These Are LA’s Most Buzzworthy Real Estate Stories of 2021
Josh Flagg, Nile Niami, Mohamed Hadid & Charles Munger (Getty Images, iStock)
Forget all the talk about 2021 as the year of return to normal.
It wasn’t – but overall, the LA real estate market had an unusually good year.
Various bright spots offset the persistently lackluster prospects in the office segment, which was bearing the brunt of the negative impact of the pandemic, led by the region’s housing market, which set many records, especially at the top. A key portion of the commercial market soared in studio space deals, as did the industrial sector, thanks in part to pandemic demand for logistics: The Southern California industrial market had sales of nearly $ 3 billion through August, the highest sales of any market in the world Country and maintained the pace until the end of the year.
And along with those bigger trends came tons of LA-only drama and insightful industry developments, including a zippy broker move and endless spec battles.
Here we’ve rounded up some of the most exciting ones.
Mediator of musical chairs
Realtors are the face of the real estate business, but some of them are a special kind of celebrity in LA – the beautiful, ambitious, sometimes breakneck negotiators whose businesses and personal lives fill reality shows and make tabloid headlines.
And this year, some of LA’s top real estate agents – celebrities and non-celebrities – made splashy careers. Among them were industry veteran Alan Long, who retired in September to lead a new Avenue 8 team, and Adam Rosenfeld, who brought his eight-person team from Compass to The Agency in July.
But no move has attracted nearly as much buzz as Bravo star Josh Flagg’s jump from Rodeo Realty to Douglas Elliman in August. Flagg, 36, has a career spanning more than $ 2 billion in sales, including doing business with A-listers like Adam Levine, Shonda Rhimes and Steve Aoki; He’s also something of a godfather to the real estate reality show as the original cast member of the hit show “Million Dollar Listing,” which first aired in 2006. When Flagg abruptly left Rodeo – a move first reported on by The Real Deal – the news broadcast sent a certain segment of social media into a frenzy. It was also a coup for an expanding Elliman and a reunion for Flagg, who joined his “MDL” colleague Frederik Eklund in the new store.
Of course, crypto has found its way into real estate. In recent years, the skyrocketing digital currency has created a whole new class of millionaires – and in June, The Real Deal reported how many of them – including some farsighted kids who bought their first coins in high school – are increasingly buying luxury homes across the world World bought the land.
The actors in the LA industry took notice.
“We are promoting houses that consume crypto,” said star agent Aaron Kirman, “and for that reason alone we have received several calls from billionaires in the crypto world to which we previously had no access.”
The Chronicles of Spec Land
It’s been a full year for LA spec developers, who as a group represent some of the brash, colorful – and daring – personalities in the business.
In March, Nile Niami, perhaps the boldest of them all, was faced with a bankruptcy notice from Hankey Capital that had provided the developer with $ 83 million in loans for “The One.” Six months later, without submitting an occupancy certificate for the “most expensive house in the urban world”, a judge ordered a bailiff to take control of the megavilla. This prompted Niami to respond by filing for bankruptcy to stave off an auction. Amid the turmoil of the year, the developer also tossed another Chapter 11 property and unloaded a flurry of projects including two Bel Air mansions and his own 6,000-square-foot home in the Hollywood Hills.
Speaking of bankruptcies: 2021 was more than eventful for Mohamed Hadid, the supplier of some of the region’s most controversial projects. One of Hadid’s battles for the fate of 66 acres on the hillside next to Franklin Canyon Park has taken more twists and turns than an unlikely airport novel.
A forerunner to the drama came in January when Hadid’s lead actor – attorney Ronald Richards who manages an LLC that bought up the developer’s loans with the stated aim of preserving the land – sought foreclosure. Hadid bankrupted the companies that own the property, and in late November – after months of ceaseless litigation, a mysterious potential Saudi royal buyer, and a failed auction – a judge turned control of the disputed land to a court administrator – a move the Richards did called “a terrible day for Hadid,” which the development team welcomed.
Meanwhile, another high profile Hadid property dispute over the semi-built Strada Vecchia mansion broke out in September when a jury ruled that the developer and an affiliate should pay $ 3 million in damages; In December, The Real Deal spread word that the doomed, court-controlled property had finally been sold to a little-known Ventura County construction company that agreed to demolish it.
Another spec developer, Ardie Tavangarian, managed to sell a project for $ 83 million and buy out Elon Musk’s land while still remaining relatively unremarkable.
Industrial is getting sexy
Before the pandemic, e-commerce sales accounted for around 10 percent of total retail sales. In the second quarter of 2020 it was just under 16 percent – and the “new normal” was only just beginning. One of the biggest beneficiaries of the shift in 2021 was the industrial real estate market, which led to historically low vacancies and record prices.
“Industrial is sexy now,” said Jerry Sackler, longtime LA industrial broker, in a Real Deal feature about the trend that was released in July.
As a result, trade brokers have had to adapt by taking on increasingly sophisticated roles and striving to find business. “I have to be a very good detective to find clients,” said one agent. “I have to work to get rid of this product.”
Streamers produce hits – and studio demand
In November, Hackman Capital and its partner Square Mile Capital Management LLC reached a landmark deal: a whopping $ 1.8 billion for the CBS Studio Center in the Studio Center. ViacomCBS had been buying the 38-acre property for several months, and the deal it eventually hit beat insiders’ projections by about $ 500 million. In early March, Hackman also announced that it would be spending $ 1.3 billion to renovate CBS Television City’s 25-acre campus in the Fairfax District.
The big strides testified to a bigger pattern: an increasing demand for studio space amid the pandemic, especially as soaring small-screen content producers like Netflix and Apple TV + continue to produce hits after hits for a global audience that is largely stuck at home.
Wall Street caught on too, sending a spate of institutionally backed cash into the asset class, including a $ 500 million venture founded in November backed by King Street Capital Management that aims to bring up to 750,000 square feet of soundstage build and acquire.
Charles in charge
You know him as Warren Buffet’s long-term top deputy, but billionaire investor Charlie Munger is also a passionate architect. Munger has been donating massive amounts of money to universities for new buildings for years – on condition that the institutions use his designs. But this year a similar agreement at the University of California, Santa Barbara resulted in an architectural consultant quitting in protest, and the resulting Brouhaha became the biggest campus architecture controversy of recent times.
The offensive building was a massive, practically windowless student dormitory inspired by cruise ship design, a project the resigning consultant described as “unbearable from my perspective as an architect, parent, and person.” But 97-year-old Munger stuck to his weapons. Amid the controversy, famous outspoken financial legend The Real Deal told that its design would eventually take off across the country.
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