In the midst of headlines about layoffs and shutdowns, L.A. business leaders seem to be ramping up. Many are working remotely but embracing technology to stay connected with employees and clients via video meetings or the still-important personal phone call. A shared entrepreneurial spirit has them turning a crisis into a learning experience. These Type-A personalities are also rediscovering there’s more to life than work and are more than willing to share their tips for using at-home time as opportunity for introspection and self-improvement in anticipation of the next chapter.

    Aftalion has served as development director for real estate investment company Markwood since 2014. The company focuses mostly on commercial developments across Los Angeles. Construction goes on, but Markwood observed that projects remain vulnerable to potential government policy changes. Aftalion has found himself thinking about how remote work may permanently change the design of future workspaces, particularly when today’s creative office spaces offer the opposite of social distancing. “I love real estate because it’s forever, (but) how we think about the office may change,” he said. Now that his home is his office, Aftalion has been rethinking his role as a business leader and has surprised himself by rediscovering his creative roots.

    HOME AS OFFICE: “You have to work your entrepreneurial muscle; you have to look at how you can be a self-starter. I am going to be working at home, and I need to get over it. I have an amazing view of the sunset. I (was) never home to see it.” Simon Aftalion has started drawing architectural plans again. SELF-DISCOVERY: Aftalion found some of his old architectural plans and started drawing again, including this plan for a multifamily building inspired by L.A.’s Case Study houses. “I taught myself how to draft plans. I forgot about that hobby. It’s very easy to get obsessed with the science part of (construction) rather than the art part of it. It has brought out the art side.”

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  • COMMERCIAL OBSERVER: Historic DTLA Garage Readies for Office Revamp

    Markwood is converting the historic parking garage, formerly known as the May Company Garage, into a modern office space.

    Downtown Los Angeles’ years-long development boom is entering the new decade, and some original structures from a century ago are due for new and improved uses.

    Read More >

  • BISNOW: In Seattle, These Robots Will Park Your Car

    When Seattle Cancer Care Alliance’s new facility opens in 2022, patients will have a valet-style parking experience without the valet. The facility is installing a 43K SF automated parking garage under its five-story complex, providing a garage that will be both a convenience for patients and a functional parking solution for an odd-shaped lot. The garage will have space for 160 to 180 cars and will maximize its available space. Patients will drive up to a centralized valet, where they will turn their cars over to a robotic system. The system will then take the cars and shift them horizontally and vertically until they arrive in their designated spots, parking tighter than a traditional would lot allow. Patients won’t have the hassle of getting in and out of cars in small, cramped spaces.

    “This is a small, narrow, rectangular site,” Bellevue-based GLY Construction Senior Project Manager Joe Walker said. “Due to the geometry, drivers would need to park on the ramps. This robotic system is more efficient, as it gives us more space and it’s easier on the patients.” As a healthcare facility, the mobility of the patients is a major consideration. While typical drivers take about 30 seconds to get out of their cars, SCCA patients took three to four minutes. Using data provided by SCCA, GLY determined patients need to retrieve their cars within about two minutes. They kept that in mind when seeking vendors, and ultimately decided on Wohr Parking and Denver-based Harding Steel as the subcontractors, Walker said. “There are a lot of vendors and manufacturers out there, so developers need to be sure they are doing their homework,” Walker said. When comparing vendors and manufacturers, developers shouldn’t overlook the benefit of boots-on-the-ground service, U-tron Executive Vice President Yair Goldberg said. U-tron has a fully automated parking system. Goldberg points out this technology is not new. In fact, the first patents for automated garages landed in the late 1800s. In Seattle, there was an automated garage in the 1930s, but the algorithms have become significantly more sophisticated since the early models were introduced.

    The assemblies are costly upfront, but they add value to the development in the long term. Automated parking eliminates the need for excessive ceiling heights, ramps, stairs, lights, and heating and cooling. It also reduces excavation costs. “The idea that parking garages are expensive is largely a misconception,” Markwood Development Director Simon Aftalion said. “In the long run, automated parking provides a more efficient use of space to park the same volume of cars when compared to traditional parking options.” While the U.S. has few automated garages, Goldberg expects that to change as land becomes more valuable and density increases. Citing a Houston development, a commercial mixed-use real estate development features a 230-space, stand-alone structure, Goldberg said, providing an enhanced user experience and additional space.

