A rendering of 3980 Wilshire Boulevard, a new residential complex being built by Jamison. Inset: Jamison Services’ David Lee

From the L.A. print issue: There are few in commercial real estate in Los Angeles who haven’t interacted in some way, shape or form with David Lee, the largest private office landlord in the county, who has rapidly launched into residential development in the past two years as the demand for housing has ticked up.

Although the former doctor stopped practicing medicine in the early aughts, he’s still known locally as Dr. Lee. His firm, Jamison Services — named after his daughter, 31-year-old Jaime Lee, who now heads leasing for the company — owns more dated Class B office properties than any other landlord by a landslide. Most of them sit in Koreatown, and Lee acquired them on the cheap during the 1990s recession and amid the L.A. riots that hobbled the neighborhood. His holdings, which also include retail and multifamily properties, have an estimated value of $3.8 billion, according to Real Capital Analytics.

The doctor, who moved to the United States from Seoul, South Korea, as a teenager, is notoriously press-shy and secretive, to a degree that baffles many who have positive relationships with him. Lee and the two of his four children who are involved in the business — Jaime and Garrett Lee — declined to be interviewed for this article.

“Dr. Lee is a private person who does not interact with the media,” said John Cushman III of Cushman & Wakefield, who said the brokerage’s leasing and capital markets teams have worked frequently with Jamison. He added that Lee “is a savvy businessman, who has acquired a very significant real estate portfolio of properties he bought at the right time in the right markets.”

Lee’s interactions with the media across his 22-year career as a landlord can be counted on one hand, and sources say he’s never been pleased with the outcome. Nevertheless, with a roughly 17 million-square-foot office portfolio in L.A. County, according to CoStar, he is ubiquitous. Several of the real estate professionals who’ve interacted with him over the years did not immediately recognize the company name Jamison Services, but they certainly knew him, asking, “Oh, you mean Dr. Lee?”

What the name Dr. Lee conjures depends on the audience. He is a man who has more than one reputation.

On the one hand, he is known for being a neglectful office landlord who bought his properties on the cheap and then let them fall into disrepair. Stained carpets, minimal amenities and a lack of decorum and landscaping — paired with cheap rent — are the hallmarks of a Jamison-owned building, several sources said.

“I try to steer tenants away from his office buildings because he doesn’t put any money into them,” said a commercial tenant broker who wished to remain anonymous because he said “everyone” works with Jamison at some point. “Dr. Lee just holds them until the time is right to sell.”

For example, the broker cited the former Macy’s Plaza retail-and-office complex that Jamison acquired for $160 million in 2005. Under Jamison’s ownership, it declined to such a state that the Los Angeles Times called it a “dated, downscale relic.” In 2013, Jamison sold the multi-use complex for $241 million to Ratkovich, which is in the final stages of giving the site — now dubbed the Bloc — a $180 million makeover.

But Lee also has a reputation as a smart investor who sticks to his word.

Kevin Shannon, president of the West Coast Capital Markets team at Newmark Grubb Knight Frank, has worked with Jamison on 20 deals. “He knows every building. He’s sarcastic. He’s also charming…Dr. Lee always does what he says,” Shannon said. “He takes risks and he is known in the investment marketplace as a closer. He has a strong reputation.”

Someone on the finance side of Dr. Lee’s deals called him “honest, reasonable and accessible at all times of the day,” but did not want his name in print, aware that Lee dislikes appearing in the press.

Multifamily moves                      

Regardless of the somewhat contrasting views of Lee, market experts agree that he and his family-run firm are entering a new era.

Either by luck or by design — it depends on whom you ask — Jamison owns more parcels than any other real estate investor in now gentrifying Koreatown. Apartment rents in the neighborhood climbed by almost 5 percent in the 12 months ending on June 30, while vacancy rates fell to just over 3 percent during the same period, according to CoStar data.Jamison has quickly shifted its focus to multifamily development, converting several of the office holdings in its portfolio in the increasingly hip area to rentals, as well as embarking on ground-up developments in the neighborhood and in Downtown Los Angeles.

“His strategy of expanding his business from office to residential is a very natural evolution, given that the multifamily market has been red hot across the country,” said Cushman.

Since 2014, Lee has placed more than 15 multifamily developments totaling roughly 3 million square feet in the pipeline, including projects with as many as 648 units, according to data from CoStar. Some reports pinned the number of planned multifamily projects as high as 27.

“People are working against the clock right now,” Jaime Lee told the Wall Street Journal in a rare press interview in early 2016, explaining that Jamison wants to get its residential projects online before the cycle ends. “We’re coming to market as quickly as we can.”

The largest projects are Circa — a $500 million development with 648 units across two towers in DTLA — and a proposed 644-unit high-rise at 2908 Wilshire Boulevard, on the border of the Koreatown and Westlake neighborhoods. Both are being done in partnership with Mid-Wilshire investment firm Hankey Investment Company. Circa is slated for completion in 2017.

Jamison recently proposed a residential project at 3980 Wilshire Boulevard designed by KTGY, an architectural firm based in Irvine, California. The 205,000-square-foot, mixed-use development would include 228 residential units and 17,000 square feet of retail.

Office rents in Koreatown average $2.15 a square foot, according to JLL research. Rent at Jamison’s buildings can be even lower, according to CoStar data, which logged them in the $1.50-per-square-foot range, with an average office vacancy rate of 22 percent at Jamison-owned buildings. Meanwhile, apartments in the area rent for $3 a square foot with a 3.3 percent vacancy rate, according to CoStar.

By building new product, Jamison also has a particular advantage. New construction commands a dramatic 45 percent rent premium on average over the older product, according to a report by CoStar. The rent at 4- and 5-star properties averaged $2,300 a month in the second quarter.

Because Lee is building on land he already owns, development costs are much lower than for investors who must purchase land, said Brent Sprenkle, a broker with Berkadia, who has sold two multifamily properties with adjoining developable lots to Jamison. “To get the land from scratch would be about $250 a square foot, and now it’s $100 a square foot because they already own land,” he said.

Some offices, if gutted, would look “like bowling alleys,” Sprenkle said. Jamison was able to look through its portfolio for office buildings with short-term leases that also had attractive layouts.

Adding residential to the portfolio also  diversifies the Jamison holdings, Sprenkle said. “It’s a smart move. Dr. Lee is a busy guy and he doesn’t have time to play games.”

Face forward

Meanwhile, Jaime Lee, a recently married USC Gould School of Law graduate, has stepped forward as the face of the company on the office front as the family attempts to change its reputation as a landlord.

