For months, trade war tensions with China have been on the rise. The Chinese government said Friday morning it would implement a $75 billion retaliatory tariffs on U.S. goods — a response to President Trump’s $300 billion tariff on Chinese goods.

After the announcement, Trump said he would raise tariffs on Chinese goods by as much as 30 percent, according to the Wall Street Journal.

As the back and forth unfolds, watch the video above to see how the multibillion-dollar trade war has hit New York real estate so far.

Voice-over by Lucas McGill

From left: John Catsimatidis, Darcy Stacom and Brad Hargreaves (Illustration by Paul Kisselev)

It’s hard to forget a first job, whether it was scooping ice cream, waiting tables or selling knives door-to-door.

But it’s funny to think that the CEOs, developers and top industry brokers — who these days have hundreds of employees under their purview and salaries that put them in the uppermost stratosphere of earners — once made minimum wage.

Last year, The Real Deal brought you the first edition of this annual series, in which bigwigs like Harry Macklowe, Don Peebles and MaryAnne Gilmartin talked about shoveling snow, pumping gas and flipping burgers at McDonald’s, respectively.

This summer we went back for more, talking to six more industry power players to find out how they got their start and what they learned from their first foray into the workforce.

Darcy Stacom
Chair and head of New York City Capital Markets at CBRE

When CBRE’s Darcy Stacom was 15 years old, her parents called her into the living room of their Greenwich, Connecticut, home and told her to take a look around.

“I’m thinking, ‘Someday, this will be mine,’” she said, “and they go, ‘We just want you to know we plan on spending every dime, so we’re sending you to work in New York City this summer.’”

So, her mother and father, Matthew Stacom — the late veteran broker who played a key role in the making of the Sears Tower in Chicago — got her a job at her father’s firm Cushman & Wakefield. She worked in the mailroom in the summer of 1976 before her sophomore year of high school and in the market research department the following year, Stacom said.

“I was expecting to spend the summer at the country club with all my friends,” she noted. “Instead, I ended up commuting [by train].”

Stacom, who is now 59 and likely rakes in millions per year as one of the city’s top investment sales brokers, said she started out earning a rate that amounted to about $13,000 a year at the time.

She reported to a middle-aged female manager in Cushman’s market research department. And her responsibilities, such as updating building surveys, would sometimes increase in the afternoons due to her boss’ curious habit of occasionally slumping over after lunch, Stacom recalled.

“This woman was fantastic, but she was not quite with it in the afternoon,” she said. “I came to realize that her endless glasses of water were vodka.” 

Stacom also volunteered at Greenwich Hospital as a candy striper, a gig that eventually landed her on the front page of the Greenwich Times thanks to the many hours she put in. But that was the only non-real estate gig she ever held. Stacom attended Lehigh University, worked at Cushman every summer through college and started there full-time one week after graduating. (Her parents, of course, never actually spent all of their money.)

“I really saw all of the functions that went on behind brokerages and became very respectful of the people in the mailroom or on the reception desk or the switchboard or in market research,” she said. “They were the ones that were paid the least, but in many ways, really made things stick or let them fall apart.”

John Catsimatidis
Founder and CEO of Red Apple Group

Greece-born billionaire John Catsimatidis has dabbled in everything from real estate to radio to politics, but he’s still arguably best known as the head of the New York City grocery store chain Gristedes.

The supermarket portion of Red Apple Group spans about 350,000 square feet and generates slightly less than $300 million in revenue per year, making up about 2 percent of Red Apple Group’s overall business, according to Catsimatidis.

So it’s fitting that the 70-year-old mogul got his start at a supermarket called the Red Apple on 137th Street and Broadway in 1966.

“I just finished Brooklyn Tech High School,” Catsimatidis said. “I went home and sat on the couch, ready to watch television all summer until college.”

But his mother had other ideas and went to the local grocery store, less than three blocks from their home, to get him a summer job that paid $1.10 per hour. Instead of watching television, Catsimatidis  said, he spent the season — about 10 hours per day and seven days per week — packing yogurts  and making sure all the beers were cold.

He went to New York University that fall to study engineering but dropped out during his senior year to buy and run his first grocery store building  — a property on Grand Concourse in the Bronx that he said he purchased for about $400,000. That move eventually led to Catsimatidis acquiring Gristedes from 7-Eleven’s parent company, the Southland Corporation, in 1986.

“I was making $1 million a year at the age of 23,” he said. “Then I started buying real estate.”

Young Woo
Founder and principal of Youngwoo & Associates

Before launching his eponymous development firm in 1979 and spearheading about 55 residential and commercial projects across the city, Young Woo milked cows.

“Our family actually immigrated from Korea to Paraguay [in 1965], and we couldn’t stay in Paraguay, so we moved to Argentina,” Woo recalled. “The first job we got was working at a dairy farm and milking the cows.”

He was 12 years old when he held down that first job on that Argentinian farm. 

The 66-year old developer said he appreciated working on a farm at such a young age and got a kick out of competing with other workers to see who could get the most milk.

But Woo wasn’t a big fan of the 2 a.m. wakeup calls, which were necessary to make sure the milk was ready to deliver to a cheese factory before 7 a.m. And he said the cows needed to be milked every day to make sure they would be able to consistently produce.

His family spent more than two years on the farm; Woo ultimately ended up in New York and landed in the real estate industry thanks to his background in architecture.

Although Youngwoo & Associates is now best known for big projects like its 22-story mixed-use development at 2420 Amsterdam Avenue in Washington Heights, DeKalb Market in Downtown Brooklyn and a $500 million Opportunity Zone fund, the firm —  which is currently developing more than $1 billion worth of construction — also still owns farmland in Paraguay and a winery in Argentina.

For Woo, getting to know the animals back when he was milking cows was one of the most fascinating parts of the job.

“Cows are like humans. You can tell their personalities by looking at their faces, and you know some of them are the bad guys or good guys,” he said. “It’s amazing how each cow has a different personality.”

From left: Pam Liebman, Young Woo and Benjamin Brafman (Illustration by Paul Kisselev)

Pam Liebman
President and CEO of the Corcoran Group

Corcoran’s CEO, Pam Liebman, learned at an early age to stand up for herself in the workplace.

The Staten Island native got her first job while she was a student at Curtis High School, working at her local swim club over the summer.

Liebman, who recalled being a good student and president of the student body at the time, said she mainly took the job because she was bored and wanted to work. She doesn’t remember what she earned but said it was “considered good pay” at the time.

