South Florida commercial real estate developer James Batmasian was among the 26 people who received a pardon from President Donald Trump on Wednesday.

The Boca Raton real estate mogul served eight months in federal prison in 2008 for not paying the IRS about $250,000 in payroll taxes tied to his real estate business Investments Limited.

Batmasian’s pardon, announced by the White House, was supported by Rep. Brian Mast, criminal justice reform advocate Alice Johnson, and famed golfer Bernhard Langer who is a friend of President Trump.

In a statement, the White House cited Batmasian’s charitable work. It also mentioned that the developer recorded all of its payments and “made no attempt to hide them when confronted by the IRS.” He also fully repaid the IRS the money he owed, according to the White House.

“I am so grateful for President Trump’s benevolence, as are all the members of my family,” Batmasian said in a statement.

Trump also pardoned former Palm Beach County commissioner Mary McCarty who served 21 months in prison for honest services fraud. McCarty was found guilty in 2009 of using her position as a commissioner to direct money into her husband’s bond underwriting business without disclosing it to the public.

Batmasian is no stranger to controversy.

He and his wife Marta were allegedly connected to Boca Raton Mayor Susan Haynie, who is now facing charges of perjury, official misconduct and misuse of public office, among other charges. Prosecutors allege that Haynie failed to disclose her financial ties to the Batmasians, while voting on their projects. Haynie is awaiting trial.

Investments Limited owns and manages about 3,800 apartments and over 3 million square feet of commercial properties in South Florida and around Boston, according to its website. It is among the largest and most active real estate firms in Boca Raton.

The pardon could have large implications on Batmasian’s real estate firm. In particular, it could make it easier for the developer to get financing from a bank.

On Wednesday, Trump also pardoned Kushner Companies boss Charles Kushner who spent over a year in prison on charges including falsifying tax returns, making illegal campaign donations and retaliating against a witness. Kushner’s conviction had been a complicating factor in the company’s ability to get loans, according to David Enrich, a New York Times journalist who authored a book about one of the firm’s biggest lenders, Deutsche Bank.

Others on the list of the 26 pardons issued by Trump Wednesday were Roger Stone, a long time informal adviser to the president, and Paul Manafort, his 2016 campaign chairman.

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Billionaire investor Ron Burkle has purchased Michael Jackson’s former “Neverland Ranch” for $22 million, a far cry from the $100 million the sprawling estate was once asking.

Property records spotted by the Wall Street Journal show that a “Remember LLC” bought the 2,600-acre Santa Barbara County plot on Dec. 17, and the publication traced that LLC back to Burkle. The seller is a joint venture between the late pop megastar’s estate and Colony Capital, which bought the note on the property in 2008 and became a co-owner.

The ranch spans 2,700 acres and its centerpiece is a 12,000-square-foot mansion. The property includes a 50-seat movie theater, a basketball court and a tennis court.

Colony has tried to unload the property at various points, including for an ambitious $100 million listing price in 2015. The 5225 Figueroa Mt. Road land in Los Olivos has since hit the market a half-a-dozen times only to be later pulled, according to Redfin.

This includes the home coming to market for $31 million in February 2019 — the same month HBO premiered “Finding Neverland,” in which two men claim Jackson repeatedly molested them, including at the Neverland Ranch, when they were children.

In the wake of the HBO documentary and an earlier molestation trial against Jackson, Colony tried rebranding the property as “Sycamore Valley Ranch.”

But it would appear that Burkle, whose Yucaipa Companies made a fortune selling supermarket chains, got a bargain. Santa Barbara County has given the property an assessed value of $34 million.

Burkle is an active real estate investor and owns a number of trophy properties. In 2016, he paid $13 million for the Bob Hope house in Palm Springs and oversaw an extensive restoration. [WSJ] — Matthew Blake

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Square Mile Capital provided an $82.2 million construction loan to the developers of a planned 250-unit apartment building in Reseda.

The borrowers, Gelt and Uhon Inc., intend to build the complex at 6625 Reseda Boulevard in the San Fernando Valley, Square Mile said. 

While there won’t quite be a freeway running through the yard — to steal a line from Tom Petty — the 109,000-square-foot Reseda site does sit at the intersection of the 405 and 101 highways.

Countywide, apartment construction loans have been increasingly difficult to lock down during the pandemic. This week, WSC Communities said it was looking to sell off 23 different mixed-use sites in Santa Monica — to build up to 2,100 units — citing difficulty obtaining the necessary financing.

Square Mile has been a relatively active lender during the pandemic. The firm recently provided a $211 million loan on an apartment building in Southwest Washington, D.C.

Multifamily sales activity in L.A. County has slowed this year. The five largest investment sales involving apartment developments totaled $646 million, less than half the amount of 2019. 

Tarzana-based Gelt — led by Steve and Keith Wasserman — picked up several properties in the San Fernando Valley in the last few years. In early January, the company announced plans to significantly expand its multifamily holdings in Southern California, along with six states across the Western U.S.

Uhon, a private equity firm tied to China homebuilder Shenzhen Yuhong, has a portfolio of at least nine multifamily buildings in Southern California, according to its website. 

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A year before Zac Efron appeared in the movie “Neighbors” as a mischievous, hard-partying fraternity president, the actor made a quieter entrance into the Los Feliz neighborhood, paying $4 million for a 5,600-square-foot home.

Seven years later, Efron has listed the five-bedroom, five-bathroom property with sweet views of Downtown Los Angeles for $5.9 million, according to the Los Angeles Times.

The home includes three stories of decks and balconies. Efron made improvements to the pool and spa, including a waterfall, according to the Times. The property encompasses about an acre.

Kathrin Nicholson of the Agency has the listing.

L.A. is never without celebrity real estate deals, and this has been a particularly active month.

Composer Danny Elfman and actress Bridget Fonda recently sold for $8.8 million one of two Hancock Park homes they listed in October while Grammy-nominated rapper French Montana bought NBA star Paul George’s 16,000-square-foot Hidden Hills home for $8.4 million.

Countywide, the L.A. luxury market has been on the upswing since early spring when Covid-19 slammed the brakes on nonessential business, including house tours. For the year, the five priciest residential sales in L.A. County totaled $448 million, just edging out last year’s top-five total of $438.8 million. Jeff Bezos led the way with a record-setting $165 million purchase in February, followed by Jeffrey Katzenberg’s $125 million sale of his Beverly Hills mansion to Jan Koum, co-founder of WhatsApp. Kurt Rappaport, co-founder of Westside Estate Agency, brokered that deal. [LAT] — Alexi Friedman

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One major Canadian developer is making a big bet that urban centers will rebound after the pandemic.

