Developers in Los Angeles may get bonuses for building three- and -four-bedroom apartments.

Los Angeles City Council President Paul Krekorian has filed a motion to create a new density bonus incentive to promote the construction of large family units in new apartment buildings, Urbanize Los Angeles reported.

The motion calls for the Planning Department to create a density bonus program to exempt the square footage of third, fourth and fifth bedrooms, as well as third and fourth bathrooms, from floor area calculations of large family apartments.

The program would also allow developers to add an additional story of height beyond current zoning restrictions, and take advantage of bonuses for developments of mostly large family units.

And it would require a 99-year covenant ensuring that the apartments would maintain the same unit mix and be set aside for households earning no more than 120 percent of the area median income.

The problem, Krekorian says, is a lack of larger apartments, which makes it difficult for larger families to find appropriate and affordable rental housing. Some 17 percent of the city’s renter households live in overcrowded flats.

He says encouraging the development of larger apartments would help the city adapt to changes brought about by a broad shift to remote work during the pandemic. 

At the same time, larger residential units can more easily accommodate multi-generational households.

“Fully a third of the households in the City of Los Angeles are comprised of four or more people, yet only 14 percent of the renter-occupied housing stock encompasses three- or four-bedroom units,” his motion reads. 

“Newly constructed rental units tend to be much smaller, and a majority are studios or one-bedroom units,” the motion added. 

The motion also clarifies that the large family unit bonus would be in addition to existing incentives through the density bonus and Transit Oriented Communities guidelines.

The motion comes when the city of L.A. is under pressure to add 255,000 new homes by 2029. 

As part of that effort, city planning officials are rolling out a citywide adaptive reuse ordinance, expanding upon a program which allowed for the conversion of dozens of older Downtown office buildings into homes.

L.A. County, a pioneer of single-family housing sprawl, has more overpacked homes than anywhere in the U.S.

For three decades, the county has led the nation in overcrowding, with 11 percent of homes now having more than one occupant per room, the Los Angeles Times reported in an expose in October 2022. More than 370,000 families in L.A. County live in overcrowded conditions.

— Dana Bartholomew

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Arya Group, known for building super mansions across Los Angeles, is placing a major hospitality bet on the L.A. Clippers.

The West L.A.-based development firm, led by Ardie Tavangarian, has filed plans to build a 15-story, 174-room hotel at 3820 West 102nd Street, next to a future Clippers arena, Urbanize Los Angeles reported. It would bulldoze an 18,000-square-foot industrial building.

The 200-foot Arya Hotel, among the tallest proposed buildings in Inglewood, would stand next to the Clippers’ Intuit Dome, and near Hollywood Park and SoFi Stadium, home of the L.A. Rams and Chargers NFL teams.

Pending approvals, Arya could break ground in April and complete the hotel by June 2026.

Plans call for a 310,000-square-foot hotel with 174 rooms, 3,300 square feet of offices, 6,500 square feet of restaurant space, 1,300 square feet of lounges, a 4,000-square-foot private club and a 4,000-square-foot spa.

The hotel would include 33,000 square feet of outdoor terraces, including a roof deck and  swimming pool. A basement and above-ground parking garage would serve 269 cars.

The white hotel, designed by Orange-based AO, features an undulating stack of landscaped balconies between floor-to-ceiling windows, according to a rendering. The backside appears to wield a large mural or digital display.

The hotel is billed as a “boutique hotel and wellness center in a sports and entertainment destination,” according to AO’s website, which says the hotel will have rooms for 300 keys and a 10,000-square-foot ballroom.

The project is among several hotel developments in the works around Intuit Dome and SoFi Stadium, according to Urbanize. 

They include a 300-room hotel planned within the Hollywood Park site, a 13-story inn proposed at 4200 West Century Boulevard and a Fairfield Inn slated to break ground this year at 3640 Century Boulevard.

Tavangarian, a native of Iran, has developed dozens of ultra high-end projects, including mansions, public works developments and resorts. They include a Bel-Air mansion that sold in 2019 for $75 million and a Pacific Palisades mansion that sold two years later for $83 million.

— Dana Bartholomew

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Starwood Capital and Artisan Ventures are on the brink of losing a 257,000-square-foot office building in El Segundo, The Real Deal has learned. 

The firms have defaulted on an $84.8 million loan from MetLife Investment Management tied to the property, located at 1960 East Grand Avenue, according to a notice of default filed with L.A. County last month. 

Starwood and Artisan, formerly known as Artisan Realty Advisors, is $960,800 behind on the loan, as of Jan. 25. Neither company responded to requests for comment. 

The duo failed to “cure a covenant breach” and failed to pay default interest, among other things, all of which triggered a default. 

MetLife provided the loan in 2020, records show, to finance Starwood and Artisan’s acquisition of the building and a neighboring parking lot for $133 million. The firms bought the property from Brookfield. 

In 2022, Artisan and Starwood planned to redevelop the parking lot into 94,000 square feet of office space and a four-level parking structure, according to documents filed with the city of El Segundo’s planning department. The plans, however, were only in the beginning stages. 