“Jaime is coming into leadership, and has a creative eye, and wants to invest capital and go fishing for a different kind of tenant,” said Mark Fluent at Deutsche Bank, who has worked on financing deals with Jamison. “Before, they had institutional or government tenants. Now they are courting tech and media tenants. They are well- positioned to take advantage of the changes in Koreatown and Downtown Los Angeles.”

Jamison has begun creative office conversions on three of its properties, sources estimated, including the California Market Center in DTLA, where it has leased to e-commerce fashion companies. Three office properties have been refinanced in the last year, according to Real Capital Analytics.

“We’re a long-term holder and this new shift is focused on capital improvements because it’s that time to put money back into the buildings,” Jaime Lee told the Los Angeles Business Journal last year.

Sources said the investment into its office holdings was limited in scope, and that Jamison planned to renovate only the buildings with creative office potential in prime locations, or those with architectural significance. But any change is change. Some market pros characterized Jaime Lee’s stepping into the forefront as a positive for the company.

“I think she learned a lot from her father, and is taking what she has learned from him and what she thinks should be done and elevating Jamison to a very high level,” said Jonathan Larsen of Avison Young.

A contractor who has worked with Jamison had blunter words. “Dr. Lee is difficult to work with,” the contractor said. “But he is turning more responsibility over to his son Garrett and his daughter, Jaime, both of whom are delightful to work with.”

An Amazon store and Jeff Bezos at the ENCORE awards (image credit: Steve Jurvetson via Wiki Commons)

From the New York website: Amazon is aggressively expanding its presence in the real-world retail market, with a plan to open dozens of new pop-up stores in US shopping malls over the next year, a source familiar with the matter told Business Insider.

The miniature retail storefronts are a separate effort from the physical bookstore that Amazon opened in Seattle last year and are primarily designed to showcase and sell the company’s hardware devices, particularly its Echo home speakers.

The pop-up stores, which are spearheaded by Amazon’s head of devices and services, reflect the company’s growing drive to reach consumers directly through a variety of access points including retail storefronts, home delivery, and innovative devices.

Just as Apple changed its relationship with customers through its sleek retail stores, Amazon is building out its vision for a new class retail business that weaves together a powerful assortment of online and physical components.

Pop-up stores, typically 300- to 500-square-foot locations in the middle of shopping malls, carry an assortment of Amazon hardware — including the Kindle e-readers, Fire TV, and the Echo speakers — as well as accessories. But the broader goal is to drive more traffic to Amazon’s online store, as these devices make it easier to purchase items there.

As of August, Amazon had 16 pop-up stores in the US — nearly three times as many as the six it had at the end of last year, according to the source. That number is expected to exceed 30 this year and could go up to as many as 100 by next year, as new stores are popping up almost every week in shopping malls across the country, this person said.

In fact, Amazon quietly launched a new site dedicated to its pop-up stores; it shows 21 now. The stores are spread across 12 states, including New York and Texas, with California owning the most (six).

End of the test phase

The Amazon pop-up store in San Francisco’s Westfield (Mall.Business Insider/Eugene Kim)

Amazon is hiring a number of positions for “Amazon device pop-up stores” in multiple locations that have yet to be announced, including Miami, Florida, and West Hartford, Connecticut, according to job listings.

In one of the job posts, Amazon says pop-up stores “have emerged from the test phase with a goal to expand and grow.”

Business Insider’s source said Amazon seems to be putting a lot more resources in its pop-up store expansion and that it could potentially evolve into other forms as well, such as a brick-and-mortar space similar to an Apple Store. Amazon has tested things like pop-up trucks, but those haven’t really materialized into any meaningful sales channels.

Amazon never officially announced pop-up store launches, although it did confirm the 2014 opening of its San Francisco one in the upscale Westfield Mall. And The Wall Street Journal’s Greg Bensinger discovered a smaller pop-up store in the mall a year before that.

Amazon still hasn’t closed its Westfield Mall location, despite the short-term nature of pop-up stores.

The pop-up stores come with hefty fixed costs, including leases in shopping malls and full-time employees to staff the storefronts. But they offer a new way for the company to boost its brand awareness and to drive sales, both at the stores and on its website.

Given Amazon’s obsession with data, the decision to expand the network of stores may indicate that the company has seen an uptick in online sales in the regions where it already has pop-up stores.

The pop-ups also serve a strategic purpose by providing Amazon with its own physical sales channel — something that has become especially important after big-box retailers such as Target and Walmart stopped selling Amazon devices in 2012. (Target plans to bring Amazon products back this year.)

Amazon declined to comment on its roadmap for the stores but provided this statement: “We offer pop-up kiosks so that customers can try out all our new devices and learn about our services like Prime and unique content like Amazon Originals.”

The Echo effect

One interesting part about Amazon’s pop-up stores is that they’re run by the devices team, not the retail team that opened Amazon’s bookstore last year. The initiative is led by Senior Vice President of Devices and Services Dave Limp, who oversees everything from the Kindle to the Echo.

That means the push for more pop-up stores coincides with the success of the Echo, which is widely considered to be the next big hit product for Amazon. The Echo’s success has prompted rivals such as Google and, reportedly, Apple to develop competing versions.

According to multiple sources, Amazon is increasingly putting more resources to developing the Echo and its voice technology platform, Alexa — and the pop-up stores provide an important way to raise brand awareness for both products.

Another source said Amazon played with the pop-up store concept while the Echo was being developed in 2013, as it’s a way to let people play, hands-on, with its devices, especially the unusual ones like the Echo.

“Lowering the barriers to trial and letting people feel how things actually work is a great way to start,” this person said.

It’s unclear why Amazon’s taking such a low-key approach to its pop-up store expansion. But it’s not too uncommon for Amazon to do things quietly when it’s clear that it has bigger ambitions. Amazon’s fashion team, for example, launched seven private labels over the past year — and it’s expected to overtake Macy’s as the top apparel retailer in the US by 2017.

Rendering of the Cube at North Broadway and First Street (Credit: Clark Construction)

Dozens of federal judges and their 100 staff members have begun their arduous move into the “Cube,” the freshly complete $340 million courthouse at the corner North Broadway and First Street.

The 10-story modern structure, designed by architects Skidmore, Owings & Merrill and built by Clark Construction, spans 633,000 square feet and required more than 41,500 cubic yards of concrete. The building’s exterior is almost wholly tempered glass, and underneath, 4,300 tons of steel serve as the foundation.

It houses 24 courtrooms and 32 judges’ chambers.

Although the building is ready for move-in, the transition itself will not be complete until mid-November, the Los Angeles Business Journal reported. The process will involve installing security systems, relocating case files and fine-tuning logistics to ensure that court services will run smoothly despite the move.