Oxford Properties Group, the real estate division of Ontario Municipal Employees Retirement System, is planning a $2 billion megadevelopment in midtown Toronto, according to Bloomberg. The developer wants to bring a mix of apartments, offices and retail to a 9.2-acre area that’s largely parking lots.

The development, dubbed “Canada” Square,” would have five new skyscrapers totaling 3 million square feet. The rest of the area would be turned into parkland.

The site of its proposed project sits along Yonge Street and Eglinton Avenue. A wave of development has brought a young population into the area, hence its nickname “Young and Eligible.”

Oxford is no stranger to projects of such scale: It’s Related Companies’ partner on the 26-acre Hudson Yards megaproject on Manhattan’s Far West Side. In Toronto, Oxford is also building a convention center, offices, apartments and retail over railway tracks next to Rogers Centre, where the Blue Jays play.

Still, the planned project comes at a time when city dwellers have been fleeing to the suburbs in droves. And many companies are reconsidering their real estate footprints after the success — and potential cost savings — of working from home. [Bloomberg] — Danielle Balbi

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Related Companies https://therealdeal.com/tag/related-companies/ made a big bet on the “city within a city” concept in New York with its Hudson Yards megaproject — and now it’s trying something even more ambitious in London.

The firm has partnered with Argent, a developer in the U.K., to build a so-called “15-minute city,” according to the Wall Street Journal. The joint venture of Argent Related is calling the project Brent Cross Town.

The 180-acre site — that’s more than six times the size of Hudson Yards — will have some 6,700 homes, along with 3 million square feet of office space, 50 acres of parkland and other amenities. The project, located about eight miles from central London, will also get a new train station in 2022 to ferry commuters into the city.

The idea behind the 15-minute city concept is to have everything a resident might need within a short walk from their home. Other cities have built or are building similar projects, including Manchester, about 180 miles northwest of London; and Rotterdam in the Netherlands.

And people are willing to shell out for the promise of having their office or other necessities close to home: Dominic Grace of U.K. real estate firm Savills told the Journal that buyers will pay as much as 30 percent more to live close to restaurants, gyms and other amenities. Plus, “Covid-19 has accelerated that realization,” Grace said.

Related Argent is confident in the success of the more than $6 billion megaproject, the first chunks of which are due to be finished by 2024. But to be sure, the developers plan to “monitor the residents” of the project — it didn’t say how — to prove that the 15-minute city concept is good for mental and physical health. (That sounds familiar.)
[WSJ] — Amy Plitt

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The pandemic has upended every part of the hospitality industry, with travel restrictions leaving hotel rooms empty, and lockdowns in cities forcing restaurants and bars to severely limit occupancy.

That’s left some hoteliers and restaurateurs to try out a creative solution to both problems: Turn those empty rooms into private dining suites, where patrons can pay a premium for a meal provided by a local eatery (or, in some cases, the hotel’s restaurant).

These sorts of ventures have rolled out at hotels in Philadelphia, New York, Boston and other cities ravaged by the pandemic, according to the New York Times. In Brooklyn, the Wythe Hotel’s restaurant, Le Crocodile, worked to create Le Crocodile Upstairs, which set aside 13 hotel rooms that could be reserved for private dining, with accommodations for six to 10 people and a set menu of $100 per person. (New York’s recently enacted indoor dining restrictions, however, forced even this setup to close.)

In Philadelphia, AKA University City offered a deal with a local restaurant, Walnut Street Cafe, where — for $50, plus $65 for a prix fixe menu — groups of up to four people could dine in a private room within the hotel. Customers prepay for the meal and have contact with only one person throughout the experience, minimizing (in theory, anyway) the risk of exposure to Covid-19.

Still, the trend may not be enough to save many of the establishments that have been hit hard by these pandemic-related restrictions. The hotel industry has lost $46 billion in revenue in 2020, with nearly 1 billion unsold hotel room nights on the horizon for the year. Several large hotel chains have already closed properties, such as the 478-room Hilton Times Square in New York, which permanently shut its doors in September.

Restaurants aren’t faring any better: 37 percent of restaurants nationwide said they do not expect to survive the next six months without federal relief, according to a recent industry survey. [NYT] — Amy Plitt

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Construction timelines were disrupted across the city this year as sites deemed unessential were shut down.

Still, work at many projects — including some of the largest ongoing developments — either qualified as essential or received approval from the Department of Buildings to move forward. And despite some delays, The Real Deal’s ranking of the most active developers in 2020 closely mirrors last year’s list, as well as 2018’s, with some minor shuffling among the top firms.

The ranking is based on the volume of work each developer has underway and the total square footage of those projects. Just as last year, one non-developer — a bank — made the top 10.

1. Brookfield Property Partners | Square feet: 3.8 million | Project count: 6

After two years of trailing Related Companies, Brookfield snagged the top spot in this year’s ranking. The firm’s largest project is Two Manhattan West, a 1.8 million-square-foot office tower being built on Manhattan’s West Side. The design of the tower is nearly identical to One Manhattan West, Brookfield’s recently completed adjacent office building.

CEO Brian Kingston told TRD in June that it was moving “full steam ahead on the final tower,” noting that the company had secured approval from the city to continue work on the project when construction activity was restricted. Amazon reportedly considered leasing space in the tower, but announced last year that it was taking space at SL Green Realty’s 410 10th Avenue.

2. Related Companies | Square feet: 3.6 million | Project count: 5

Hudson Yards, the 28-acre development on Manhattan’s Far West Side, has kept Related at the top of TRD’s ranking for several years. The developer’s largest ongoing project this year is the nearly 2.3 million-square-foot office tower, 50 Hudson Yards. Late last year, Facebook agreed to take more than half of that space, along with 265,000 square feet at 30 Hudson Yards and 57,000 square feet at 55 Hudson Yards.

Like Two Manhattan West, work was able to continue at 50 Hudson Yards when construction was limited to essential and approved work. The DOB temporarily stopped operations on the site, however, after finding that some unsanctioned work was happening.

3. BRP Companies | Square feet: 3.1 million | Project count: 10

BRP didn’t crack the top 10 list last year or in 2018. But projects in Jamaica, Queens, helped propel the firm this year to the third spot. The largest is a 500,000-square-foot, mixed-use building at 90-02 168th Street. The project is expected to include 614 units of mixed-income housing. The developer is also constructing a 490,000-square-foot, 669-unit apartment building at 147-40 and 148-10 Archer Avenue.