About 70 percent of 1960 East Grand Avenue is leased, according to online listings for the property. 

The default comes after reports that Starwood and Artisan are in talks with another lender, Morgan Stanley, over $500 million in debt tied to the Pacific Coast Tower next door. 

The companies are still in negotiations to extend or forgive the debt, to avoid default, according to sources familiar with the matter, given the office complexes are struggling with occupancy issues.  

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TPG Real Estate Capital has unloaded a 2.3-acre multifamily development site in Playa del Rey, just a few months after foreclosing on the property.

Kajima USA, the U.S. arm of Tokyo-based construction firm, bought the site and 176-unit complex at 6733 South Sepulveda Boulevard for $56 million, according to property records filed with L.A. County in December.

The sale price comes to about $320,000 per unit, although it’s unclear how much work remains to get the project ready for occupancy.

TPG foreclosed on the property in October through a $29.9 million partial credit bid, meaning TPG could acquire the assets by relieving part of the debt, without paying actual cash. 

The sale to Kajima still came at a loss for TPG. 

The Texas-based investment firm had handed out a $97 million loan to Sandstone Properties in 2022, records show. 

Sandstone then defaulted last year, owing nearly $80 million under the loan and failed to make monthly debt payments in December 2021 and January and February of 2022, according to notices of default filed with the county. 

Sandstone had planned to build 176 units on the site, called Silicon Beach Live. Reports said the project’s shell was completed last April, though default notices state that the developer failed to meet certain completion deadlines for the project. 

It’s unclear whether Kajima will complete the process of finishing the site. The firm, which did not respond to a request for comment, has been planning residential projects across the U.S. for the last eight years, including condo developments in Florida and industrial sites in Texas.

As part of the sale to Kajima, TPG was on the hook for $3.3 million in transfer taxes, given the property is located in the city of L.A. and subject to a 5.5 percent tax. 

The post TPG unloads foreclosed Westside multifamily project for $56M appeared first on The Real Deal.

Financial executive Benjamin Griefer has purchased a 13,100-square-foot mansion in Hidden Hills for $23.7 million, or $1.3 million less than its asking price.

The chief operating officer of Calabasas-based Maverick Payments and his wife, Chantal, bought the new farmhouse-style estate at 5275 Round Meadow Road, according to the Robb Report.

The six-bedroom, eight bathroom estate, built last year on 1.4 acres, was listed in October at $24.995 million.

The two-story gabled mansion includes an expansive living room with a fireplace and automated walls of glass that open onto a covered terrace. 

An adjacent dining area connects to a gourmet kitchen, with two islands and top appliances. A formal dining room has a temperature-controlled wine wall encased in glass.

The home includes a bookshelf-lined office, soundproof movie theater, gym and steam shower, lounge with a seated bar.

Upstairs, a master bedroom has a stone fireplace, with a sitting area that flows onto a balcony. It has “room-sized” closets, a luxe soaking tub, plus dual vanities and showers.

The grounds, dotted with mature oaks, has an infinity-edge pool with an oversized Baja shelf, with a spa next to an open-air cabana. An attached garage holds four cars.

Broker Marc Shevin of Douglas Elliman held the listing. Brokers Nicole Tekiela and Dennis Chernov of The Agency represented the buyers.   

At age 29, Griefer was recognized as one of the Electronic Transactions Association’s 40 under 40 extraordinary payments executives last year.

In the gated celebrity haven of Hidden Hills, the couple join neighbors including Kris and Khloe Kardashian, Matt Stafford, Lori Loughlin, Jessica Simpson, French Montana and Tristan Thompson, according to Robb.

In December, Los Angeles Rams quarterback Matt Stafford bought a 15,000-square-foot hilltop mansion in Hidden Hills for $28 million, a local record. But the brokers on the deal are now locked in a legal fight over a commission payout,

— Dana Bartholomew

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The first cut is the deepest — especially for Rod Stewart, who lopped $6 million off the price of his Beverly Park manor after a $10 million bump before Christmas.

The British-born singer and songwriter behind “Da Ya Think I’m Sexy?” has again relisted his 28,000-square-foot mansion at 23 Beverly Park Terrace, now asking $74 million, Mansion Global reported.

In June, the now 78-year-old rocker sought $70 million for the English Country-style estate. In mid-December he raised the asking price to $80 million. Stewart originally bought the 3.3-acre lot in the gated celebrity enclave in 1991 for $12 million.

A couple of years later, he enlisted architect Richard Landry, “king of the megamansion,” to design the nine-bedroom, 12-bathroom manor house. 

The canary yellow, two-story mansion that some compare to a French chateau has patterned marble floors, wood paneling, crystal chandeliers, egg-and-dart moldings, gilded accents and hand-forged wrought iron work.

The 33,000-square-foot estate comes with a three-story, 4,500-square-foot guesthouse, a five-car garage and two gyms, plus a pool and a full-size soccer field — a sport for which Stewart is a major fan.

