NantWorks, the biotech holding company run by Los Angeles-based billionaire Patrick Soon-Shiong, has bought another El Segundo office building, boosting its portfolio of office, land and data centers in the South Bay city, The Real Deal has learned. 

The firm paid $25 million for 1940 East Mariposa Avenue, a roughly 84,000-square-foot building, according to property records filed with L.A. County. The deal came out to about $294 per square foot. 

Montana Avenue Capital Partners sold the property at a 5 percent discount compared to the $26.4 million it bought the building for in 2020, records show. Montana Avenue did not respond to a request for comment. 

Montana Avenue also held a $28.75 million loan from New York-based Amherst Capital Management on the property, records show, which was used to substantially renovate the building last year.

When the building was put up for sale last year, it was 50 percent leased, according to marketing materials from Colliers, which held the listing. 

NantWorks has bought at least five office buildings and data centers in El Segundo and Redondo Beach over the last six years, spending at least $244 million. On most deals, NantWorks did not obtain financing, records show. 

But office prices have shifted since NantWorks’ first forays into the asset class. 

In 2021, the firm bought a 52,000-square-foot office building at 601 North Nash Street in El Segundo for $52 million, or roughly $1,000 a square foot.

The typical office buyer in Los Angeles has shifted from institutional to private wealth, those who are likely to pay in all cash or use private money lenders, according to commercial agents. And with the prevalence of remote work and a dearth of capital to finance office acquisitions, prices for offices have begun to plummet. 

Transactions have dipped, too. Investors spent $2.5 billion buying offices across L.A. last year, down 51 percent from 2022 and 63 percent from 2019, according to Newmark. 

The post Patrick Soon-Shiong’s NantWorks buys another El Segundo building appeared first on The Real Deal.

Cain International has scored a $2 billion financing package led by JP Morgan for a 17.5-acre luxury megaproject now under construction in Beverly Hills.

The London-based developer, which is the majority partner in the deal, landed the loans for their One Beverly Hills project at 9850, 9876, 9900 and 9988 Wilshire Boulevard, Bloomberg reported.

The $2 billion project, approved in 2021 for a triangular site between Wilshire and Santa Monica boulevards next to the Los Angeles Country Club, will link the Waldorf Astoria and a restored Beverly Hilton hotel with the first Aman luxury hotel on the West Coast.

The site, once occupied by a Robinsons-May department store and a gas station, will contain up to 200 luxury condominiums across two towers of up to 32 stories, surrounded by eight acres of botanical gardens and water features. It will also contain a retail pavilion and conference center.

The Switzerland-based Aman will operate the 10-story, 42-room hotel and 37-unit hotel-branded condo complex, a 100,000-square-foot private club, spa and restaurant, plus Aman-branded condos next to the Beverly Hilton.

Other partners in the project include Alagem Capital Group, Todd Boehly’s Eldridge Industries, based in Greenwich, Conn., and Vlad Doronin’s OKO Group, based in Miami.

The financing deal was led by a $500 million senior loan from New York-based JP Morgan, according to Bloomberg. The remaining lenders behind $1.5 billion in loans were not disclosed.

The new loans replace and supplement $500 million secured in 2021 from Aareal Capital and Goldman Sachs Group, both based in New York.

The deal comes as many banks have stepped back from commercial real estate, with higher interest rates and construction costs raising the risk of loan defaults, and reduced profitability for lenders.

“We’re hopeful we’ve gotten through the worst of the rate rises and that we’ll see rates going our way during the course of this project,” Jonathan Goldstein, CEO of Cain International, told Bloomberg. “It’s best to keep the momentum going on a site that’s unique like this.” 

The money will help pay the cost of renovations at the Beverly Hilton, owned by Cain, Eldridge and Alagem. The hotel, which opened in 1955, hosts such events as the Milken Institute’s annual global conference and the Golden Globe Awards.

A groundbreaking ceremony for One Beverly Hills was held last month, nearly two decades after developers first envisioned the luxury project. 

The land passed through a series of owners, including Christian and Nick Candy, Carlos Slim and Dalian Wanda Group, before the current partners bought the site in 2018 for $445 million.

— Dana Bartholomew

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The post Cain secures $2B for One Beverly Hills megaproject appeared first on The Real Deal.

Gemdale USA, the domestic arm of China-based investment firm Gemdale Corporation, is looking to offload an office campus in Calabasas for just $3 million more than it bought it for in 2021.

The firm has listed Park Calabasas, located at 4500 Park Granada, for $82 million, or roughly $364 per square foot, according to Real Estate Alert. Newmark has the listing. 

Gemdale bought the 225,000-square-foot office campus for $79 million in 2021 from Rising Realty and its partner, Fortress Investment Group. Gemdale USA did not respond to a request for comment. 

It purchased the building using a $55 million loan from Athene Annuity and Life Company, records show. 

Rising and Fortress made a pretty penny off the sale — the duo bought the building for $38 million in 2013 as part of a larger portfolio acquisition. 

And when the two sold it off in 2021, the property was 92 percent leased, mostly to cosmetics company Coty and co-working firm Spaces. 

But according to online listings for the property, the building is currently 75 percent occupied, with about 60,000 square feet up for grabs. 

Though many office owners have put their buildings up for sale, few have shared pricing guidance. Gemdale’s listing is one of a handful that have suggested the building’s value has not creeped up much, if anything, over the last three years.

If the property sells at $82 million, it would trade at a higher price-per-square-foot than many recent deals across Los Angeles. 

