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Real Estate Bisnow
January 10, 2012 
Cassidy Turley's
Colossal LA Growth

Just eight months after opening its LA office, Cassidy Turley already has outgrown its office space. (What kind of milk are they drinking over there?) This week, we chatted with regional managing principal Jonathan Larsen, who says the office has quadrupled in size to 20 folks, and it's negotiating a new lease downtown while continuing to grow its full-service platform.
He oversees Cassidy Turley’s LA metro region—essentially SoCal minus San Diego—which recently closed a 38k SF lease with Nationwide Medical in Agoura Hills and is currently repping an entertainment company looking to relocate downtown. The firm also has a 20-acre development site in Pico Rivera in escrow for $15M; the seller is a family trust. Jonathan sees a big push for transactions that were on the sidelines in Q4 starting up robustly right now. “It’s going to be an active year both in the leasing world and also the capital markets world.” Jonathan just got back from Rome, where he went with a client on business and also toured historic sites (such as the Colosseum, above) with wife Barbara, and El Paso, where he watched son Chandler, a tight end for USC, play in the Sun Bowl. On Jan. 24, you can find Jonathan at the Beverly Wilshire in Beverly Hills—he’ll be a panelist at Bisnow’s 3rd annual LA State of the Market (sign up here.)

Last night at the AT&T Center, we snapped Colony Capital chairman Tom Barrack with CREW-LA past prez Trudi Lesser, Sheppard Mullin partner Pam Westhoff, and CREW-LA prez Joyce Soriano-McDowell. Tom, the star attraction of CREW-LA’s inaugural “Icons Speaker Series,” talked about his career and the importance of incidents that are happenstance, along with his philosophy to befriend the bewildered. The essence to everything, he said, is “the invisible things that you learn and develop over time that become the mortar and the bricks of all of those massive things that you accomplish."
As an attorney in LA, Tom befriended one of the firm's non-lawyer employees, who ultimately became director of personnel in the Nixon, Ford, and Reagan White Houses. (Be nice to the interns!) Tom went on to become Reagan’s deputy undersecretary of the Interior. Tom's favorite RE sector: “what’s out of favor the most, which is single-family foreclosed residential across the nation.” The company now owns about 7,000 homes and is investing $150M a month buying houses, rehabbing and putting them out for rent. He also discussed the value of going to the edge, recalling the time he brought big-wave surfer Laird Hamilton to speak at an investment conference. Although his team thought he’d gone off the deep end, it turned out to be the greatest discussion of risk they ever had.
Tom was introduced by his friend and USC fraternity brother, Newmark Grubb Knight Frank EVP and managing director-Downtown LA Don Hudson, who credited Tom’s success in large measure to his gift of communication: “There’s a reason why presidents, heads of state, and kings around the world call this man a friend and trusted adviser and business partner.” During an earlier part of his career when Tom was a bit less flush, Don lent him $5,000 on a credit card so he could buy a Pan Am plane ticket to Saudi Arabia, where Tom had been tapped to work for a Saudi prince. “Without that, I wouldn’t be anywhere. He befriended the bewildered.”
Before the program began, Tom told us that he expects real estate in the New Year will be pretty much the same as what we saw in 2012, with very little growth and cap rate contraction. “Until we solve the employment problem and the supply and demand balance stays in tow, I think rents will be about where they are and vacancies will also be about where they are.”


Berkadia Commercial Mortgage’s just-announced acquisition of Hendricks & Partners is good news for LA apartment investors, Hendricks senior partner Dean Zander told us yesterday. By joining forces, he says, the apartment sales and research firm will have a dedicated underwriter and loan processor in each office, enabling it to provide real-time accurate and reliable financing options to clients considering a sell, hold, or refi strategy. He notes Berkadia, formed by Warren Buffet’s Berkshire Hathaway and Leucadia National Corp, is anticipated to loan over $10B in apartment debt this year and is the lender of choice among many of Hendricks’ clients. With LA among the top three cities nationally in rent growth, he anticipates more transaction activity this year; If employment numbers pick up as he expects, the area’s rent growth may even outpace NorCal and DC.

Up in the Central Valley, Dean and colleagues Robin Kane, Vince Norris, and Gordon Larkin just sold a four-property, 410-unit, apartment portfolio in Fresno to Omninet Capital for nearly $15M cash. Seller Decron Properties bought the properties, which include the 80-unit Sequoia Ridge (above), 106-unit Cedar Creek, 92-unit Redwood Canyon, and 132-unit Sycamore Heights, as an REO in 2011. At the time, the properties suffered from deferred maintenance and 20%-plus vacancy, and the company made capital improvements, bringing occupancy to over 90%. Omninet managing partner Michael Daniel, who oversaw the acquisition, says the company plans to buy an additional $200M in multifamily this year.

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