The Los Angeles home, featured nearly two decades ago in Architectural Digest, has two ornate double-glass doors flanked by four Corinthian columns.

Inside, a grand foyer has marble floors, more Corinthian columns and ornate mirrors.

The Neoclassical interior has a living room with a 200-year-old French crystal chandelier, a bar, fireplace and French doors leading to a covered loggia overlooking the gardens.

Highlights include a wood-paneled library with a chandelier, a formal dining room big enough to seat 20 guests, wine room, tea room, eat-in chef’s kitchen and a “speakeasy” with green wood paneling and a screening room.

It’s not clear why Stewart, married to model Penny Lancaster, wants to move. The  Rock & Roll Hall of Famer has homes in Palm Beach, Fla., and in the United Kingdom.

“This house has a very extensive family history,” listing agent Tomer Fridman at Compass told the Robb Report in December. “He raised his (eight) children there and his family lived there for 30 years … so it makes sense that, despite all of their amazing experiences, he’s ready to move on.” 

— Dana Bartholomew

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Los Angeles taxpayers will spend $3.8 million to secure and clean 27 floors of graffitied hotel and condo towers partially built by Oceanwide Holdings.

The City Council voted to allot the money to strip the graffiti and fence off three abandoned skyscrapers of the Oceanwide Plaza project at Figueroa, Flower, 11th and 12th streets, across from the Crypto.com Arena, the Los Angeles Times reported.

Councilman Kevin de León filed the motion to allocate the funds to secure the property and restore the public right of way, now blocked by plastic barriers, scaffolding and debris. 

“I’m not holding my breath waiting for the developer to clean up their property,” De León said last week. “The purpose of my motion is clear: to prepare our city to take decisive action if the Oceanwide Plaza developer ignores their responsibility and to put them on the hook for costs incurred by the city.”

The city will move $1.1 million into a fund to fence and secure the ground floors of the South Park buildings. It will pour another $2.7 million into a fund for security services, fire safety upgrades and graffiti removal.

The motion also calls on the city attorney and city administrative officer to report back to the council within 30 days with a legal strategy to recoup the funds from Oceanwide Holdings,  developer of the failed luxury project.

Oceanwide is a unit of Beijing-based China Oceanwide Holdings Group, now facing a foreclosure battle over the unfinished L.A. project.

In recent weeks, the Oceanwide Plaza project has become a site for graffiti tagging and even paragliding. At least 18 people have been arrested, according to the Los Angeles Police Department. 

After footage of graffiti on each floor of the towers went viral, the city gave Oceanwide until Feb. 17 to remove the graffiti from the towers and fence, according to LAist. The council allotted the funding after it became clear that Oceanwide would not meet the deadline.

In 2015, Oceanwide broke ground on what was then a $900 million Oceanwide Plaza project that promised to turn Downtown Los Angeles from “an in-and-out destination to a place to dwell,” according to the architecture firm CallisonRTKL’s website. 

Plans called for two 40-story buildings with 340 luxury condominiums that would include private screening rooms, a dog washing facility and other amenities. Its centerpiece was a 49-story highrise with 164 condos, a Park Hyatt hotel, a rooftop pool, plus restaurants and event spaces.

A year later in 2016, Shenzhen-based Oceanwide upped its estimated costs to $1.5 billion, while still aiming to complete the buildings in 2018. 

But in early 2019 the development stalled, leaving in the lurch a 2 million-square-foot hotel, condo and retail complex without roofs. By 2022, Oceanwide pegged the cost of completion at $2.3 billion. Since then, the project has faced more than $240 million in mechanics liens, as well as complaints from a group of Chinese EB-5 investors over alleged mismanagement. 

In August, a state court of appeals temporarily blocked a foreclosure of Oceanwide Plaza from moving forward, saying it needs more time to review claims by Lendlease, its general contractor. 

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In September, a Bermuda court ordered the liquidation of Beijing-based China Oceanwide Holdings, whose U.S.-based Oceanwide Holdings didn’t complete the three-building Oceanwide Plaza.

Oceanwide was implicated during a federal investigation into Los Angeles corruption involving bribery and money laundering by city officials. Oceanwide, along with former councilmen Curren Price and José Huizar, was named in an FBI search warrant against the email account of Raymond Chan, the former head of the L.A. Department of Building and Safety.

— Dana Bartholomew

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The Swig Company is following the trend of many office owners in Downtown L.A. — it wants out. 

The San Francisco-based investment firm has listed 617 West 7th Street, a 215,000-square-foot office building near Pershing Square, according to marketing materials for the property. 

A team led by JLL’s Andrew Harper is offering the property for sale. Swig did not respond to a request for comment. 

Swig is pitching the building as a prime candidate for a partial conversion into a residential property, advertising that the property could qualify for historic tax credits and would benefit from L.A.’s adaptive reuse ordinance. 

That ordinance allows developers to convert vacant or underutilized buildings into other uses by-right, that is, without the need for formal rezoning applications. The ordinance applies to Downtown L.A. 