    Read More >

  • Battleground: LA Development

    Despite court decisions, the battle between developers and NIMBY groups continues

    Los Angeles has long been a battleground for the most prolific planning and land use issues in California, where developers and landlords struggle with activist groups that are dedicated to reining them in.

    More so than rising construction costs, developers and real estate experts tell Commercial Observer that the top challenge to production is the difficulty and risk involved in the entitlement process, which is made more strenuous by local groups who delay projects with appeals and court challenges via the California Environmental Quality Act (CEQA). The issue has been an ever-growing concern for years as delays add more costs, especially for housing developments in a time when the city is experiencing a historic housing shortage.

    Carl Muhlstein, a broker for JLL, has been calling for CEQA reform for years, and said the costs that come from delays are becoming insurmountable for developers. He said lawmakers must address delays to break ground, as well as transparency behind serial litigation challenges using settlements to hide payoffs and avoiding prevailing party legal fees liability.

    “Developers are interested in providing affordable housing with expedited approvals,” he said. “It’s always easy to blame the developer for high prices, but it’s just not the case. It’s very frustrating. As a commercial broker, a resident, a father of two sons, I am concerned about the government’s ability to deliver affordable housing in a growing housing crisis.”

    Sometimes, a few projects can be exempt from CEQA requirements, but that doesn’t shield them from appeals or court challenges. The projects that are not exempt from CEQA are required to complete environmental reports that can take more than two years to finish in many cases. Afterward, they can still be challenged in court, further delaying the builder from breaking ground by years at a time.

    The 200,000-square-foot Target retail development in Hollywood has been one of the top examples over the past decade for projects hindered by CEQA. An opponent group noticed the city failed to complete an additional impact review after it was approved, which was required by CEQA. The opponents successfully challenged the project, and delayed the completion of construction by years. The project was first stalled in 2012, and was not resolved until March this year.

    Other projects run into opposition from other interests like labor unions. For example, Laborers’ Union International of North America has appealed the environment review via CEQA for Holland Partner Group’s 185-unit apartment proposed for Hollywood. UNITE HERE Local 11 forced developer Perri Lee to create a new project after they appealed plans for a 120-unit hotel at 2870 West Olympic Boulevard, according to reports.

    But despite recent losses for the opposition groups at the ballot box and in court — which have decided in favor of the development process and approved megaprojects — opponents are showing no signs of easing their fight to curb the rate of construction in Los Angeles, and the issue is set to continue playing out.

    AHF Versus City Hall

    In November, a Superior Court Judge ruled in favor of the city of Los Angeles and four development firms who are building major developments in Hollywood. The lawsuit came from AIDS Healthcare Foundation (AHF), which has been the most active group in the city in seeking to clamp down on property owners and developers.

    AHF was formed by Michael Weinstein in 1987 to provide testing and healthcare services for HIV patients. For at least the past five years, the firm has increasingly been involved in controversial efforts to thwart major development projects and policy in Los Angeles. Weinstein has said those efforts are consistent with the firm’s mission of addressing issues facing disadvantaged people, and that high-priced projects gentrify neighborhoods and force people with AIDS and HIV out of L.A.

    In the past year, AHF lost at least three land use-related lawsuits, and failed at the ballot box with Proposition 10, which AHF drafted and spent tens of millions of dollars supporting. Nearly 60 percent of voters voted against Proposition 10 in November 2018, which would have repealed the state law that prohibits rent control on properties built after 1995. After the ruling, Weinstein said the foundation will appeal the dismissal of the lawsuit. 

    In early December, a branch of AHF submitted signatures to put a new version of the failed Prop. 10 on the November 2020 ballot. If approved, the measure would give municipalities the ability to add new rent control limits — at 15 percent over three years — to buildings that are up to 15 years old.

    State lawmakers already approved rent control expansion this year for the first time in 25 years. The new measure takes effect next month and caps annual rent to 5 percent plus inflation. 

    However, opponents to such measures say strengthening rent control actually worsens the housing crisis because it dissuades developers and builders from creating new housing. Sid Lakireddy, president of the California Rental Housing Association, opposed the state’s rent control measure, and last week released a statement denouncing AHF’s new proposed ballot measure. 

    “Weinstein’s flawed initiative would reduce housing options for Californians and make our housing crisis worse,” he said in a prepared statement. 

