Craig Kish (left) and Christian Ulbrich (right)

NBCUniversal is welcoming a new chief real estate officer — Edward Chuchla, who joins the media conglomerate from Las Vegas Sands Corporation. In his new role, effective Sept. 12, Chuchla will oversee all real estate transactions and manage the company’s 25-year master plan for its 400-acre property in L.A. He will report to Ian Trombley, president of NBCUniversal Operations and Technical Services.

At LVSC, Chuchla was the senior vice president of development and handled global real estate. Chuchla also had an eight-year tenure with the Walt Disney Company, serving as the senior VP of corporate operations and real estate. He has a master’s degree in architecture.

Over at JLL, president Christian Ulbrich has been promoted to CEO, effective Oct. 1. Ulbrich will replace current CEO Colin Dyer, who will remain on JLL’s board of director until 2017.

Ulbrich began his term at JLL in 2005 as managing director of its German headquarters. He was named president in 2009.

Dyer has been JLL’s CEO since 2004. Under him, JLL saw a 500 percent revenue growth, closed 80 acquisitions and added more than 100 offices around the world.

“In my new role, I intend to build on the platform of profitable and resilient growth that we have maintained in the last 12 years,” Ulbrich said in a statement.

And finally, Newmark Grubb Knight Frank announced Tuesday that it had poached Cresa’s senior vice president Craig Kish. At NGKF, Kish will serve as the new senior managing director, in which he will focus on representing corporate user clients and make sure operations are in line with the overall company strategy.

At Cresa, he advised corporate users for five years and has more than 2 million square feet of transactions under his belt. Kish previously spent 15 years at the Staubach Company, which was was purchased by JLL in 2008. He became a senior vice president and led its tenant representation team in West L.A.

Circa, a 648-unit residential tower near the Staples Center, is slated to open in 2017.

From the L.A. print issue: Real estate investors have increasingly poured more and more money into Downtown Los Angeles over the past two to three years, building skyscrapers, revamping retail spaces and redeveloping older industrial structures. This may be the area’s most active period since the 1990s, when developers first began erecting gleaming skyscrapers in an area once dominated by drab parking garages, low-rise buildings and high crime rates.

But at this late stage of the building boom, some market pros are wondering whether there’s enough interest from potential residents, retailers and companies in all the new space coming on the market in DTLA, as the neighborhood has become known.

“The question is whether it’s feasible to build and still make it work financially, if you’re building at the top of the market,” said Steve Basham, a senior market analyst at research firm CoStar.

Given the rise in vacancy rates and the slower growth of asking rents, Basham speculated that some developers might decide to postpone projects. “If developers approved their new developments pro forma based off of 2014 or even 2015 rental levels, when their projects deliver in 2018, they’ll probably find themselves in a different situation,” he said.

More than 2,500 new housing units — primarily rental apartments — were delivered in the 12 months ending June 2016, with another 5,000 or so under construction, according to CoStar data. And, sure enough, vacancy levels for the residential units are beginning to rise.

The residential vacancy rate in DTLA was a low 4.1 percent in 2013, but rose to 6.7 percent in 2014 and 6.9 percent in 2015. CoStar Market Analytics projects that it will rise above 7 percent this year. In a bid to attract tenants, downtown developers have begun offering concessions on new apartment leases, a practice unheard of elsewhere in the region. George Crawford, a commercial broker with Charles Dunn Company, said the building boom reminded him of the end of the last cycle, in 2006 and 2007. “You see all these homes going up,” he said, “and it makes you think, ‘where are all these people coming from?’”

A 24-hour neighborhood

Yet new residents keep moving into DTLA. The neighborhood’s population grew by 9 percent from 2010 to 2015, compared with a 4 percent growth rate for the Greater Los Angeles area. The median annual income of the neighborhood’s residents stands at $98,000, according to a survey by the Downtown Center Business Improvement District.

Some market pros attribute the influx to the tendency of high-earning millennials to gravitate toward urban centers. The recent extension of the metro’s Purple Line also allows residents to commute more easily between Downtown and the West Side.

Many developers who got in on the ground floor of the recent boom have reaped the rewards. Projects such as the first phase of One Santa Fe, which has added 438 units to the market so far, and the 290-unit 8th + Hope, both delivered in 2014, are now fully leased up. Even some of the apartment buildings that opened in 2015, while a little slower on the uptake, are nearing full occupancy. DTLA’s average rents clock in at roughly $2,200 per unit, or about 20 percent higher than the average for the region, according to CoStar.

But as more inventory hits the market, would-be residents find themselves spoiled for choice. Some of the area’s largest and most high-profile new residential projects include Eighth & Grand, a 700-unit high- rise that is slated to open in October 2016; Circa, a 648-unit residential tower near the Staples Center, planned for completion in 2017; and the first phase of the massive Metropolis project, which will add 308 condos to the market later in 2016.

Landlord concessions at some of these high-flying projects may indicate the early stages of a slowdown. Eighth & Grand was offering up to six weeks free rent to new tenants at the end of the second quarter of 2016.