In the last few months, Kennedy Wilson sold 400 and 450 North Brand Boulevard in Glendale for $136 per square foot; Carolwood bought the AON Center, a Downtown L.A. office tower, for about $134 a square foot, and; Harbor Associates bought 1640 South Sepulveda Boulevard in Westwood for $271 a foot.

The post Gemdale Lists Calabasas office campus for $82M appeared first on The Real Deal.

A year after Rihanna paid $21 million for a 40th-floor penthouse in Century City, the pop star has put it on the market for $24.95 million.

The billionaire businesswoman, born Robyn Rihanna Fenty in Barbados, listed the 9,300-square-foot penthouse close to the top of The Century at 1 West Century Drive, according to Mansion Global and the Robb Report.

Rihanna bought the condominium through a trust last March for $21 million. 

The seller, via a trust, was Nick Molnar, billionaire co-founder of tech company Afterpay, who originally sought $28 million. He’d bought the pad from Matthew Perry in 2021 for $21.6 million. The “Friends” star, who died in October at 54, bought it in 2017 for $20 million.

Rihanna reportedly never moved into her pricey penthouse and has tried to unload the place off-market for the past few months, according to Robb. Current listings reveal staged interiors.

During his four-year ownership, Perry revamped it with architect Scott Joyce and interior designer L.M. Pagano.

The four-bedroom, seven-bathroom luxury penthouse has floor-to-ceiling windows with L.A. skyline views.

A private elevator opens into the condo’s entrance. Hardwood floors flow into the dining room, which is served by an all-white kitchen with marble countertops, dual islands and top appliances.

The condo has a soundproof movie theater with velour couches and a master suite equipped with a curved bedroom, dual closets, dual bathrooms and a private lounge. 

Its most impressive features may be its four separate outdoor terraces, which face north, south, east and west with panoramic views of the Pacific Ocean, Downtown Los Angeles and Mount Baldy.

Notable residents at The Century include Denzel Washington and reality TV stars Terry and Heather Dubrow. Then there’s Candy Spelling, whose famed two-floor penthouse lies just above Rihanna’s on the 41st and 42nd floors of the building.

Completed in 2010 and designed by Robert A.M. Stern Architects, the oval highrise on 4 acres is a landmark of the Century City skyline.

Rihanna’s penthouse includes $8,814 in monthly HOA dues, which pay for four parking spots in its underground garage, 24/7 concierge and security guards, access to an outdoor swimming pool and gardens, onsite storage facilities, an in-house restaurant and conference rooms.

Rihanna, who owns a smaller condo at The Century, considers her main home a mansion above Beverly Hills she bought in 2021 for $14 million, according to Robb.

The singer also owns a vacation home in Barbados and a condo along the Wilshire Corridor in L.A. In 2018, a stalker broke into Rihanna’s Hollywood Hills home, which she later listed as a rental. She was one of several victims of a burglary ring active years ago.

According to Forbes, the “We Found Love” hitmaker is now the world’s richest female musician, with a net worth of $1.4 billion.

— Dana Bartholomew

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The post Rihanna to flip Century City penthouse once owned by Matthew Perry appeared first on The Real Deal.

The Beverly Hills-based Altman Brothers Team was dubbed Douglas Elliman’s top large team for sales volume and gross commission income in the nation, according to a press release from the residential brokerage. The team was also named to Elliman’s “Billion Dollar Club” for the third consecutive year. 

The Ellie Awards honor the top Elliman agents each year and many top performers were based in Southern California, according to the release. 

“In the face of financial and market headwinds across the industry, Douglas Elliman agents persevered and prevailed,” Howard Lorber, Douglas Elliman CEO, said in a statement. 

In addition to the Altman Brothers, Beverly Hills-based Ernie Carswell and Associates was named the eighth-best large team in the nation. There was no mention of the Altmans’ “Million Dollar Listing” co-star Josh Flagg, who recently left Elliman for Compass. 

The Newport Beach-based John Stanaland Group was the 10-best medium team by volume and the 11th by gross commission income in the country, as well as the top team by commissions in the state. The Shevin Team from Calabasas was the third-highest small team by volume nationwide, and top in the state. 

Beverly Hills-based agent and former MTV News personality Juliette Hohnen was the top individual California agent by volume and commission and the 17th best nationwide by volume, as well as 18th by commission. Fellow Beverly Hills agent Chad Lund was second in California and also cracked the top 25 nationwide at the 22nd spot for volume. 

The Altman Brothers Team also dominated several other Ellie Awards categories. They were the top large team in California by transactions, and were the top for rentals, based on both commissions and transactions. Brentwood agent Kevin Krakower, formerly a rapper with a song on the “Good Burger” soundtrack, was the top individual rental agent by commission and volume in the state. 

The Altmans also won the Pinnacle Club Award, which goes to California agents and teams who made more than $1 million in 2023. Carswell, Hohnen, Shevin, Stanaland and Lund also made that list. In Beverly Hills, Heather & Learka, The Rachelle Rosten and Kelly deLaat Team, The Scrocco and Isaacs Team and The Tracy Tutor team all made the Pinnacle Club as well. 

Orange County-based The Brad Feldman Group, Pasadena-based Holcomb Durkovic Group, Coronado-based Olga Lavalle and Maria Garate-Lavalle, and L.A.-based Solomon Property Group, all hit Pinnacle status as well. 