The 57-year old — whose firm closed $4.53 billion in Manhattan sales in 2018 and had 1,320 agents in the borough as of January — recalled one day when her boss tried to get her to stay on lifeguarding duty for one more shift after she had just finished working a double.

“They were totally favoring the guys because this other guy was supposed to do the next shift on the chair, and I think [my boss] just wanted to hang with him or something,” she said. “He said, ‘Pam, why don’t you do another shift?’ I said, ‘Why don’t you go to hell?’”

So she quit on the spot and got a job at a nearby club for the rest of the summer.

Liebman said she worked about four lifeguarding gigs before taking a job as a camp counselor when she was at the University of Massachusetts Amherst.

But she turned out to be less effective at managing seventh-grade campers than managing residential agents, noting that she almost got fired for being too hands-off.

“I think I was ignoring the kids too much and not supervising them,” she said, “because at some point, I was just like, ‘I don’t really care. Do whatever you want to do. Just say I didn’t know about it.’”

But right after graduating college, in 1984, she joined Corcoran, and she hasn’t looked back.

Benjamin Brafman
Founder of Brafman & Associates

Benjamin Brafman has had a long career as one of the country’s most prominent criminal defense attorneys, representing celebrities such as Sean Combs and Michael Jackson and real estate execs like Charlie Kushner and Steve Croman.

The 70-year-old lawyer started his own defense practice in 1980 and estimates he has since worked on at least 1,500 cases, with a success rate of about 80 percent. Brafman represented Kushner 15 years ago in his trial for witness tampering and tax evasion. In 2017 he represented Croman, who spent eight months in jail after pleading guilty to charges of tax fraud and mortgage fraud.

But prior to passing the bar, and even graduating high school, Brafman worked as an assistant to a group of waiters and busboys at a hotel in Rockaway Beach called the Baders. He was 12 years old and would walk from his home in Arverne, a few blocks away, to help them set up the tables and meal stations for about 10 hours each day in the summer.

“I wasn’t officially working for the hotel,” Brafman said. “I was actually working for a couple of the waiters who I had befriended and who liked me, and I think they paid me 50 cents a meal. And I’ve been working ever since.”

Brafman said he had a “very winding” path to his career as a lawyer — one that also included stints mowing lawns, tutoring and selling Monkees concert T-shirts.

And he still has fond memories of his first gig at the Rockaway Beach hotel. “The waiters were cool guys, and it was fun,” he said. “It wasn’t hard work.”

Brad Hargreaves
Founder and CEO of Common

Brad Hargreaves runs one of the city’s first and most active co-living companies, with 30 properties (some renovated buildings, some ground-up) in New York, Los Angeles, San Francisco, Chicago, Seattle and Washington, D.C.

Hargreaves, 33, studied molecular biology at Yale University, and his first job in college was a far cry from his efforts to shake up the rental space. He joined a Connecticut-based startup called 454 Life Sciences, where he sold genome sequencers — used to automate the process of reading DNA strings — mainly to Asian buyers. The startup was acquired by another company and shuttered in 2013.

“I was the intern, and therefore the lowest man on the totem pole, so I had to be up at 3 a.m. selling genome sequencers to Japanese scientists,” Hargreaves said.

The sequencers were mainly used to better understand serious diseases like cancer by examining the underlying genetic causes. And the main accounts at the time were large government organizations and universities, along with a few agriculture and pharmaceutical companies, he noted.

That internship soon turned into a part-time job, and Hargreaves stayed with 454 Life for about nine months overall. At the time, the sequencers were selling for about $50,000 apiece, which he estimated was more than he earned during his entire time with the company.

“It was fun to sell them,” he said. “But you had to have real expertise on these things and what they could do, so it was a good mix of very technical knowledge and sales. You’re still going for the close.”

Though he liked the work, Hargreaves decided to try his hand at entrepreneurship and went on to launch Common in 2015. Prior to that he co-founded an education startup called General Assembly, and he said seeing employees, students and teachers struggle to find decent affordable housing options helped spark the idea for Common.

The co-living company, which now serves 800-plus members, has landed $65 million in venture funding to date.

“I went into college wanting to start a biotechnology company,” Hargreaves said. “I realized about halfway through college that the thing I actually liked [most] was starting companies.”

From left: CREXi’s Courtney Ettus, Allen Matkins’ Mark Nicoletti and Compass’ Justin Alexander

The band has broken up. Or at least, Hilton & Hyland’s Alexander Partridge Team. Justin Alexander has jumped to join Compass while his partner of several years, Mick Partridge, will remain, a spokesperson confirmed. Alexander is not leaving empty-handed. He is bringing team members Noah Applebaum, a broker; and Sarah Mastey, who will oversee operations. Alexander and Partridge moved to Hilton & Hyland at the end of 2017, when they left Venice-based Halton Pardee and Partners. Alexander was recently involved in selling Dean Martin’s former hacienda in Brentwood for $5.2 million, and now listing a Noah Walker-designed home in Venice Beach. He and his team, which started Monday, are based in Compass’ Beverly Hills office.

CREXi — Commercial Real Estate Exchange — is stocking its top executive ranks. The company, which allows industry professionals to search and manage properties online, hired Hans Ku as chief product officer, Courtney Ettus as chief marketing officer and Bob Drury as managing director. Most recently, Ku worked as chief product officer for Weedmaps, while Ettus served as chief marketing officer for Greenfly. Drury, a former broker, joins from Ten-X. CREXi is based in Marina Del Rey.

Allen Matkins, a top real estate law firm, has recruited Mark Nicoletti to join the firm’s L.A. office as a partner. Most recently, he was a partner at Sklar Kirsch, where he worked for six years. Nicoletti has represented commercial landlords and tenants, as well as real estate funds, institutional lenders and developers. In Orange County, Allen Matkins also recently named Ryan Smith as litigation partner.

A subsidiary of Marcus & Millichap has promoted Tyler Theobald to first vice president, general counsel. Theobald will oversee the legal department of Marcus & Milichap Real Estate Investment Services.

From left: Brian Hecktman, founder and CEO of Graymark Capital and Lone Star Funds founder John P. Grayken with the building

Graymark Capital has expanded its Pasadena footprint with the purchase of an office campus whose tenants include technology and creative office firms.