    Developers have held steady, and are expected to continue opposing such measures. Firms like Blackstone, Western National Group, Essex Property Trust, and Equity Residential each donated more than $1.5 million on efforts to defeat Proposition 10. The California Association of Realtors also added $1.5 million.

    In Hollywood, AHF filed four separate lawsuits challenging four projects on Sunset Boulevard — where AHF has its headquarters. Despite losing two of the four, the foundation filed another lawsuit against the city in August that cited all four projects.

     The lawsuit included the $1-billion Crossroads Hollywood by Harridge Development Group, which will add a 26-story hotel, 190,000 square feet of commercial space, and about 950 new units; the Sunset Gordon tower by CIM Group which will add about 300 units; the Hollywood Palladium Residences by developer Crescent Heights that includes 730 residential units; and 6400 Sunset, a 200-unit project by GPI Companies on the site of the Amoeba Records building.

    AHF helped fund a new lawsuit filed this month by an affiliate of the Los Angeles Tenants Union, according to the Los Angeles Times. The group argues that the developers of Crossroads Hollywood did not follow city requirements aimed at protecting renters of existing residential properties that will be demolished.

    AHF was also behind the notorious Measure S ballot initiative in 2017, which would have implemented a two-year moratorium on projects that require zone changes or height increases. Measure S was rejected by nearly 70 percent of voters in Los Angeles. AHF’s involvement in land use issues was criticized by City Controller Ron Galperin, among others, at the time.

    “Michael Weinstein has sadly injected his organization into a debate over land use that has nothing to do with HIV or AIDS or healthcare,” Galperin said at the time. “In the process, unfortunately, AHF is squandering millions of dollars that should be spent on HIV prevention and treatment.”

    Entitlement Versus Development 

    Ryan Leaderman, an attorney with Holland & Knight, focuses on helping his clients adhere to regulations and avoiding litigation.

    “It absolutely is a fear for developers to be stuck in litigation for years,” he said. “It can kill a project or cost a tremendous amount to survive litigation, even if it’s for a bogus reason. It definitely has a chilling effect on development.”

    He explained that EIRs — environmental reports required by CEQA — need a lot of technical analysis, and can take more than two years to complete. They can also cost more than $1 million, especially if there is opposition. It has birthed a cottage industry for CEQA for consultants and attorneys that support or oppose the EIRs.

    Leaderman explained that there are benefits to CEQA, and it addresses real environmental issues. He said its goals are good, but there is a “big disconnect” between the goals and the way it’s used.

    “The way that we structure the law gives a lot of power to people who can be an extortionist,” he said.

    Leaderman’s first experience with CEQA litigation involved Caruso Affiliated at the Santa Anita racetrack about 15 years ago. He estimated that Westfield spent about $10 million at the time fighting Caruso’s shopping center opening next door to them. Leaderman said it’s difficult to connect all the dots to find out who’s funding opposition efforts, but they also suspect Westfield funded a community group’s challenge against the project.

    As California continues to suffer a historic housing crisis, many opponents also lament that lack of “affordable” housing produced, while “luxury” housing projects continue to rise. Developers, however, point out that higher rent is the only way major projects pencil out, especially with added fees and requirements from each municipality.

    Simon Aftalion, development director for Markwood Enterprises, explained how the fees, risks and the “ever-changing and more restrictive city requirements” involved in the entitlement process add “tremendous cost to developers overall budget,” and leading to lower returns and less profit.


  • MULTI-HOUSING NEWS: Innovations in Energy-Efficient Apartments

    Multifamily operators face high expectations for reducing their properties’ carbon footprints and greenhouse gas emissions. A deep dive into today’s best practices.

    Faced with the urgency of reducing carbon footprints and greenhouse gases, multifamily operators are embarking on a new era of energy efficiency. No one-size-fits-all approach exists; strategies vary widely by location and multifamily category. Whether the community is a ground-up project or a vintage property, identifying the best tools demands a smart assessment.

    Yet by all accounts, the investment of time and capital can pay handsome dividends. Comprehensive, cost-effective upgrades improve the energy efficiency of multifamily properties by 15 to 30 percent and save $3.4 billion in multifamily utility costs annually, the American Council for an Energy-Efficient Economy estimates. They also help properties stay competitive as tenants seek more sophisticated energy-efficient homes.