4. Extell Development | Square feet: 2.5 million | Project count: 5

Once again, Extell’s massive luxury tower at 217 West 57th Street is the firm’s largest ongoing project. Central Park Tower will rise 1,775 feet and span 1.2 million square feet. Sales launched in October 2018, with a projected sellout of $4 billion. In October, Extell brought in Corcoran Sunshine Marketing Group to serve as co-exclusive brokers alongside its in-house sales team.

5. L+M Development Partners | Square feet: 2.4 million | Project count: 9

Most of L+M’s ongoing projects are in Manhattan and Brooklyn. The largest is 575 Exterior Street, which is part of the two-phase Bronx Point waterfront development. The 23-story, 542-unit, mixed-use building is expected to span more than 550,000 square feet and is being co-developed with Type A Projects. Bronx Point will ultimately include some 1,045 units, of which more than half will be permanently affordable. The developer is also working on a 446-unit apartment building at 2926 West 19th Street in Coney Island with BFC Partners and Taconic Investment Partners.

6. Tishman Speyer | Square feet: 2.2 million | Project count: 1

The Bjarke Ingels-designed supertall at 509 West 34th Street, known as “the Spiral,” once again landed Tishman Speyer on this year’s ranking, taking the sixth spot for the second year in a row. The office tower is expected to span 2.2 million square feet (though, it is marketed as 2.8 million). Pfizer agreed to anchor the building, signing a lease in 2018 for 800,000 square feet.

7. TF Cornerstone | Square feet: 2.1 million | Project count: 4

The firm is working on a pair of affordable-housing towers in its Hunters Point South development. Together, the buildings — at 52-03 and 52-41 Center Boulevard — are projected to span more than 1 million square feet and include 1,200 apartments. The towers represent TF Cornerstone’s largest ongoing project.

The second-biggest is part of the Pacific Park development in Brooklyn. In early 2019, the developer bought 615 and 595 Dean streets from Greenland Forest City for $143 million. TF Cornerstone is building two towers there, which will collectively span more than 900,000 square feet and include nearly 800 apartments.

8. JPMorgan Chase | Square feet: 1.9 million | Project count: 1

Despite a rise in office vacancies and a shift to remote work, the pandemic hasn’t put a damper on JPMorgan’s plans for a new headquarters at 270 Park Avenue in Midtown East. The bank is demolishing the existing office tower on the site to make way for a larger tower (marketed as 2.5 million square feet), marking the first project to take advantage of the recent rezoning of the neighborhood.

9. Durst Organization | Square feet: 1.6 million | Project count: 8

Most of the Durst Organization’s ongoing projects are located in Queens, the largest of which is a rental tower known as Queens Plaza Park. That project, at 29-55 Northern Boulevard in Long Island City, will include nearly 1,000 apartments and span roughly 1 million square feet. The firm is also chipping away at its seven-building, 2,002-unit rental complex known as Hallets Point. That project, however, has been repeatedly delayed, most recently in January by disagreements between the developer and City Hall. The firm has indicated it will wait until the next administration to move forward.

10. United Construction and Development Group | Square feet: 1.5 million | Project count: 6

All of United’s ongoing projects are in Queens. When complete, a 778-foot tower at 23-15 44th Drive in Long Island City will be the borough’s tallest. Appropriately dubbed Skyline Tower, the 780,000-square-foot project will have more than 800 condo units. The tower is being developed by United alongside FSA Capital and Risland US Holdings. Yimby reported earlier this month that work on the building’s exterior was in the final stages.

SOURCE: TRD analysis of Department of Buildings data for jobs that have not received a temporary certificate of occupancy as of December 2020.

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Multifamily landlords that are having trouble with mortgage payments are in luck: The Federal Housing Finance Agency has extended forbearance options for loans backed by Fannie Mae and Freddie Mac until Mar. 31.

The measure was originally set to expire on Dec. 31.

Struggling landlords who have federally guaranteed mortgages and want to take advantage of the forbearance options must also extend benefits to their tenants, according to HousingWire. To qualify, landlords must notify tenants about the protections they have available, and agree not to evict tenants for nonpayment of rent while the property is in forbearance.

Many landlords may feel relieved by the extension: About 12 percent of landlords with mortgages are in forbearances, according to the Urban Institute. Of those landlords, 20 percent are Black and 14 percent are Hispanic.

While the CDC’s eviction moratorium is set to continue through Jan. 31 now that a federal stimulus package has been approved by President Donald Trump, many renters are facing economic hardship from the loss of unemployment benefits, and may be unable to pay rent in the new year — which could subsequently lead to financial trouble for their landlords.

According to the National Multifamily Housing Council, only 75 percent of renters in 11.5 million market-rate apartments paid some or all of their rent by Dec. 6 — the lowest rental payment rate since close to the start of the pandemic. The figure is nearly 8 points lower than it was a year ago.

[Housing Wire] — Akiko Matsuda 

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It’s a long-held tenet of the business that agents switch firms when times are bad — and few years in recent memory have been worse than 2020.

“When the market is super strong… agents don’t really move,” said Scott Durkin, president and chief operating officer of Douglas Elliman. “That’s a natural evolution of the business.”

Now, a volatile market has sent brokers running, some from the business altogether. Nearly 4,000 agents terminated their licenses between January and December, a 9 percent drop from 63,835, according to Corofy, a data firm which tracks agent movement. Manhattan lost 2,372 agents, while Brooklyn, the Bronx, Queens and Staten Island lost a combined 1,562.

“The number of agents today is the most important metric,” said Eddy Boccara, Corofy’s founder. “I really consider the agents to be the consumer of the brokerage.”

The drop in headcount is understandable: Many agents saw their income virtually dry up overnight when the pandemic hit. And though the national housing market is roaring, New York City is struggling with an oversupply of high-end condominiums, banks tightening lending standards and buyers’ preferences for more space and private outdoor areas. All told, Manhattan sales fell 46 percent year over year in the third quarter of 2020; in Brooklyn and Queens, deal volume fell 43 and 40.5 percent, respectively.

“It’s a time of enormous dislocation,” said Frederick Peters, CEO of Warburg Realty. “For a great many real estate agents, I think it’s really created a lot of fear.”

The climate hasn’t stopped brokerages, many of which had to make cuts in the early days of the pandemic, from recruiting. Brokerages always want to grow market share by adding more “consumers,” as Boccara put it, but the landscape has become more challenging with more competition, slower sales and fewer agents. Though firms may not have the financial resources to offer big signing bonuses, many have placed an increased focus on rolling out tools to boost productivity, both for existing agents and to lure in new ones.