“The vacancy rate in and of itself isn’t a reason for panic,” Basham said. “It was pretty much unavoidable with so many new units hitting at the same time. But you’re probably not going to see the aggressive rents that you saw early in the cycle.”

If the goal of developers is to create an urban “live/work/play” environment, the missing link may be retail, which has been showing signs of weakness. For example, the majority of the retail portion of The Bloc, an ongoing mixed-use project with more than 150,000 square feet of retail space, hasn’t opened six months after it was scheduled to debut. Speculation is rife that some of the tenants showing initial interest in the complex ultimately did not sign on.

Brokers say that with so many retail spaces being created at the street level of new residential towers, a question mark hangs over whether there will be enough demand. Another complication is the rising homeless population, which has led to persistent concerns about safety in the area.  “Downtown is still in the early stages of its renaissance, and it remains to be seen what’s going to happen with these retail spaces,” Crawford said. “Some of these concepts are unproven.”

Foreign investors

Real estate investment in DTLA has been buoyed by a handful of big deals by major institutions and foreign players willing to bet big on the area’s long-term renaissance.

Eighth & Grand, a 700-unit condominium, will debut in the fall of 2016.

Wilshire Grand Center — a 1.6 million square-foot office, hotel and retail tower being developed by Korean Air — is slated for completion in 2017, when it will become the tallest structure west of the Mississippi. It will assume that title from the current holder, the nearby U.S. Bank tower. Yet the Wilshire Grand isn’t even the largest project under construction in DTLA. That would be the 2.1 million square-foot Metropolis Los Angeles being developed by Greenland Group, China’s largest real estate developer, which is state-owned.

Market experts say that many local real estate players are being priced out of the market, with the exception of some California-based real estate investment trusts and the occasional large private developer such as Jamison.

The prices for investment sales might still look like a bargain relative to comparable buildings in New York or San Francisco, but the spread is tightening. Experts say that some DTLA buildings that would have fetched $100 to $150 a square foot a few years ago are now selling for up to $440 or $450 a square foot.

The cost of increasingly elusive building lots is being pushed higher by the influx of international capital, said Alexa Arena, executive general manager of West Coast development at Lend Lease, which opened up shop in L.A. in early 2016 with a view toward investing here. “This is happening to an extent that it’s becoming more difficult to delineate the true value — the intrinsic value — of land,” she said. Redevelopment

As the market for developable land parcels tightens, the redevelopment of existing structures becomes a compelling option. Indeed, almost 10 percent of the area’s total inventory changed hands at least once within the 12 months ending in June 2016.

“You’ve got these historic, beautiful buildings from the early 1900s that you only see in other top tier towns, and they’ve been underutilized,” said Gibran Begum, a managing director at Newmark Grubb Knight Frank. “There’s been a large rush to come in and repurpose them.”

Those repurposed buildings have been a draw to creative tenants, many of which are looking for more inspirational spaces than typical glass towers. Warner Music Group is just one of the major creative tenants reportedly eying DTLA, and the company is rumored to be relocating from Burbank to the Ford Factory in the area’s Arts District. Landlord Shorenstein Properties bought the old Ford motor plant in 2014 and is turning it into a mixed-use complex. A Shorenstein spokesperson told TRD that they were not commenting on the rumors about Warner.

Among the adaptive reuse projects underway is Simon Baron Development’s bid to transform the historic Hotel Cecil, at 640 South Main Street, into a 301-unit micro-apartment complex. This 600-room hotel sits only a few blocks from Skid Row.

Canadian developer Onni Group plans to turn a landmark Art Deco building at 202 West 1st Street into a residential and retail development. The Vancouver-based firm also owns the historic Western Pacific Building at 1031 South Broadway.

This frenzy of activity has only confirmed for some real estate investors that the DTLA market is the place to be, said Newmark’s Begum. “It’s been a huge beacon for capital.”

Mayor Eric Garcetti and DTLA (Credit: L.A. Mayor, Hunter Kerhart)

A city bond measure will appear on the November ballot with the goal of raising $1.2 billion for homeless housing development, after the Los Angeles County supervisors voted to approve it Tuesday.

If two-thirds of voters choose to support the measure, property taxes would be marginally raised. A home valued at L.A.’s median of $327,900, for instance, would see an estimated $44.31 added to its property taxes.

When city and county officials budgeted more than $200 million earlier this year toward housing and other services to address homelessness, they were unsure how such efforts could be funded.

The bond measure was endorsed by city officials as well, including Mayor Eric Garcetti, the L.A. Times reported.

“I guarantee that the work that you’re doing, we will be there in turn to support what you do, whether it’s on the ballot, whether it’s here in these august chambers,” he said to the county supervisors.

Supervisor Mark Ridley-Thomas, who proposed the county measure, said that the city bond proceeds would be used for housing construction only. Further services could be bankrolled by a possible county sales tax measure on the March ballot. [LAT] — Cathaleen Chen

Eric Holder

Amid legal challenges and discrimination-based criticism across the country, Airbnb is making moves to improve its public image.