    Coronel Apartments, a newly completed 54-unit community in the East Hollywood section of Los Angeles, is loaded with energy-efficient features –  enough to ensure likely LEED Platinum certification. “Coronel optimizes energy performance with high-efficiency windows, boiler and solar hot water,” said John Arnold, partner at KFA Architecture, designer for the transit-oriented multifamily property developed by Hollywood Community Housing Corp. Also featured: all-LED light fixtures, certified sustainable flooring,  low-emission insulation and locally sourced concrete aggregate.

    While Arnold acknowledges that an affordable housing project doesn’t need to market its energy-efficiency efforts the way a market-rate development does, sustainability features are often used to promote affordable housing among non-profit organizations, politicians, funding agencies. BRP Cos., which specializes in affordable housing, workforce and market-rate housing, routinely installs programmable thermostats, Energy Star appliances, energy-efficient lighting, floor-to-ceiling Low-E windows and water conserving fixtures in its New York City-area projects.

    “Most of our projects aspire to LEED Silver or greater,” noted Mary Serafy, managing director at BRP Cos. “These features provide significant operational savings for years to come.”


  • COMMERCIAL OBSERVER: Markwood’s Aftalion Dreams of a More Urban Future for LA

    Parking garages might not be the sexiest real estate assets out there, but Simon Aftalion has found a way to make them a hot topic.

    Parking garages might not be the sexiest real estate assets out there, but Simon Aftalion has found a way to make them a hot topic.

    Aftalion is the development director at Markwood Enterprises, a boutique developer with a crop of mostly residential developments across Los Angeles. Aftalion joined the firm in 2014 to help grow the company’s development arm, and is helping introduce automated parking to Los Angeles while revamping a historic downtown L.A. parking garage.

    Markwood has projects in several changing corridors, including a 53-unit residential building on Barrington Avenue in Brentwood and a mixed-use development on the corner of La Brea and Melrose Boulevards. Aftalion is a strong proponent of adding more density in a city known for its suburban sprawl. For Los Angeles to be the city of the future, it will need to find ways to build urban nodes that offer the 24-hour lifestyle that other cities offer, Aftalion said.

    A key way to increase density is to find more efficient parking solutions, and Markwood has been a pioneer in introducing automated parking. At the moment, Markwood has three projects under construction with plans for either fully or semi-automated parking, including the Barrington development, and two more in the Mid-Wilshire area.

    Commercial Observer sat down with Aftalion to discuss Markwood’s projects, puzzle-shift parking, and the path to a denser, more urban Los Angeles. The following is an edited version of the conversation.

    Give us some background on Markwood.

    Markwood was established as a real estate investment company. The two principals, James and Robert Mehdizadeh, who are from New York, planted their flag around 2010 and 2011. They started selling some of their assets in New York and exchanging the money and buying some properties in LA, with the intention of having a firm that owned and operated real estate in LA.

    Soon, it became clear that there was a lot of opportunity being left on the table.

    They brought in a gentleman called David Wright, to help them create a development business. I joined about a year after that. I recognized the exponential growth, and the opportunity to create and implement ways to make us into a development arm.

    How did you get started in the business?

    I was born in San Francisco, moved to L.A. when I was six, lived there all my life, then went to Georgetown for grad school.

    Leaving L.A. during the recession, it was a very different place when I came back. When I lived on the East Coast I saw how people were really embracing the live-work lifestyle, to live how they work, because it’s such an urban setting.

    On a national level we’ve embraced that sort of lifestyle, and Los Angeles is really starting to see a change in the approach developers take to creating the urban fabric in LA.

    Most of your projects are residential. Why did that become your focus?

    Our approach is multifamily oriented. We’re apartment guys, I love creating residential communities.

    We also have this historic building in Downtown L.A., which is kind of my baby. It’s a historic building, built in 1927, a beautiful beaux arts building. It was built by the May Company (a nineteenth century department store) which needed refrigeration, so that’s why it’s three floors below grade, and five floors above. This asset was one of the legacy properties and once it came into my lap, I thought of it as the jewel of our pipeline.

    We needed to do an adaptive reuse…It’s just sitting there, it’s a big parking structure.

    The first idea was to add floors and make an apartment community. But eventually we realized that this building called for an office play. To me, creative office, or co-working is kind of like an apartment community, in that it’s small cubes with amenities et cetera. We decided to add a sixth or seventh floor for office, keep the parking and redo the retail, but instead of little stores, put in one contiguous tenant.

    As developers, we are in the business of developing, and real estate is our proxy. At this point in the trajectory of development, we’re thinking about what service we’re providing. To me, commercial and residential have become very similar.