The Corcoran Group launched a new customer relationship management system in lockdown and an entirely virtual training center for agents in March. As of early December, the firm had run more than 900 classes on business development, digital marketing and wellness, among others. It is also working on getting a program ready to pay agents their commissions as soon as deals close. 

Brown Harris Stevens began rolling out two lending products in December that will front staging costs for sellers and offer bridge loans up to $25 million to buyers at the behest of agents.

“We’re doing it solely because agents have said it’s important,” said Matt Leone, BHS’ head of business development. “I think everything we do is a recruiting and retention tool. … I call it doing your job.”

Meanwhile, Compass is gearing up for its initial public offering, which could mean windfall for the agents who took advantage of its stock options. Earlier this month, Robert Reffkin, the firm’s founder and CEO, encouraged that line of thinking in a recent internal memo to agents.

“We will be able to invest more in building towards the Compass Northstar: Anything an agent needs, Compass provides,” Reffkin wrote.

Coming and going

Even at the best of times, many brokerages view recruiting as a numbers game, where the highest agent headcount reaps the largest gross revenues for the company. But when business is bad, the need for more agents is even more acute.

“The industry knows that, really, one out of 10 agents is going to make it and really be profitable for the company,” Corofy’s Boccara said.

The game is harder now than ever before: There are fewer agents across the board, and those left know they’re in demand.

“The agents themselves are starting to realize that they’re a commodity in hot demand,” Boccara said. “Everybody wants to talk to them.”

Compass is the recruiting game’s biggest player. The brokerage hired 249 agents away from its rivals between May and November — more than any of its competitors, according to an analysis by Corofy.

“Compass really owns a really, really important market share of hiring,” said Boccara, referring to the strategy of recruiting agents to gain market share.

Rory Golod, Tri-State president of Compass, pushed back, however, saying that firms allowing growth to be driven by headcount was leading the industry “astray.”

“Great organizations are built by being thoughtful and selective,” he said. “We have never thought about our company in terms of the number of agents. … We don’t set targets based on the number of agents.”

The firm was far from alone when it came to bringing on new talent from competitors. Corcoran made 120 new hires, followed by eXp, which drew 92 agents. Douglas Elliman snapped up 58 agents from its rivals, while Oxford Property Group picked up 53.

“We are very aggressive,” said Pam Liebman, CEO and president of Corcoran. “We did not stop.” She did note, however, that the firm had limited recruitment to agents who’d been in touch with the firm before and previously expressed interest out of a desire to be “sensitive” during the pandemic. 

Overall, Compass netted 97 agents between May and November — meaning that the firm gained more agents than it lost. eXp Realty, RE/MAX Edge, Nest Seekers International and Triplemint reported similar gains.

Still, Compass churned, or lost, an average of 39 agents per month. Among the city’s other biggest brokerages, Elliman and Corcoran saw an average monthly churn of 54 and 53 agents between May and November, while BHS churn was 9.5.

(Compass disputed Corofy’s results, stating that its churn was just under 2.5 agents per month because the firm only counts “principal agents” not their team members internally.)

At BHS, the firm has upped its marketing budgets and is pouring resources into a new CRM system that recently launched, according to CEO Bess Freedman.

“We’re just going to be a little bit more flexible than usual taking into account the pandemic,” she said referring to costs agents incur.  “We’re sensitive to the agents that have had a really tough time this year.”

Merger mania

For the last few years, consolidation has swept the brokerage industry, and the recent volatility hasn’t changed that pattern. Last year, Compass acquired Stribling & Associates, and in January of this year Bond New York snapped up rental brokerage Caliber Associates, while Citi Habitats merged into Corcoran. 

BHS and Halstead’s merger in June was the largest of 2020. The two firms, sister companies under Terra Holdings, now have a combined roughly 2,500 agents. However, the process did result in the departure of 38 “underperforming agents,” according to Freedman and Richard Grossman, president of Halstead.

Freedman said the pandemic was the “catalyst” for the deal. She said Terra had discussed merging the firms for years, but the idea became an “ideal” option as the city locked down last spring.

“If we didn’t have the pandemic, I don’t know that we would have done it at such a quick speed,” she said. “Maybe we would have at some point.”

Oxford Property Group absorbed Kian Realty and Spire Group, which meant adding about 280 agents to the firm over the course of the year.

The firm’s founder and CEO Adam Mahfouda said that Oxford’s growth insulated the firm from the pain of a market where transaction volume has sunk.

“As a company we’re not feeling the toll,” he said. “But a lot of our agents are feeling that.”

  In a similar vein, Elegran acquired Anchor Associates earlier this fall, bringing on 20 new people.

Celebrity broker Ryan Serhant took an even more extreme approach, launching a new firm altogether in September. He began hiring immediately, despite the fact that a lot of his existing business will continue to be handled by his team at Nest Seekers.

“I’m not building this for today. I’m building this for 2030, and 2040, and beyond,” Serhant said in an October interview. “The age old way of getting a desk and you have to drive all your own business and it’s the brokerage’s brand first and your brand second … it will not last, it cannot last.”

Serhant’s firm and Triplemint both scooped up agents and staff who had been let go when many firms were forced to make deep cuts earlier in the year.

Triplemint CEO David Walker called cutting support staff and agent services “the wrong strategy” back in June, just as agents were allowed to show homes for the first time in three months.

“This is the time to invest in your agents because the market is going to rebound,” he said at the time. Fast-forward six months, Triplemint said its headcount has increased by about 20 percent since last December. Walker said he stands by the firm’s “targeted and specific” strategy.

“Value to buyers and sellers stands out even more in a challenging market,” he said in December. “It’s the extreme opposite of when the market is roaring, and you can hire your friend who’s done two deals and has their license on the side.”

Breaking out

For agents themselves, a different calculus comes into play when deciding whether to stay or go.

The pandemic has led some agents, concerned about health and safety, to retire, according to Barbara Fox at Fox Residential.

“I think a few of them just don’t want to deal with everything,” she said, noting that there is a real fear among agents showing homes and meeting with clients despite there being no vaccine.

“I don’t know anyone who isn’t afraid,” Fox said. “I’ve never been so looking forward to getting a shot.”

Meanwhile, others decided this was the time to leave the sheltered wing of major teams. Two agents who had been on the Serhant Team for seven years, Ivy Kramp and Jenna Amicucci-DeChristopher, decided to move to Compass in late June where they founded a four-person team, which includes another Serhant Team alum Vanessa Beretta. 

The brokers, who say they closed $222 million in total sales between 2018 and 2019, said they parted with Serhant on good terms and the decision didn’t have anything to do with his new firm.