The San Francisco-based firm acquired the Eaton Canyon Tech Center for $30 million, a two-building campus with lease-up potential. More than half of its space is now vacant. The 219,377-square-foot complex also leases out space to medical science firms. It spans nearly 12 acres at 2923 and 2947 Bradley Street, at the base of the San Gabriel Mountains. Graymark declined to comment on future plans for the property.

The seller was Texas-based Lone Star Funds. The campus last sold for $24.4 million in 2015, records show.

The two buildings were completed in 1984. As of July, it was 45 percent leased, according to marketing materials. Tenants include Cogent Communications, York Risk Services Group, Forza Silicon Corp., Abeo Management Corp., and Coverall North America.

Research and development firms have helped drive the strong office market in Pasadena. The city ranks fourth highest in per capita income and takes in more than $1.9 billion in annual federal R&D funding, according to JLL.

Earlier this year, biometrics firms Gemalto Cogent Inc. signed a $14 million lease at a different Pasadena office building owned by Graymark Capital and Blue Vista Capital Management. The two firms purchased that building for $16.3 million. Around the same time, a local firm filed plans to build a medical office and retail complex near Huntington Hospital in Pasadena.

GM Cruise also signed a seven-year, $11.4 million lease for 47,000 square feet in Pasadena this year.

Ellen DeGeneres and Portia de Rossi with the home (Credit: Getty Images)

Celebrity power couple and home-flipping pros Ellen DeGeneres and Portia de Rossi sold another home in Beverly Hills.

The talk show host and her actress wife sold the Hollywood Regency-style home for $15.5 million, according to the Los Angeles Times. It solidifies yet another active year for DeGeneres in the real estate game.

But even DeGeneres isn’t immune to the stalling high-end market. The couple purchased the property 10 months ago for $15 million — amounting to a modest profit in comparison to some of her bigger trades. The deal also came after a roughly 13 percent price cut; it was first listed for $17.9 million.

The single-story home was built in 1962. It spans 5,100 square feet with five bedrooms — each with a private courtyard — four-and-a-half bathrooms, and an office and den. The property also features a built-in barbecue and a swimming pool.

It previously belonged to actress Marjorie Lord, who died in 2015. The first iteration was designed by John Elgin Woolf, and it was restored by design firm Marmol Radziner

Kurt Rappaport of Westside Estate Agency had the listing. Stephen Resnick and Jonathan Nash of Hilton & Hyland represented the buyer.

DeGeneres has closed deals that combined are worth hundreds of millions of dollars in just the past two years alone. And one of her main targets is often Beverly Hills. Three months ago, she purchased a different Beverly Hills estate for $45 million from singer Adam Levine. [LAT] — Gregory Cornfield

Donald Trump, and Trump National Doral Miami golf resort (Credit: Getty Images and iStock)

President Trump disputed a resurfaced report that the Trump National Doral Miami golf resort has bedbugs after he proposed hosting next year’s Group of Seven summit at the property.

Trump took to Twitter to respond to social media posts stemming from a 2016 lawsuit by New Jersey insurance executive Eric Linder, who alleged he was bitten by bedbugs in his room at the Trump Doral golf resort, according to the Wall Street Journal.

The suit was settled in early 2017, according to court documents. The terms of the settlement were not made public.

“No bedbugs at Doral,” Trump tweeted. “The Radical Left Democrats, upon hearing that the perfectly located (for the next G-7) Doral National MIAMI was under consideration for the next G-7, spread that false and nasty rumor. Not nice!”

The G-7 is made up of the United States, Canada, France, Germany, Italy, Japan and the United Kingdom. His plan to host the G-7 at Doral raised accusations that he could violate the emoluments clause of the U.S. Constitution.

President Trump has previously touted Trump National Doral Miami in federal disclosures as the Trump Organization’s most profitable resort.

But according to a recent report by the Washington Post, overall revenue at the golf resort is down since 2015 and net operating income declined by 69 percent from 2015 to 2017. [WSJ] — Keith Larsen

SRO Housing Corporation CEO Anita U. Nelson, the development site, and a rendering of the project

An affordable developer wants to build an 81-unit permanent supportive housing complex in Echo Park, at a time when Los Angeles is struggling to address its rising homeless population.

SRO Housing Corporation filed plans for the city’s Transit-Oriented Communities project across a series of lots at the corner of North Alvarado Street and West Kent Street, county records show. The development, which would be called Alvarado Kent Apartments, would replace low-rise commercial buildings and a parking lot.

It is eligible for TOC benefits because of its proximity to bus lines in the area.

The program provides density bonuses and other incentives to developers if they include affordable units in properties near mass transit. Many of L.A.’s most active affordable developers have used the program to boost units at supportive and affordable housing developments.

The Downtown-based SRO Housing Corp. is planning all of the units as studio apartments.

The firm picked up the development site in May 2018 for $6.5 million from Axiom Real Estate Investments. Axiom entitled the site for a 67-unit building that it wanted to call Echo Heights, but that project never moved ahead.

SRO Housing looks to house chronically homeless individuals with mental illnesses as well as homeless veterans, but anyone with an income below 60 percent of area median income is eligible to live in the complex.

Amenities include a computer room, community kitchen, and a laundry room. Supportive services will be available on-site in a dedicated office.

SRO Housing Corporation is pursuing a similar 120-unit supportive housing project not far away in Westlake. In July the county approved $5.5 million in debt financing for the project.

The developer wants to fast-track that project through a state law enacted called SB 35. The program went into effect early last year and requires cities fast-track affordable projects to help address the housing crisis. It’s not clear if SRO Housing wants to do the same for the Alvarado Kent Apartments.

Blackstone CEO Stephen Schwarzman and Stuyvesant Town (Credit: Getty Images and Wikipedia)

Blackstone Group is keeping some rent-regulated apartments at Stuyvesant Town and Peter Cooper Village vacant, sources say, after changes to the rent law impacted landlords’ ability to reap profits.

There are between 20 to 50 units being left empty, according to the complex’s tenant association president Susan Steinberg. Blackstone, which in partnership with Ivanhoe Cambridge paid $5.3 billion for the 11,000-unit complex, had announced in July that it would halt renovations because of the new limits on individual apartment improvement (IAI) and major capital improvement (MCI) programs. (Emergency fixes such as leaks and hot water service would continue, a spokesperson said at the time.)

A source familiar with Blackstone’s thinking told The Real Deal that the landlord was “in the process of evaluating capital investments and operations. No final decisions have been made.”

