Real Estate newsletter: An iconic mansion is set for auction
Welcome back to the Real Estate newsletter. It was a week of surprising scoops, and the most notable story could mean cheap rent in a market where good deals are few and far between.
L.A. Times subscribers got a special treat this week when real estate reporter Andrew Khouri unveiled a new program in which California government agencies are buying luxury buildings and, surprisingly, lowering the rent. The initiative is aimed toward middle-class Californians who make too much for subsidized housing but struggle to afford a place near their work.
The story is for subscribers only, so throw us a few dollars and I promise I’ll stop bothering you about it (for now).
The other unexpected scoop comes by way of Beverly Hills, where the iconic Hearst estate is set to hit the auction block after once asking $195 million. The owner, facing bankruptcy on the historic home, accepted an offer of $47 million, so bidders have until Sept. 14 to top that.
A few miles away in Mulholland Estates, a house that passed from a Lakers legend to a Japanese pop star to an oral surgeon was the “Only in L.A.” headline of the week. Japanese rocker Kyosuke Himuro bought Shaq’s custom mansion, complete with a golf simulator and Superman-themed basketball court, in 2004 for $6.4 million and he just sold it to surgeon Apel Keuroghlian for $9 million. Per usual with Shaq’s mansions, the pictures are worth the click.
Speaking of photos, you’ll want to check out Frank Sinatra’s former Midcentury stunner that surfaced for sale this week at $21.5 million. Though it’s tucked away in the sleepy suburb of Chatsworth, the sleek home has Hollywood roots with appearances in “Mad Men,” “Californication,” “Big Little Lies,” “The Last Man on Earth” and “Transformers.”
The pandemic was brutal for many businesses, but good news came this week for the shoppers of Baldwin Hills Crenshaw Plaza. The struggling mall sold for around $140 million, and the new owner plans to transform it into a more modern complex with housing, offices, stores and restaurants.
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California looks to lower the rent
In hopes of plugging the state’s affordable housing shortage, some California government agencies are purchasing buildings, usually luxury ones, and doing the opposite of most real estate buyers. They’re lowering the rent, writes Andrew Khouri.
The programs are geared toward middle-income workers — including police officers, teachers and nurses — who make too much to qualify for most traditional subsidized housing but still struggle to afford a place near their work, according to government authorities and the private partners involved.
They hinge on a unique financial model that involves local property tax subsidies. Proponents say the approach makes thousands of units across the state more accessible to those who aren’t high earners — serving the “missing middle” excluded from other affordable housing programs and left behind by a runaway real estate market.
At least three government agencies have launched these programs, bringing rents down by double-digit percentages in places such as Long Beach and Pasadena. In all, the government agencies — known as joint powers authorities — have bought more than 20 buildings, totaling more than 6,000 units.
Hearst estate is up for auction
In 2016, Southern California real estate soared to new heights with the $100-million sale of the Playboy Mansion. The market-defining deal was the largest in L.A. County history at the time, and soon after, owners of iconic California estates brought them to market in hopes of securing similar fortunes.
One of those was attorney Leonard Ross, owner of the iconic Hearst estate in Beverly Hills. Weeks after the Playboy Mansion sold, he listed the trophy home for $195 million but couldn’t find a buyer.
Five years later, he faces a debt of more than $50 million on the estate. As a result, the famous residence with ties to William Randolph Hearst, John F. Kennedy and “The Godfather” will be auctioned off to the highest bidder Sept. 14, according to a court document obtained by The Times.
It’s a surprising turn for the prized property, which relisted in April for $89.75 million before a June price cut brought the tag down to about $69.95 million.
Pop star sells Shaq’s place
In the Beverly Hills Post Office neighborhood, Japanese singer Kyosuke Himuro just sold Shaquille O’Neal’s former mansion — complete with a golf simulator and Superman-themed basketball court — for $9 million.
Himuro, the front man for the 1980s Japanese rock band Boøwy, bought it from the NBA legend in 2004 for $6.4 million and listed it for sale earlier this year at $9.25 million.
The compound covers nearly an acre in Mulholland Estates, a guard-gated, celebrity-favored neighborhood with residents over the years including Tyler Perry, Paris Hilton, Big Sean and Charlie Sheen.
Like many of Shaq’s mansions, the palm-topped property is extravagant. Grand archways and built-in aquariums line the living spaces, and the many amenities include a gym, game room, bar, elevator, music studio and plush movie theater with guitars strung along the walls.
Hollywood history in Chatsworth
Whether you know it or not, you’ve probably already seen this Chatsworth home. The iconic Midcentury residence, which housed Frank Sinatra for a decade and starred in more films and TV shows than most actors working today, just surfaced for sale at $21.5 million.
By far the priciest of the 70 or so homes currently listed in the sleepy San Fernando Valley suburb, the sprawling 13-acre estate boasts an illustrious Hollywood history dating back seven decades.
It was built in 1951 for banking heiress Dora Hutchinson, who commissioned William Pereira for the job. Pereira, a prolific architect famous for his futuristic designs, is better known for his commercial work, including the Transamerica Pyramid in San Francisco, the Geisel Library in San Diego, the Disneyland Hotel in Anaheim, the Los Angeles County Museum of Art and LAX.
Hutchinson hosted lavish parties at the estate before moving to New York and leasing the place to Frank Sinatra, who lived there in the 1950s and 1960s.
Baldwin Hills mall has big things in store
Baldwin Hills Crenshaw Plaza, a regional mall that has served the South Los Angeles community for many decades, has been sold to a local developer who plans to transform the struggling center into a more modern complex with housing, offices, stores and restaurants, writes Roger Vincent.
The deal, valued at more than $140 million, ended a contentious sale process that lasted nearly two years and saw other would-be buyers drop out in the face of pressure from a group of neighborhood activists who hoped to acquire the property themselves and develop it as a community-owned project.
Harridge Development Group bought the mall from a Chicago private equity fund for about $111 million, said David Schwartzman, chief executive of Harridge. His company also bought the Macy’s department store building in the mall in a separate transaction of more than $30 million with Macy’s Inc., he said, giving Harridge control of almost the entire 42-acre site that straddles Martin Luther King Jr. Boulevard at Crenshaw Boulevard.
What we’re reading
No matter the market, $5 million goes pretty far. Forbes Global Properties took that price around the globe and found it buys a modern home in Canada, a storied chateau in France and a sprawling villa in Spain.
Weeks before the NFL kicks off its regular season, Chicago’s Soldier Field is absent of grass, sidelines and end zones. Instead, it holds a reproduction of the childhood home of Kanye West, who commissioned the building in anticipation of a listening party for his upcoming album, “Donda,” Vanity Fair reports.
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