The property is currently 39 percent leased, according to JLL’s marketing materials. 

One issue for potential buyers looking at redevelopment is the building’s long-term leases. Walgreens, which occupies about 16,000 square feet, has a lease that expires in 2084. 

Part of the building could be converted into residential units while the long-term leases are in effect, JLL said. However, partial conversions are often quite complex. 

For the ideal residential conversion, a building would be entirely empty, according to brokers, developers and architects, meaning in this scenario, a future owner would have to buy out the tenants. 

Swig bought the building, located on the corner of South Hope Street, for $38.8 million in 2011, records show. In 2018, Swig refinanced the building with a $25 million loan from HSBC Bank.  

The post Swig looks to offload DTLA office building with office-to-resi pitch appeared first on The Real Deal.

Abode Communities wants to build a 60-unit affordable housing complex in South Los Angeles.

An affiliate of the nonprofit developer based in Downtown L.A. filed plans to build the four-story building at 5407 South Western Avenue, in Chesterfield Square, Urbanize Los Angeles reported. It would replace a vacant lot.

Plans for the project, dubbed The Carlton, include 60 studio, one- and two-bedroom apartments, with surface parking for 20 cars.

Abode, a developer of affordable housing, wants to split the complex between subsidized affordable units and permanent supportive housing, which often serves homeless residents.

That makes the project at Western and 54th Street eligible for streamlined approvals through L.A. Mayor Karen Bass’ Executive Directive 1, according to Urbanize.

Abode Communities is now working on projects in Glendale, Harbor City and Broadway-Manchester.

The nonprofit has developed other affordable projects in the South Bay, including a revamp of the Dana Strand public housing complex in Wilmington and the modular Beacon Landing apartments in San Pedro.

The developer is also partnering with AvalonBay Communities on larger redevelopment projects at the West Los Angeles Civic Center and the former Marine Corps Air Station in Tustin.

— Dana Bartholomew

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Anthony Zuiker, the mastermind behind the television franchise “CSI,” sold his beach house in Malibu for $15.3 million on Feb. 15, according to the listing on Zillow.

The property, which is located at 31504 Victoria Point Road, is a single-family, four-story house built in 1976.

Zuiker bought it from basketball star Kevin Durant in 2019 for $12.15 million, according to data compiled by Zillow and media reports at the time.

It’s a moderately priced home for Malibu, with recent sales including interior designer and developer Saffron Case selling a 4,000-square-foot house along Carbon Beach for about $29 million in December.

Also in December, rapper and entrepreneur Kanye West sold his home for $53 million, after purchasing it for $57.25 million two years prior. Last year, Beyonce and husband Jay-Z paid $200 million for a Malibu mansion, the highest price for a home in California history.

Zuiker was looking to rent out the Malibu beach house last year for $90,000 per month and then listed it for sale in September, according to Zillow records.

Back in 2019, the television producer sold another Malibu property, a 5,500-square-foot home, to NBA player Chandler Parsons for $9.25 million, Variety reported.

The house features a third-story entrance, family room, kitchen, dining room, bedroom and the grand living room with ocean views, according to listing notes. Down one level is a mezzanine-style sitting room and two ensuite bedrooms. The bottom floor is a beach-level media suite, plus a full kitchen and a guest bedroom. The top floor includes an office space.

Chris Cortazzo of Compass held the listing. David Parnes and James Harris with The Agency represented the unidentified buyer.

Zuiker as well as the agents representing both sides of the deal did not respond to a request for comment.

The show “CSI: Crime Scene Investigation” launched in 2000 focused on the Las Vegas Police Department. The concept later spawned three other television series.

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Carolwood Estates has snagged Los Angeles luxury brokers James Harris and David Parnes from The Agency.

The founders of Bond Street Partners, who starred on “Million Dollar Listing Los Angeles” for seven seasons until two years ago, have jumped ship for the boutique brokerage based in Beverly Hills, according to The Hollywood Reporter.

Harris and Parnes, who broker between $500 million and $600 million a year in luxury home deals, had long served The Agency, co-founded in Beverly Hills by Mauricio Umansky of “Buying Beverly Hills” and “Real Housewives of Beverly Hills.”

The duo represented Formula 1 heiress Petra Ecclestone in the sale of her Holmby Hills mansion in 2019 for $120 million, among the priciest home sales in the U.S. They’ve also represented entertainment and sports stars such as Rihanna, Carey Mulligan, Demi Lovato, Big Sean and Kevin Durant.

Now they’re hanging a shingle at Carolwood Estates, founded in 2022 by Drew Fenton, Nick Segal and Ed Leyson.

At their new office, they’ll join such luxury real estate power brokers as Linda May, Brett Lawyer, Jonathan Nash, Stephen Resnick, Susan Smith, Marci Kays, Jonathan Mogharrabi and Jonah Wilson. Many Carolwood agents formerly worked at Hilton & Hyland.

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Harris and Parnes, while lauding their time at The Agency, didn’t say why they chose to leave the firm for Carolwood. Terms of the arrangement were not disclosed.