READ MORE:
Creative ways landlords are getting around the new rent rules

What the new rent law will do to the average stabilized apartment

Steinberg noted that Blackstone has a “responsibility to look at their bottom line,” and that the landlord may be waiting to see what will happen as the courts and state agencies rush to understand the sweeping reforms the state Legislature made to rent laws in June. Seven New York City landlords, along with the Rent Stabilization Association and the Community Housing Improvement Program, are suing over the reforms.

Blackstone, though not involved in the suit against the state’s housing agency, had joined others to spend millions to avert tenant-friendly changes to the rent laws in Albany.

When Blackstone and Ivanhoe bought the sprawling housing complex in 2015, the landlords received perks from the city in exchange for preserving 5,000 affordable housing units for two decades. That included an interest-free loan from the Housing Development Corporation, $220 million in financial assistance, a waived mortgage recording tax and air rights benefits. A 2018 study from the city’s Independent Budget Office found that the benefits of the deal were exaggerated, because tenants were likely to remain in their apartments for two-thirds of the 20-year deal and a low turnover rate means fewer units will become available to low-income renters.

As for warehousing units, according to real estate law firm Belkin, Burden Wenig and Goldman’s Sherwin Belkin, there is no restriction, except in some limited condo-conversion scenarios.

“I assume there are many cases where making repairs and renovations and putting apartments on the market is simply not worth the effort now,” Belkin said.

While landlords with rent-stabilized apartments may have taken vacant units off the market due to the new limits on offsetting renovation costs, there are other potential factors. The industry, Belkin said, may also be hoping that unintended effects of the new rent laws, like warehoused rent-regulated apartments, will attract the attention of lawmakers and compel them to “make remedy” in subsequent legislative sessions.

For Stuy Town resident Pete Harrison, Blackstone’s willingness to warehouse apartments is evidence that the firm is “just fine.”

“At the very least they are slow-walking stuff, to give the perception of a capital strike and try to spook people,” Harrison said.

Stellar Management is also keeping three apartments vacant at its Central Park Gardens apartments at 50 West 97th Street, according to the building’s tenant association president Sue Susman. Stellar’s 14-story 274-unit apartment building has shed 20 of its 224 rent stabilized apartments since 2007, according to data from tax bills. The persistent vacancies of the rent-regulated apartments in Stellar’s building have been accompanied with buyout offers for apartments adjacent to them, according to Susman, which may be an effort to “substantially change the configuration and set a new rent.”

A representative from Stellar Management said that they could not confirm or deny that apartments are being held vacant at their 50 West 97th Street apartment building in order to combine them into a new apartment.

The current legal framework allows landlords to set a one-time first rent if there is a substantial change to the floor plan — although the new “Frankenstein” apartments must remain stabilized.

Los Angeles homes (Credit: iStock)

Lower mortgage rates is helping spur stronger home sales in Southern California, as median sale prices keep climbing amid a nationwide housing market slowdown.

According to a new report by CoreLogic, 22,071 new and existing houses and condos sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties in July.

That’s up 6.1 percent from June, and up 3.7 percent year over year. The total number of homes sold last month was the highest for the month of July since 2015.

“After 11 months of year-over-year declines, Southern California posted a modest annual increase in home sales in July,” said Andrew LePage, a CoreLogic analyst. “The gain is no surprise given the significant drop in mortgage rates in recent months, combined with a healthy job market, income growth and a rise in inventory.”

But the numbers were not all good.

July sales were still 10.9 percent below the historic average for the month.

In L.A. County, 6,965 homes were sold in July, one fewer than July 2018. The median home sale price for the county was $635,000, 5 percent higher than the same time last year, and 2.75 percent higher than it was in June.

The median price paid for all Southern California homes sold in July 2019 was $540,000, down 0.3 percent month over month from a record high of $541,750 in June 2019 and up 1.9 percent over the $530,000 mark in July 2018.

In July, the number of homes sold for $500,000 or more in Southern California rose 7.1 percent compared with July 2018, and sales of $1 million-plus homes increased by 2.4 percent. Homes that sold for $500,000 or above accounted for more than half of all sales last month.

Every day, The Real Deal rounds up Los Angeles’ biggest real estate news. We update this page in real time, starting at 9 a.m. Please send any tips or deals to tips@therealdeal.com

This page was last updated at 3:40 p.m. PT

From left: Jose Huizar, Huang Wei, Mohamed Hadid, Robert Herscu, Raymond Chan, and Arman Gabay, with Los Angeles City Hall (Credit: iStock and Getty Images)

Real estate’s role in corruption scandals in City Hall is hard to ignore. Recent investigations into wrongdoing at City Hall has revealed the entrenched relationships certain real estate developers hold with elected officials. TRD compiled a roundup of the most recent scandals and how they tie into the industry. [TRD] 

Weight isn’t the only thing Jenny Craig is losing. The nutrition guru has sold her home in Del Mar for $22 million, nearly half of what she initially asked. The five-bedroom home has oceanfront views, as well as a swimming pool. [LAT] 

Music Center Plaza has reopened after nearly 2 years. Designed by Rios Clementi Hale Studios, the $41 million makeover has added a wine bar, glass elevators, coffee shop and restrooms to the 55-year-old space in Bunker Hill. The plaza is situated on Grand Avenue, where Related Co. is planning a major Frank Gehry-designed development across the Disney Concert Hall. [Curbed] 

Former L.A. Kings’ Brad Stuart looks to score buyer for South Bay mansion. The home is on the market for $4.7 million, which would be a little less than 10 percent over what he paid for it in 2017. The 6,000-square-foot home was completed in 2016 on half-an-acre overlooking Trump National Golf Club in Rancho Palos Verdes. [LAT]

A rendering of Faring’s French Market project (Credit: R&A Architecture and Design)

Trio charged in killing of Marina del Rey man amid luxury home dispute. Two people who lived in William Webb’s three-story home were charged with his murder following the discovery of his body in Joshua Tree earlier this month. Authorities say the killing followed Webb’s decision to list the $2.6 million property for sale. His former stepdaughter was also charged. [LAT]

Faring earns support for WeHo development from historic preservation commission. West Hollywood preservation officials voted to support the firm’s redevelopment of the French Market Place building. The 1930s structure later became a gathering place for the gay liberation movement. Faring first wanted to demolish the building, but in late 2017 agreed to preserve the market’s exterior and add an 83,000-square-foot building. [WeHoville]