The John Stanaland Group was named top team in California by commission in the medium team category followed by the Solomon Property Group, The Tracy Tutor Team and The Yost Quesada Team in San Diego. The Yost Quesada Team was another California team outside the L.A. market to figure prominently in the Ellie Awards this year, and also make the Pinnacle List.

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The post Altman Brothers dominate state awards at Douglas Elliman bash appeared first on The Real Deal.

State lawmaker Miguel Santiago wants to revive adaptive reuse to house Angelenos. 

Santiago, who represents the California Assembly’s 54th District that includes Los Angeles, Commerce, Montebello and Vernon, has recently introduced the bills AB 2909 and AB 2910 which would enable conversion of vacant office buildings into residential housing citywide. He’s the latest advocate of the strategy, arguing it’s a timely solution in a market with an oversupply of office space and shortage of residential housing. 

The idea of adaptive reuse isn’t new. It has figured as a potential solution to California’s housing challenges before, with some crediting Los Angeles’ 1999 Adaptive Reuse Ordinance with creating more than 14,000 new units from underused office space.

The Assembly Local Government Committee is expected to review Santiago’s bills next month, according to a statement released by his team.

Santiago, who is the assistant assembly majority leader, also serves on the Arts, Entertainment, Sports and Tourism Committee, the Health Committee and the Utilities & Energy Committee. He is also running in the L.A. City Council election to represent District 14.

Earlier this week, he spoke at a panel hosted by Central City Association of Los Angeles, which has endorsed Santiago’s candidacy in the City Council race.

“AB 2909 expands the Mills Act, an economic incentive program in California for the restoration and preservation of qualified historic buildings by private property owners, to incentivize the conversion of commercial buildings to residential uses,” Santiago said at the virtual event on March 12. “Specifically, the bill would make buildings that are at least 30 years old and located in commercial zones eligible for Mills Act contracts and require that property tax savings be reinvested in retrofitting and repurposing existing buildings to create new residential rental units.”

L.A. City Councilwoman Nithya Raman, who also spoke at the CCA event, is another lawmaker who advocates for the new bills, citing both the housing shortage and environmental concerns.

“The adaptive reuse ordinance that will now be coming before the council is going to be an update of the previous ordinance. It will apply citywide instead of just the downtown area — it will actually take some of those same lessons and apply it citywide,” she said. “So adaptive reuse to me is both a smart strategy in trying to address a new way of people going to the office and using office spaces, but also a way of addressing some of the environmental concerns that come from large construction projects.”

Not everyone is convinced that the financials behind adaptive reuse projects automatically make sense for developers. One study found that only 30 percent of the office buildings surveyed across the U.S. and Canada were eligible for conversion.

“Unfortunately today, there are very few cases in which that math equation is working,” said Beatrice Jsu, principal at BCH Group. “That’s what as a developer and investor what many are watching closely, because it does seem to make sense, but it hasn’t been unlocked yet.”

The post State Lawmaker Miguel Santiago looks to adaptive reuse for LA housing appeared first on The Real Deal.

Albert Pujols has sold his 9,200-square-foot mansion in Irvine’s Shady Canyon for $8.8 million, after initially asking $9.98 million.

The retired first baseman and 11-time MLB All-Star sold the Mediterranean-style villa at 25 Cactus, in gated Shady Canyon, Realtor.com reported. The buyer was undisclosed.

The slugger known as “The Machine” bought the five-bedroom, eight-bathroom house in 2012 for $5.55 million after he signed a 10-year, $240 million contract with the Los Angeles Angels.

Pujols initially put the L-shaped mansion on the market in 2016 for $7.75 million, but it never sold, according to Realtor.com.

He then listed the half-acre estate in January last year for $9.98 million and found a buyer that didn’t close the deal, according to Zillow.

The property was relisted and removed for that price in March, June and August, with a contingent deal in October, then removed in February at $9.98 million. It sold on March 5 in an apparent off-market deal for $1.18 million less.

The two-story, red-tiled mansion, built in 2010, has a double-height foyer with a curved wooden staircase and white tiled floors. There’s a luxury kitchen, multiple living rooms, a formal dining room and a laundry room.

The home comes with two offices, a movie theater, a wet bar and a meditation room. There’s also a bonus room that could be turned into a wine cellar, kid’s playroom or home gym, according to Realtor.com.

The kitchen has a marble center island, wood cabinets, a walk-in pantry and a breakfast nook. A formal dining room has a coffered ceiling and doors that open to the backyard. Sitting areas have stone fireplaces, beamed ceilings and wooden shutters.

The master bedroom has a wall of windows, a spa-style bathroom with a center tub, two walk-in closets and a laundry room.

Outside, there’s a resort-style pool with a Baja step, a rock slide grotto and a waterfall, plus a Jacuzzi, fire pit and patios surrounded by gardens, with a four-car garage. The monthly HOA fee is $725.

Brokers Charisse Okamoto and Carrie English of Caliber Real Estate held the listing.

Shady Canyon features 300 homes on nearly 1,100 acres. The large lots coupled with a sense of privacy has prompted athletes, executives and others to call Shady Canyon home, including best-selling author Dean Koontz and Alteryx Executive Chairman Dean Stoecker.

Pujols, a native of the Dominican Republic, was drafted by the St. Louis Cardinals in 1999, and went on to play for the Los Angeles Angels of Anaheim and the L.A. Dodgers before retiring as a Cardinal in 2022, having won two World Series, two Golden Glove Awards and socked 703 home runs.