The move is being handled by Pomona-based Serna’s Relocation Systems.

Not all of the judges will end up at the Cube. Some will be move to the Roybal Federal Building, which will receive its own $19 million transformation come November.

The move was a long time coming. Judges have been discussing the need for a new courthouse in the mid-1990s. [LABJ] — Cathaleen Chen

Proposed amendments to the EB-5 program could end its use in real estate, observers say

From the New York website: A new proposal to reform the controversial EB-5 visa program is causing alarm among real estate developers who’ve used it as a source of cheap capital for years. Some say its conditions would spell doom for the program, which has brought in billions of dollars for New York projects in recent years.

The new bill, sponsored by Congressman Bob Goodlatte (R-Va.), would raise the minimum amount investors would need to pump in to get a green card. That in itself was expected. But what makes it unusual is a provision that would require existing investors to retroactively cough up the additional amounts. It is this provision, real estate insiders say, that could cause investors to pull their money out of U.S. real estate projects, leaving developers in the lurch.

It could, they say, even spell the end of the popular program, which allows foreign investors to plow funds into real estate projects and has been one of the most popular sources of alternative financing for projects in New York, Miami and Los Angeles.

“It cannot go through,” said Mona Shah, an EB-5 immigration attorney. “If it goes through in its current form, it ends the EB-5 program. It’s as simple as that.”

The bill, proposed Sept. 9, would up the minimum investment amount for EB-5 applicants from $500,000 to $800,000 for projects in high unemployment areas. In areas with low unemployment, the investment amount would be hiked from $1 million to $1.2 million.

These higher amounts would apply to applications filed by investors starting in June 2015. This means investors who entered the program thinking they’d only have to shell out $500,000 would now be on the hook for $800,000. That could cause some to back out of their investments, and developers could find themselves without the funds to finish their projects.

Speaking from Shanghai, Shah said the bill had Chinese investors and U.S. developers spooked.

“Everybody is panicking about it here,” she said.

In a statement, Goodlatte told The Real Deal that while he supported the overall goals of EB-5 — the program was designed to generate economic activity and boost jobs — it is in desperate need of reform. EB-5, he said, is currently riddled with fraud and abuse and has strayed further and further away from the program Congress envisioned when creating the program a quarter century ago.

Goodlatte did not comment directly on the retroactive nature of some provisions of the bill.

EB-5 in its current form was extended in December for nine months, in what was seen as a big victory for developers.  It is now likely to be extended until December so that lawmakers can come to a resolution. Some lawmakers, including senators Chuck Grassley and Patrick Leahy, have spoken out in opposition of renewing the program as it currently stands, citing fraud and abuse. Sen. Dianne Feinstein called for an end to the program altogether, saying it creates the impression that “American citizenship is for sale.”

Goodlatte also proposes increased scrutiny on investors’ source of funds. His bill would require investors to submit up to seven years of tax returns from their home countries, as well as disclose any judgements against them and any pending governmental, civil or criminal legal actions.

It would also crack down on developers’ ability to present their projects as being in high-unemployment areas by creatively cobbling together census tracts, a process some have likened to gerrymandering. Many New York developers, including the Related Companies and Extell Development, have been accused of manipulating census tracts to make sure their developments are located in “Targeted Employment Areas,” allowing them to qualify for the lower investment threshold.

Under the bill, combining census tracts would no longer be permitted. In addition, approximately 2,000 visas would be reserved for projects in rural areas, which are seen as high-risk. Those visas would not be reallocated to urban projects even if they remain unused.

Had the proposed bill been in place several years ago, many of the big-ticket Manhattan that have benefited from EB-5 would not have been eligible for funds.

“I would go so far as to say that the Goodlatte Bill would pretty much end TEAs as we know them,” Elliot Winer, an EB-5 consultant, wrote on EB5Diligence.com. “ I would estimate that about 90 percent of current TEAs would no longer qualify.”

“You’re essentially going to kill everything in big urban areas,” Winer later added in an interview with TRD. “It’s just completely absurd. I don’t think people really understand the magnitude.”

EB-5 insiders speculated that the bill is unlikely to pass in its current form.

Shah even said that some measures, particularly that of retroactive investment increases, may have been put into the bill as a “bargaining chip.”

Arden Hearing of Trumark Urban and a model residence at TEN50 (via Trumark)

After the first phase of Trumark Urban’s high-rise building in Downtown Los Angeles sold out two months after hitting the market, the second phase was rushed to the market early in July.

The 25-story, 151-unit luxury development at 1050 S. Grand Avenue in South Park, dubbed TEN50, will be the first new condo project to be completed Downtown in almost a decade once construction wraps up later this year. Its residences will be released into a market so deprived of condo inventory that prices shot up 13.3 percent in the three month period ended July 31, 2016 — a bigger uptick than any other L.A. market, according to a report by Polaris Pacific.

TEN50 currently has only one competitor with new condos Downtown, but it’s a big one: Greenland’s Metropolis, which includes more than 500 units in its second phase alone.

But Arden Hearing, managing director of Trumark Urban, said there more than enough buyer demand in an area dominated by pricey rental projects — and an influx of more of them on the way.

The master bedroom in a model residence at Ten50

“Our competition is actually the people paying $5,000 rents in lesser buildings,” he said. “It’s accretive to buy rather than rent as long as you have a 20 percent deposit — and that’s different than other cities.”

With tax write-offs, it is $750 to $900 cheaper per month to buy a $600,000 condo than to rent in a new building Downtown, according to Johanna Gunther of Polaris Pacific, which is handling sales and marketing for TEN50. It’s more expensive on the buying side in markets like San Francisco, she said.

Hearing said the discrepancy is owed to the fact that Downtown is “a burgeoning market where world class living is still a growing trend.” Historically, he said, “it wasn’t a place where people wanted to live.”

He expects robust condo pricing growth over next few months as rent prices flatten, due to the influx of luxury apartments.

The kitchen in a model residence at Ten50

The second phase of Ten50 includes one- and two-bedroom residences as well as penthouse and two-story penthouse units that range from $600,000 to just over $4 million. The Real Deal got a first look at the model residences of its third phase, which show a new crop of bedroom and dining layouts.

The entrance to a model residence at Ten50

The TEN50 building, designed by HansonLA with interiors by Handel Architects, includes an Amazon-approved landing pad for drone delivery service. It also has  a 13,000-square-foot indoor/outdoor lounge, a “resort-style” pool and a “yoga garden,” according to marketing materials.

Debt fund PCCP provided more than $70 million in financing to support the construction of TEN50, The Real Deal previously reported.