IMT Residential scales back redevelopment of Sherman Oaks’ Sunkist HQ. The firm has cut back the number of apartments in the proposed plan from 298 to 249 across three new buildings. The new complex will include 27,400 square feet of ground-floor retail space. The Sunkist building, a 1970s-era Brutalist structure designed by the firm AC Martin, will be restored and maintained as office space. [Urbanize]

L.A.’s homeless outreach agency failed to meet goals, says city controller. Ron Galperin’s office says that the Los Angeles Homeless Services Authority has placed just 4 percent of people they assessed into permanent housing, well under the goal of 10 percent. [LAT]

Ellen DeGeneres and Portia de Rossi with the home (Credit: Getty Images)

Power-flipper Ellen DeGeneres closes another sale, but takes home a modest sum. DeGeneres and wife Portia de Rossi sold a Hollywood Regency-style home in Beverly Hills for $15.5 million. Amid L.A.’s luxury market slowdown, the couple received $500,000 more than they paid for the 5,100-square-foot home late last year. [TRD]

A home mortgage refinance boom has been cut short after rates rose. The average contract interest rate for a 30-year fixed rate mortgage jumped to 3.94 percent, up from 3.90 last week. As a result, refinancing applications fell 8 percent, and mortgage applications to buy a home dropped 4 percent. [CNBC]

Blackstone Group is currently warehousing some units at the enormous Stuyvesant Town and Peter Cooper Village apartment complexes in Manhattan. The landlord has between 20 and 50 units empty following the introduction of New York state rent laws which will impact the landlord’s ability to raise rents through renovations. Blackstone previously announced it would temporarily halt renovations (with the exception of emergency issues such as leaks and hot water service) at the site. [TRD]

FROM THE CITY’S RECORDS:

SRO Housing Corporation wants to build an 81-unit permanent supportive housing building in on N. Alvarado Street in Echo Park. A small commercial structure would be demolished to make way for the new building. [LADCP]

From left: Jose Huizar, Huang Wei, Mohamed Hadid, Robert Herscu, Raymond Chan, and Arman Gabay, with Los Angeles City Hall (Credit: iStock and Getty Images)

In order to get a project off the ground in Los Angeles, the developer needs a wealth of expertise. While some of that involves tapping the right land-use attorneys, or finding out which district needs what, it also often requires having the right connections.

Just how deep should those connections reach?

Recent investigations into wrongdoing at City Hall has revealed the entrenched relationships certain real estate developers hold with elected officials. Though they range in scope, each of the scandals has brought to light how city employees — even those at the bottom of the totem pole — can impact a project. It should be noted that many of the real estate players mentioned in the investigations have not been charged.

Here’s a recap of the recent probes and how they tie to real estate:

Jose Huizar | Shenzhen New World Group, Shenzhen Hazens Real Estate Group

Perhaps the most far-reaching, an FBI investigation into City Council member Jose Huizar has roped in more than a dozen individuals, two real estate development firms and large development projects in Downtown Los Angeles. Huizar, who led the powerful Planning and Land Use Committee, is under investigation for possible bribery, extortion, money laundering and conspiracy.

An FBI search warrant — made public in January — also named Wei Huang and Ricky Zheng, executives at Shenzhen New World Group. Shenzhen New World owns the Los Angeles Marriott Downtown and the Sheraton Universal hotel. It filed plans to expand both properties in a two-day span in June 2018, a few months before the FBI raided Huizar’s office.

Also named was Fuer Yuan, founder of Shenzhen Hazens Real Estate Group Company, and Mason Situ, a general manager at the firm. The company owns the Luxe City Center hotel, where it was planning a contentious redevelopment project. City Council approved the project in 2017.

Michael LoGrande | HQ Development, Soho House, Vella Group, VE Equities

Earlier this month, Michael LoGrande was handed the largest fine ever levied against a city employee for illegally lobbying the city shortly after his departure. At the same time, the former planning department chief was also being paid $18,000 per month in consulting fees by the city. A report by the Ethics Commission found that LoGrande helped expedite a project proposed by Robert Herscu’s HQ Development during his consulting contract. He also held a tight relationship with New York-based Vella Group, VE Equities and Soho House & Co. — all of which had major projects in the pipeline during the time he was running the planning department.

Raymond Chan | Greenland USA, Oceanwide, Shenzen Hazens

The same FBI raid that targeted Huizar last summer also targeted the email account of former Deputy Mayor Raymond Chan. In those emails, it was revealed that Chan, a longtime city employee who formerly led the Department of Building and Safety, raised tens of thousands of dollars for a charity event from developers seeking city approvals for major projects. Among the developers he reached out to were three who were included in the FBI search warrant — Greenland USA, Oceanwide, and Shenzen Hazens.

Thomas Shepos | Arman Gabay

Thomas Shepos, a former public official in L.A. County’s Real Estate Division, pled guilty to accepting cash bribes from one of West Hollywood’s most prominent developers late last year. He also pled guilty to making false statements to the FBI about the bribe and kickback deal with Arman Gabay, co-founder of West Hollywood-based Charles Co. The payments — about $434,000 in bribes over seven years — were used to help Gabay secure a lease with county departments at the Charles Co.-owned Hawthorne Plaza Mall.

Gabay also managed to engangle City Council President Herb Wesson, in another unrelated project in South L.A. Though there has been no indictment or official inquiry, a Los Angeles Times investigation revealed Wesson was a big proponent of the Charles Co.’s District Square project and approved more than $26 million in federal grants for it to get built, though it never did. Campaign contribution records show Gabay had donated to Wesson’s campaigns.

Anthony Anderson | Mohamed Hadid

The case surrounding spec home developer Mohamed Hadid and his half-built mansion on Strada Vecchia Road in Bel-Air has had its share of characters, including litigious neighbors, construction managers and about a dozen attorneys. Anthony Anderson, a former inspector for the L.A. Department of Building and Safety, has also become a key figure. In a legal declaration filed in June, a former construction manager at the project said Hadid ordered one of his carpenters to build wooden cabinets at Anderson’s home. There was no record of Anderson ever paying Hadid, according to the declaration. Though Hadid has denied claims that he’s ever paid off a city inspector, the property remains the subject of an FBI investigation.

Department of Water and Power

Though it’s not exactly tied to real estate, it’s worth noting that FBI agents stormed the Department of Water and Power headquarters in July as part of an investigation into a botched customer billing system. Investigators were reportedly seeking evidence of bribery, kickbacks, extortion, mail fraud and money laundering, according to the warrant. The agency has been in hot water since it launched a new billing system six years ago, where thousands of customers received inflated bills.

