Realty Bancorp Equities managing member and principal owner Norman Kravetz no longer appears on the company website. It’s unclear why. It could be related to a distressed office portfolio that has made headlines recently. But there is some good news to share: the landlord landed a tenant.
Ecrypt announced it inked a long-term, off-market lease for 23,000 square feet at Kravetz’ 29899 Agoura Road, once home to the Los Angeles Rams. The deal is valued at more than $7 million, according to a release.
Earlier, Kravetz-connected entities defaulted on the commercial mortgage-backed securities debt secured by a five-office-property portfolio located throughout the San Fernando Valley — and faced calls to cede control to a court-appointed receiver; 29899 Agoura Road is part of that portfolio.
A Wells Fargo Bank unit, on behalf of the securities holders, and the special servicer claim the entities owe about $72 million. That’s more than the Kravetz portfolio is worth. According to Morningstar Credit, the offices are valued at $50 million, half of their underwriting, months before the pandemic. The offices are only 71 percent occupied, compared to 98 percent at issuance, per Morningstar, but the latest lease amounts to 7 percent of the rentable space.
It’ll provide a boost. But enough to save Kravetz? Who knows.
The court hasn’t ruled on whether to appoint a receiver to take control of the five-office-property portfolio or not — but according to the lender, the borrowers, entities connected to Kravetz and his Realty Bancorp, consented in the loan documents to the appointment of a receiver in the event of a default with or without notice of a hearing.
Kravetz and attorneys for the plaintiff and defendants did not respond to a request for comment.
Bad Robot sells
If you’ve ever binge-watched Lost, you probably remember the red robot that appeared on your screen after every episode. It was the logo for J.J. Abrams’ Bad Robot. Well, Abrams sold the brick building that housed the production company for about $31 million. The buyer is a mystery — but could be a client of HCVT chief executive Vicken Haleblian.
The deal for the 25,650 square-foot creative office space located in Santa Monica, near the pier, comes out to about $1,200 per square foot. The building has a big sign on the outside that says the National Typewriter Company, not Bad Robots…if you know, you know.
Chrome Hearts buys
Everyone wants a beach house, so it’s no surprise that one of California’s priciest per-key deals ever and priciest all year was a small, stunning Malibu hotel that calls itself “your California beach house.”
Chrome Hearts, owned by Richard and Laurie Stark, purchased the Surfrider for $37.5 million. That comes out to about $1.9 million a room. The luxe 20-room oceanfront property was owned by Dauntless Capital Partners, and the Marella Group brokered the deal.
Exceptions
The two deals mentioned above are anomalies in Los Angeles commercial real estate.
Creative offices are unlike other spaces that haven’t recovered post-pandemic — which are not typically connected to J.J. Abrams and his famed production company or locations of star-studded cocktail parties, so the general rules don’t apply. Santa Monica, for example, has a 26 percent vacancy rate in its office sector, and properties aren’t trading for more than a thousand dollars a square foot.
When it comes to hotels, many are defaulting on debt, facing foreclosure and a challenging sales environment, in part because of the so-called mansion tax that has resulted in fewer commercial trades. Homelessness is believed to have contributed to a dip in tourism that’s hurt revenues, and a $30 minimum wage for hotel workers is also spooking investors.
The exception, of course, is the one-of-a-kind Surfrider in Malibu, where David Beckham and Margot Robbie have stayed and there is a guest-only rooftop bar and restaurant that overlooks the Pacific.
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