Listings by Carolwood include an 8.4-acre estate known as Casa Encantada, with a 60-room mansion at 10644 Bellagio Road, in Bel-Air, for $195 million, after a $55 million drop in the asking price.

— Dana Bartholomew

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Californians can make do with less — especially when it comes to the size of their yards.

A typical California homeowner in the Golden State lives on a third less land than the average U.S. resident, the Los Angeles Daily News reported, citing figures from LawnStarter.

A survey of 2,000 cities across the nation, including 301 in California, found that non-Californians live on typical lots of 10,000 square feet, or 0.23 acres. Average yardage ranged from 49,658 square feet in Carney, Maryland, to 871 square feet in Boston.

Californians, in comparison, make do with typical yards of 6,900 square feet, or 0.16 acres, when weighted for their populations. Average yardage ranged from Fallbrook’s 37,157 square feet to San Francisco’s 784, according to the Daily News.

In short, Californians live on 30.4 percent less land than their U.S. counterparts. Only 55 of the 301 California cities had typical lots larger than the out-of-state average.

The 10 most populated cities in California had a population-weighted average yard size of 5,300 square feet., or 0.12 acres, according to the Daily News.

In Southern California, they include Los Angeles at 5,314 square feet; San Diego at 5,706 square feet; Fresno at 8,494 square feet; Long Beach at 4,356 square feet; Bakersfield at 8,364 square feet; and Anaheim at 6,142 square feet.

In Northern California, they include San Jose at 4,443 square feet; San Francisco at 784 square feet; Sacramento at 8,320 square feet; and Oakland at 3,833 square feet.

In comparison, residents in the 10 biggest cities outside California averaged lots of 4,200 square feet, or 0.1 acres.

Typical lots in New York were 958 square feet; Chicago at 2,047; Houston at 6,360; Phoenix at 6,970; Philadelphia at 828; San Antonio at 10,019; Dallas at 7,884; Austin at 10,498; Jacksonville at 12,284; and Fort Worth at 8,015 square feet.

Other California cities with smaller yards were mostly located in suburbs of major cities, according to the Daily News.

In Southern California, they include Irvine with typical yards at 3,180 square feet; Seal Beach at 2,919; Manhattan Beach at 2,526; Aliso Viejo at 2,309; and Newport Beach at 2,265.

Cities further away from big cities had bigger typical yards, including Apple Valley at 24,132; Norco at 22,651; and Hesperia at 21,606 square feet, or 0.5 acres.

— Dana Bartholomew

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“You know what could happen if he talks.”

That was the alleged warning made by David Nelson, on trial this week for a murder-for-hire plot linked to a $375,000 real estate fraud, the Los Angeles Times reported.

Nelson, 50, of Fontana, has pleaded not guilty to charges of murder and conspiracy in the 2013 shooting death of Rigoberto Dupre, in South Los Angeles.

The 54-year-old Dupre was shot in the back by an unknown assailant one evening at his auto repair shop. A bullet to the chest and two more in the head made sure he was dead.

Dupre’s business dealings set him on a “collision course” with Nelson, accused of orchestrating his death, Deputy District Attorney Paul Thompson said at the trial.

Hoping to make a few bucks to pour into his home auto shop on Florence Avenue, Dupre got involved in a fraudulent real estate deal with Nelson, Thompson told the jury in his closing argument.

Nelson drove a Rolls Royce. Dupre was an “unsophisticated” man who worked on cars six days a week, the prosecutor said.

Nelson was trying to steal equity from an Inglewood apartment complex, according to Thompson. While posing as the landlord, Dupre secured a loan against the building’s value for $375,000, which was then converted into gold coins. 

Nelson’s attorney, Jovan Blacknell, said there was no evidence that Nelson received any of the gold.

Two years after the loan was made, investigators for the financing company confronted Dupre, who “laid it all out,” Thompson said. Dupre then picked out Nelson among a lineup of potential suspects as the man who put him up to the fraud, records show.

The prosecutor said this sealed Dupre’s fate.

Dupre’s son would later tell detectives that Nelson showed up at his father’s business and warned the son: “You know what could happen if he talks.”

Nelson offered an associate, Tina Alexander, $5,000 to orchestrate Dupre’s murder. Alexander, 62, pleaded guilty to murder and testified against Nelson in exchange for a sentence of 15 years to life, according to prosecutors.

After a botched murder attempt by her husband (who led police on a 10-mile chase before he was arrested in connection with check-cashing robberies), Alexander asked her brother-in-law to rent another car. 

She parked it on 69th Street, a few blocks from Dupre’s shop, and left the keys inside,Thompson said. A gunman then walked into the shop and killed Dupre, then escaped in the getaway car.

“Wallet was there, money was there,” Dupre’s son told ABC7 at the time, discounting robbery as a motive. “He didn’t pat him down, nothing. He just shot him and left.”

Blacknell asked the jury to consider the lack of evidence.

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The spoils of the fraud that set the alleged conspiracy in motion — $375,000 in gold coins — were never recovered.