The “Razor Home” in Los Angeles sold for $20.8 million (Credit: Getty Images)

In today’s market, not even Marvel’s wide-reaching appeal was able to fetch a buyer willing to pay full asking price for Tony Stark’s lookalike mansion in La Jolla.

The architecturally significant “Razor Home” sold for $20.8 million Tuesday, roughly 30 percent less than what it originally listed for a year ago. It was most recently listed for nearly $25 million.

Still, the deal marks the most expensive sale in La Jolla so far this year.

The “Razor Home” in Los Angeles

Designed by Wallace Cunningham, the hillside estate is believed to have served as inspiration for Iron Man’s “Razor Point” mansion in the franchise film. It’s also become a popular filming spot for commercials, luring big-name brands like Calvin Klein and Visa.

Property records reveal the seller was Donald Burns, a Palm Beach resident who has owned the property since 2011. It’s unclear who bought the property.

Spanning 11,000 square feet, the home has four bedrooms and six bathrooms. Inside, a circular living room offers sweeping views of the Pacific Ocean. Amenities include a glass elevator, infinity-edge swimming pool, wet bar, gym and movie theater.

Josh and Matt Altman of Douglas Elliman represented both sides of the deal. Stephen Sweeney, who is also part of their team at Elliman, also represented the buyer.

Jason Yaselli and Usher (Credit: Getty Images and iStock)

To sell a property, the open house event is a time-honored tradition and stands as a critical component for brokers and potential homebuyers. But for homeowners in some of Los Angeles’ toniest neighborhoods, it has become an increasingly risky proposition.

“The concept of an open house is kind of strange. You’re letting strangers into a house,” Rodeo Realty luxury broker Josh Flagg said. “You don’t have to lock up the furniture, but I wouldn’t leave your diamond ring out.”

That advice comes after the L.A. County District Attorney last week charged a now-former Keller Williams agent for his alleged role in a string of celebrity burglaries at open house events in Beverly Hills, Brentwood and West Hollywood, among other wealthy enclaves.

Jason Yaselli and an accomplice allegedly made off with $500,000 in stolen luxury merchandise from high-profile names including Usher, Adam Lambert, “Real Housewives of Beverly Hills” stars Paul and Dorit Kemsley, and former NFL player Shaun Phillips.

Last fall police charged four people in a series of similar burglaries to celebrity homes, and authorities say those culprits used social media and listing websites to track their victims’ whereabouts and locate the homes.

In those instances, the homes were empty.

This time around, police say Yaselli allegedly cased out some of the homes using his expertise and experience as a luxury agent. His accomplice, Benjamin Ackerman, then posed as a broker or potential buyer at open houses and made off with the valuables.

Yaselli and Ackerman’s scheme should serve as a “wakeup call” for both agents and homeowners to be more vigilant, said Douglas Elliman luxury agent Ernie Carswell.

“That’s not just for the general public, that’s also for when agents [are touring a property],” Carswell, whose office is in Beverly Hills. “It’s a call to arms for using common sense and good street smarts.”

Yaselli and Ackerman allegedly pulled off their thefts from late 2016 to mid-2018, authorities said. At 14 open houses over that period, they allegedly stole more than 2,000 items, including jewelry, wine and artwork.

Keller Williams’ Beverly Hills office did not respond to requests for comment, but Yaselli is no longer listed as an agent on its website. Yaselli and Ackerman both face up to 30 years in prison if convicted on the top counts.

Brokers interviewed for this story say their responsibility includes managing all aspects of the open house. That includes overseeing security and briefing owners to ensure they don’t leave valuables or other personal items in plain sight.

“I tell them to put away anything that is worth more than $50,000 and smaller than the palm of your hand,” Flagg said. “I also tell them to put away important medications, because you don’t want someone taking photos of your medication or stealing pills.”

Flagg said he always has two other people at each open house for added security measures. One person is on the first floor and another upstairs to safeguard the bedrooms. That deters most would-be thieves, but he did catch one person grabbing something from a closet at an open house in Beverly Hills Post Office.

He called the police and struck up a conversation with the would-be thief to keep until the police arrived.

“We have a sign-in sheet at the door and will hire security to be at the door,” he said. “But the truth is we don’t know who is coming in.”

Calswell agreed, saying he has escorted visitors from his open houses three times over his career for suspicious behavior.

“If agents are shy about that they probably shouldn’t be interacting with the public,” he said. “You got to have the strength to know something isn’t right and the state that clearly.”

Adam Neumann and a WeWork location in Detroit (Credit: Getty Images)

With a blockbuster regulatory filing this month, WeWork raised more questions about its impending IPO than it answered. Perhaps no stakeholders read the filing more closely than its own landlords.

“There were certain things in that report I would rather have not seen,” Rory Greenberg, a Miami landlord who owns a building entirely occupied by WeWork, said of certain expenditures and loans detailed in the filing, though he would not specify. “Obviously, I’m sure a lot of it can be explained.”

The debate over WeWork’s financial viability has reached a fever pitch, and few have more at stake than the landlords of its 200-plus locations in the U.S. The company received wide criticism for some of its business practices, the scale of its outstanding lease commitments and lack of corporate governance, which led to eye-popping loans to its CEO Adam Neumann and other executives. After the regulatory filing dropped, one Manhattan landlord even sued the company to get out of its lease.

According to its most recent U.S Securities and Exchange Commission filing, known as an S-1, WeWork has committed $47 billion to U.S. landlords over the next 15 years, and plans to raise as much as $6 billion in debt when its IPO launches. (It currently has $2.5 billion in cash, and has acknowledged that it sees no pathway to profitability in the foreseeable future.) WeWork declined to comment for this story.

The Real Deal spoke to multiple landlords across the country to hear first-hand what they think about the S-1.

One institutional landlord, who owns a Manhattan building partially occupied by WeWork, said they are unconcerned by the risk factor attached to the startup, because they took added precautions when signing the lease. One measure involved reducing its tenant improvements — an investment by the landlord to build out a rental space, which is often repaid by rent — and instead asked WeWork to build out its own space.

“They were risky as a startup, and now they’re risky as they chase their IPO,” said the landlord, who requested anonymity because WeWork is a tenant.

The landlord bristled at WeWork’s push to attract enterprise companies, which now make up 40 percent of its members. “They have this enterprise division, and you’ll be chasing a 60,000-square-foot tenant or bigger, [against] WeWork,” the landlord said. “That’s the big difference now.”