    Tell me more about the garage. It’s been reported that you’re going to have an Erewhon market as the retail tenant?

    Actually, we came to a mutual, amicable decision to part ways because the trajectory of the place being delivered was a year-and-a-half out, so we came to a decision not to do the lease.

    I love [Erewhon] and I love their concept. We’re focused on the development of the whole 220,000 square feet. It’s not the type of play that allows for a retail tenant to move in immediately.

    Is there a specific type of retail tenant that you’d like to see in that space, as well as in your retail spaces at your residential properties, at Barrington and La Brea?

    At Barrington, that was my first development, we have a retail space. And yes, its an amenity to what’s above it, but it’s also an amenity for the neighborhood.

    Catty corner across from Barringon, Jeff Appel is building a Whole Foods. As much as his retail is an amenity for us, our retail is an amenity for him. While they’re not giving you cash flow, they’re impacting your cash flow.

    All I’m focused on is making sure that the retail tenants are the best they could possibly be, have great access to parking, and are separate from the other uses on the site. It’s not like we have big box malls, it’s a small retail jewel and it should fit into the neighborhood, and be complementary to the other uses on the site.

    In three of your residential projects you have automated parking. Tell me how that came to be.

    James and Robert acquired this assemblage at Barrington. We wouldn’t buy it today because it has so many obstacles. Because of the city’s zoning laws, our nice beautiful 16,000 square-foot-site became 13,000 square feet.

    And in L.A. if you can’t park it you can’t build it. Building a ramp just wasn’t possible; it was not an option to do conventional parking. So I started thinking about alternatives.

    I had an obsession with shipping containers and how they move things around at the port. I started to dive deep into what is automated parking — it’s a storage facility essentially, a real estate asset which takes your car and racks and rails it. I went to China and went on a tour of parking. I was recently in Japan. They don’t have ramps, I would just sit for 20 minutes and watch people walk in and out, ask for their cars, wait while talking and using their phones. It was great.


  • As EVs continue to grow in popularity, the need for electric charging stations is also growing and commercial real estate owners and managers are helping lead the charge to make them available for tenants, shoppers and visitors at office buildings, retail centers, big-box stores, hotels and multifamily properties. EVs are expected to make up nearly 60 percent of the light vehicle market in the U.S. by 2030, and more electric cars were sold in the U.S. in the first half of 2019 than all of 2016.

    Industry leaders are embracing the EV by making charging stations available across large portfolios:

    Simon Property Group now has more than 645 EV charging station at 110 properties in 20 states. The company has been installing them for nearly a decade, partnering with EVgo and more recently with Electrify America. In May 2018, Simon and Electrify America agreed to install charging stations for EVs and plug-in hybrids at more than 30 Simon centers, including King of Prussia in Philadelphia, Florida Mall in Orlando, Fla., and Gulfport Premium Outlets in Gulfport, Miss.
    Walmart was also an early adopter, installing its first EV charging stations almost 10 years ago. Working with Electrify America, the retail chain offers more than 120 plus ultra-fast EV charging station at Walmart locations in 34 states.
    Walgreens provides EV charging stations at about 400 locations. The stations feature either a high-speed DC charger that can add 30 miles of range in about 10 minutes or a level 2 charger that can add up to 25 miles of range per hour of charge.
    More than 3,137 EV Level 2 charging stations are available at Marriott hotels across the U.S.
    For some companies offering charing stations fits in with their own sustainability goals. For most, it also gives them a competitive edge.

    “EV charging is an amenity. We are seeing it in a lot of Class A buildings. They are almost required to do it to stay competitive,” said Cara Carmichael, a principal at Rocky Mountain Institute and co-author along with Angelique Fathy of a recent report and blog post, Why Building Owners Should Care About Increasing EV Adoption.

    At 71 S. Wacker, a 1.5 million-square-foot trophy tower owned by The Irvine Co. in Chicago’s West Loop, EV stations provide both a competitive edge and an amenity. “We’re a Class A trophy building driven by amenities,” said Jeff Venable, vice president of JLL’s property management group in Chicago and the general manager of the LEED Platinum tower.


  • What Will Cause The Next Recession?

    Real estate fundamentals are strong, but the same isn’t true for every industry, and technology could bring down the whole system.