Locally, Airbnb is taking a feelings-based approach to countering criticism. The short-term rental company launched a new ad campaign in the Los Angeles area Wednesday, featuring hosts that make an emotional case against the city’s impending regulations. One day later, Airbnb announced its new set of anti-discrimination measures, including the recruitment of former U.S. Attorney General Eric Holder as a consultant.

“Airbnb helps me,” says Vanessa, an Airbnb host from South Central L.A. and the star of one of the ads, as an uplifting piano melody plays in the background. “Without that income I wouldn’t have survived. Without that income now I wouldn’t be able to stay in my home that I’ve been in since I was 12-years-old.”

Still from an Airbnb ad

The 30-second commercials are being aired as City Council prepares to roll out regulations and restrictions on short-term rentals.

The proposed rules dictate that users could rent out their homes or a room within their homes for no longer than 180 days annually. Units listed as a short-term rentals must be the user’s primary residence, defined as the home in which they live for at least six months out of the year.

Those who don’t abide by these rules would face hefty fines, and all hosts would be required to pay transient occupancy taxes.

On Thursday, Airbnb released a 32-page report detailing its new anti-discrimination policy in response to recent criticism that hosts have been turning guests away based on race or nationality. It was penned by former American Civil Liberties Union director Laura Murphy, a new hire alongside with Holder.

“An increasing number of Airbnb hosts and guests have voiced their concerns about being discriminated against when trying to book a listing because of their race, sexual orientation or gender identity,” she wrote. “This outcry from the community led Airbnb to closely examine their nondiscrimination policies and procedures.”

The new rules, effective as soon as next month, call for the company to provide assistance to users who feel they’ve experienced discrimination, anti-bias training for all staff and an updated approvals process. [Curbed] [Airbnb] — Cathaleen Chen

Beverly House (credit: Zillow)

As of this week, the Hearst Estate in Beverly Hills is on the market for $195 million, making it California’s priciest listing. But an analysis of property records by The Real Deal reveals that the property is weighed down by nearly $60 million in loans.

The interest on the loans, sources said, adds up to millions of dollars a year and is likely to put pressure on the owner, real estate investor and attorney Leonard Ross, to swiftly sell or refinance the property, once owned by William Randolph Hearst and featured in the movie “The Godfather.”

Title documents related to the property, known as the Beverly House, reveal an elaborate web of LLCs and a series of intricate refinancings.

The biggest loan attached to the property is a $40 million, three-year loan provided to Ross by an entity linked to Fortress Investment Group. That short-term loan matures in 2018. Another loan, provided by an entity linked to philanthropist Glorya Kaufman, has a balance of $19 million. Kaufman also serves as a guarantor on the Fortress loan, title documents show.

Fortress, an investment management firm known for managing hedge funds, is widely known as an expert in distressed assets and owns special servicer CW Capital.

The Fortress loan looks to be “an interim measure in the hope of obtaining better financing down the road,” said New York real estate attorney Joshua Stein, who was not involved in the deal. “You would really expect first deed of trust financing on this type of asset to be longer term and provided by a bank,” he said.

Ross is now seeking to refinance the property again, and is using a nontraditional method this time. He’s tying to raise $40 million by crowdfunding, soliciting a minimum investment of $125,000 from each investor into an LLC. That entity would, in turn, make a trust deed secured loan on the property, according to StartEngine, a crowdfunding website that posted the offering.

An attorney for Ross declined to comment. The Agency’s Mauricio Umansky, who listed the compound this week, didn’t respond to multiple requests for comment. In an interview with the Wall Street Journal this week, however, he said Ross was selling because he was “getting up there in age.”

The five-acre compound, which includes the 50,000-square-foot Hearst property dating back to 1927, has 28 bedrooms and 38 bathrooms. President John F. Kennedy and Jacqueline Kennedy honeymooned there. Ross paid less than $2 million for the property about 40 years ago. In 2007, he put it on the market for $165 million, and though it was later taken off the market, sources said it’s been quietly shopped around in the years since.

In 2010, Ross filed for bankruptcy protection after defaulting on a $32.5 million mortgage from Bank of America attached to the property. The bankruptcy case was later dismissed after Ross repaid his creditors successfully. But sources speculated that Ross could have difficulty securing a new loan from a traditional bank due to the bankruptcy filing.

As part of the crowdfunding offering documents, it was said that Ross actually preferred to sell a 50 percent stake in the property as opposed to 100 percent.

Mayor Eric Garcetti and Councilmember David Ryu sit next to each other at a concert (Credit: Ryu’s Facebook page)

In an effort to negotiate with supporters of the Neighborhood Integrity Initiative, Mayor Eric Garcetti said he wants to ban ex-parte communications between developers and city planning commissioners.

His executive directive would “ensure that all dialogue with private stakeholders is on the record,” Garcetti wrote in a letter this week. He is seconded by Councilmember David Ryu in a similar proposal.

Critics have long lamented the closed-door meetings between the commissioners, who are appointed by Garcetti, and the stakeholders of big real estate projects, arguing that the private sessions give an unfair advantage to development interests.