But some building owners see considerable upside to WeWork’s IPO. Another New York-based institutional landlord, who is currently negotiating a lease with WeWork in Manhattan and did not wish to be identified, said that an IPO could prove a better deal for landlords because it will provide “better collateral from WeWork than the current state that they are in.”

A Los Angeles landlord, who has multiple WeWork locations, said “there are definitely aspects of WeWork’s business that concerns me.” For example, the landlord said, in a downturn buildings that are underperforming will be more likely to close. About 30 percent of WeWork’s locations are mature, which means occupied for longer than 24 months, according to its S-1 filing.

The LA-based landlord, who has kept WeWork occupancy low, said those with high occupancy rates in their buildings should be more concerned in the event WeWork would downsize.

“I would be concerned for sure if you had a WeWork location that is doing so-so,” the landlord said. “Those are the ones that in a downturn they are going to close.”

A prior analysis by TRD, which focused on WeWork’s New York locations, found that the co-working startup wholly occupies five buildings in the city, and at least 18 buildings have more than 50 percent occupancy.

Major lenders, for their part, are tied to more properties than any one landlord. Bank of America currently has debt tied up in 16 buildings, according to an analysis by real estate data company Reonomy and TRD. It is followed closely by MetLife, Wells Fargo and Citibank.

Wells Fargo, which has provided loans to 12 buildings, said that as a general rule, it will not provide loans to a building that is more than 20 percent occupied by co-working companies.

“We have tried to limit our exposure to co-working and non-credit tenants,” said Mark Myers, Wells Fargo’s head of commercial real estate.

Greenberg, the Miami landlord who is a part-owner of the Security Building, a 96,000-square-foot building where WeWork is the sole tenant, said that he was comfortable signing the lease because WeWork agreed to make its own tenant improvements. He added: “I love the business model.”

He is in discussions with WeWork to lease another building, but said he would not consider the company to entirely fill a location again. Instead, he said he would consider the company as an anchor tenant.

“Not to say anything about the tenant,” he said. “I think it’s just my personal tolerance for risk.”

Pierce Brosnan and his new home in Santa Monica (Credit: Getty Images)

Pierce Brosnan retired as fictional British secret agent James Bond in 2002, and like the character, Brosnan’s tastes are subtle.

He and his wife, Keely Shaye Brosnan, picked up a single-story home in Santa Monica’s College Streets neighborhood for $3 million, according to the Los Angeles Times.

Amid a Los Angeles luxury residential market that has slowed down over the last year, the couple paid slightly less than the original asking price. The home hit the market a month ago.

The 2,319-square-foot home was built in 1941. It has four bedrooms, three bathrooms, and a detached two-car garage. There is a covered front porch and a patio area in the back of the home.

The Brosnans’ last big real estate play in the L.A. area was in 2017, when they sold a Mediterrean-style villa in Malibu’s Broad Beach area for $2.8 million. They owned that home for more than a decade. [LAT] — Dennis Lynch

Opendoor CEO Eric Woo and images of its Opendoor Home Loans app (Credit: Resolute Ventures)

Opendoor, an instant-homebuying startup with a valuation of $3.8 billion, is moving into lending.

The company announced its newest program, Opendoor Home Loans, on Thursday, promising it would make the process of securing a mortgage quicker, simpler and more transparent.

Through the Opendoor app, consumers can determine if they pre-qualify for financing, regardless of whether they planned to buy a property through the iBuyer or in the wider market. Opendoor buys homes from individuals and flips them after completing renovations.

The company said it would offer competitive interest rates and no lender fees, however it does not currently have a function that allows users to compare these figures with third parties.

Each borrower would also receive assistance from a qualified mortgage consultant employed by Opendoor.

Opendoor is the latest iBuyer to enter the lending space after competitor Zillow launched a home loans division in April.

“It takes us one step closer to providing an end-to-end experience where you can buy, sell or trade-in a home in just a few clicks,” said Nadia Aziz, who heads up Opendoor Home Loans, in the company’s Thursday blog post.

Through the Opendoor app, consumers can determine if they pre-qualify for financing, regardless of whether they planned to buy a property through the iBuyer or in the wider market.

The announcement followed months of turbulence at Opendoor. The startup started firing about 50 of its 1,300 employees back in June, and asked hundreds of remaining employees to move to the company’s Phoenix location, where it said it plans to double its headcount over the next year. The company has also scaled back its free-lunch policy.

The company has also experienced a flurry of executive turnover, losing its co-founder JD Ross, CFO Jason Child and vice president of engineering Bali Raghavan all in the past year.

Opendoor announced a new $300 million fundraising round in the spring, with investors including SoftBank’s $100 billion Vision Fund.

The lending product was in development for about a year, and was initially tested in Texas. Aziz wrote in the blog post that Opendoor planned to move into other markets in the coming months.

Daniel Wrublin (right), principal of Dalan Management and Gregory Fowler, managing partner at FPA Multifamily with The Vue Apartment Homes in San Bernardino

Investment firm FPA Multifamily has unloaded a 197-unit apartment community in San Bernardino, in an area that has benefited from the continued strong performance of the industrial market.

New York-based Dalan Management paid $37.4 million for the property, located at 1660 W. Kendall Drive.

The Vue Apartment Homes

The Vue Apartment Homes have floor plans that range from 800 square feet to 1,030 square feet. Built in 1988, the property is near California State University features a pool, a sundeck, a business and student center. Stew Weston, Dean Zander and John Montakab of CBRE represented Irvine-based FPA.

In a statement that accompanied the announced acquisition, Dalan Management principal Daniel Wrublin said job growth in the Inland Empire attracted the firm to the property. About 104 million square feet of industrial and commercial space and 10 million square feet that is now under construction are located within a 10-mile radius of the complex.

The multifamily market in the Inland Empire has remained healthy this year, according to CBRE. Construction activity continued to rise with 1,555 apartments added from March 2018 to March 2019. Demand has also stayed strong, exceeding new supply, as 1,445 units were absorbedw.

Chairman/CEO of Saatchi & Saatchi LA Kurt Ritter and 555 Aviation

Global advertising giant Saatchi & Saatchi has signed a new lease to relocate its Los Angeles headquarters to El Segundo, joining a growing number of media and technology firms that have set up shop in the former aerospace and industrial hub.