— Dana Bartholomew

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The post Slugger Albert Pujols sells house in Irvine’s Shady Canyon for $8.8M appeared first on The Real Deal.

In Downtown Los Angeles, one out of four offices sits empty. But landlords have come up with a sweetener to help draw tenants back to their cubicles: ground-floor retail.

Downtown property owners and leasing experts at Bisnow’s Downtown Los Angeles State of the Market confab at the AON Center looked to the power of shops and restaurants to lure workers back to the office, Bisnow reported.

“You’re competing against the return to work,” Douglas Brown, vice president of leasing at Lincoln Property in Dallas, told the crowd. 

“You need to offer amenities, you need to offer an experience,” he said. “Something that’s in your building. That’s going to get people excited. That’s going to make that main decision-maker believe that this is going to help get his people back in the office.”

The retail presence along the sidewalk is “hugely important” to the success of office buildings, Brown told attendees. It’s also something that speakers said contributes to the successful rebound of Downtown.

In central Downtown L.A., office vacancy was 26 percent in December, according to Cushman & Wakefield, following a broad shift to hybrid and remote work. Offices in non-central Downtown were 33 percent vacant.

The office exodus in Los Angeles and nationwide has led to plummeting commercial valuations, rising defaults and worsening traffic for local businesses.

Recent L.A. offices have traded for a 50 to 60 percent discount, with prices as low as $130 per square foot, setting new floors in some submarkets, according to The Real Deal.

Downtown L.A. has become a graveyard for Class A offices. In December, Shorenstein sold a Downtown tower to Carolwood for $147.8 million, or $134 a square foot. Some industry insiders have cautioned buyers that towers in the neighborhood will never return to healthy occupancy.

“I do think it’s very important to understand that you have to give people a reason to want to come to work outside of their office,” Carolwood principal Andrew Shanfeld told the Bisnow crowd.

Shanfeld and his Carolwood partner, Adam Rubin, spoke about the food retailers they are bringing to the ground floor of the tower, plus upgrades to the gym and a new spa — all aimed at “mak[ing] your life a lot easier at work.” 

Occupied storefronts mean more feet on the street, which could lead to more dollars spent — and a widespread feeling of vibrancy and safety for those traversing those streets. 

At a discussion panel on Downtown L.A.’s office struggles sponsored by The Real Deal in September, one landlord said “a turnaround may require the government to clean up the streets and make Downtown safe.”

Though office workers haven’t returned in full to Downtown, it may be on the upswing.

In a January survey of Downtown L.A. residents, denizens reported improvements in homelessness, crime, cleanliness and transportation compared to last year.

Brown said some landlords will need to accept some losses on the retail front in order to create an atmosphere that’s inviting to workers. That may mean property owners offering subsidies to  restaurants or other fun tenants in order to create a desirable building. 

“You need to be taken out of that commodity office bucket and separate yourself from the rest of the competition,” Brown said.

Justin Weiss, a vice president at brokerage Kennedy Wilson, said a quarter of a century ago, when Downtown began to see loft conversions and a flood of middle-income office workers, “exciting short-term tenants” helped build interest in Downtown.

“Rather than waiting for that national credit tenant, or that tenant that you can underwrite, that can securitize the entire term or even half of the term, let’s work on bringing in temporary tenants on a month-to-month basis, six-month leases, one-year leases, to activate the space,” Weiss said.

— Dana Bartholomew

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The post In Downtown LA, back-to-office decision involves retail attractions appeared first on The Real Deal.

Pacific Equity Partners has scored a $135 million loan to refinance Cross Creek Ranch, a large Malibu retail and office development slated to open this year. 

Torchlight Investors provided the five-year loan, according to property records and an announcement from JLL, which arranged the financing. Terms of the deal were not disclosed.

The 122,000-square-foot property, at 23465 Civic Center Way, is about 60 percent retail and 40 percent office space, according to JLL. The loan values the property at upwards of $1,200 a square foot. 

According to the website for the development, it’s set to open this year, though no tenants have been announced yet. Jay Luchs, a luxury retail broker at Newmark who is involved in the project, plans to open his own business at a 600-square-foot location at the property, CoStar reported last year. 

The loan replaces $130 million in construction financing, provided by Related Fund Management in 2021, records show. 

The property is set to be the largest development approved by the beachside city since it was formally incorporated in 1991. It will sit right next to Malibu Country Mart, owned by Koss Real Estate, and Malibu Village. 

Stan Kroenke, the billionaire owner of the Los Angeles Rams, bought Malibu Village in June for $81.5 million, or about $1,600 per square foot. 

The post Pacific Equity scores $135M refi on Malibu retail-office project appeared first on The Real Deal.

Los Angeles apartment rents, which fell for four months at the end of last year, have rebounded.

Average asking rents in Los Angeles rose 0.4 percent on a per-square-foot basis in February, following 0.2 percent growth in January, reversing the four-month decline, CoStar News reported.

Nationally, rents rose for three consecutive months since late last year. In February, they were up 0.8 percent year-over-year, and 0.3 percent from January.

The turnaround for rents in Los Angeles was attributed to rent give-aways. Spurred by modest renter demand, local property managers relied more heavily in recent months on concessions, according to CoStar.

Some 27 percent of multifamily properties with more than 25 units offered concessions last month — the city’s highest percentage since the first half of 2021.

The highest rent growth in Los Angeles occurred in neighborhoods with below-average rents, below-average vacancy and sluggish development, according to CoStar.