“We wish him the best of luck,” said Amicucci-DeChristopher. “Just for us we wanted to go in a little bit of a different direction.” Kramp said the in-house resources at Compass for new development was a big factor in their move.

On the other end of the spectrum, Kayla Lee, who handled sales at new development buildings for Modern Spaces for the past five years before jumping to Serhant’s new firm, said the decision was born out of a lull between projects and wanting a new challenge.

“I thought this would take me to a new level,” she said.

The Peters Breese team at Elliman splintered off from the Eklund-Gomes Team in May, noting that making a move as the market was frozen afforded them additional time to reorganize and communicate with clients. “We have the time to do it now,” as Breese put it.

Aaron Seawood, a Brooklyn-based broker and a founding member of Compass’ sports and entertainment division, agreed. He moved to Triplemint in June for the opportunity to “have a seat at the table” as the firm expanded into Brooklyn.

“When you’re able to be still, you’re really able to be self aware,” Seawood said in June about deciding to make the jump amid so much volatility. “You have a little more time to think about what’s important to you.

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Meghan Trainor is the latest famous musician to pick up a pad in Los Angeles’ Encino neighborhood.

The singer — best known for her 2014 debut hit “All About That Bass” — dropped $6.6 million on a 9,000-square-foot mansion replete with a recording studio, Variety reported. Gwen Stefani, Jennifer Lopez, Selena Gomez and Kelly Clarkson have all recently purchased homes nearby.

Trainor’s new home was built in 1998, and rapper TMG Fresh (Doug Jordan) installed the studio and made many other upgrades during his two years owning it. Even with those improvements, he sold the home for a paper loss of $35,000, according to the publication.

The six-bedroom, eight-bathroom home sits on 1.1 acres and is hidden from street view by tall hedges. The estate has a plunge pool with a waterslide, a two-story guesthouse, a gym and a sports court.

The main home’s living room is set up as an arcade, with a pool table, pinball machine and shoot-’em-up station. Jordan is 30 years old. His father, Doug Jordan, is a well known developer in the Bay Area.

Since her famous ditty about derrieres, Trainor has had no treble amassing a real estate booty in L.A. She also owns a farmhouse-style home in Toluca Lake, acquired for $4.9 million in 2016, and a property in Valley Village purchased that same year for $1.7 million.

[Variety] — Danielle Balbi

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A Seattle-based developer is betting big on micro-housing in Los Angeles.

Housing Diversity Corporation is filing plans for an eight-story, 227-unit rental project at 1411 South Flower Street in Downtown Los Angeles’ South Park neighborhood, Commercial Observer reported. The project, about half a block from the Convention Center, is the developer’s third micro project in the city.

Housing Diversity Corporation is putting up 151 units at 1317 South Grand Avenue, also downtown, and 69 units at 1621 North McCadden Place in Hollywood. Units average 375 square feet and the developer will target $1,995 in rent.

At the South Flower Street project, the developer is taking advantage of tax credits for construction near transit, as well as Opportunity Zone credits, which allow for capital gains taxes to be deferred, and even erased.

DTLA is seeing much in the way of development. The Convention Center is in for a $1.2 billion overhaul and a 685-unit luxury rental tower recently opened at Greenland USA’s Metropolis megadevelopment.

STS Construction and Development is partnering with Housing Diversity Corporation on the micro-housing project. The work should be permitted by December 2023.

[CO] — Danielle Balbi

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A small Queens glass company sent out a letter in 2017, alerting clients that it had fired three of its employees. It did not say why, but that became clear soon enough.

Authorities had discovered an alleged bribery scheme centered not on little-known Jonathan Metal & Glass but on Turner Construction and Bloomberg. Executives from the two giant firms were charged with accepting millions of dollars’ worth of payoffs in exchange for inflating interior construction contracts.

Federal authorities raided Turner’s offices in October 2017, roughly a week before the glass shop revealed the firings. One of the terminated employees was later accused in the scheme, along with nearly two dozen other subcontractors and vendors.

The federal and state criminal cases against former Turner and Bloomberg employees, as well as the subcontractors, are only now nearing a conclusion. Four former executives of the big firms have pleaded guilty to tax evasion, theft and other charges.

By marking up construction costs at Bloomberg offices, executives stole at least $15 million from the media and financial information company, authorities said. They now face prison.

As for Turner, although its client was ripped off, the firm was not charged, suffered no apparent blow to its reputation and has continued to win large contracts. Which surprised absolutely no one.

Large construction companies often emerge from corruption cases relatively unscathed, even when found to be directly involved in wrongdoing. They pay a fine, issue an apologetic statement and continue to bid on work.

But the Turner case also underscores how vulnerable construction is to malfeasance and the persistent appetite of industry players to cheat at every level of the process.

“You can never be content with the controls that you set up because people who are looking to pad their invoices are vigilant as well, in a negative sense,” said Dennis Walsh, a former prosecutor with the New York attorney general’s Organized Crime Task Force and a consultant with Guidepost Solutions. “Companies need to think in a forward way and be mindful of the tireless efforts of some contractors to exploit opportunities.”

The scheme

In September 2017, a project superintendent for Turner, Vito Nigro, sent a cryptic text message to an air conditioning subcontractor.

“When u bringing lunch so we’re done. The other guy is getting married,” he wrote, according to state prosecutors.

He was referring not to food but to a series of illicit cash payments that were used in part, to help pay for then-Bloomberg construction manager Michael Campana’s wedding photographer, prosecutors allege. Nigro repeatedly referred to bribes in lunch terms, most often as “sandwiches,” according to the 2018 indictment.

The two, along with more than a dozen others, were charged with conspiring with various subcontractors and vendors to award work to certain companies, artificially driving up the costs of construction work at Bloomberg’s offices at 120 Park Avenue and 919 Third Avenue.

In return, the subcontractors allegedly provided cash bribes and other kickbacks, including vacations and home renovations, to executives at Bloomberg and Turner. This went on for six and a half years.

Finally, a month after Nigro’s message about “lunch,” New York State Police officers and investigators crashed the party.

Prosecutors said at the time that the graft turned the New Jersey home of Anthony Guzzone, Bloomberg’s head of global construction, into a “palace.”

A separate federal indictment slapped tax-evasion charges on the executives, who had not reported the illicit benefits to the IRS. Attorneys for Nigro and Campana did not comment for this story.

The scheme was not novel in the annals of construction fraud. In the past three decades, New York’s largest construction managers have paid millions in fines and penalties to settle similar allegations. But the case was notable for a few key reasons.