Last month, backers of the Neighborhood Integrity Initiative, a ballot initiative that would place a two-year moratorium on all real estate development that requires zone changes, told the mayor that they would halt their campaign if he agreed to the ban, among other conditions. But they’ve since submitted enough signatures to appear on the ballot next March.

Mayor Garcetti is clearly trying to  compromise with the NII. He wrote in a letter to the campaign’s major funder, AIDS Healthcare Foundation President Michael Weinstein, that the private meetings ban and other changes would accomplish their shared goals, and asked him to drop “a costly and potentially divisive ballot measure campaign.” However, he is not caving to all of the NII’s requests. The initiative wanted Garcetti to ban private meetings between developers and all city officials, not just planning commissioners.

The NII’s director Jill Stewart told the L.A. Times her group welcomes the proposal from Garcetti but did not say that they will back down.

“I think it’s more likely that the mayor would endorse us than we would withdraw the measure,” Stewart said.

The California Assembly defeated a bill seeking to ban ex-parte meetings for the state’s Coastal Commission just last week. [LAT] — Cathaleen Chen

Brian Block and Preet Bharara

From the New York website: Federal authorities have arrested the former chief financial officer of American Realty Capital Properties, charging Brian Block with purposely misleading investors about the health of the company’s finances.

Block is accused of intentionally inflating the REIT’s earnings in 2014 to cover up an accounting error that ultimately sapped billions of dollars in value from the real estate investment trust, U.S. Attorney Preet Bharara said Thursday.

Separately, the Securities and Exchange Commission announced Thursday that it is also charging Block and the REIT’s former principal accounting officer Lisa McAlister in the matter. McAlister pleaded guilty in June to four counts of securities fraud and conspiracy. She’s cooperating with federal authorities.

According to Bharara and the SEC, the pair conspired to falsify figures to make it seem that the company had met its earnings estimates in the second quarter of 2014, not long after the REITs internal accounting team informed them that the wrong metrics had been used to determine the adjusted funds from operation.

Block’s lawyer, Reid Weingarten, said the charges against his client are “entirely unwarranted.”

“He is completely innocent and will be exonerated in court,” Weingarten said in a statement.

American Realty Capital Properties, which went public in 2011, was one of a handful of REITs founded by Nicholas Schorsch. When news of the accounting scandal broke in October 2014, it sent its share price on a tailspin and led several top executives to resign. Schorsch no longer has any formal ties to the company.

In March 2015, Glenn Rufrano took over the company – which specializes in suburban retail – and later renamed the firm Vereit.  The firm’s share price has since rallied. Neither Vereit nor Schorsch were charged in the SEC suit. [Reuters] — Konrad Putzier

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Andrew Tashjian

Updated, Friday, September 9, 10:18 a.m.: On September 1, 2015, DTZ officially merged with Cushman & Wakefield. One year later, the merged company is marking its anniversary by aggressively hiring talent out of other shops.

On the heels of poaching retail broker Stephen Algermissen back from Colliers, Cushman has hired Andrew Tashjian out of CBRE.  

“I’m excited to take the next step at Cushman & Wakefield with the benefit of resources and leadership,” he told The Real Deal. “I think I will be arguably a little more nimble. My business won’t change, but when you have more resources to build it into something significant, it will go a long way to putting points up on the board.”

As a managing director at Cushman, Tashjian will continue to work the territory that has been his exclusive focus since he started at CBRE seven years ago: Downtown Los Angeles.

“I’m filling a niche that [Cushman & Wakefield] has a need for and are willing to put money behind,” he said.

The broker has been involved in many major DTLA investment sales deals, and he also oversees a creative office leasing portfolio of nearly 2 million square feet. Tashjian was brokered the $26 million dollar sale of 1201 South Grand Avenue, where Shenglong Group plans to build a 37-story luxury condominium tower, and the sale of the Commercial Exchange Building, which is being converted by Sydell Group into a 200-key Freehand Hotel.

He heads leasing for office properties owned Vancouver-based developer Onni Group, which has swiftly acquired a sizable portfolio in DTLA in recent years. Those buildings include 600 and 800 Wilshire. He has been involved in DTLA leases for coworking company Industrious, the Los Angeles Clippers headquarters, All Def Digital, Evite, HelloGiggles and Modcloth.

Tashjian said his day to day in DTLA won’t change dramatically at his new shop.

“At the end of the day, it’s a different color jersey and different email address, but it’s business as usual.”

Correction: A previous version of this story said Sydell Group is converting the Commercial Exchange Building to a NoMad Hotel. It is a Freehand hotel. 

The Sepulveda Center at 3415 South Sepulveda Boulevard (Credit: Regus)

The Sepulveda Center between Palms and Mars Vista has sold to investment firm Swig Co. of San Francisco for $68.2 million, or about $380 per square foot.

The seller was Newport Beach-based KBS Realty Advisors. Andrew Harper, Ryan Gallagher, Michael Leggett, and Tim Geiman of HFF represented KBS, while Farella Braun + Martel’s Tony Ratner and Quinn Arntsen represented Swig.

