Commercial real estate professionals shuffled through a film set and gathered at stages five and six at the Lot at Formosa Wednesday morning — and after chatting over coffee and some very-L.A. breakfast burritos, they heard from Ethan Penner, the pioneer of commercial mortgage-backed securities running for governor.
Penner is an independent candidate and a decided long-shot in our Golden State, but you would not have known the latter as he made his case to a room full of decision makers in a studio in West Hollywood.
He set his premise with a fundamental question: Is real estate still all about location, location, location? After all, downtown Los Angeles was hot once and now it’s not — something his company knew all too well, he said, with soured investments that touched him personally.
Penner then pivoted to the real reason he was on stage: Politics.
He showed some fang right off the bat, blaming politicians — not the pandemic — for the rough shape of downtown these days. Penner said we all made one of the worst decisions in entrusting politics to the politicians.
Penner went on to trash the two parties and media for creating our current disconnect. He took aim at the toxic political atmosphere, mentioning that his son went through a breakup over the president (no more details on that unfortunately). Then he turned his longshot status into a flex of sorts, claiming that crazy things happen when there’s “systemic capitulation.”
Unplugged on ULA
The latter half of the conference was just as interesting, a panel on policy proving particularly so. Measure ULA, the so-called “mansion tax,” came up. California Landmark Group’s Ari Kahan said it wasn’t the elephant in the room, but the elephant running through the room.
Kahan, similar to others, claimed the city is redlined so long as Measure ULA is in effect. That’s because, he explained, it doesn’t make sense to throw your capital at development when the economics don’t make sense and a tax eats your profits.
He said all this while the Los Angeles Department of City Planning’s Kevin Keller was one person down on the same stage. He did, however, give his public-sector colleague a break, noting that Measure ULA isn’t a planning issue — rather something voters adopted in a citywide vote.
The Max Collaborative’s Kevin Ratner didn’t hold back either. Investors see beyond Measure ULA when coming up with reasons to cross L.A. off their list, with many steering clear because they don’t want to be around when the next shoe drops, he said. It used to be worth it, going through the arduous entitlement and development process, because then you owned something in Southern California.
That’s not the case anymore, he said — investors expect bad news around every corner now.
Will the real Leo Pustilnikov please stand up?
Leo Pustilnikov of Builder’s Remedy fame has made another downtown buy.
He joined fellow investors in purchasing the PacMutual, an office complex encompassing three interconnected structures, for less than $50 million. Ivanhoe Cambridge, now La Caisse, purchased the historic real estate a decade ago for $200 million.
It’s the second piece of DTLA history for Pustilnikov, who a month earlier bought the Original Pantry, a shuttered diner once owned by the late Los Angeles Mayor Richard Riordan. Pustilnikov said the beloved restaurant and its workers were making a comeback.
When he made his office buy, he and partners said they were thrilled to contribute to downtown’s revival as the owners of the century-old architectural jewel box.
It raises the question of whether Pustilnikov is a white knight, a bargain buyer — or both?
Retail deals by the numbers — all the way up to nine figures
Deal number one: A company connected to Metlife sold the two-story shopping center called One Westside to an entity that names Mark Darwish as a manager for $66.9 million, records show. Darwish confirmed the deal; the seller declined to comment.
Deal number two: Mamo’s Long Beach Marketplace, an outdoor retail center, notched a $56 million refinance. LoanCore Capital provided the fresh financing on the property, which is home to fan-favorite Trader Joe’s and, eventually, apartments, if all goes as planned.
Deal number three: CenterCal Properties, owner of 2ND & PCH, and DRA Advisors purchased the Long Beach Towne Center for $145 million.
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