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Sandeep Mathrani and an Aéropostale store

From the New York website: A bankruptcy judge gave the final approval for General Growth Properties and Simon Property Group’s purchase of distressed teen clothing retailer Aeropostale, thus saving 229 stores from closure.

The two real estate investment trusts formed a joint venture with Gordon Brothers Retail Partners and Hilco Merchant Resources to buy the ailing clothing chain. They won a bankruptcy auction on Sept. 2 to buy the stores for $243.3 million . The sale required approval from a bankruptcy judge, Bloomberg reported.

“This could be a model for future restructurings in the years ahead,” Ray Schrock, a lawyer for Aeropostale, told the court.

The new owners will keep the clothing chain alive, but the number of stores will dramatically decrease from around 800 to 229. Private equity firm Sycamore Partners had offered $1 million more for the company, but its plan was to liquidate all of Aeropostale’s assets.

GGP and Simon Property Group were both Aeropostale landlords when the company went bankrupt in May and closed 154 stores in North America, including its spot in Westside Pavilion.  About six Aeropostale stores remain in Los Angeles County now, according to its store locator.

When only liquidation offers came forward, the two REITs formed a consortium to buy and revive their tenant. The deal includes $74 million to fund a Chapter 11 plan, the website reported, which will be confirmed at a hearing slated for November. [Bloomberg] — Miriam Hall

Rich Paul and his new pad at 822 North Laurel Avenue (Credit: Framed Pixel, Kareem Black, c/o The Black Cager)

Forget Cleveland — LeBron James’ squad is putting down roots right here in La La Land.

James’ agent and close bud Rich Paul has snagged a Beverly Grove pad for $3 million, on the heels of James buying his own digs in Brentwood just 10 months ago.

The NBA MVP’s business manager, Maverick Carter, also bought a home in Hollywood Hills for $3.5 million around the same time, the L.A. Times reported.

New Vision R.E. & Investments’ Zack Blum was the most recent transaction’s listing agent, while Jaime Cuevas of Compass represented Paul.

Paul’s new residence in the Melrose district spans just under 4,000 square feet and has five bedrooms. The newly built, modernist house features hardwood floors, a floating staircase, a chef’s kitchen, six bathrooms and an office. The master bedroom suite has its own balcony.

James bought his Ken Ungar-designed, 9,440-square-foot Brentwood mansion last November for $21 million. [LAT] — Cathaleen Chen

City Terrace Park in East L.A. (Credit: Big Orange Landmarks)

A jury has ruled against Winstar Properties in a case brought against the landlord for raising the rent on an East L.A. apartment by 63 percent.

The verdict means that the tenants, Roberto Perez and Carolina Rodriguez, whose rent was upped to $2,000 a month by Winstar, will not be evicted for now, Curbed reported.

The rent increase was not warranted, the jury decided, because of the unit’s condition: It had a cockroach infestation, broken doors, dysfunctional electrical outlets and peeling walls, according to Rodriguez.

When those defects are fixed, Winstar could still increase the rent. Rodriguez, Perez and their attorney are now attempting to file a housing discrimination case in federal court, claiming that Winstar only raised rents for foreign-born tenants.

In the meantime, the tenants must pay back rent at an approved rate of $1,050 per month. [Curbed] — Cathaleen Chen

Christopher Martin

From the L.A. print issue: Christopher Martin is a dyed-in-the-wool Angeleno. His father and grandfather both had long, productive careers as L.A. architects, and many of his own commissions have been centered in and around Los Angeles County. He has designed large public projects for clients such as the Los Angeles Police Department and the County Justice System, as well as academic buildings at institutions such as the California Institute of Technology and the University of Southern California. His son is also in the family business, making AC Martin a fourth-generation firm.

Now, Martin has reached a pinnacle in his career with the topping off of the tallest building west of the Mississippi. But the accolades this has brought certainly haven’t gone to his head. In fact, he said he didn’t realize that the height of the Wilshire Grand — 1,100 feet — would set a new record until an L.A. Times reporter brought this to his attention.

He does have a goal: He wants every Angeleno to visit the Wilshire Grand and ride the high-speed glass elevator up to the 71st floor to drink a glass of wine at the restaurant.

In anticipation of the skyscraper’s grand opening next year, Martin sat down with The Real Deal to discuss the hurdles his team faced , the transformation of the L.A. skyline and just how ridiculous he thinks the ballot initiatives are that would limit development.

What was your vision behind the Wilshire Grand? What were you trying to achieve?

The goal is always, really, to make your client successful, and our client wanted to have a very large, high-quality high-rise hotel that maximizes the use of the property he bought back in the late ’80s, which we did. But then you have to end up with a design theme, and we all had a love of California. The half-dome, for example, is reminiscent of the Sierras. The outdoors was part of the architectural inspiration, externally and internally.

All of the building’s interiors are references to California imagery, whether it’s carpeting that reflects the crisscrosses of the freeways, or the patchwork of the San Joaquin Valley. With the ceilings and carpets, you’ll see this layering of materials with a rippling look. It’s a reference to California’s beaches. There are probably 100 different types of references.

How important is a title like “tallest building in the West?”

It was not important to me at all. We didn’t design it to be the tallest building. It was a consequence of our solving the fire and life safety system. I’ve always been frustrated with the flattop buildings, so I went to the fire department as an architect, letting them know that in the case of a disaster, I want to get occupants out of the building as quickly as possible, and the lesson learned from 9/11 was that firemen had trouble getting through those long staircases against the rushing crowds. I told them I’m going to build a third staircase and a firemen-dedicated elevator with an impenetrable shaft, so there would be no need to have a helipad, and they agreed. This allowed us to add a spire, and all of a sudden the building was to be 1,100 feet tall. We didn’t realize it would be the tallest building in the West until an L.A. Times staffer wrote about it. But it was never our goal.

What is it like working with a foreign developer in creating a major new building in L.A.? Does that make the development process more complicated?

Oh yeah. There are a couple of things. Chairman [Cho Yang-ho, CEO of Korean Air] loves America and he loves USC. And L.A. has the second-largest population of Koreans in the world, so this project was a perfect opportunity for him. But I learned right away that all of our meetings had to be face-to-face. I made 40 trips in the past five years.

Specifically, what were some conflicts?

One hurdle was convincing him on the shape of the building, the way it’s stacked, and having the lobby on the 70th floor. And the interior design has been exhaustive because he’s a perfectionist — he wants to see everything, review everything. It’s far more time spent with a client than ever before.

Martin’s grandfather co-designed City Hall in 1928.

Do you think L.A. is unusual in the sense that communities are so invested in curtailing developments?