The 12-story, 180,000-square-foot center, at 3415 South Sepulveda Boulevard, is Swig’s sixth Los Angeles acquisition, the L.A. Business Journal reported. The building is already 85 percent leased.

Swig is on the lookout for other properties in L.A., said Tomas Schoenberg, the company’s executive vice president of investments.

“L.A. has myriad drivers,” he told LABJ. “We like that diversity, whereas San Francisco is so heavily reliant on tech and software.”

KBS acquired the Sepulveda Center for $50.5 million in 2006, according to CoStar. [LABJ] — Cathaleen Chen

The fi rms of Douglas Elliman’s Howard Lorber (left), The Agency’s Mauricio Umansky (middle) and Compass’ Robert Reffkin (right) have all poached top producers from other brokerages. (Illustration by Guy Parsons)

From the L.A. print issue: The booming Los Angeles housing market has become the new frontier for residential brokerages from other parts of the country, particularly New York. Over the past few years, firms such as Douglas Elliman, New York’s largest brokerage, and Compass, an aggressive venture-capital-backed startup from the Big Apple, have trotted into the L.A. market, opening flashy new offices and trying to woo top agents from veteran L.A. companies.

Their entry comes five years after two powerful agents, Mauricio Umansky and Billy Rose, formed their own company, The Agency, adding to a field that includes existing behemoths such as Sotheby’s International Realty and Coldwell Banker.

All of a sudden, the market is looking extremely crowded and competition for top talent is at an all-time high.

The free-for-all has sent commission splits skyrocketing and margins sinking, brokerage chiefs told The Real Deal. With so many firms vying to sign top producers, hiring managers are being forced to come up with ever more generous offers and compelling reasons for a broker to jump ship.

Brokers are getting used to the new gold standard and have taken advantage of market conditions by hopping between firms.

“I have had brand-new agents coming in requesting, and some even expecting, a split that I would not give anyone, regardless of their productivity,” said Colin Keenan, a senior vice president at Douglas Elliman’s Beverly Hills office. “There is a sense of entitlement and an impatience. People just want to see an offer. They don’t necessarily want to be schmoozed and wined and dined, although they’ll take that, too, if it’s offered.”

But most realize it’s a race to the bottom. With L.A.’s standard commission splits already much higher than their counterparts in cities such as New York, brokerage operators can’t afford to get into a “how low can you go?” tug-of-war. At the end of the day, they have to make money.

(Click to enlarge)

“It’s a very dangerous thing for the industry as a whole,” said John Aaroe, founder of John Aaroe Group, a high-end brokerage. “The brokerage business is one in which you make your money on the nickel, not on the dollar. You can’t give dollars away when you make your profits in nickels.”

That’s particularly true since the high-end L.A. market has more recently shown signs of topping out.

The median price for a luxury single-family property — defined as being among the top 10 percent of sales based on price — dropped by 0.3 percent in the second quarter, while the median price for the overall market increased by 5.7 percent, according to Elliman data.

“Some brokerages have realized that they’re biting off more than they can chew,” said Sunny Magner, Elliman’s vice president of people and culture. “At the price you have to pay to get these top producers, it’s sometimes just not worth it.”

Some of the region’s top agents are also wary of the industry’s revolving door.

Ben Bacal, a top-producing agent at Rodeo Realty, said he’s not playing the game.

“I think it’s a bunch of hype and rumors and people should just focus on selling real estate,” he said. “Everyone thinks moving firms will help their business so much, but it won’t.”

Jade Mills, Coldwell Banker’s top agent and one of the industry’s most sought-after producers, agrees. “I’ve never changed companies,” she said. “How successful you are as an agent comes from you as a person. It doesn’t really come from the company.  It’s the agent and her personal relationships.”

The Big Splash

Many of the most active top producers in the L.A. market are actually owners or partners in their own firms, making poaching more challenging. Three of the top agents are Jeff Hyland of Hilton & Hyland, Kurt Rappaport of Westside Estate Agency and Umansky. Those agents cannot be wooed, short of acquiring their entire companies.

That leaves newcomers with a small pool of heavy hitters to pick off, from firms such as Coldwell Banker and Sotheby’s International Realty.

Douglas Elliman’s swanky Beverly Hills office, which opened in 2014.

When Elliman — one of the nation’s oldest and largest real estate brokerages, currently led by Chairman Howard Lorber — launched in Beverly Hills in 2014, the firm was eager to make a splash. It quickly nabbed brothers Josh and Matt Altman, stars of Bravo’s hit series “Million Dollar Listing,” from 23-year-old Hilton & Hyland, which ranks second on TRD’s list of top luxury brokerages in L.A. County.

Stephen Kotler, Elliman’s chief revenue officer of residential brokerage, relocated to the West Coast from New York to oversee the expansion and is reportedly looking to hire 80 to 100 more brokers within the next year. He said he spends half his time working toward recruiting brokers from competing firms.

Some say the situation is becoming a free-for-all. Just as TRD was heading to print at the end of August, David Findley and David Kelmenson of Partners Trust hopped to The Agency, the Beverly Hills firm that came in third on TRD’s ranking.