In all of Nelson’s phone, internet and bank records, police and prosecutors didn’t find a record of Nelson soliciting someone to murder Dupre after Alexander’s husband was arrested. The shooter has never been identified, despite a $50,000 reward offered by the Los Angeles City Council. 

“When does [Nelson] hire and recruit and pay this unknown killer?” Blacknell asked the jury. Deliberation by the jurors began on Wednesday.

— Dana Bartholomew

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Priya Living, a chain of senior living facilities, sold Cypress Village Apartments in northwestern Orange County to Newport Real Estate Partners on Feb. 4, according to a deed reviewed by TRD.

The buyer paid $34.4 million for the Buena Park property, according to a statement issued by Northmarq, which brokered the sale and arranged financing for the deal.

The apartment complex, which was built in 1963 and renovated last year, includes 88 two-bed, two-bath units. The 5.1-acre property is located at 6343 Lincoln Avenue.

The property is currently 95.5 percent occupied. 

Newport Real Estate Partners’ purchase price works out to $390,625 per unit. 

Northmarq’s Shane Shafer represented Priya in the deal. Nate Prouty, Briana Harney DeHaan, Andrew Deaver and Soraya Rios in Northmarq’s San Francisco office arranged $19.7 million in acquisition financing for the buyer.

Voya Investment Management is listed as the lender that provided the $19.7 million conventional loan for the transaction, according to public property records accessed by TRD. 

The sale “shows the continued interest into 2024 for Orange County multifamily,” Shafer said in a statement, noting that “locations like Buena Park are in high demand for investors, are highly sought after and rarely trade.”

Priya Living, founded by Arun Paul, has been expanding in the U.S. over the last few years, targeting 13 cities, Quartz reported in 2020. Its website lists three locations in Northern California and one in India.

Newport Real Estate Partners is a Newport Beach-based real estate private equity firm. Its investment strategy focuses on “change of use, repositioning of assets, rehabilitation and redevelopment,” according to its website.

Priya Living, Newport Real Estate Partners and Voya Investment Management did not respond to a request for comment.

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Tishbees has received the go-ahead to build an 11-story hotel and apartment complex in Downtown Los Angeles.

The Boyle Heights-based developer led by Elliot Tishbi was approved by the City Council to construct the 100-room hotel with 48 apartments at 1323-1331 South Flower Street, in South Park, Urbanize Los Angeles and the Commercial Observer reported. 

A 31,000-square-foot industrial building would be demolished.

Tishbi purchased the third-acre property, less than a  block from the Los Angeles Convention Center and Pico Metro Station, in 2003 for a little more than $3 million.

The approved tower, known as The Element, calls for the 100-room hotel, 48 market-rate units and 12,700 square feet of ground-floor shops and restaurants. Parking would serve 158 cars.

The 118,000-square-foot project, proposed five years ago, initially called for 132 hotel rooms and a restaurant.

The project, designed by Irvine-based nKlosures, will rise in swimming-pool blue, white and orange, with multi-colored accents. The tower will include a pool for apartment residents, a rooftop fountain and water feature for restaurant users, and a grand lobby and restaurant on the street below.

Should the project move forward, Tishbees will be required to make a more than $2 million public benefits payment to the city. The developer  shares an address with A Plus Fabrics in Boyle Heights, with Tishbi serving as head of both firms.

The proposed development would join a handful of other commercial and residential developments in close proximity to Pico Station, including the recently completed AC and Moxy Hotel tower a block north at Pico Boulevard and Figueroa Street, according to Urbanize.

Another project by nKlosures, an unfinished hotel with 43  rooms, is across the street from the Element site. That building was slated to become a La Quinta Inn, according to a market report by the DTLA Alliance.

— Dana Bartholomew

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The post Tishbees wins approval for hotel-apartment complex in DTLA appeared first on The Real Deal.

UPDATED FEB. 22 at 3:00 p.m.:

When AECOM Capital and Combined Properties opened the Pendry West Hollywood — a 149-key hotel with an attached condo project — the project was appraised at nearly $526 million.

That was in 2021, after the duo had spent more than $500 million constructing the hotel and attached condo project. They later refinanced the project with $515 million in loans. 

Since then, the condos have sold. This month, the hotel was appraised at $139 million — about a 60 percent loss compared to its value three years ago, according to one source.

AECOM Capital and Combined are struggling to pay off senior and mezzanine debt tied to the property, according to sources familiar with the matter and data from Morningstar. In particular, the owners are working to refinance a $350 million senior loan provided by Credit Suisse. 

Monarch Alternative Capital also holds a $165 million mezzanine loan on the property, located at 8430 Sunset Boulevard.

The firms had tried to sell off the hotel last year, according to one source, with a price tag of about $149 million, which would have been a huge loss compared to what it cost to build the property. But the hotel got no takers. 

AECOM Capital declined to comment, while Combined did not respond to a request.

The financial issues stem from two causes: rising interest rates and competition.

“Floating-rate debt has absolutely impacted the net operating income,” one source added. 

