Aflalo Family Looks to Offload Entitled Beverly Hills Sites

The Aflalo family hopes to sell four parcels entitled for a combined 368 residential units in Beverly Hills, according to a new offering memorandum from Westmac Commercial Brokerage Company.

The parcels, all builder’s remedy projects clustered at West Olympic Boulevard and South Beverly Drive, are listed from $20 million to $87 million, with a combined value of $132 million.

“It’s one of the largest commercial land offerings in Beverly Hills history,” Westmac’s T.C. Macker said.

Plans call for 74 affordable units spread over the four projects, along with 37,276 square feet of ground-floor retail, and parking.

Sites include 333-337 South Beverly Drive and 353 South Beverly Drive, approved for an eight-story building with 135 residential units, 16,099 square feet of ground-floor retail, and three levels of subterranean parking with 263 parking spaces; and the Pavilions grocery store site at 9467 West Olympic Boulevard, with an eight-story building with 105 residential units, 17,085 square feet of retail, and three levels of subterranean parking with 180 parking spaces. Those sites are priced as a package at $87 million.

Sammy Aflalo of Aflalo Equities helmed the entitlement process of the two sites. Sammy Aflalo is the son of Moshe and Laura Aflalo, whose Aflalo Family Trust grew a portfolio of stores in L.A.’s Fashion District in the 1990s. The sites are co-owned with Harkham Family Enterprises, run by Uri Harkham, also a prominent property holder in the Fashion District and well beyond.

The offering also includes 9430 West Olympic Boulevard, approved for a 13-story mixed-use building with 53 residential units and three levels of subterranean parking with 23 parking spaces. The tower would replace a three-story commercial building built in 1989. It has an asking price of $20 million.

Also part of the offering is 9441 West Olympic Boulevard, approved for a 13-story building with 75 residential units, 4,092 square feet of ground-floor retail, and three levels of subterranean parking with 52 parking spaces. Its asking price is $25 million.

Aflalo Equities, in a joint venture with Fisch Property, the property management arm of the family business, led the entitlement process for 9430 Olympic Boulevard and 9441 West Olympic Boulevard.

Builder’s remedy is a loophole in state housing law that lets developers skirt zoning rules in cities that fail to certify their state housing plans, as long as they include at least 20 percent affordable housing.

“These approvals, granted under builder’s remedy, allow for height, [floor area ratio] and unit counts that far exceed surrounding properties,” said Westmac’s Macker, who holds the listing for the properties.

As of Oct. 30 there were 14 active builder’s remedy applications before the City of Beverly Hills, according to Ryan Gohlich, assistant city manager in Beverly Hills.

Beverly Hills Mayor Sharona Nazarian said on the general topic of builder’s remedy that there’s a mismatch between policy intent and market outcomes.

“What was intended as a tool to create more affordable housing has, in practice, often been used to push through ultra-luxury, high-density projects, and with only a small fraction of them being actual affordable units,” Nazarian told The Real Deal at the end of October. “And it’s unclear whether there’s sufficient demand for so many expensive luxury units. Prices continue to rise, and the average renter or young families or young professionals, they’re still being priced out.”

Macker touted the offering for its “scale, prime location, and significance in a market known for its limited supply.”

Prolific developer Leo Pustilnikov, who received approval for a builder’s remedy project at 125-129 South Linden Drive and is a partner in another such project at 346 North Maple Drive, said he is not interested in the Aflalo family’s offering.

“It’s massively overpriced… and [there’s an] issue with the lease for Pavilions,” Pustilnikov said.