire will also each see over 1,000 units delivered.
There were around 28,000 units under construction in L.A. County at the end of June, most on pace for 2021 delivery.
That’s good news for L.A., which is desperately short of units affordable for average- and low-earning Angelenos. L.A. County is short around half a million units affordable to people making less than 80 percent of area median income, which around $73,100. More deliveries could help temper rents by increasing supply.
Deliveries may not continue to increase, though. The number of units permitted, an indicator of future deliveries, is on pace to fall this year.
U.S. Census data shows that in the first half of the year, metro area developers received permits to build around 13,000 new units. If that pace continues, about 12 percent fewer units will be permitted this year than last year.
The drop in permits could be a symptom of rising costs of building materials and labor, which have slowed construction over the last few years. [Curbed] — Dennis Lynch
Kim Kardashian West and Kanye West with their Bel-Air mansion, the Hidden Hills house, and a Star Wars-themed dome (Credit: Wikipedia, Compass, Douglass Elliman, and Getty Images)
During an episode of “Keeping Up with the Kardashians” earlier this spring, Kanye West and Kim Kardashian West addressed the rapper’s intention to relocate the entire family to Chicago.
Kardashian West thought her husband had been kidding. “Any conversation I have is serious,” he replied.
If that’s true, then the wider real estate world should prepare itself. Though West’s plan for a community of affordable Star Wars-inspired houses in Los Angeles hit a snag last week, he and his wife have built a reputation for real estate savvy through their own personal investments — and designs.
In 2017, the couple sold their 9,000-square-foot mansion to Ukranian billionaire Marina Acton for $17.8 million — setting a record, at the time, for the most expensive sale in the Bel-Air Crest community. The pair paid $9 million for the property in 2013, and spent two years renovating the six-bedroom, eight-bathroom residence before moving in.
By 2018, the Kardashian-West clan had decamped to another property, purchased in 2014 for $20 million, in the gated Hidden Hills community. Photos West shared on Twitter that April prompted Kardashian-West to publicly tease him for breaking their rule to keep their space private before posting a tour of the property on her own channels. Featuring minimalist architecture and a monochromatic palette, the design includes a television that rises out of a concealed space in the floor and bathroom sinks with slits instead of bowls conceptualized by West, among other unique architectural choices. Kardashian West’s mother, Kris Jenner, later claimed — via Twitter — that the home’s value had reached $60 million.
Around the same time, West had publicly declared his intentions to build a real estate empire and delve into urban design — an announcement that proved divisive. During an interview with television and radio personality Charlemagne Tha God, West said he wanted to be “one of the biggest real estate developers of all time, what Howard Hughes was to aircrafts and Henry Ford was to cars… We’re going to develop cities.”
Later that month, he announced a plan to launch an architectural practice called Yeezy home with an aim to “make the world better.” Tackling that, in this case, would involve the construction of 50-foot dome-like structures in Calabasas, inspired by the aesthetics of Luke Skywalker’s home planet, Tatooine. West envisioned the design as having potential for affordable housing.
“I really do believe that the world can be saved through design, and everything needed to actually be architected … but we’re led by the least noble, the least dignified, the least tasteful, the dumbest, the most political,” he said during the interview.
CityLab staffer Brentin Mock didn’t doubt West’s ability to enter the field, but doubted his ability to actually execute projects that would meet the needs of actual people. Mock cautioned that the mogul would be “the most technocrat-est of technocrats, if not a dictator — and one who believes that his love for all people is all the evidence that’s needed for people to trust his development vision, which is a personality trait of the worst kind of developer.”
Around the same time, rumors — fed by West himself — began to circulate that West was contemplating a move to the Windy City (thus the cross-wire conversation with his wife on the show). But while evidence of a home in the city has yet to materialize, West did dip a toe into the commercial space with a million-dollar investment in the Avalon Regal Theater in February. The historical movie palace, purchased by entrepreneur Jerald Gary for $100,000 in 2014, has been empty for nearly a decade.
As for the domes: They were being constructed on a 300-acre plot of land owned by West in the San Fernando Valley. In August, Forbes published details about the structures, which West has said draw on “every period of man’s existence on earth” and will “break the barriers that separate classes … namely, the rich, the middle class and the poor.”
Reminiscent of “wooden spaceships” according to the reporter, they stand 50 feet high; West imagines they could be used to house the homeless. But while West has found great success thinking outside the box in many other endeavors, for now this one is on hold. Earlier this month, inspectors came to the work site and concluded that the project was missing the plans and building permits necessary to move forward. If West is truly serious about continuing to create prefabricated housing, this time he’ll have to hew to the rules.
Gala Asher’s latest spec home to hit the market (Credit: Redfin)
A large and opulent spec mansion built by Gala Asher in Holmby Hills has listed for $55 million.
