Introduction to Ethan Penner’s Case
Commercial real estate professionals gathered at the Lot at Formosa in West Hollywood to hear from Ethan Penner, an independent candidate running for governor. Penner, known for pioneering commercial mortgage-backed securities, made his case to a room full of decision makers. He began by questioning whether real estate is still all about location, citing the example of downtown Los Angeles, which was once thriving but is now struggling. His company had personal experience with soured investments in the area.
Politics and Real Estate
Penner then shifted his focus to politics, blaming politicians for the current state of downtown Los Angeles. He claimed that entrusting politics to politicians has led to poor decisions. Penner criticized the two-party system and the media for creating a toxic political atmosphere. He even shared a personal anecdote about his son going through a breakup over the president. Despite being a long-shot candidate, Penner remained optimistic, suggesting that unexpected events can occur when there is "systemic capitulation."
Unplugged on ULA
The conference also featured a panel discussion on policy, which included a debate about Measure ULA, also known as the "mansion tax." California Landmark Group’s Ari Kahan described it as an "elephant running through the room," claiming that it has led to redlining in the city. Kahan argued that it doesn’t make sense to invest in development when the economics don’t add up and a tax eats into profits. Kevin Keller from the Los Angeles Department of City Planning was also present, but Kahan noted that Measure ULA is a voter-approved initiative, not a planning issue.
Investor Concerns
Other panelists, including Kevin Ratner from the Max Collaborative, expressed concerns about Measure ULA. Ratner stated that investors are hesitant to invest in Los Angeles because they expect bad news around every corner. He claimed that it’s no longer worth going through the entitlement and development process, as investors can expect constant challenges.
Recent Real Estate Deals
In other news, Leo Pustilnikov, known for his work on Builder’s Remedy, has made another significant purchase in downtown Los Angeles. He joined investors in buying the PacMutual office complex for under $50 million, a significant discount from its previous sale price of $200 million. Pustilnikov has also purchased the Original Pantry, a historic diner, and plans to revive it.
Retail Deals
Several notable retail deals have recently taken place in Los Angeles. A company connected to Metlife sold the One Westside shopping center for $66.9 million, while Mamo’s Long Beach Marketplace secured a $56 million refinance. CenterCal Properties and DRA Advisors purchased the Long Beach Towne Center for $145 million.
Conclusion
Ethan Penner’s speech highlighted the interconnectedness of politics and real estate. The panel discussion on Measure ULA and the recent retail deals demonstrate the complexities and challenges facing the real estate industry in Los Angeles. As the city continues to evolve, it will be interesting to see how these factors shape its future.
FAQs
- What is Measure ULA, and how does it affect real estate development in Los Angeles?
Measure ULA, also known as the "mansion tax," is a voter-approved initiative that imposes a tax on certain real estate transactions. It has led to concerns about redlining and has made it less attractive for investors to develop properties in Los Angeles. - Who is Ethan Penner, and what is his background in real estate?
Ethan Penner is an independent candidate running for governor and is known for pioneering commercial mortgage-backed securities. He has personal experience with real estate investments in downtown Los Angeles. - What is the current state of downtown Los Angeles, and how has it changed over time?
Downtown Los Angeles was once thriving but is now struggling. The area has experienced a decline in recent years, with some investors hesitant to develop properties due to concerns about Measure ULA and other factors.