Development really can be difficult in certain areas. In DTLA, because it’s designed for high density, generally you don’t stumble into problems here. In fact, all of our approvals here were unanimous by City Council. But if you go to North Hollywood, it’s a different story. And it could get worse in the future. The anti-development ballot initiatives are terrible. It’s terrorism to say, “We have enough housing in Los Angeles; let’s put up a moratorium.”

There’s $60 billion worth of work out there right now. First of all, a moratorium would put a huge damper on all the investments and the jobs that result from the development. Wilshire Grand alone created 11,000 jobs during our five years of construction. 

And it’d take the cost of housing prohibitively high. Vacancy in apartments is, like, 1 or 2 percent now. Proposing to stop all construction would be chaos. Let’s take authority from elected officials and put it in the hands of the voting public? No, that’s chaos. 

Has there ever been a development issue that has slowed one of your projects?

In my career, which started in 1970, planning was always the big hurdle. But things have changed. The Wilshire Grand is an enormous project, and it wouldn’t have worked if it wasn’t for a thing called parallel permit processing that L.A. City now embraces. What it means is that we can design and consult with the Building Department at the same time, before we finish planning the entire development. We’d work with them for resolutions of specific code issues, like fire-life safety and seismic issues. The Wilshire Grand project is such a great example. In 2012, we set an opening date five years in advance, and we’re going to make that date. That is unheard of!

The reason I want to publicize the parallel permit process is that we’re just in the startup of international investment, and L.A. is open for business. Our planning process is now perfectly streamlined and put into a form that’s user-friendly and attractive to investors — that is an enormous change! Ray Chan, the former general manager of the Department of Building and Safety and now the deputy mayor, is truly a visionary.

L.A. development is literally in your blood, as your father and grandfather were both architects. How have you seen the L.A. skyline change?

It’s definitely getting taller, but what’s really wonderful is the changing of the imagery of the skyline. Historically, it’s always been truncated, flattop buildings, which was not a problem per se, but it’s a forced look. Here we are at the land of art and cinematography — can you imagine going to the Academy Awards and everyone having flat hair? It’s good, though, that we’ve changed the code. We just changed it in the past two years.

Before that, the change in DTLA really came when we brought in the Staples Center. L.A. Live has changed L.A.’s image and made it a downtown entertainment space. And then the adaptive reuse of old buildings came. Downtown changed from a 9-to-5 kind of area to seven days a week, 24/7. It’s really been a metamorphosis.

What else is interesting is that the look of the city has followed the use of the city. Before, there were all these buildings for corporate America headquarters, so our high-rises were driven by the companies in them. They were not driven by residential purposes, entertainment or hotels. For instance, the Wilshire Grand was designed as a hotel instead of offices, but the very top five floors are all entertainment — dining rooms, bars, open-air decks, and they’re all for the public to visit. I was talking to some of the workmen, and they were saying, “Oh, I want to bring my wife down here,” and then one of them asked, “Can I actually come?” And I said, “Yes, of course. I want you and your wife to come here to have a drink and dinner.” I want all the Angelenos to come here and say, “I’m going to stay for dinner.”

In 1960, his father’s time, AC Martin designed the Department of Water and Power.

What else is on your plate right now?

So many different things. Right now, AC Martin is busy with some educational work. We finished the Hall of Justice about a year ago, which was a very interesting, adaptive reuse project. We have a number of housing projects in DTLA. We just started a couple of new educational projects, one for the master plan of Cal State Northridge.

What was so interesting about the Hall of Justice?

It’s a historical building, built in the 1920s as a combination of county administrative and judges’ offices and a 3,000-inmate lockdown facility. It’s been converted to house the L.A. County District Attorney and Sheriff. The prison, of course, is gone.

It was a challenging project because the first thing to consider is, how do you make a 90-year-old building comply with today’s emergency standards, seismic engineering, heating, life-safety and clean-energy standards? And the rest is, how do you maintain its historic beauty? And cleaning up was very interesting because the structure had gathered 100 years of dirt and grime, and when we washed the building, the runoff was actually toxic.

What is a favorite recent project of yours?

Aside from the Wilshire Grand, working on the L.A. City Hall renovations — developing all the architectural friezes and old graphics. It was a lot of details.

Your grandfather designed it, so it must be very dear to your heart

Yeah, my grandfather did so with two other architects: John Parkinson and John Austin. It took three of the best architects in the city.

What are some of your favorite L.A. landmarks?

One of my favorite structures is the Department of Water and Power that our office, under my father, did in 1960. It still holds up today as one of the finest city structures in the Western U.S. I’m proud of the fact that this is a fourth-generation company, starting with my grandfather. We’ve been here for 110 years; we’ve done many of the landmark buildings. Our family came here in the 1840s and settled as lima bean farmers, but now we’re growing buildings.

What draws you to particular projects?

I’m drawn to the people. When I was designing CalTech’s Beckman Research Institute, I had lunch with Arnold Beckman himself — he lived to be 104 — and one day he told me he invented the pH scale because his neighbor in Pasadena wanted to know when to pick oranges. When you have a personal connection like that, it’s such a privilege. You meet somebody who’s one of the greatest scientists of our time, and you realize he’s a real person who appreciates the same things as you do. Great design is a consequence of personal interaction.

Do you have any hobbies?

The most unusual hobby would be designing, building and flying experimental airplanes. In my family, almost everybody, including my brother, has been pilots. And my children were interested in it as well. When my oldest son said we should buy an airplane, I said, why don’t we build one instead?

Another thing I do and am passionate about is forestry. We have a very large timber farm, 3,600 acres, just outside of Yosemite, where we grow sugar pines, ponderosa, incense cedar and white fir that we harvest every year. It’s really like gardening.

Nate Berkus, Jeremiah Brent and their house at 8195 Hollywood Boulevard (Credit: Trulia, Celebrity Baby Scoop)

TV-famous couple Nate Berkus and Jeremiah Brent have put their midas touch on a Sunset Strip property, and now the interior designers are selling it for a sliver below $3 million. They are seeking $600,000 more than what they paid for the property last year. 

Interior designers to the stars, Berkus and Brent acquired the residence at 8195 Hollywood Boulevard for $2.4 million in 2015, and spent the last year remodeling it, the New York Post reported.

Brent Watson of Compass is the listing agent.

The 3,643-square-foot, five-bedroom spread now features white walls and fixtures, beamed ceilings, a wood-burning fireplace and a whole lot of natural lighting. The master bedroom suite has its own patio.

Outside, there’s a swimming pool, several patios and gardens. [NYP] — Cathaleen Chen

The protest in front of the Medici at 725 South Bixel Street (Credit: Mike Dennis)

Like its fallen sister the Da Vinci, the Medici is getting no love.

