These are LA’s most buzzworthy real estate stories in 2021

Josh Flagg, Nile Niami, Mohamed Hadid & Charles Munger (Getty Images, iStock)

Forget all that talk of 2021 as the year of a return to normalcy.

It was not – but LA’s real estate market still managed an abnormally good year overall.

Various bright spots offset a continued weak outlook in the office segment, which bore the brunt of the negative effects of the pandemic, led by the region’s housing market, which set plenty of records, especially at the top. A key corner of the commercial market skyrocketed in the supply of study space, and so did the industrial sector, thanks in part to pandemic-driven logistics demand: Southern California’s industrial market reached nearly $ 3 billion in sales in August, the largest of any market in land, and kept pace at the end of the year.
And along with the bigger trends came lots of only-in-LA drama and revealing industry developments, including a bubbling brokerage move and endless spec battles.

Here we have gathered some of the most lively.

Broker musical chairs

Realtors are the face of the real estate industry, but in LA some of them are also a special kind of celebrity – the beautiful, ambitious, sometimes laborious dealers whose appointments and personal lives fill reality shows and spread into tabloid headlines.

And this year, some of LA’s best realtors – celebrities and non-celebrities – made exuberant career moves. Among them were industrial veterinarian Alan Long, who retired in September to lead a new Avenue 8 team, and Adam Rosenfeld, who took his eight agent team from Compass to The Agency in July.

But no move created nearly as much buzz as Bravo star Josh Flagg’s leap from Rodeo Realty to Douglas Elliman in August. The 36-year-old Flagg can already boast a career that has included more than $ 2 billion in sales, including deals with A-lists, including Adam Levine, Shonda Rhimes and Steve Aoki; he is also something of a real estate show godfather as an original cast member in the hit show “Million Dollar Listing”, which aired for the first time in 2006. So when Flagg abruptly left the Rodeo – a move first reported by The Real Deal – the news sent a particular segment of social media in madness. It also meant a coup for an expanding Elliman and a reunion for Flagg, who joined his fellow “MDL” star Frederik Eklund in the new store.

Crypto bonanza

Of course, crypto has found its way into real estate. In recent years, the exploding digital currency has created a whole new class of millionaires – and in June, The Real Deal portrayed how many of them – including some far-sighted children who bought their first coins in high school – increasingly bought luxury properties across of the country.

LA industry players noticed that.

“We advertise that housing takes crypto,” said star agent Aaron Kirman, “and based on that alone, we’ve had several calls from billionaires in the crypto world that we did not have access to before.”

The Chronicles on Spec Land

It’s been a great year for LA spec developers, who as a group represent some of the industry’s most accomplished, most colorful – and daring – personalities.

In March, perhaps the most cheeky of all, Nile Niami, faced a default notice from Hankey Capital, which had given the developer $ 83 million in loans for “The One.” Six months later, with no certificate of occupancy in place for “the most expensive house in the urban world,” a judge ordered a jurist to take control of the mega-mansion. It prompted Niami to respond by filing for bankruptcy in an attempt to avert an auction. In the midst of this year’s turmoil, the developer also threw another property into Chapter 11 and unloaded a barrage of projects, including two Bel Air mansions and his own 6,000-square-foot house in the Hollywood Hills.

Speaking of bankruptcies, 2021 was more than eventful for Mohamed Hadid, the provider of some of the region’s most controversial projects. One of Hadid’s battles, over the fate of 66 hilltops adjacent to Franklin Canyon Park, has recently taken more turns than an unlikely airport novel.
A precursor to the drama came in January when Hadid’s main foil – lawyer Ronald Richards, who manages an LLC that bought up the developer’s loan with the stated goal of conserving the land – moved to foreclose. Hadid bankrupted the units that own the properties, and in late November – after months of relentless legal quarrels, a mysterious potential Saudi royal buyer and a failed auction – a judge granted control of the disputed land to a trustee – a step , which Richards called “a terrible day for Hadid”, but which the developer’s team actually welcomed.

Meanwhile, another high-profile Hadid property battle over the half-built Strada Vecchia mansion saw a major development in September, when a jury ruled that the developer and an affiliated entity must pay $ 3 million in damages; in December, The Real Deal broke the news that the doomed court-controlled property had finally been sold to a little-known Ventura County construction company, which agreed to tear it down.

Another spec developer, Ardie Tavangarian, managed to sell a $ 83 million project and buy Elon Musk’s properties while still maintaining a relatively low profile.

Industrial gets sexy

Before the pandemic, e-commerce sales accounted for about 10 percent of all retail sales. In the second quarter of 2020, the figure was almost 16 percent – and the “new normal” had just begun. In 2021, among the biggest benefits of the shift was the industrial real estate market, which led to historically low vacancy rates and record prices.

“Industrial is sexy now,” Jerry Sackler, a longtime LA-based industrial broker, said in a Real Deal feature on the trend, released in July.

As a result, commercial brokers have had to adapt by taking on an increasingly sophisticated responsibility and making an effort to find deals. “I have to be a very good detective to find clients,” said one agent. “I have to work to shake that product loose.”

Streamers produce hits – and studio demand

In November, Hackman Capital and its partner Square Mile Capital Management LLC agreed on a landmark deal: as much as $ 1.8 billion for CBS Studio Center in Studio Center. ViacomCBS had been trading the 38-acre plot for a few months, and the deal it eventually landed exceeded insider predictions by about $ 500 million. Earlier in March, Hackman also announced plans to spend $ 1.3 billion on renovating the 25-acre CBS Television City campus in the Fairfax district.

The big moves were evidence of a bigger pattern: a growing demand for study space in the midst of the pandemic, especially as high-flying small-screen content producers like Netflix and Apple TV + continue to topple hit after hit to a global audience that is largely at home. .

Wall Street also noticed this, sending a barrage of institutional-backed cash into the asset class, including a $ 500 million venture formed in November, which was backed by King Street Capital Management and aims to build and acquire up to 750,000 square feet of soundtrack.

Charles in charge

You know him as the longtime top deputy for Warren Buffet, but billionaire investor Charlie Munger is also a passionate architect. Munger has for years donated huge sums of money to universities for new buildings – on condition that the institutions use his designs. But this year, a similar agreement at the University of California, Santa Barbara got an architectural consultant to stop in protest, and the resulting brouhaha became the biggest campus architecture controversy in recent times.

The insulting building was a massive, virtually windowless dormitory inspired by the design of cruise ships, a project that the outgoing advisor called “unsupported from my perspective as an architect, parent and human being.” But the 97-year-old Munger held on to his weapons. In the midst of the controversy, the famous blunt financial legend told The right deal that his design would eventually take off across the country.

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