Apartment rents in North Hills/Panorama City and South Los Angeles grew between 2 percent and 2.5 percent, with vacancies between 2.5 percent and 3.5 percent — well below average in  Los Angeles County. Both regions have had modest construction for decades. 

At the same time, rents in Downtown Los Angeles fell 2.5 percent, with a vacancy of 10 percent, the highest in the county. Over the past 12 months, the area had more than 2,000 new apartments.

CoStar expected Los Angeles to see rent growth accelerate this year, with apartment vacancy expected to fall this summer, and anticipated renter demand better matching “supply additions” compared to last year. 

In Orange County, overall rents rose 2.2 percent last year, while falling 2.6 percent across L.A. County, according to Apartment List.

A University of Southern California study in December predicted apartment rents across Southern California would rise up to 4 percent through 2025, with a slightly above-average rent increase in Orange County, where the typical asking rent would hit a record $2,800 a month. 

— Dana Bartholomew

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The post Apartment rents in LA tick up this year, reversing four-month decline appeared first on The Real Deal.

Progressive L.A. City Councilwoman Nithya Raman has beat self-proclaimed realist candidate Eric Weaver to win back her District 4 seat, avoiding a November runoff.

The advocate for renters rights and homeless residents took 50.64 percent of the vote with 32,400 ballots to Weaver’s 38.62 percent and 24,730 votes, according to a 4 p.m. Thursday tally by the Los Angeles Registrar Recorder/County Clerk. Her opponent conceded the race.

ABC/7 called the election in favor of Raman, a first-term councilmember who faced a challenge from Weaver and Lev Baronian, who garnered 10.74 percent of the vote.

The main issues were homelessness and crime in a district that stretches from Koreatown through the Hollywood Hills to North Hollywood. 

Raman was elected in 2020, after unseating incumbent David Ryu, who had served on the council for five years.

Weaver, a strong contender backed by real estate interests and the police union, issued a concession statement Thursday congratulating Raman on her win. 

“First and foremost, I want to congratulate Councilmember Raman,” Weaver wrote to his supporters. “She ran an incredibly well-organized, hard-fought campaign. She stayed true to her core values and principles, even when that elicited criticism. She stood firm in her beliefs and I admire that. Councilmember Raman also never ducked an opportunity to debate, even on unfriendly turf. While we agreed on the important issues facing our city, we often have disagreed on the solutions, but we were never disagreeable. I congratulate her on a terrific victory.”

Raman told Eyewitness News the results make her “proud to be an Angeleno” because voters rejected the heavy spending by Weaver and the unions backing him. She said she understands how voters feel about homelessness.

“There is a lot of frustration and anger out there and to be honest, I feel that same frustration,” Raman said. “But to me, what this vote, what this outcome represents, is that Angelenos want to respond to homelessness in the right way. By offering housing, by offering services, by doing work that can really move people indoors and off the streets — not just shuffle them from sidewalk to sidewalk as the city has been doing for so long.”

Under Mayor Karen Bass, the city launched the Inside Safe program to clear encampments and connect the homeless with services.

The first site cleared, at the 101 Freeway and Cahuenga Boulevard in Hollywood, was in Raman’s district. It has had to be cleared three times, including last week when 15 people were found living there. A fence now surrounds the site.

“This encampment has repopulated and we go back and we offer people housing and services and we get them indoors again,” Raman said.

The race highlighted a pushback against Raman’s progressive policies and approach to homelessness, renters’ rights and environmental regulations, including criticism from the real estate industry.

Weaver, a deputy city attorney in Los Angeles who lives in a studio apartment in Los Feliz with his fiancé, positioned himself as the realist candidate versus Raman’s idealistic advocacy.

Raman’s policies had ramifications on the real estate industry beyond her district. She worked with Bass to pass an ordinance requiring new buildings to be all-electric in order to make Los Angeles the “largest American city to make all future buildings carbon-free.”

She also acknowledged a bait-and-switch on the Measure ULA commercial and residential transfer tax, saying, “It was marketed as a mansion tax, and that’s what made it easy for voters to get behind.”

Weaver’s priorities included “building more housing” in addition to addressing the homelessness crisis and public safety, a message that resonated with landlords, developers and brokers.

— Dana Bartholomew

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The post Renter advocate Nithya Raman wins second term on LA City Council appeared first on The Real Deal.

Developer J.J. Abraham has moved forward with plans to replace a two-story strip mall in Beverly Grove with an eight-story apartment building.

An affiliate led by Abraham, founder of the Newport Beach-based Abraham Companies, won approval from the Los Angeles City Planning Commission to replace the Beverly Plaza Center with a 126-unit complex at 400 South San Vicente Boulevard, City News Service reported via the Daily News.

The Abraham Companies and Oklahoma Rock Holdings, tied to MidFirst Bank in Oklahoma City, bought the 0.77-acre property in April 2022 for $26 million.

The Abraham-led affiliate, 400 S. Vicente LLC, filed plans to build the eight-story luxury complex with 126 apartments and 11,615 square feet of ground-floor shops and restaurants. Three levels of underground parking would serve 153 cars and 109 bicycles.

The complex would include lounge areas, a fitness center, an outdoor pool and 6,200 square feet of open space dotted by 32 new trees.

The developer used density bonus incentives to permit a larger building than zoning rules allow in exchange for 14 apartments set aside as affordable for very-low income households.

The complex, designed by Steinberg Hart, includes floor-to-ceiling windows between long eaves, with balconies tucked inside alcoves, according to a rendering featured by Urbanize Los Angeles.