A listing for the 15,350-square-foot property at 145 N. Mapleton Drive hit listings platform Redfin on Wednesday with Ginger Glass of Compass as the listing agent.
The listing calls the Mapleton Drive mansion “a Modern Fortress with a private resort” with “massive walls” surrounding it for privacy and security. Asher seems to have used every bit of space on the property, which is less than an acre in size. Satellite imagery shows that the walls line it in its entirety.
A dedicated guard house has a full kitchen and bath. In all, the property has seven bedrooms and 14 bathrooms.
The “resort” appears to refer to a large courtyard area at the rear of the main house with a pool at its center. A dining room and other spaces flank the pool on either side. There’s also a court for pickleball and basketball.
Asher started working on the property in late 2017. He paid $12 million for the property, which at the time had an aging 6,000-square-foot house with five bedrooms. Glass also repped Asher in that purchase. It wasn’t clear at the time what exactly Asher planned to build there.
In 2016, Asher sold another fortress nearly twice the size in Holmby Hills for a record-setting $100 million to Tom Gores, the CEO of Platinum Equities and the owner of the Detroit Pistons.
Elsewhere, Asher has at least one other spec manse on the market. In June of last year, he listed the so-called “Wallingford Estate” for $135 million. The 31,000-square-foot home has 12 bedrooms and 24 bathrooms.
Keller Williams CEO Gary Keller and Offerpad CEO Brian Bair (Credit: Keller Williams/Gage Skidmore via Flickr)
Amid an iBuying craze, Keller Williams and Offerpad are teaming up to buy and sell more homes.
Through a new partnership, Keller agents will steer sellers seeking all-cash offers to Offerpad, the companies announced Wednesday. Offerpad, which looks to flip homes within a week to 10 days, will then enlist Keller agents to market the properties.
In an increasingly crowded field of iBuyers, the companies said the partnership ensures that consumers don’t have to choose between using a real estate agent or getting an all-cash offer for their home.
“Every consumer deserves a trusted advisor in every transaction,” said Gayln Ziegler, director of operations for Keller Offers. “We do believe that this will change the game.”
The partnership, though, represents a new strategy on home-flipping for Keller, which entered the iBuying space somewhat reluctantly last year.
“I feel like I have no choice now,” CEO Gary Keller said in January. “I can’t allow Opendoor or Zillow to go out and be the only player in the iBuyer space and then begin to dictate terms and build brand around ‘they buy houses.’”
Last year, the Austin-based brokerage — which has 156,700 agents nationwide — confirmed it was testing an iBuying program and had completed about 100 transactions. In April, Keller said it would spend $100 million through Keller Offers this year.
According to Ziegler, Keller no longer plans to use the majority of that money to buy homes, but the brokerage will use it to expand the Keller Offers business. The Offerpad deal will let the brokerage scale its instant-buying program much more quickly. “Our goal is to be in every single market we can get to,” she said.
Keller Offers powered by Offerpad will be live in Phoenix and Dallas by the end of the month and will be in 10 cities — including Atlanta, Houston and Tampa — by November.
According to Ziegler, Keller Williams agents will complete a training program to participate in Keller Offers. Any of those agents can request an offer from Offerpad on behalf of their seller. If they choose to sell through Offerpad, the iBuyer pays the agent 1 percent on the front and back ends of the deal.
“The [agent’s] fiduciary responsibility is to the seller. They still only represent the seller,” Ziegler said. “The beauty of this scenario is the Keller Williams agent gets paid on the front end, back end and their sign will stay in the yard.”
For Offerpad, the deal with Keller Williams is an acknowledgment that some sellers still prefer interacting with a real estate agent. Through Keller Offers, the iBuyer hopes to capture more of those users.
Last month, Offerpad rival Opendoor also announced a partnership with discount brokerage firm Redfin.
“For us, it’s going to allow us to spread our message to even more consumers,” said Cortney Read, a spokesperson for Offerpad. She said Offerpad believes the partnership will yield a “significant increase” in offers, but declined to disclose further details.
Offerpad was one of the first companies to partner with Zillow when the listings giant piloted an iBuying service. But Offerpad severed ties with Zillow when the listings giant launched Zillow Offers last year.
To date, Offerpad has raised $975 million in debt and equity from investors. When it purchases homes, it does so with a debt facility backed by Citibank. In 2018, Offerpad purchased more than 4,600 homes. The company targets homes valued between $100,000 and $600,000 that it can renovate within a week to 10 days. “Our goal is to sell it quickly,” Read said.
Referencing the Opendoor-Redfin deal, Read said Offerpad’s partnership with Keller is different.
“This isn’t a test,” she said. “Both companies agree, this is what consumers want.”