But Compass, in particular, has taken poaching to a new level, picking up agents en masse from firms such as The Agency and Coldwell Banker. The heads of competing firms are so upset, they’ve nicknamed the company “Comp-ASS.”

From Coldwell, Compass poached Stan Richman, mother-and-son team Linda and Brent Chang, and Sabrina Wu. From The Agency, it poached Kofi Nartey and Hana Cha, the managing director of The Agency’s new development division. Eastside broker duo Kurt Wisner and Courtney Smith also joined from Beverly Hills-based Nourmand & Associates earlier in 2016.

Among competitors, rumors are rife that Compass is forking out six-figure signing bonuses to recruit top talent.

“You have several companies trying to slice up the pie, but the pie is not getting any bigger,” said Hyland, one of his firm’s founding partners. “It’s become a food fight.”

For its part, Compass has denied offering brokers outrageous bonuses or compensation packages. CEO Robert Reffkin claims that only 1 percent of top agent recruits are offered bonuses, and only a “very small minority” of new hires have been offered equity in the company.

“I know they have wanted some people very badly, and some have been offered more money than others,” Mills said. “I feel that I’ve been very open to hearing everything, but in the end I just think that it all comes down to hard work and Coldwell Banker has been very supportive and it comes down to loyalty.”

Keenan also said executives recognize that it’s important Elliman not hand out top-dollar offers to every broker that walks in the door, or the company risks significantly compromising its potential profit margin.

(Click to enlarge)

As a result, some firms have focused their attention on attracting brokers who perhaps aren’t closing $100 million deals, and don’t have the name recognition that goes with that, but are doing a large volume of transactions in a lower price range. Those agents can really drive the value of the firm and are easier to recruit, they said.

“You have to be careful, and you have to be disciplined,” Keenan said.

Stacking up

Despite the best efforts of newbie firms, national powerhouses Sotheby’s and Coldwell Banker still control most of the region’s volume of deals, and boutique firm Hilton & Hyland controls the lion’s share of the über-luxury market in areas such as Beverly Hills from its single office.

TRD’s inaugural ranking of L.A. firms shows that, for sales valued at $5 million and above, Coldwell Banker had the largest market share of any firm in the region, selling $1.12 billion across 11 offices. And, despite only having one office, Hilton & Hyland was not far behind, with $895.1 million in sales.

Hilton & Hyland alumni Mauricio Umansky and Billy Rose have seemingly had tremendous success in a short time with their five-year-old startup, posting $759.3 million in sales across just three offices. In fourth place was Sotheby’s International Realty, with $434.9 million in sales over $5 million.

Meanwhile, Compass, which has been open for less than a year, posted $66.2 million in sales, while Elliman logged in $137.2 million in sales priced over $5 million.

The five top-performing offices in L.A. County by sales over $5 million were all in Beverly Hills, starting with Hilton & Hyland. The Agency and Coldwell Banker offices came in at second and third, respectively.

Still, some said it might be too early to tell whether or not the region’s newcomers will succeed.

“It’s not how they do the first six or 12 months that tells the story of whether they’re going to be successful or not,” Aaroe said. “It’s a look back at the end of the second or third year. I’ve seen new players come into this market before and not be able to achieve liftoff by then.”

Joe Keenan and the property at 3506 Berry Drive

Emmy-winning “Glee” producer Joe Keenan has something to sing about. He’s sold his two-home compound in Studio City for $7.4 million — more than three times what he paid for the property about two decades ago, Variety reported.

The 5,300-square-foot main house, which he bought for $1.5 million in 1997, sits on 1.5 acres and has three bedrooms, five bathrooms, a dining room, two living areas, a double office, a library and four fireplaces.

Upstairs, the master bedroom suite has its own “morning bar” and a large, wood-paneled bathroom. Outside, an oval swimming pool is the centerpiece of the property.

Next door, a smaller residence measures a little more than 1,600 square feet and sits on a third of an acre. Keenan acquired it for $625,000 three years after he bought the larger residence.

Keenan has also worked on “Frasier,” “Desperate Housewives” and, more recently, the CBS reboot of “The Odd Couple.” [Variety] — Cathaleen Chen

Rendering of the project at 527 South Colyton Street and Bolour CEO Mark Bolour (Credit: Bolour Associates)

UPDATED, 2:25 p.m., Sept. 9: Beverly Hills development firm Bolour Associates is tweaking its plans for a live-work complex in the heart of the Arts District — to make it even bigger.

First proposed in November of 2014, the project now calls for the construction of a 310-unit mixed-use building on the corner of Colyton and Palmetto Streets. It would also include 11,375 square feet of commercial space, according to documents filed with city planning Friday.

Bolour acquired the property at 527 South Colyton Street for $5.4 million in 2014, property records show. The firm then filed for 234 live-work units and 13,010 square feet of commercial space, but that version of the project did not move forward.

It was mostly a creative decision, Bolour’s director of acquisitions, Adam Eisenberg, told The Real Deal. The company changed the structure’s construction type from a combination of wood and concrete to all concrete.

The new plans also feature more space for amenities such as art rooms and storage units, as well as a public plaza outside.