The 17,200-square-foot Beverly Plaza Center, built in the 1980s, would be demolished. 

The strip mall at South San Vicente and La Cienega Boulevard is home to a Persian restaurant, Thai restaurant and an Indian restaurant, plus a nail salon and alterations shop. It sits two blocks from the Beverly Center and across the street from a Trader Joe’s grocery store.

In response to safety concerns voiced by neighbors, including the Beverly Wilshire Homes Association, Abraham agreed to include fencing, security cameras and courtesy patrols. 

The developer upgraded driveway plans to reduce incoming and exiting cars, plus extend landscape and retail designs and move the rooftop pool further away from homes on Fourth Street.

Abraham also agreed to not sell alcohol and limit outdoor noise on the eighth floor by 10 p.m. On the commercial floors, alcohol sales would be permitted until 11 p.m., with indoor alcohol sales until midnight.

Two strip mall business tenants opposed the project. The property owners inherited 14 different leases, including two yet to be resolved. The owners of India’s Grill claim conversations have not gone well, saying they fear the project will negatively impact their families and livelihood.

The project will now be reviewed by the City Council’s Planning and Land Use Management Committee at an unknown date.

The Abraham Companies has been involved in more than $12 billion in real estate, including the  more than 12,000 luxury and mixed-use apartments across the U.S. and Mexico, according to its website. 

— Dana Bartholomew

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The post J.J. Abraham moves ahead on luxury apartments in LA’s Beverly Grove appeared first on The Real Deal.

Just months after taking over more than 20 properties across the Westside Los Angeles market from Neil Shekhter, Madison Realty Capital wasted no time planning its own developments on the sites. 

New York-based Madison has filed plans to switch up one of Shekhter’s former projects at 6401 Wilshire Boulevard in Beverly Grove, according to city planning documents. The applicant is listed as Zachary Kadden, Madison’s head of development. 

The firm plans to reconfigure the 16-story apartment building to add 65 units to the property, bringing it up to 177 units on top of 5,100 of existing ground-floor retail. Madison did not respond to a request for comment.

Madison will not expand out the building, which has been renamed Sentral, but saw a way to rearrange the floor plans to add more apartments, according to a source familiar with the projects. Urbanize first reported on the plans. 

In December, Shekhter’s firm WS Communities signed deeds-in-lieu on 28 multifamily buildings and development sites across L.A. County, in exchange for relieving about $1.1 billion in unpaid debt. Madison acquired the bulk of the portfolio. 

Hankey Capital, which also took over some of Shekhter’s properties through deeds-in-lieu, has helped refinance the Wilshire site, plus seven other developments, through a $250 million loan, according to documents filed with Los Angeles County. 

Shekhter bought the site for $38 million in 2019, records show, and put the property up as collateral on a $345 million construction loan from Axos Bank. Shekhter then refinanced with a $175 million loan from Hankey and Madison. 

Shekhter finished construction on the apartments and scored a certificate of occupancy last year, according to records from the Department of Building and Safety. 

Apartments at Sentral are currently available for rent, starting at $3,815 a month for a studio. When Shekhter completed the project, monthly rents were $2,336 for a studio. 

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Over the last three years, Los Angeles has led the world in commercial property deals, despite a slowdown in global spending.

More than $96 billion of commercial property deals of $5 million or more, not including land and entity-level transactions, took place in Los Angeles from 2021 through last year, CoStar News reported, citing a global study from JLL.

After L.A. in the top spot, Dallas followed with $91.2 billion in deals, then New York with $80.7 billion and London at $77.9 billion. 

Paris ranked sixth and Phoenix seventh, JLL’s Global Real Estate Perspective report found.

“The cities have emerged as top global markets for direct investments due to factors such as thriving industries, strategic locations, favorable business environments and economic growth, attracting significant investments,” JLL said in an email to CoStar News.

It’s not clear if JLL defined Los Angeles as a city, county or metropolitan region stretching out to the Inland Empire, a growing hub for logistics warehouses.

Last year, global commercial property deals totaled $594 billion, a 44 percent drop from 2022 — the lowest direct investment, including cross-border transactions, in more than 10 years, according to JLL.

Global commercial spending dropped because higher interest rates and capital costs led to a gap between what sellers sought for properties and what buyers were willing to pay, JLL said.

At the same time, capital raising for closed-end funds that make real estate purchases fell to $142 billion, a 28 percent drop from to 2022, according to the brokerage.

This year, market conditions have stabilized, with some property sectors showing momentum, according to the Chicago-based firm.

While “pricing and liquidity for office assets are under pressure, amid weak global sentiment from investors and lenders,” interest in logistics, residential and select alternative growth sectors remains strong, according to the report. 

JLL plans to discuss cross-border investment during a panel in France this week at Mipim, the world’s biggest annual real estate event.

— Dana Bartholomew

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XLD Group has hit a snag on a $130 million loan linked to the Los Angeles Airport Marriott hotel next to LAX.

The loan to the Pasadena-based unit of Sichuan Xinglida Group Enterprises, based in China, was put on a servicer’s watchlist for the hotel at 5855 West Century Boulevard, in Westchester, the Commercial Observer reported, citing an alert from Trepp.

The commercial mortgage-backed securities loan was placed on the watchlist after a drop in debt service coverage ratio for the 1,004-room hotel, built in 1972, according to the alert. 