For one, Bloomberg and Turner are huge, sophisticated companies. Bloomberg, founded by former New York City Mayor Michael Bloomberg and headquartered on Lexington Avenue, is worth as much as $60 billion, according to Burton-Taylor International Consulting. Turner bills itself as the country’s largest construction manager. Its global revenue last year was $14.66 billion, according to ENR.

Turner is a subsidiary of German engineering giant Hochtief, which acquired the New York–based construction manager in 1999 for $263 million. Since then, Turner has expanded across the U.S. — where it now has more than 40 offices — and internationally.

But size can make corruption harder to find. “Rogue actors” can keep misdeeds under the radar for an extended period at a large company, especially when projects are worth tens of millions of dollars, according to Jodie Kane, head of the Manhattan district attorney’s Rackets Bureau.

“It’s easy to skim off what would still be a considerable amount of money for many of us but, in the larger view of the project, is a small fraction,” she said. The alleged involvement of top Bloomberg executives likely made the scheme even harder to stop.

“I think it’s easy to go undetected for a long time, even with very rigorous internal compliance and especially when it’s the gatekeeper, who’s supposed to be identifying the compliance, who ends up being a bad actor,” Kane said. “Really, that’s the worst of all possible worlds.”

Some elements of a construction contract can be readily inflated if they have no fixed value, such as responding to conditions on a site that emerge during the building process.

“If there was a stock that you could buy for a dollar, and someone paid $1.10, you’d know something was up,” said Ronald Goldstock, a private, independent inspector general and construction integrity monitor who was once director of the New York State Organized Crime Task Force. “The construction industry by its very nature is rife with the possibilities of bribery and extortion.”

Diana Florence, who spent 25 years at the Manhattan district attorney’s office and headed its Construction Fraud Task Force, said looking at a company’s culture is key in determining its culpability.

“There also has to be fairness,” she said. “You can’t indict an entire company, and you shouldn’t, based on a rogue employee.”

But some believe Bloomberg should have been prepared for this kind of scheme. Bloomberg’s previous construction manager, Structure Tone, was also accused of overbilling the firm, as well as other clients. Structure Tone pleaded guilty in 2014 to falsifying business records.

Also, Nastasi & Associates, a carpentry subcontractor, had warned Bloomberg and Turner of problems with their bidding processes, according to lawsuits filed after the criminal federal and state cases were revealed.

The company’s owner, Anthony Nastasi, claims in the suits that after he raised questions, his company was abruptly fired from a Bloomberg project and then blocked from bidding on others, which destroyed his company.

“This is how Turner runs its business,” the lawsuit states. “Everyone knows the risk of crossing Turner, and Turner does not hesitate to impose its enormous market power on subcontractors that depend on Turner for work.”

The suit, which a Turner spokesperson said has “no merit” and was dismissed in March in a decision now being appealed, also contends that both companies ignored “red flags” that the schemes “reached the highest levels of these companies, permeating through many departments and levels of employees in different areas of the construction business.”

“Not only should their compliance programs have caught this scheme, based on the breadth and brazenness of the conduct by their highest-level executives,” the lawsuit claims, “but these companies have long been on alert that their employees, including their highest-level executives, were susceptible to it.”

Moving on

Three years after being revealed, the federal and state cases against the Turner and Bloomberg executives are coming to a close.

Guzzone, whom prosecutors referred to as the scheme’s mastermind, faces up to five years in prison on the federal tax evasion charge and three to nine years for grand larceny in the state case. Ronald Olson, former Turner vice president and deputy operation manager, faces the same sentences. Campana was sentenced to 24 months in prison in the federal case and faces one year in the state case, after pleading guilty to tax evasion and money laundering, respectively.

An attorney for Guzzone, Alex Spiro, said in a statement that his client has “accepted responsibility for accepting gratuities and not disclosing certain matters on his taxes and will further explain the circumstances in court.” A lawyer for Olson did not comment.

One employee of Jonathan Metal & Glass, Frank Zustovich, pleaded guilty to stealing $50,000 from Bloomberg and agreed to provide authorities with the names of Bloomberg and Turner executives, according to the New York Times. Zustovich, along with at least one other employee fired from Jonathan Metal, now work for another company, GFC Ornamental Metal & Glass, according to LinkedIn.

Turner, meanwhile, seems to have emerged with nary a scratch. In New York, the company is serving as construction manager for the Spiral, Tishman Speyer’s Bjarke Ingels–designed office tower. In May it was selected to build out the interiors of Ernst & Young’s offices spanning 18 floors at One Manhattan West. Vornado Realty Trust recently tapped the company to oversee the redevelopment of 2 Penn Plaza.

“Clients recognize that the actions of two former employees do not reflect Turner’s true character of honesty and integrity,” the Turner spokesperson said about the Bloomberg case. “Turner actively cooperated with law enforcement throughout the investigation and applauds their efforts in prosecuting these individuals.”

Kane said larger companies are typically better equipped to weather bad press and reputational damage that accompanies criminal convictions. Smaller companies will sometimes shut down and reopen under a new name, she said.

But the government rarely tries to put firms out of business, a lesson learned when the conviction of Arthur Andersen in the 2001 Enron scandal triggered the disintegration of the accounting giant, costing thousands of employees their jobs.

In determining whether to go after the company itself, prosecutors consider how many people it employs and if there is a way to remedy criminal activity while keeping it in business, according to Kane.

“Many of these companies, despite criminal wrongdoing, they do good work in the construction industry,” she said. “So if you can find a way to clean up the culture of the company, but to keep the workers employed, that’s one of the things that we try to do.”

Louis Coletti, president of the Building Trades Employers Association, called the cases against Turner — a member of his group — and Bloomberg employees an “aberration.”

“At the end of the day, human beings will try to take advantage of any system,” he said. “We do all we can to prevent it, but if anybody goes asunder, rest assured they will be terminated and have been terminated.”

Indeed, executives were caught. But by the government, not by the companies. And given the weaknesses inherent in construction contracting, it appears certain such crimes will happen again.

In addition to increased corporate vigilance, Florence said, the government needs to make clear it is continuously watching for fraud. Otherwise, companies and their employees will continue to think the risk of getting caught is outweighed by potential rewards.

“It’s like Groundhog Day over and over,” she said.

The post Cracks in the foundation: Construction’s kickback problem appeared first on The Real Deal Los Angeles.

It’s a big month for Gal Gadot — and not just because of the debut of “Wonder Woman 1984.”

The actress, whose latest in the “Wonder Woman” series was released Christmas Day, dished out $5 million for a penthouse along Malibu’s waterfront, according to Variety.

Ocean views abound in the 2,000-square-foot pad: The unit features a floor-to-ceiling wall that rolls away for access to a large, seafront balcony. There’s also a dramatic skylight.