“It will be very community oriented and pedestrian friendly,” Eisenberg said.

The site is currently occupied by a 12,000-square-foot industrial building. It’s not leased and the Bolour uses it for its own filming projects.

Earlier this summer, Bolour filed plans for a 65-unit luxury residential project at 3160 Riverside Drive after acquiring the site for $5.3 million. And in June, the firm submitted plan to build a 101-unit condo complex with 600 square feet of ground floor commercial space in Sherman Oaks.

In the Arts District, Bolour also proposed the Amp Lofts, a large multifamily project at 695 South Santa Fe which is slated to begin construction in December, according to CoStar, and has been pushed back from earlier reports.

Illustration by Lexi Pilgrim for The Real Deal

From the New York website: Gender, marital status and mortgages don’t get a lot of research attention in real estate, but two new reports examine the exceptional role of single women in the home purchase marketplace and the challenges they face in getting a loan.

A couple of highlights: Single women are statistically better at paying their mortgages than men — they default less — yet they get charged more for their loans and are denied credit more often. Though they have lower incomes on average than single men, they tend to make larger down payments, according to researchers at the Housing Finance Policy Center of the Urban Institute.

Also, single women are now the second largest group of buyers in the marketplace, accounting for anywhere from 15 percent to more than 20 percent of all home purchases in recent years. Single men, by contrast, have accounted for about 9 percent of purchases since 2012. Married buyers once represented more than four-fifths of the market, but that has declined over the past several decades. In 1985 married couples made 81 percent of all purchases; last year it was 67 percent. You might assume that unmarried couples have taken up the slack but that’s not the case. Last year, according to a new research note titled “All the Single Ladies” by Jessica Lautz, managing director of survey research at the National Association of Realtors, unmarried partners accounted for just 7 percent of total sales.

The Urban Institute study, conducted by Laurie Goodman, co-director of the Housing Finance Policy Center, and Jun Zhu, a senior research associate, looked at a national database of mortgage transactions compiled by the federal government, along with proprietary information on borrower credit characteristics and properties from CoreLogic, an analytics firm.

The study is blunt about its core conclusions: Single women pay slightly more for their mortgages, despite their superior repayment performance. They tend to present somewhat “weaker credit characteristics” at the application stage and as a result are more likely to end up with subprime or higher-cost financing.

But there’s an inequity in the system in light of women’s statistically lower rate of defaults: Single women “are paying too much” for their home loans. “Given that more than one-third of single women borrowers are minorities and almost half of them live in low-income communities,” the authors argue that in fairness “we need to develop more robust and accurate

Focusing on three distinct sets of years — 2004-2007, 2008-2010, and 2011-2014 — the researchers found that single women defaulted at lower rates than single males in all three periods, which represented sharply different economic environments. The years 2004-2007 were prime boom times; 2008-2010 encompassed the housing bust and global financial crisis; and 2011-2014 were post-recession recovery years.

Yet the pattern of lower rates of default exhibited by single women borrowers persisted through all three periods.

Though mortgage lending groups have not had an opportunity to review or comment on the study because it had not been publicly released as of this writing, one lender with operations in eight states told me he not only sees single women as an important part of his business, but a rapidly expanding one. Joe Petrowsky, mortgage consultant with Right Trac Financial Group Inc., says 26 percent of his business is with single women, and “there’s no question” it will soon exceed 30 percent. He believes single women represent solid risks in part because “the reality is they have a better ability to save and plan for the future” than most single men.

Real estate agents say buying a condo or a house may have a stronger and deeper emotional component for single women compared with men. Leslie White, a Redfin agent in the Washington D.C. area, told me that for single women, ownership of a home means “stability — you own it, you’re in charge, there is no landlord,” and that’s extremely important to them. Out of White’s last 25 transactions, 20 percent were purchases by single women, zero by single men.

Lottie Kendall, an agent with Today/Sotheby’s International Realty in the San Francisco Bay area, says single women “want to create a nest, be part of a community. They’re buying to fulfill a dream,” whereas in her experience, single men seem more interested in tax writeoffs and possible financial gains rather than stability.

Rendering of Agence Ter’s design for Pershing Square

Get your frolick on, Los Angeles — more parks may be coming this way.

City Council unanimously approved a measure Wednesday that would charge developers higher fees that would go toward the city’s park system, Curbed reported.

Under the city’s old “Quimby Fees” system, most residential developers could skirt the park fees. Wednesday’s change could generate $30 million in additional funding, according to Councilmember José Huizar, who spearheaded the new ordinance.

Out of 100 American cities, L.A. ranked 65th in the Trust of Public Land’s assessment of how well a city is meeting the public need for park space. Between 2014 and 2015, the city lost nearly 10,000 acres of total park space, despite increased per-capita park spending.

In May, the city revealed the winning design, courtesy of French landscaping firm Agence Ter, for the redevelopment of Pershing Square. [Curbed] — Cathaleen Chen

Citigroup Center (via Hines) and, from left: Thomas Ricci, Randall Scott and John Sischo of Coretrust

Coretrust Capital Partners may soon have a trophy Downtown Los Angeles property on its hands. The firm is in advanced talks to buy the 48-story Citigroup Center at 444 South Flower Street for roughly $340 million, or $382 a square foot, The Real Deal has learned.