Nearly 100 people gathered in front of the 632-unit “Fauxtalian” apartment complex Tuesday morning, protesting what they claim to be developer Geoff Palmer’s dismissal of Los Angeles’ affordable housing crisis. They were simultaneously promoting newly dubbed Proposition JJJ, a ballot initiative that would require big residential projects to guarantee low-income units.

Organized by Build Better L.A. Coalition, the rally lasted about 90 minutes. Protesters — among them, construction workers donning bright orange vests — held up signs that read, “Yes on JJJ!!! G. H. Palmer doesn’t own L.A.” and “Good Jobs for Los Angeles.”

The coalition was formed by the L.A. County Federation of Labor, and accordingly a vital part of Proposition JJJ calls for major construction projects to hire at least 30 percent of local residents, as well as the veterans and the unemployed.

The measure also offers additional incentives to developers who build near transit hubs.

“We went to the Medici because it’s really a symbol of the kind of development we don’t want in L.A.,” organizer Laura Raymond told The Real Deal. “[Palmer] has been an infamous developer.”

Raymond is campaign director for the Alliance for Community Transit-Los Angeles, a coalition within the Build Better L.A. umbrella.

Palmer isn’t undeserving of the title of infamy among housing advocates. In the past 15 years, he has railed against the city’s affordable housing policies in multiple lawsuits, the most successful of which set a statewide legal precedence that no city can mandate developers to include affordable housing in new projects.

Palmer’s company, G. H. Palmer Associates, declined to comment.

Proposition JJJ will appear on the November ballot.

600 Wilshire Boulevard and Industrious CEO Jamie Hodari (credit: Google Earth, YouTube)

From the New York website: Brooklyn-based co-working company Industrious, which recently inked a lease at Onni’s 600 Wilshire in Downtown Los Angeles, raised $37 million in a Series B funding round, the startup announced Tuesday.

Riverwood Capital led the round, which also included Outlook Ventures and Maplewood and brought Industrious’ total funding to $51 million to date.

Industrious is one of a handful of firms looking to challenge $16 billion behemoth WeWork in the nascent co-working industry. The firm’s co-founder and CEO Jamie Hodari told The Real Deal that it plans to spend the bulk of its new funds on building out and opening new co-working spaces across the U.S. It currently runs a dozen spaces, and wants to add 12 more.

Unlike most of its peers, Industrious chose to expand to different cities before growing within New York and has locations in places like Raleigh, St. Louis and Minneapolis. Meanwhile, its competitor The Yard has nine locations in New York and only one outside (in Philadelphia).  WeWork, which currently claims to have 112 spaces in 33 cities around the globe, also started off by opening several locations in New York before venturing out to new markets.

Hodari pointed to the competitiveness of New York’s co-working market — where dozens of firms fight for market share — and to the potential benefit of being present in different cities.  “There’s enormous advantages to scale,” he said, arguing that customers value the ability to find offices in places they travel to. He also argued that being in different cities gives it a better handle on what customers there want, making it easier to grow later on. “You might scale vertically in one market to a very large scale, and then it’s very hard to say to investors whether you’ll succeed in Cleveland,” he said.

Prior to founding Industrious, Hodari ran Kepler, a nonprofit university for developing countries. The other co-founder, Justin Stewart, is a former vice president at Madison Realty Capital [TRDataCustom] and served as director of acquisitions for Windham Development.

Industrious seeks to set itself apart by appealing to more “mature” (in the words of Hodari) tenants — companies that prefer a quiet office suitable for corporate meetings, rather than a common beer keg. In practice, this means Industrious has kept its spaces far smaller than the average WeWork (its Brooklyn location on Dean Street totals less than 20,000 square feet), which it claims makes them more quiet.

“I would say if you look at a lot of our competitors, the look and feel is appealing to a very different sense of style,” Hodari said, “something that is noisy and loud and exciting.”

The Alhambra at 1000 South Fremont and Ratkovich CEO Wayne Ratkovich

Los Angeles’ commercial property market has been blazing hot in places like Hollywood and Playa Vista over the past couple of years, with properties trading for record high prices per square foot.

But that doesn’t mean everyone is in the black. Indeed, a recent analysis of July CMBS data provided to The Real Deal by research firm Trepp shows that a slew of L.A. property owners, particularly those with assets outside of city centers, have struggled to pay back their creditors over the past year. And, with approximately $56 billion in CMBS loans set to mature by 2017, there could be more defaults on the way.

Read on for a closer look at L.A. County’s 10 most distressed properties, ranked by current balance.

1.The Alhambra — $130M

A $130 million loan attached to the Alhambra, the Ratkovich Co.’s mixed-use office campus in Downtown Alhambra was recently transferred to special servicing after it was classified as non-performing beyond maturity.

The securitized loan was issued a decade ago by Goldman Sachs. The property had been plagued by tenant defections, but more recently has seen a flurry of new leases. In March, Ratkovich announced that the complex was 70 percent leased and said it expected it would be 90 percent occupied by the end of 2016.

A spokesperson for the company told The Real Deal last week that it was in the final stages of securing a loan to recapitalize the property. “While we have continued to fulfill payment obligations against the existing CMBS loan, the recapitalization process has taken longer than anticipated,” the spokesperson said. “Since 1999, the Ratkovich Company and our partners have invested nearly $100 million to protect, enhance and expand The Alhambra campus into a truly integrated urban community. We anticipate an expedient resolution to the recapitalization, and remain confident in our future plans for the property.”

2. Glendale Center — $125M

A $125 million loan attached to the Glendale Center, a 14-story, Class A office building at 611 North Brand Boulevard in Glendale went into REO status in 2012 after the borrower defaulted.

The former owner Maguire Properties paid $71.1 million for the building in 2003 and used the CMBS loan, issued by Nomura, to recapitalize it in 2006. The property went into default after it failed to generate enough rent to meet its debt service requirements and the bank stepped in. Tenants included Disney.

The loan matured earlier this year. The building is not currently available for sale.

Maguire, once one the L.A. region’s biggest office landlords, defaulted on a series of loans after overpaying for properties at the height of the last real estate cycle and handed over the keys to several properties.

3. West Covina Village Community Shopping Center — $39.48M

A $39.48 million loan attached to the West Covina Village Shopping Center, a 229,252-square-foot community shopping center built in 1982 by Ziad Alhassen, has been in special servicing since 2014. The lender is considering selling the note, according to Trepp.

The CMBS loan was issued to the borrower in 2006. The maturity date was extended by the lender through 2017.