The seller was Thai philanthropist and onetime Miss Universe winner Bui Simon. She purchased the condo for $850,000 in 1994, just six years after receiving the crown.

The unit has two bedrooms, three bathrooms, granite kitchen counters and custom cabinets, a soaking tub and two parking spots. The deal works out to $2,500 per square foot.

Gadot and her husband Yaron Varson, a real estate developer in Tel Aviv, also have homes in Israel and Hollywood Hills; they picked up the latter four years ago for $5.6 million.

Simon is also married to a developer, billionaire Herbert Simon, and she has homes in Carbon Beach, Montecito and Pacific Palisades.

[Variety] — Danielle Balbi

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It’s been a rough year for the office market — and it’s unlikely that the first half of next year will be much better.

Even though Covid-19 vaccines are being distributed across the country, public health and real estate experts believe that a return to the office likely will not happen until late spring or early summer, the Wall Street Journal reports.

Experts say that it will take months for the vaccine rollout to become effective and for employees to reach herd immunity, meaning remote work will continue in the next year and office rents will continue to drop.

The real estate firm CBRE projects that office rents could fall by as much as 8 percent in 2021.

In the meantime, landlords are dealing with mostly empty offices. An average of about 23 percent of workers in 10 cities had returned to the office the week of Dec. 16, according to Kastle Systems, which tracks access-card swipes. The highest rate since the pandemic was 27.4 percent in mid-October, Kastle said.

Some companies are planning their return to the office in light of the promising vaccine news. In New York, 25 new tenants per week were searching for office space in the first two weeks of December, up from 20 per week in November, according to the data firm VTS.

Many of these companies are considering leasing space from co-working operators such as WeWork and Industrious, according to the Journal.

[WSJ] — Keith Larsen

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Churchill Real Estate’s Justin Ehrlich has seen a lot during his time as a developer and lender in New York. He witnessed the collapse of the real estate market during the 2008 financial crisis, followed by the mad rush to build luxury condo towers in some of Manhattan’s swankiest neighborhoods.

But nothing compares to the past nine months, he said. “It’s not normal,”  Ehrlich noted. “It’s the worst I’ve ever seen.”

He pointed to an unusual rise in Uniform Commercial Code foreclosures by mezzanine lenders, which he sees as a canary in the coal mine for a mound of distress expected to hit the market in the next year. While judicial foreclosures are still banned under an emergency order by New York Gov. Andrew Cuomo, UCC foreclosures on some high-stakes projects have been moving ahead in recent months since they can bypass state courts.

With one of the roughest years on record coming to a close, many have been waiting for their moment to jump on distressed properties. Now, mezz lenders — which provide junior debt on real estate projects — are increasingly initiating UCC foreclosures on some major developments in need of “rescue funding.”

In August, for example, SL Green Realty filed a UCC foreclosure tied to a high-end retail property on Fifth Avenue owned by Joe Sitt’s Thor Equities. And most recently, CIM Group has been battling it out in court with Ziel Feldman’s HFZ Capital Group to auction off loans tied to several of the developer’s Manhattan condo projects.

Matthew Mannion, who specializes in UCC foreclosures, has conducted at least eight auctions tied to mezz loans or so-called membership interests since March, according to an affidavit filed last month. And Mannion told The Real Deal that more are on the way.

“This is the tip of the iceberg,” he noted.

The uptick in cases presents an opportunity for deep-pocketed lenders like SL Green and CIM that may soon be able to expand their portfolios by taking over projects on the cheap.

Representatives for SL Green and CIM declined to comment.

“Many of the players in the mezz space are not afraid to own the asset,” said Janice Mac Avoy, co-head of Fried Frank’s real estate litigation practice.

Mezzing around

After the last recession, banks pumped the brakes on highly leveraged real estate deals, forcing many developers to look elsewhere for funding. Mezz debt became one of the go-to financing sources to help fill the gaps.

It also has its drawbacks.

Mezz lenders are often among the last to get paid back on a project. So when things go south, their positions can easily get wiped out.

But mezz lenders have a trump card in UCC foreclosures. They are often processed within two to three months, much quicker than traditional foreclosures, which can carry on for years.

By initiating a UCC foreclosure, a mezz lender has a chance to take over a struggling project or sell its stake in the property. In such cases, the junior lender has a huge advantage. It can place a “credit bid” on the property using the existing debt it is owed from the borrower. This allows mezz lenders to acquire assets at a lower cost than if they bought the property outright.

“Mezz lenders are much more aggressive because they are in a riskier position,” said Neil Shapiro, a partner at the law firm Herrick, Feinstein.

Yet UCC mezzanine foreclosures can be trickier than traditional mortgage foreclosures. Rather than being secured by the property, a mezz loan is converted to an equity interest in the business. So if the junior lender succeeds in a foreclose, it becomes the property’s primary owner and must make payments on the senior debt.

But Mac Avoy said banks and other senior lenders are often more apt to work with subordinate lenders — which usually have no prior history of default — than troubled borrowers. “Lenders aren’t thrilled doing business with someone who isn’t able to pay them back,” she noted.

When considering a foreclosure, mezz lenders have to decide if the project is worth more than its debt. If not, the mezz lender can try to sell its loan or work with the borrower on restructuring the loan terms.

“I am seeing the beginning of a lot of lenders saying, ‘We can’t do nothing,’” said Jay Neveloff, a commercial real estate lawyer and partner at New York-based Kramer Levin Naftalis & Frankel.

Lenders are getting especially antsy with borrowers who have been behind on payments for some time.

Such is the case with Mack Real Estate Group, which is seeking to foreclose on the second phase of the Denizen — All Year Management’s luxury apartment complex in Bushwick. Yoel Goldman’s Brooklyn-based firm was unable to close on a $652 million refinancing for the 900-unit rental complex and has halted payments to its bond investors in Israel.

Representatives for All Year and Mack did not respond to requests for comment.

Courtroom drama

In New York’s high-flying real estate market, nothing comes easy.

So as more lenders seek to foreclose on assets, more borrowers are filing lawsuits to stop them.

In one of the most high-profile cases so far, Los Angeles-based developer and lender CIM sought to foreclose on mezz positions on four of HFZ’s Manhattan condo projects.

The day before the planned auction last month, HFZ filed a lawsuit seeking to stop the sale, arguing that it was “commercially unreasonable.” The developer claimed that CIM’s two-month auction notice was indefensible and called the foreclosure effort a “predatory attempt to capitalize on the Covid-19 pandemic.” The judge ruled in HFZ’s favor and halted the auction for the time being.