The firm could not be reached for comment, but sources said it intends to invest in a renovation program and will redo the lobby. Improvements will be aimed at fully leasing the 891,100-square-foot property, which is 74 percent occupied, below the DTLA average of 82.5 percent.

Stephen Somer, Stephen Silk and Jay Borzi of Eastdil Secured are representing Hines in the sale to Coretrust, sources said, but the brokers could not be reached for comment. Representatives of Hines and Coretrust also could not be reached.

Hines stands to make a significant profit on the property, which it acquired in 2008 for $275 million, or $309 a square foot, from Beacon Capital Partners, according to CoStar. It listed the property with Eastdil earlier this year, seeking a reported $350 million.

The founders of Coretrust have a history of restoring skyscrapers Downtown. The company was formed in 2014 by Thomas Ricci, Randall Scott and John Sischo, three former Thomas Properties Group executives, along with Charles Toppino, founder of Oak Pass Capital. Under Jim Thomas’ leadership, Thomas Properties Group gave the property kitty-cornered to the Citigroup Center a $125 million facelift, restoring the downtrodden property at 555 South Flower to prominence in the skyline. Now, it seems, former executives of the company are looking to do the same across the way.

“I think the market will take this ownership well because of the association with what is now known as the City National Center, but was then the Arco Center,” said Nico Vilgiate of Colliers, who is not involved with the Coretrust deal but has worked on leases at the Citigroup Center. “[444 South Flower] is a core asset in the center of Downtown. The center has arguably been shifting South, but [Flower and 5th] is still one of the main intersections.”

The Citigroup Center has a futuristic Equinox and a storied history of appearing onscreen. Developed in the 1980s, the building was featured in the opening credits of “L.A. Law” and was the setting of the major gun battle in the Al Pacino and Robert DeNiro movie “Heat.”

Major tenants include Citigroup, Morgan Stanley, Freddie Mac and the U.S. Securities and Exchange Commission.

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A photo posted by @e_vamo_l on Sep 12, 2016 at 4:27am PDT

The Beverly Center is getting sassy in a bid to mask ongoing construction related to its renovations.

Taubman Centers, the mall owner, has debuted an edgy mural on the side of the building by Los Angeles-based artist Geoff McFetridge. It depicts a flashing girl, who lifts up her blue skirt to the world. But motorists needn’t avert their gazes, since she’s facing away.

Taubman said the design “”evokes the open and civic spirit of Beverly Center’s reimagining — itself, a kind of lifting of skirts,” Curbed reported.

The famed Brutalist-style Beverly Center is currently undergoing a major  $500 million renovation, which includes a new facade and floorplan. The work is slated to be completed by 2017.

“Our scope of work was to give it light and a new quality of space,” the project’s architect, Massimiliano Fuksas, told The Real Deal last month. [Curbed] — Cathaleen Chen

(Credit: Wikipedia Commons)

L.A. home price growth doesn’t show any signs of slowing.

The price of a single-family home in L.A. County went up by 6.7 percent in price in July compared to the previous month, according to a CoreLogic report cited by the L.A. Daily News. Statewide prices increased 5.9 percent in the same period. The increase marks 51 continuous months of growth for L.A.

Home prices will likely continue to rise about 5 percent over the next year, CoreLogic chief economist Frank Nothaft told the paper.

“If mortgage rates continue to remain relatively low and job growth continues, as most forecasters expect, then home purchases are likely to rise in the coming year,” he said. “The increased sales will support further price appreciation.” [LADN] — Cathaleen Chen

The Wilshire Financial Tower at 3600 Wilshire Boulevard (Credit: 42 Floors)

Jamison is taking its multi-family development streak to new heights.

The Koreatown landlord filed plans Friday to build two 23-story apartment buildings on a site at 3600 Wilshire Boulevard, between Kingsley Drive and Harvard Boulevard, according to public records viewed by The Real Deal. 

The project — potentially its third biggest by RBA, after two towers in DTLA and a complex called Circa just down the street — calls for 760 units total, as well as 6,359 square feet of commercial space. While records show the address of the development as being 3600 Wilshire, which is the site of the Wilshire Financial Tower, a 420,000-square-foot Class A office building also owned by Jamison, a Jamison property manager told TRD that the new buildings are actually slated for an adjacent parcel.

The plans are just the latest in Jamison’s aggressive push into residential development. Earlier this month, the development firm initiated the review process for a seven-story mixed-use complex at the corner of West 8th Street and South Berendo Street — just up the block, The Real Deal reported. And, in July, Jamison filed plans for a 506-unit 36-story apartment tower on the block bound by Wilshire Boulevard, Oxford Avenue, 7th Street and Serrano Avenue.

Jamison is Koreatown’s biggest property owner, TRD previously reported. Under founder David Lee, the firm has proposed in the submarket at least 15 multifamily developments, or about 3 million square feet of new construction.