The ratio fell because of higher operating and capital costs, plus a rise in departmental room expenses and food and beverage costs, Trepp said.

The change in status follows a modification needed to bring the loan current in 2022 after it became delinquent for at least a year and a half, according to Trepp. New York-based Ladder Capital led the financing for the hotel in 2017.

XLD Group, led by Jun Zhang, bought the hotel in December 2014 for $135.4 million, or $134,861 per room, at a time when Chinese investments poured into the L.A. real estate market.

It was the biggest hotel sale of the year in Los Angeles County,  according to the Los Angeles Times. A year earlier, XLD bought the 487-room, 17-story Torrance Marriott South Bay hotel in Torrance for $74 million, or $151,951 per room.

In April 2021, the appraised value for the 18-story hotel near LAX fell to $182 million, a nearly 40 percent drop from the $301 million valuation made at securitization, according to Trepp.

Occupancy at the Los Angeles Airport Marriott was 85.9 percent last year, compared to 83.8 percent in 2022.

— Dana Bartholomew

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Carson Hospitality to build 111-room Marriott hotel

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Wanted: renter willing to shell out $250,000 a month for a 13,000-square-foot mansion in Newport Beach’s Newport Coast.

Baja Washington, a locally based limited liability company, has listed the never-before-lived-in-house at 7 Clear Water in gated Crystal Cove, the Orange County Register reported.

The newly built Mediterranean-style estate is among the most expensive month-to-month listings in OC.

“You don’t typically see these brand-new mansions, no matter what market,” broker Josh Altman of Douglas Elliman Real Estate, whose firm holds the listing for the estate, told the Register. “Whether it’s L.A. or Newport, this is as topnotch as you will see: the best of the best.”

“Topnotch” means a three-story hilltop mansion with sweeping views of the Pacific Ocean.

The seven-bedroom, 11-bathroom house sits on two-thirds of an acre, and comes with a circular wine cellar, state-of-the-art theater and spa with a sauna, steam room and cold plunge pool.

The dining room has a stocked wine wall. The living room has a 30-foot glass wall that slides open to the backyard’s double swimming pools, a barbecue center, fireplace and an 80-inch TV.

The basement level contains a furnished bar, lounge and billiards room.

The lease listing seeks what Altman estimates is the monthly maintenance cost of a $70 million home. The owner, who declined to comment, may also consider a short-term lease, such as three months in the summer.

Baja Washington bought the lot in 2016 for $7.1 million.

There are now 11 coastal mansions for rent in Newport Beach, Laguna Beach and Dana Point for $100,000 a month or more, with 7 Clear Water seeking the highest rent, according to Homes.com.

Last year, there was one closed lease listing at or above $100,000, which asked $350,000 a month but leased for $150,000, according to Steven Thomas, chief economist at Reports on Housing. 

No such rental contracts closed between 2020 and 2022. And in 2019, only one went for $195,000 a month. Not all mansion rentals are listed on the open market or registered in public records, as many lease deals aren’t public. 

Many mansion owners can be open to renting, Thomas said.

“What I’ve noticed in looking at all of the high-cost luxury leases is that in order to get those high amounts, many are actually open to renting it out for a month or two on a short-term rental basis,” Thomas told the Register. “A lot of these are furnished, which means they probably rent these out and then come back and live in them.”

Such leases are not for everyone.

“This is a big-time property, so the tenant is just as important as the money,” Altman added. “The type of person who would rent a house like this is going to easily have a worth of more than $100 million.”

— Dana Bartholomew

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Los Angeles

Newport Beach ultra luxe home market sees upswing in asks and sales

Los Angeles

$50M listing joins top-of-the-market club in OC’s Newport Coast

Los Angeles

Newport Coast mansion with $55M price tag joins OC’s ascending trend

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Investors Mark Cirlin and Man Li-Yeh have parted with a Malibu estate for $38.45 million, marking the priciest home sale in Los Angeles County so far this year. 

The property, at 33740 Pacific Coast Highway, is a Cape Cod-style house that has spent time on and off the market since 2017. It was originally listed for $57.5 million, according to Zillow. The oceanfront Malibu site once contained the home of Marta Kauffman, co-creator of TV show “Friends,” and her husband, composer Michael Skloff. 

Steven Schaefer and Jay Luchs of Newmark Residential and Gabi Sharron of Compass represented the buyer, while Chris Cortazzo of Compass represented the seller.

Cirlin and Man bought the property for $10.7 million in 2007 and tore down Kauffman and Skloff’s home.

What came out of the rebuilding process was a 4,400-square-foot estate designed by architect Doug Burdge. The property sits on 1.7 acres of “resort-style grounds” that contains an open-air pavilion with a fireplace, an al fresco kitchen with a pizza oven and a sunken lounge area. 

Between the two-story main house and a guesthouse, the property has a total of six bedrooms and seven-and-a-half bathrooms, according to a previous report from the L.A. Times. Last year, the home was offered for rent at $275,000 per month, according to Zillow. 

The deal ranks as the most expensive home sale in Los Angeles County so far this year, according to property records and Zillow. The Malibu sale displaces two $36 million transactions from the top of the rankings. Last month, Lola Karimova-Tillyaeva, the daughter of former Uzbekistan President Islam Karimov, and her husband Timur Tillyaev sold Le Palais, a Mohamed Hadid-developed Beverly Hills mansion. 

The other $36 million transaction involved the estate of screenwriter Rudolph Borchert, who wrote for TV shows such as “Rockford Files” and “CHiPs.” The property in that deal was 28856 Cliffside Drive, a 3,300-square-foot mansion in Malibu.     