The loan is cross collateralized and cross-defaulted with the Wells Fargo Bank Tower (also on this list.) The borrower was making interest only payments as of July while submitting quarterly principal payments, according to Trepp.

4. Wells Fargo Bank Tower — $36.08M

Wells Fargo Tower in West Covina

A $36 million loan attached to a 14-story Class A office building in West Covina is currently in default after the borrower, Eastland Tower Partnership, an entity also linked to developer Ziad Alhassen, failed to make payments. The original loan, which was for $41 million, was originated by Column Financial in 2006. Tenants of the building include Wells Fargo.

The bank appears to have taken control of the asset at foreclosure auction for $28 million earlier this year in a deal that valued the tower at $64.62 million. The maturity date for the loan was extended through 2017.

5. Whittier Hospital Medical Center — $26.1M

A $26.1 million acquisition loan attached to a 142,776-square-foot medical office complex at 9080 Colima Road in Whittier fell into default after several of its medical tenants departed the complex.

The bank-owned property has more recently upped its leasing efforts and has inked 11 new leases according to Trepp.

The loan was originated by Nomura in 2007.

6. Chatsworth Business Park — $22M

Five years after purchasing the 231,770-square-foot office complex for $46.7 million, the now defunct Grubb & Ellis Realty Investors defaulted on $22 million of its debt from a $33.75 million loan originated by GACC. The loan was transferred to a special officer in March 2010, a month before it matured.

The property at 21605-21615 & 21415 Plummer Street went into foreclosure in November 2011. It was 100 percent leased at the time.

Around the same period, Grubb & Ellis filed for Chapter 11 bankruptcy, according to Trepp data. Just months after, it was acquired by BGC Partners to create what is now Newmark Grubb Knight Frank. The property is now 50 percent leased, according to CoStar.

7. Castaic Village Shopping Center — $16.8M

Columbus Pacific Properties bought the 100,000-square-foot shopping center at 31810-31970 North Castaic Road for $11.5 million with the intention of growing its value through expansion, the Santa Monica-based firm’s principal Brian Shirken told the L.A. Times in 2000.

In 2004, Columbus Pacific acquired a $20.6 million loan from Keybank. Though the company maintained payments throughout the recession and the immediate recovery from it, the 125,000-square-foot property’s loan went into default in January 2011, with $16.8 million remaining in debt. Efforts in refinancing were futile.

Two months later, it was transferred to a special servicer. Now, six years after becoming REO, the 1992-built center is on the market, according to Trepp notes.

Its biggest tenant, Ralph’s Grocery, is shuttered.

8. Northridge Promenade Shopping Center — $14.7M

Northridge Shopping Plaza in Northridge

Newport Beach-based firm Core Realty first acquired the 80,000-square-foot Northridge Promenade Shopping Center in 2007 for $22 million, according to CoStar. In April of that year, Core Realty acquired a $15.1 million loan from Wachovia, classified as an acquisition with interest only debt service payment for the first 84 months. The loan was set to convert to P&I in May 2014, according to Trepp.

Troubles began in July 2011, when Core requested a loan modification due to cash flow issues. Soon after, red flags were raised that Core and its property management arm failed to pay brokers’ commission on the leases they brought in.

Totaling $14.7 million, the remaining debt was transferred to a special servicer in June 2011 and sold in foreclosure the following year. It was about 78 percent leased at the time, according to Trepp.

As of July 2016, the three-building property is not on the market.

9. Airport Plaza — $12.9M

Sitting on a 5.4-acre site in Long Beach, the 150,403-square-foot Airport Plaza office complex was purchased by Arden Realty in 2006, according to CoStar, right as Arden’s sale to GE was closing.

The troubles began in October 2012, Trepp notes show, when the only tenant at the time, the Boeing Company, allowed its lease to expire. Four months later, the $12.9 million loan was transferred to a special officer. The lender, Morgan Stanley, won the foreclosure auction that took place the following March, and acquired back the property as a ground lease.

10. Antelope Valley Plaza — $12.8M

Four years into acquiring the Antelope Valley Plaza for $20.2 million, Mar Monte Corp.’s ownership of the 126,000-square-foot Lancaster shopping center was in good shape. Even two months before its imminent default notice, watchlist commentary observed in May 2010 that “total returns in the final years of the forecast will impress, setting the market up for nice value-add or market timing plays,” according to Trepp notes.

That following July, Mar Monte’s $13.2 million loan, originated by Keybank, was transferred to a special servicer. It was transferred back the following year, but by 2013, occupancy dropped to barely above 60 percent. Requests for loan modification were denied and by early 2015, the loan was back to a special servicer.

The mall finally went into foreclosure in August 2014, with Mar Monte still owing $12.8 million. The property will soon be marketed for sale, according to Trepp.

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Anne Gale Hurd, the Swank at 345 East Colorado Boulevard and a zombie from “The Walking Dead”

For those seeking a nice place to ride out the zombie apocalypse, Gale Anne Hurd’s might do the trick.

The screenwriter and producer, whose credits include “The Walking Dead,” “Armageddon” and “Aliens,” recently ponied up $4.5 million for a penthouse condo in Pasadena with her husband, screenwriter Jonathan Hensleigh.

The 4,300-square-foot residence is part of the newly constructed Swank condominium in downtown Pasadena. It has three bedrooms and four bathrooms.

The property also features an open living and a dining area that has a glass wall and opens up onto a wraparound terrace.

Swank’s amenties include a library, fitness center with indoor swimming pool and multiple lounges. [Variety] — Cathaleen Chen

Nick Segal and Horacio LeDon

Residential brokerage firm Partners Trust has tapped a Douglas Elliman alumnus to head its newly-launched new development division, The Real Deal has learned.

Horacio LeDon, the former head of Elliman’s new development division in Florida and California and a veteran of the Related Companies, is charged with developing the company’s presence in the new development arena. He will be based out of the company’s corporate office in Beverly Hills.

“Downtown L.A. has rewritten the book on what Angelenos are doing from a lifestyle perspective and where they want to live,” LeDon said. “You’re starting to see the agencies finally realizing that new development can be another feather in their cap or a way to attract new business. We want to be a part of all that.”

At Elliman, LeDon was involved in bringing in the company’s first big L.A. new development project, Greenland Group’s Metropolis in DTLA. His other properties included Ian Schrager’s the Residences at The Miami Beach EDITION, the Faena House, and architect Rem Koolhaas’ Park Grove development in Miami.

Before joining Elliman in early 2013, LeDon was the founder of the eponymous brokerage Horacio LeDon Real Estate. LeDon operated his firm in Florida, New York and London.
A former Related Cos. executive, he was also the West Coast senior vice president for Starwood Capital’s ST Residential unit.