As of September, the debt service coverage ratio on the senior loan was 0 — anything below 1 indicates that the property is not making enough to pay off the debt. And it has been that way since 2022, according to Morningstar. 

“Multiple hotel competitors within a few hundred feet of the subject property is hurting the property’s overall financial performance,” servicer KeyBank wrote in commentary cited by Morningstar. “Property is also spending more on food and beverages than what it receives from food and beverages revenues.”

The firms are not delinquent on the $350 million loan, according to data from Trepp and Morningstar. However, it’s unclear whether the duo is delinquent on the mezzanine debt from Monarch, which did not respond to a request for comment.

If they are, Monarch could file to foreclose on the property or opt for a deed-in-lieu, forcing AECOM and Combined to forfeit ownership of the property in exchange for relieving the debt, according to a source familiar with the hotel. 

Correction: Previous story did not distinguish property’s previous value with condos and later hotel-only valuation.

The post Pendry West Hollywood bleeds value in debt crisis for owners AECOM, Combined appeared first on The Real Deal.

Mansions perched on the edge of oceanfront cliffs in Dana Point. Homes red-tagged across shifting soil in Rancho Palos Verdes. Mudslides hurling debris into homes in Studio City.

The river of storms sending buckets of rain across Southern California this month have caused slope collapses and shifting ground, placing homes into harm’s way, The Washington Post reported. 

With the damage from floods, mudslides, sinkholes and coastal erosion has emerged striking images of three mansions atop the cliffs of Dana Point — stubbornly clinging to the precipice.

Lewis Bruggeman, owner of the multimillion-dollar house nearest to the landslide, has told reporters that his house is stable despite its perilous appearance, while city officials insist the home is firmly anchored to bedrock.

But an executive with an engineering firm that inspected the property after the slide said future rainstorms are “going to continue to eat away at the slopes.”

“That’s going to need major, major work to stabilize that property,” Kyle Tourjé, executive vice president of Alpha Structural, a Los Angeles-based engineering firm that specializes in soil and structural work, told the Post.

Tourjé said his firm has responded for emergency assessments and repairs for more than 60 landslides over the past week in Southern California.

“We’re seeing more damage, and I think we will continue to see more significant damage,” he said. “Between back-to-back years of heavy saturation, these houses, these properties … they just can’t take this kind of beating.”

The rains have only speeded up the slow-moving ground movement across hundreds of acres in Rancho Palos Verdes.

The land has shifted and slumped, damaging homes and causing water and gas pipe leaks. Crews have worked to fill in fissures, while engineers have described the movement as unprecedented.

“Areas that were only moving in inches are now moving in feet per year,” Rancho Palos Verdes Mayor John Cruikshank told the Post.

The upscale city has confronted landslides for decades, but two rainy winters have accelerated the movement.

In recent months, two homes have been red-tagged — deemed unsafe for occupancy — and the city closed eight miles of trails because of safety issues from open fissures, according to the mayor. Wayfarers Chapel, a famous ocean-view wedding spot known as the “glass church,” also closed earlier this month because of the shifting dirt. 

“Clearly with that much glass above the temple area and being so precarious, you just can’t leave that open,” Cruikshank said. “That would be way, way too dangerous.”

Cruikshank said the city will ask Gov. Gavin Newsom to declare a state of emergency for Rancho Palos Verdes.

The latest storm slammed counties along the coast with more than 10 inches of rain over three days in some places, including hilly areas that have already been soaked by earlier downpours.

Alpha Structural officials said they visited the Scenic Drive landslide site in Dana Point at Bruggeman’s request. The firm said it couldn’t provide a detailed report on its assessment or recommendations for the Orange County home.

But the storms this month have left destruction far beyond Dana Point. Some 1.1 million homes across six counties have a moderate or greater risk of suffering damage from flash floods.

Tourjé blames much of the problem to development decades ago under insufficient building and grading codes. 

Residents also make problems worse, he said, by directing roof downspouts or pool runoff pipes onto vulnerable slopes. He and his colleagues have been racing to Malibu beachfront homes with the sand below them scoured away, train lines wiped out by landslides, homes knocked down, swimming pools filled with mud.

“It seems to be getting progressively worse, year after year,” Tourjé told the newspaper.

— Dana Bartholomew

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Rupert Murdoch’s Fox is pressing ahead with plans to redevelop its 50-acre Fox Studio Lot in Century City.

The New York-based entertainment giant run by Rupert’s son Lachlan Murdoch has applied for state environmental approvals to add 2 million square feet of soundstages, new production facilities and offices at 10201 West Pico Boulevard, CoStar News reported, citing state documents.

Fox’s application comes 11 months after the firm announced plans to add nine soundstages and a 24-story office tower to the nearly century-old studio lot once run by 20th Century Fox. Some 465,500 square feet of buildings would be demolished.

The plan would increase the entertainment studios’ footprint by 88 percent, according to state documents. A timeline for construction was not disclosed.

Fox has leased the facility to Disney for seven years as part of a $52 billion deal in 2017, in which Disney acquired Fox’s film and television assets, much of which was centered on the lot.   