Wonder Works Construction made similar claims in a lawsuit against New York-based mezz lender Nahla Capital. The lender sought to foreclose Wonder Works’ Upper East Side condo development Vitre, noted for its shiny glass façade. Nahla hired a team of JLL brokers to market the loan back in October.

But a judge denied Wonder Works’ lawsuit, noting that the firm had been in default on its loan payments since January. The auction went ahead this month, and Nahla won a credit bid on the property to essentially become the owner.

Representatives for Wonder Works did not respond to a  request for comment.

Generally speaking, Neveloff said, borrowers usually file lawsuits to “buy time” to negotiate on payments. In at least one case, this has proved to be a successful strategy.

In May, Beverly Hills-based Ohana Real Estate Investors sought to foreclose on the five-star Mark Hotel on the Upper East Side and sell the hotel through auction. Alexico Group, the hotel’s owner, filed a lawsuit, which led to a judge delaying the sale for 30 days. That bought Alexico time, and the two parties were eventually able to reach a settlement, which increased the principal and interest rate on the mezz debt, Bloomberg reported.

Ohana and Alexico declined to comment.

The lawsuits can delay a sale, but ultimately a developer has to find money to pay its lenders. If not, Mac Avoy said, it will be similar to what occurred in the last crisis. 

“It’s the musical chairs … of different ownership,” she noted

The post Rising UCC foreclosures are “the tip of the iceberg” appeared first on The Real Deal Los Angeles.

After lingering on the market for more than two years, a cliffside Malibu estate sold for a fraction of its $58 million original asking price.

Billionaire Chad Richison, the founder and head of Oklahoma City–based payroll firm Paycom, paid $26.5 million for the 3,800-square-foot home known as Il Pelicano, according to Variety.

The sellers, Liz Edlich and Dale Kinsella, spent more than seven years completing the property, which replaced a small surf shack. They first listed it in May 2018, then slashed the price a year later to $35 million.

The home is off Pacific Coast Highway and includes only three bedrooms but 4.5 bathrooms on a half-acre lot. The Tuscan-style property was named for the pelicans that flock nearby. It includes stone imported from Italy, antique balustrade from France and custom-designed mosaic tiles from Rome, not to mention a private stairway to the beach.

Edlich is co-founder of Radical Skincare and Kinsella is a trial attorney.
Malibu has been one of the most active luxury markets in Los Angeles during the pandemic, especially among boldface names. “Wonder Woman” star Gal Gadot this week paid $5 million for a 2,000-square-foot oceanfront penthouse, heiress Anne Hearst and novelist Jay McInerney this month paid $10.7 million for a home on Colony Beach, and in November singer Avril Livigne dropped $7.8 million for a home near Trancas Canyon, which developer Scott Gillen had renovated. [Variety] — Alexi Friedman 

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After a tumultuous process, Simon Property Group has completed its acquisition of Taubman Realty Group.

Under the merger agreement, which was made official Tuesday, Simon acquired an 80 percent ownership stake in the company. The Taubman family sold off about a third of its ownership interest, but will retain a 20 percent stake in the company.

“We are very pleased to complete this transaction and to add some of the world’s premier retail assets to our portfolio,” CEO David Simon said in a press release.

The two companies have danced around a deal for years, with Simon first attempting a hostile takeover of Taubman in 2003. They reached an agreement in February in which Simon would have paid $52.50 per share for its stake.

But when malls shuttered and retail revenue plummeted due to the pandemic, Simon attempted to back out of the deal, claiming that Taubman did not sufficiently mitigate the impact the health crisis had on its business.

Taubman, which operates high-end malls throughout the country, countered by saying it would sue Simon and force the company to complete the merger.

The two companies agreed to the current arrangement in November, allowing them to avoid litigation over the initial botched agreement. Taubman also agreed to sell for a lower price, which gave Simon an approximately 20 percent discount in the deal.

The post Simon completes acquisition of high-end mall owner Taubman appeared first on The Real Deal Los Angeles.

A developer filed plans to build a 254-unit apartment complex in West Adams, a market-rate project that will include a portion set aside as affordable housing.

S.D. Abraham filed the application through Beverly Hills-based Mesa Rim LLC for the development at 3200 S. La Cienega Boulevard, according to Urbanize.

The project would rise across from Carmel Partners’ massive Cumulus complex, which when completed will include 1,200 residential units. Carmel made headlines in recent months for its possible role in the alleged development-tied criminal enterprise that former Los Angeles City Council member Jose Huizar is charged with running.

The recent filing from Abraham includes plans for a seven-story development that would encompass 250,000 square feet and a 242-vehicle garage, according to the report. The project is seeking incentives through L.A.’s Transit Oriented Communities program. The city program allows developers to boost the size of a planned complex if it’s near a transit station and at least 10 percent of units are set aside for low-income tenants. The project appears to set aside 28 units for that purpose.

DE Architects is the designer, with renderings that show a building with cement and metal panels. Amenities would include courtyards, outdoor decks and a fitness center, according to the report.

West Adams has seen a number of multifamily developments slated for construction in the last two years. Among others, they include a 115-unit project from David Pourbaba’s 4D Development at 5181 West Adams Boulevard. That $20 million project includes 13 units set aside for low-income households.

On the commercial side, the Luzzatto Company in October secured $49 million in construction financing for its Exposition 3 office complex at nearby 3101 West Exposition Boulevard. Sweetgreen will be a tenant there. [Urbanize] — Alexi Friedman 

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Home prices continued to surge in October, new data show.

Prices were up 8.4 percent year-over-year, according to the S&P CoreLogic Case-Shiller index tracking the housing market in major metropolitan areas. Their 12-month gain in September was 6.6 percent.

“The last time that the National Composite matched this month’s 8.4 percent growth rate was more than six and a half years ago, in March 2014,” Craig J. Lazzara, managing director and Global Head of Index Investment Strategy at S&P Dow Jones Indices, said in a press release.

He added, “Although the full history of the pandemic’s impact on housing prices is yet to be written, the data from the last several months are consistent with the view that Covid has encouraged potential buyers to move from urban apartments to suburban homes.”

Phoenix, Seattle and San Diego continued to report the highest year-over-year price gains among the 19 cities.

Phoenix led the way in October with a 12.7 percent year-over-year increase, followed by Seattle at 11.7 percent and San Diego at 11.6 percent. All 19 cities reported higher price increases in the year ending October compared to the year ending September.

It has been an unexpectedly stellar year for home sellers. With a low supply of homes on the market, and many buyers looking for more space, home prices have continued to fetch record prices.

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