In his new position at Partners, LeDon said he plans to employ the Elliman model of bringing in top resale brokers to help sell new development product.

Partners Trust, led by Nick Segal, is the latest brokerage firm to make a push into new development in L.A. Venture capital-backed firm Compass recently poached Hana Cha, the managing director of the Agency’s new development division.

The ghost of homeowners past flying over the Hong Kong skyline

From the New York website: In famously pricey Hong Kong, apartments can be even more expensive than in Manhattan. But there is one easy — albeit eerie — way to score a bargain: move into an apartment where someone died.

Many Chinese residents of Hong Kong believe that a death in an apartment creates bad Feng Shui, and are typically reluctant to rent or buy it afterwards. Those who don’t believe in feng shui, including most expats, can benefit from that drop in demand and land a unit on the (relatively) cheap.

Spacious.hk, a listing site, tracks deaths in news and police reports and identifies the units in which they occurred. It then allows its users to filter their apartment search by tragedy, under a category called “haunted.” The company told Vice’s Motherboard that the feature is used more than 5,000 times a month.

The death discount can be steep. For example, after two prostitutes were murdered in a one-bedroom apartment at the J Residences building, its asking rent got slashed by around half, from $3,740.

“It’s all a part of feng shui—there are no hard and fast rules, it’s about how you interpret the magic,” Spacious’ founder Asif Ghafoor told Motherboard.

Bloomberg reported in July that Hong Kong’s real estate market is at its weakest point in 25 years. [Vice] – Konrad Putzier

A view of the downtown skyline looking from the east, with the Arts District in the foreground.

From the Los Angeles print issue: New crops of highly visible developments are seemingly sprouting up on every corner of the Los Angeles Arts District, a former warehouse neighborhood on the eastern edge of Downtown. Museums, cafés, gastropubs, crafts shops, lofts and creative workspaces are all opening up at a lively clip.

The district’s artistic revival could be dated to 2001, when the Southern California Institute of Architecture, known as SCI-Arc, moved its campus to an old rail freight depot here. Then, in an extension of the old live-work lofts of the artists who first colonized the neighborhood, developers started building creative workspaces in former warehouses of American industrial icons such as the National Biscuit Company, now known as Nabisco. The trend continues with the redevelopment of former Ford Motor and Maxwell House Coffee spaces.

All of this activity has been boosting asking rents for restaurants and shops looking to move to the neighborhood. “I’d say that there has been a 35 percent increase in retail rents in the last 18 months,” John Hillman, a 17-year veteran of CBRE, said in August.

Artistic revival

This post-industrial hub still has the factory buildings that characterized the neighborhood in the 1920s, when an industrial boom kept it busy. After manufacturing shifts and global trade required more vertical clearance to stack high-volume shipments, the Arts District’s four- and five-story square blocks of symmetrical floors became obsolete, and the sector was pushed out to areas like the aptly named Commerce, about six miles southeast.

The upper floors of the buildings, left empty for years, were eventually populated, in part, by a migration of New York artists needing cheap and voluminous space. The community of bohemian crafters living in their work studios transformed the mini-factory town into the Arts District. “You couldn’t even lease these places at 10 cents (per square foot). People were living there when they shouldn’t,” Hillman said.

A mural on district anchor Angel City Brewery by Shepard Fairey (inset).

In 1981, the Artists in Residence Ordinance allowed artists to legally live in the industrially zoned units. Then, in 1999, another ordinance allowed a separate set of building standards that relaxed safety-retrofitting guidelines for buildings constructed before 1974, an attempt to preserve space that would otherwise be destroyed because of the costs of retrofitting. The city’s grudging tolerance of the artists’ illegal dwellings, combined with easier redesign for developers, gave rise to the modern urban real estate phenomenon of live-work lofts.

Then developers caught on to an investor’s dream: inexpensive, easily repurposed open space in buildings with good bones.

Two landmark projects from Linear City Development — the Toy Factory Lofts in 2005 and the Biscuit Company Lofts in 2007 — set the stage for converting hollow, neglected factories into mixed-used models of functional high density.

Lately, the emphasis has turned toward offices for media and entertainment companies. Shorenstein Properties is repurposing an old Ford Motor factory into a 255,000-square-foot gleaming corporate campus. New offices are also in the works at 405 Mateo Street, where developer Hudson Pacific Properties is preserving the old Maxwell House Coffee facility’s original wood-stamped concrete ceiling, weathered brick façade and walls, large floor plates and oversized windows.

Carl Muhlstein, regional director at JLL, said the neighborhood’s development success came as a surprise. “The early real estate players were local families,” he said. “All of a sudden the real estate became more valuable than whatever they were doing in that building.”

To a large extent, the district’s story is similar to those of other former industrial neighborhoods in other post-industrial cities — progressing from students and artists moving in as residents to funky retailers opening up shop, with an influx of office space as the final phase.

“It’s not different from Santa Monica’s creative areas, where downtown Santa Monica and Third Street Promenade hit it out of the park and the offices followed,” Muhlstein said.

This familiar pattern has some longtime denizens worried about the risk of spiking rents and fading neighborhood character. Across the river — in the adamantly anti-gentrification neighborhood Boyle Heights — the Arts District is regularly cited as a cautionary tale. The term “artwashing” is applied. Even longtime galleries have to defend their authenticity to an anxious community. An original Shepard Fairey mural on the exterior of the district anchor Angel City Brewery, warning of legislators available for purchase, shows the neighborhood’s spirit of art as subversion.

CBRE’s Hillman said that while chains like Umami Burger are coming in, and the recent changes are “just the tip of the iceberg,” the district’s artistic core will remain. “Even with institutional investment, the Arts District hasn’t lost that artistic spirit,” Hillman said. “You’re not going to see a Foot Locker. You’re not going to see a Starbucks.”

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A photo posted by Tyra Banks (@tyrabanks) on Sep 9, 2016 at 10:14am PDT

Werk it, Tyra.

TV’s fiercest personality Tyra Banks has bought a 4,800-square-foot home in Pacific Palisades for $7.35 million in an off-market deal, the L.A. Times reported. 

The oceanfront property, formerly owned by consulting entrepreneur Bernard Kinsey, comprises five bedrooms, four bathrooms and a courtyard with a cascading fountain.

Built in 1950 and renovated in 1995, the contemporary-style abode sits on a bluff behind gates. In July, the supermodel sold her Spanish Colonial-style house in Beverly Hills for $6.4 million.

Kinsey used to be a vice president at Xerox and took part in Rebuild L.A., a program that aimed to do damage control on areas affected by the 1992 L.A. riots. [LAT] — Cathaleen Chen