The 50-acre Fox Studio Lot, founded in 1928, now has 15 studio soundstages, according to its website.

The expansion project, dubbed Fox Future, would bring the total number of soundstages to 24. It would also add post-production facilities, base camps and media campus offices for film and television production in the digital age. 

With Fox Future, Fox could seek a development partner to transform the northeast portion of the lot along Avenue of the Stars into a building with 35 floors of office above seven floors of parking.

The expansion will take place where classic movies such as “Miracle on 34th Street” and “Sound of Music” were shot, and where the Fox broadcast network was launched, live sports broadcasting was transformed, and Bart Simpson began his mischief. 

Century City was built on Fox’s backlot in 1956, when studio executives sold off that land to remedy the runaway budget of “Cleopatra” in the middle of a big development boom.

Since then, motion picture and television production has fundamentally changed. The expansion project aims to ease a shortage of premium studio space in Los Angeles, which has driven production outside the region.

Fox joins CBS, NBCUniversal and Warner Bros. Discovery in looking to upgrade their Hollywood studios to compete with new soundstage and entertainment-related construction around the globe, according to CoStar.

Greater Los Angeles has 6.5 million square feet of soundstages, more than in any other U.S. city. Another 3.5 million square feet of soundstages are in the pipeline, according to a new FilmLA report. Soundstages across the region were 90 percent occupied in 2022, down from 93 percent in 2021.

— Dana Bartholomew

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The post Fox moves forward on studio lot redevelopment in Century City appeared first on The Real Deal.

George Smith Partners has acquired Clearwater Capital Management to expand its business into Commercial Property Assessed Clean Energy lending.

The Century City-based commercial real estate financing firm bought the New York-based C-PACE specialist for undisclosed terms, the Commercial Observer reported.

“The acquisition of Clearwater Capital Management strategically complements our mission to broaden our capabilities and deepen our market penetration in commercial real estate finance,” Justin Piasecki, president of George Smith, said in a statement.

Clearwater, founded by Jonathan Seabolt in 2021, acquired C-PACE.com that year to get up to speed with assessment financing, which allows commercial property owners to pay back loans for building upgrades through an assessment on their tax bills. 

Seabolt said Clearwater had $1 billion of financing requests last year for C-PACE deals.

Seabolt and William Burns, managing director at Clearwater, will join George Smith Partners and work out of the firm’s New York office. Burns, a former senior loan officer at C-PACE lender North Bridge, will serve as senior director of the merged company. 

George Smith Partners, a multifamily financier founded in 1992, has arranged $60 billion in debt and equity deals, with more than $3.5 billion in loans per year, according to its website. More than half its loans are outside the state.

In 2022, Century City-based AXCS Capital, led by Evan Kinne and Ed Steffelin, acquired George Smith for undisclosed terms. 

Company founder George Smith, dubbed the “godfather” of real estate finance in Los Angeles, died in 2005. His annual real estate luncheon at the Century Plaza Hotel drew as many as 1,500 guests, and was called the “networking event of the year.”

David Rifkind, one of four partners to found George Smith Partners, died in 2017 at 51.

AXCS Capital, founded a few months earlier, billed itself as “a technology company redefining how capital advisory services are delivered in commercial real estate financing transactions,” according to its website.

The firm lists the former office of George Smith Partners and a second office in Anacortes, Washington, 80 miles north of Seattle.

— Dana Bartholomew

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The post George Smith acquires Clearwater Capital for C-PACE expertise appeared first on The Real Deal.

Jack Nourafshan, CEO of Los Angeles-based Reliable Properties, is the buyer that took home a $36 million mansion in Beverly Hills from the daughter of a former Uzbekistan president, The Real Deal has learned. 

Chelsea View, a limited liability company controlled by Nourafshan, bought the property, according to state business and property records. 

Lola Karimova-Tillyaeva, the daughter of former Uzbekistan President Islam Karimov and her husband, Timur Tillyaev, sold the two-story mansion at 900 North Crescent Drive earlier this month. The home was developed by famous spec home builder Mohamed Hadid. 

Drew Fenton at Carolwood Estates brokered the deal on behalf of the seller. Broker Lea Porter of The Beverly Hills Estates represented the buyer along with Zac Mostame of Carolwood Estates.

Nourafshan bought the property using a $26.1 million mortgage from Deutsche Bank, according to loan documents. The mortgage has an adjustable rate, meaning it fluctuates based on the U.S. Treasury Index. 

Reliable Properties mostly builds multifamily properties and was one of the largest developers in L.A. in 2020, according to TRD data. The firm also owns a number of retail properties. 

Nourafshan’s new home includes a 15,000-square-foot basement with a ballroom that can seat 250, a Turkish-style bath and a 50-seat movie theater. It also has a 60-foot-long infinity pool. 

The home was first on the market for $58 million in 2021. 

The post Reliable Properties CEO is buyer in $36M Beverly Hills mansion deal appeared first on The Real Deal.