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Al Leibovic of Yaya Case LLC aims to replace a car repair shop in North Hollywood with a 100-unit apartment building, according to an application filed with the Los Angeles City Planning Department on March 15.

The property, located at 5554 Case Avenue, was purchased for $4.15 million in January 2023.

Leibovic, a healthcare businessman and the former president of Health Advocates, is associated with several multifamily developments.

The NoHo apartment house will rise six stories after the auto shop’s demolition, according to the Planning Department. The project will take advantage of several incentives, including a 70 percent density bonus and affordable housing incentives specified under Transit Oriented Community (TOC) guidelines with floor area percentage increases up to 50 percent according to Tier 3. 

The proposed plans feature a second-floor patio, a roof deck and gym. The building will include 87 parking spots and 10 extremely low-income units, according to the filing.

Built in 1941, the existing building was last altered in 1975 according to PropertyShark. 

The site is located blocks away from the North Hollywood Metro station and bus stops. It falls into the trendy North Hollywood Arts District, the site of numerous apartment projects.

Trammell Crow, a unit of Dallas-based CBRE Group, and its affiliate, High Street Residential, received a green light from the Los Angeles Planning Commission to build a 2.2 million-square-foot development in North Hollywood last year. The property involves nearly 1,500 homes, offices and retail around a subway terminal.

Trojan Storage, a self-storage company based in Redondo Beach, plans to build a 227,000-square feet self-storage unit with a separate residential component at 7528 North Bellaire Avenue in North Hollywood. 

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Walton Street Capital and Greenlaw Partners have lost a 350,000-square-foot office tower in Orange, after defaulting on $64 million in debt, The Real Deal has learned. 

The firms signed a deed-in-lieu of foreclosure, transferring over 1 City Boulevard West to TPG Real Estate Finance Trust, according to records filed with Orange County. 

By signing the deed-in-lieu, often referred to as handing back the keys, Walton Street and Greenlaw were relieved of $64.2 million in unpaid debt. TPG declined to comment, while Walton Street and Greenlaw did not respond to requests for comment.

Walton Street and Greenlaw became delinquent on the TPG loan in November, according to data from Trepp. TPG originated the loan in 2019 and then packaged it into a collateralized loan obligation. 

The companies bought the property in 2013, as part of a $110 million deal for the building plus an office site in Irvine. Walton Street owned a 95 percent stake in the property, while Greenlaw held the remaining 5 percent. 

Then in 2022, the firms listed the building for sale, with an asking price of $100 million, or $285 per square foot. But the catch — the building was listed as an entirely vacant property. 

The loan from TPG was floating-rate, meaning Walton Street and Greenlaw started struggling with debt payments after the Federal Reserve started hiking rates in 2022. By then, the firms had hit their rate cap of 5.55 percent and were paying monthly debts on an empty building.

Deeds-in-lieu are a common outcome for distressed real estate borrowers, through which an owner will transfer the title on the property and the lender refrains from filing a foreclosure action, which is costly and time-consuming.

And TPG, a frequent real estate lender, has not been afraid to foreclose on non-performing properties. In Los Angeles last month, TPG Real Estate Capital sold a 2.3-acre multifamily development site in Playa del Rey for $56 million, just months after foreclosing on the property. 

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Another Southern California commercial real estate veteran, Greg May, has stepped into the void.

The executive vice president for Newmark in charge of 12 company offices, including Los Angeles, Las Vegas and Phoenix, was let go by the company, Connect CRE and the Commercial Observer reported.

The western region leader will be replaced by Newmark’s L.A. Market Leader Nick DiPaolo, who has been with the New York-based firm since 2021. Neither May, DiPaolo, nor a representative from Newmark could be reached for comment.

May, based in Irvine, had been with Newmark since 2005 but has worked in the commercial real estate industry since the late 1980s, with other leadership roles at CBRE, USAA Real Estate and Transwestern.

He is credited with expanding the SoCal professional brokerage personnel by 250 percent over five years, according to Connect CRE. Among his recruits to Newmark were Kevin Shannon and his capital markets staff, Jay Nugent and Matt Berres. 

He has mentored dozens of brokers while with Newmark, and oversaw more than 300 commercial real estate brokers, according to his LinkedIn page.

His exit is the latest executive shake-up to roil commercial real estate.

This month, office dealmaker Tony Morales stepped down or was pushed out of his job as senior managing director of JLL’s Los Angeles office.

It was a position Morales commanded for 16 years as a broker of real estate leases and a tenant representative for such companies as DirectTV, Disney, William Morris Endeavor, Herbalife, Spotify and Cartoon Network.

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Los Angeles

Veteran LA office tenant rep Tony Morales leaves JLL

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The Daily Dirt: Bob Knakal gets a glowing profile and a pink slip

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JLL eyes layoffs as profits tumble 59%

New York City dealmaker Bob Knakal was abruptly let go of JLL earlier this month after six months at the firm. The highly recognized broker had done $22 billion in deals during his career.

Unidentified sources told the Observer that JLL had bounced Knakal to shift its brokerage strategy away from individual star power toward a more cohesive investment banking approach.

Also, Carl Muhlstein, who had led JLL’s international sales since 2012, slipped out of its Los Angeles office in December to start his own firm. Last month, longtime New York broker Darcy Stacom also left CBRE to launch her own firm.

— Dana Bartholomew

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