Chris Rising on Los Angeles

Some of the usual suspects of the Southern California commercial real estate crowd chatted over breakfast burritos and coffee at a Hilton hotel in Little Tokyo on Wednesday, perhaps in hopes of getting some deals done in what panelists would later describe as another hard year.

Three chief executives of family-owned businesses, among others, sat on the panel at Bisnow’s first Los Angeles event of the year: Nadine Watt of Watt Capital Partners, Mike Lowe of Lowe Enterprise, and Christopher Rising of Rising Realty Partners.

All three said this year won’t be easy, with no white knight to save the day, or downtown. Institutional capital, even if it hasn’t written off Los Angeles, is in wait-and-see mode, Lowe said.

Rising was a hit for his mix of humor and straight talk.

“At our height we were the second largest landlord behind Brookfield in downtown L.A., and we’re still around — they’re not,” Rising said, alluding to his efforts to hold on to One California Plaza as opposed to the hundreds of millions of dollars worth of downtown office towers Brookfield has defaulted upon in an exit being made mostly via lenders or receivers.Brookfield has multiple offerings throughout downtown’s Financial District that account for about a fifth of Class A office space.

That elicited some laughs, but Rising then commanded attention with a serious assessment of current events. The son of the late Nelson Rising, who was very involved in California politics, said “there is a broken trust with Wall Street,” and it stems from Measure ULA. That’s the City of Los Angeles’ property-transfer tax that’s also known as the mansion tax despite the fact that it hits the commercial as well as residential sectors with a 4 percent levy on deals of more than $5 million, and 5.5 percent on deals priced at more than $10 million.

Wall Street believes elected officials specifically went after corporate profit, Rising said, with Measure ULA, which drew rumbings of reform this week before being kicked to committee by the city council.

“We’ve got to rebuild trust,” Rising said. “I would like to see our mayor and our city council get on an airplane and go down where all the private equity firms are and say, ‘we’re open for business’ … I don’t think that will happen … I’d be happy to … make introductions.”

Back to back to work

Rising, who co-owns One California Plaza, the office tower on Bunker Hill that’s now in the hands of a receiver after a $300 million default, wants workers back at their desks, particularly government employees downtown. He shared a conversation he said he had with Mayor Karen Bass a couple years ago, where he asked her what it would take to get people back in the office. Her response, he said, was that her staff comes in but she can’t force other city personnel to do so.

Rising called the mayor’s response “inappropriate,” and that he told her she could change department heads, but she wouldn’t.

His goal wasn’t to attack her but something’s gotta give. “Our elected officials are so hostile to the business environment,” he said.

New money meets old

David and Daniel Mirharooni purchased a pair of adjacent properties in Beverly Hills’ Golden Triangle for about $25 million, or around $1,500 per square foot, from Anderson Real Estate, founded by late billionaire and Los Angeles businessman John Anderson, whose name adorns the business school at the UCLA. Newmark’s Jay Luchs and Gavin Ketchum brokered the off-market transaction.

The deal was for 202 North Canon Drive, a one-story home to Rodeo Realty, and 208 North Canon Drive, which can be used for office or retail — the two buildings amount to about 16,400 square feet.

It’s a pricey trade, and a notable one. The Mirharoonis have made other Beverly Hills buys, where commercial deals are untouched by the mansion tax. They own a Mastro’s on Canon, and recently purchased retail on South Robertson Boulevard for almost $8 million, or $985 per square foot. But why did Anderson sell? It still owns 9720 Wilshire, a stunning office tower in Beverly Hills’ Golden Triangle.

Knockout

Olympic gold medalist and 10-time world champion boxer Oscar De La Hoya defaulted on a $27 million commercial mortgage-backed securities loan connected to an office building at 626 Wilshire Boulevard in the Financial District of downtown LA. The “Golden Boy” looks tarnished on this deal, with about $23 million in date and foreclosure looming.

Eyesore no more?

Creditors reached a bankruptcy-exit agreement over Oceanwide Plaza downtown, according to Bloomberg. That clears the way for a possible sale of the undone towers covered in graffiti. A potential investor is in talks to buy the property, but the deal hinges on resolving the bankruptcy, Bloomberg reported, citing people with knowledge of the matter.