    Real estate leaders overwhelmingly agree that fundamentals are strong, lending hasn’t gotten out of hand and the market is strong—and that means there is no recession on the horizon. But, just because real estate caused the last recession, doesn’t mean that it will cause the next one. At RealShare Southern California last week, some of the speakers hinted that technology companies are at best has some financial troubles and at worst will be the purveyor of the next contraction.

    On the Uncovering Hotspots – Identifying Development Opportunities in Southern California, speaker Simon Aftalion, development director at Markwood Enterprises, said technology would cause the next recession. “I don’t think that our next recession is going to be caused by real estate,” he said. “It is going to be technology, because I think that sector is acting like the real estate market did in the early 2000s.” On an earlier panel focused on capital markets, Michael Klein, co-founder and CEO at Freedom Financial Funds, also suggested that technology companies were having financial problems that could impact real estate owners. He suggested that interest rates might be the catalyst for some issues for those companies.

    The Uncovering Hotspots panel included speakers Bob Sonnenblick, principal at Sonnenblick DevelopmentAdrian Goldstein, founder at CGI StrategiesRick Raymundo, senior managing director of investments at Marcus & Millichap; and John Petrov, president at Baldwin Construction, with moderator Marcus Arredondo, corporate managing director at Savills Studley—and many of them agreed that we were nearing the end of the cycle, even if real estate wouldn’t be its demise. Sonnenblick said, “We are at the bottom of the ninth with two outs. The game is over.” Raymundo echoed the opinion, saying, “The game is over and we are in a rain delay,” adding that a lot—at least for real estate investors—will hang on the outcome of the Costa Hawkins repeal. Petrov was more positive with his outlook, putting the cycle at the 7thinning, but adding no more commentary.

    It was no surprise that the panel of developer’s handful of concerns focused on construction and land costs, but also mentioned the inflated prices driven up by Chinese money. Sonnenblick expects a noticeable fall in pricing now that the Chinese have pulled capital, but we have yet to see that outcome in the market.

    Read more

    • New LA Multifamily Developments Implement Tetris-Style Parking System

      Two new multifamily developments in Los Angeles are getting a unique Tetris-style semi-automated parking system that could lead to a shift in how residents park their vehicles. Beverly Hills-based Markwood Enterprises recently broke ground on a 14-unit, 16K SF multifamily property in mid-Wilshire and a 13-unit, 12K SF multifamily development in Larchmont. Each offers one unit for very-low-income tenants.

      Both sites are featuring a two-level subterranean semi-automated puzzle shift parking system developed by CityLift.  “Every developer in LA knows if you can’t park it, you can’t build it,” Markwood Development Director Simon M. Aftalion said. “This enables us to pack in the density in a responsible way. Otherwise we wouldn’t be able to house this many units because we wouldn’t be able to park them.”  Multifamily developments in Los Angeles are required to have two parking spaces for each two-bedroom unit, one and a half spaces for one-bedroom units and one space for studios. But the innovative system by Oakland-based CityLift could start a trend in the city’s multifamily landscape that allows developers to build more density with less space, Aftalion said. The property on 1233 South Dunsmuir in mid-Wilshire will offer 18 parking spots, while the project on 4807 Elmwood Ave. in Larchmont will have 16 parking spaces. The puzzle shift — sometimes referred to as a puzzle lift — system appears as a stacked four-by-two grid. When a resident parks in a reserved spot, the system shifts or slides the vehicle or lifts it into place. The cars can be accessed independently. It takes an average of 30 seconds for a resident to retrieve a vehicle.

      Read More

  • RENTV: Markwood Enterprises to Reposition Downtown L.A. Garage Property

    LA-based Markwood Enterprises has received a $23.1 mil bridge and construction loan for the repositioning of the historic nine-level 900 South Hill Street Garage located in the heart of downtown Los Angeles. The financing was arranged by Mark Fisher, Alex Furnary and Val Achtemeier with CBRE’s Capital Markets’ Debt & Structured Finance team.

    Markwood will use the money to construct an additional floor and combine and expanded the ground floor space to accommodate a single tenant, Erewhon, a popular organic market. The top three floors will be re-purposed as creative office space and the balance of space will continue to operate as a garage.

    “We fully intend to maintain this historic structure’s beautiful façade while internally upgrading the building and repurposing it as a modern mixed-use facility,” said David Wright, the project’s manager.