The firm will occupy 80,000 square feet at the Tishman Speyer-owned 555 Aviation campus, The Real Deal confirmed. It will be relocating from 3501 Sepulveda Boulevard in Torrance, which is owned by Hudson Pacific Properties.

Spanning 260,000 square feet, 555 Aviation sits on nearly 14 acres. Like many commercial buildings in El Segundo, the single-story property was converted into creative office space in an adaptive reuse project.

Amenities at the campus include a fitness center, coffee shop and ping-pong tables.

Tishman acquired the building for $45 million in 2015, records show. At the time, it was fully leased by Xerox Corp. The New York-based firm renovated the building once Xerox vacated in 2017.

CoStar first reported the new lease.

El Segundo has become an increasingly attractive area for both media companies and institutional investors who are looking to take advantage of its lower prices. Last month, New York-based Vella Group paid $51 million for a 200,000-square-foot office campus that is leased to Boeing. The aerospace giant is planning to vacate the building at the end of 2020.

Several stores at Rancho Plaza Vista sold for $11 million

A local investor has made a retail play in Palmdale.

An LLC linked to Lancaster-based dentist Rami Haddad purchased a portion of Rancho Vista Plaza for $10.9 million. The sale is for around half of the single-story retail locations at the property, about 55,000 square feet.

The sold properties are currently leased to tenants including Subway, MetroPCS, and insurance company State Farm. A Vons supermarket, Rite Aid Pharmacy, a Burger King and a handful of other retail spaces at Rancho Vista Plaza, are owned by separate investors and were not sold as part of the deal.

The seller was a joint venture of two trusts tied to Robert G. Anderson and Ronald Waranch, according to property records. Marcus & Millichap’s Brandon Michaels represented both the trusts and Dr. Haddad in the deal. The asking price was $11.2 million and the deal closed in July. The property was developed in 1991 and renovated in 2004.

Despite concerns about the future viability of brick and mortar retail, the Los Angeles area has seen a handful of large retail center sales over the last few months.

In late July, restaurateur Fabio Conti purchased two retail centers in the Inland Empire for a total of $35.6 million. Later last month, Seagrove Property Group sold a Glendora property to a private foreign investor for $13.7 million.

Developer DH Holdings picked up a Thousand Oaks retail center earlier this month for $18 million with plans to expand the property with a grocery store and day care center.

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

This page was last updated at 3:15 p.m. PT

Chairman/CEO of Saatchi & Saatchi LA Kurt Ritter and 555 Aviation

Saatchi & Saatchi has a new home. The global ad agency has signed a deal to occupy 80,000 square feet at Tishman Speyer’s 555 Aviation campus in El Segundo. The firm will be relocating from Torrance, making this spot its Los Angeles headquarters. [TRD]

In a housing crisis, seniors struggle the most. Households with at least one person 62 or older made up a quarter of no-fault evictions in Los Angeles city rent-controlled buildings between June 2014 and May 2019, according to city data. Even without evictions, seniors are often unable to withstand high rent increases, placing them in a vulnerable position. [LAT]

Developer agrees to preserve landmarked Beverly Grove bungalow court apartments. Neighbors of the Edinburgh Bungalow Court property struck a private deal with a developer who wants to demolish the landmarked apartments to redevelop the property. The developer agreed to a waiting period to allow neighbors to find a buyer property who would preserve the property. If they can’t, the redevelopment can move forward. [Curbed]

Culver City’s office market set for an addition. Redcar Properties wants to build a 9,850-square-foot office building in Hayden Tract near Metro’s Culver City Station subway stop. [Urbanize]

L.A. lawmakers move toward evacuating people from high-fire zones. A City Council committee moved forward with an ordinance to create off-limit areas on days with a high risk of wildfires. Much of the San Fernando Valley would be classified as high-risk zones. Mayor Eric Garcetti called the ordinance a step toward reducing homeless encampment fires like the one that sparked the Skirball Fire in 2017. [LADN]

Coldwell Banker team in NorCal jumps to Keller Williams. The Laugesen Team is the latest Coldwell Banker team to move to jump ship. In L.A., Coldwell Banker has lost some of its biggest producers, including Chris Cortazzo and Ginger Glass, over the last three months. Coldwell banker consolidated two Beverly Hills offices recently. [Inman]

Pierce Brosnan and his new home in Santa Monica

007 picks up Santa Monica home. Pierce Brosnan and wife, Keely Brosnan, purchased a World War II-era single-story home in Santa Monica for just below asking price. The 2,300-square-foot home, which sold for $3 million, was on the market for just three months. [LAT]

Open house burglaries are a “wakeup” call to brokers and homesellers in L.A. Brokers told The Real Deal that their colleagues should be more vigilant about security at open house events following the arrest of a former Keller Williams broker for a rash of celebrity burglaries between 2016 and 2018. [TRD]

SoCal sees strongest July for home sales in four years. Lower mortgage rates are helping to support sales as median sales prices continue their upward trajectory. Sales in July were up 6.1 percent over June and 3.7 percent year over year, but were still below the historic average. In L.A. County, the median price rose 5.5 percent year over year to $635,000. [TRD]

The “Razer Home” in Los Angeles sold for $20.8 million

La Jolla mansion that inspired Tony Stark’s “Iron Man” home trades at discount. The so-called “Razor Home” designed by Wallace Cunningham traded for $20.8 million a year after hitting the market for $30 million. That’s still the priciest sale so far this year in La Jolla. The mansion inspired the “Razor Point” mansion where the character Tony Stark lives in the Marvel “Iron Man” film series. [TRD]

“I would rather have not seen”: WeWork landlords react to IPO filing. The release of WeWork’s regulatory filing this month has given some landlords cause for concern, while others say they took added precautions when signing a lease. [TRD]

Epstein’s longtime lawyer, who advised him on real estate deals, is now under scrutiny. An attorney for Jeffrey Epstein and executor of his will, Darren Indyke, has hired a defense attorney in the wake of the financier’s death as his business dealings with Epstein come under greater scrutiny. An expert told the Wall Street Journal that any dealings between Epstein and Indyke that were absent of any legal advice might not be protected by attorney-client privilege. [WSJ]

Amazon’s shipping empire putting pressure on UPS and FedEx. Since 2013, Amazon has expanded its fulfillment, sorting and other delivery facilities from 65 to about 400 — strengthening its delivery network and repositioning the retail giant’s relationship with delivery companies from that of a customer to that of a rival. [WSJ]