    “This building’s slightly larger construction component makes it what is known in the business as ‘a heavy lift,’ limiting the field of bridge lenders,” said CBRE’s Fisher. “However, as an existing garage that can perpetually generate income and with Erewhon coming in as the new anchor tenant, we believed these factors greatly mitigated the risk.”


  • Is Semi-Automated Parking the Key to Density?

    Some version of automated parking in new developments is going to be integral to both creating density in L.A. and complying with the city’s parking requirements, as they slowly evolve. Automated parking is growing in popularity, but is still seeing slow adoption from real estate owners and developers. That is likely because there is little known about automated parking systems, both functionally and financially. Markwood Enterprises, an L.A. developer, has used fully automated parking systems in prior developments, but recently implemented semi-automated parking systems in two density-bonus developments, Dunsmuir Row in Mid-Wilshire and Elmwood Row in Larchmont.

    “Fully automated parking comes with a pretty price, and that price needs to be amortized over a significant amount of units or a very luxurious, expensive project. The price needs to be absorbed somehow,” Simon M. Aftalion, development director at Markwood, tells “When you have smaller buildings, a fully automated system, which is the most efficient system in this realm of automated parking, doesn’t work. The Row projects are in a medium-density zone utilizing a density bonus, and packing on enough density to make one site pencil with 12 to 15 units. If we could evolve a plan set that really works, we can use that plan set again and again. The question was: how do we park them?”


  • THE REAL DEAL: Markwood embarks on two multifamily projects

    Markwood Enterprises is underway on two multifamily projects in Larchmont and Mid-Wilshire.

    The Beverly Hills-based firm broke ground on the Dunsmuir Row project at 1233 S. Dunsmuir Avenue and on the Elmwood Row project at 4807 Elmwood Avenue. Dunsmuir Row will have 14 units, while Elmwood Row will include 13, according to Urbanize.

    Both projects will have a mix of townhomes, studio, one-, and two-bedroom units. One unit in each building will be set aside as affordable. They’ll also both feature a CityLift automated parking system, which is designed to maximize parking space.

    R&A Architecture + Design, a firm out of Culver City, designed the two projects. R&A also designed AvalonBay Communities’ 475-unit projectin the Arts District, and a mixed-use project by Faring in West Hollywood.  [Urbanize] — Dennis Lynch


  • Bisnow: This Week’s LA Deal Sheet

    Beverly Hills’ Markwood Enterprises is building a new 45,420 SF mixed-use project that will feature a fully automated parking system
    The project, at 11701 Santa Monica Blvd., will have a five-story residential and retail building, including an amenity rooftop garden space and 53 rental units. Five of the units will be for very-low-income households. The building will also have six live-work townhouses and 1,500 SF of ground-floor commercial space. The automated parking and courtyard-style indoor/outdoor living help set this project apart, according to Markwood Enterprises Development Director Simon Aftalion.  The subterranean parking will include 82 parking spaces and 60 bicycle spaces.


  • Curbed LA: Five-story apartment project with automated parking on the way to Sawtelle

    A new five-story residential development is headed for Sawtelle—and it will have a fancy automated parking garage.

    Set to rise on the northwest corner of Santa Monica Boulevard and Barrington Avenue, the project will include 53 apartments and six live-work townhomes, along with 1,500 square feet of commercial space on the ground floor.

    Five of the apartments will be set aside for very low-income residents (those making under half the median income in the area).

    Designed by R&A Architecture + Design and developed by Markwood Enterprises, the structure will have a contemporary aesthetic with elements of wood, metal, and glass, along with hanging vines draped from upper level trellises and overhangs.

    Residents will have access to a shared rooftop deck, open-air terrace, central courtyard, and an amenity room.

    The automated parking garage will ferry up to 82 vehicles in and out of a subterranean lot via a computerized shuttle system. The garage will also offer 60 spots for bicycles.

    Plans for the project filed last year indicate that it will take about 13 months to construct and should be ready to open by the end of 2018.

  • RE Business Online: CBRE Secures $23.1M Loan for Mixed-Use Redevelopment in Downtown LA

    LOS ANGELES — CBRE has secured a $23.1 million bridge and construction loan for the repositioning of the nine-story 900 South Hill Street Garage in downtown Los Angeles.

    Mark Fisher and Alex Furnary of CBRE’s New York office, with the assistance of Val Achtemeier of CBRE’s Los Angeles, office secured the loan on behalf of the developer, Los Angeles-based Markwood Enterprises.

    Markwood will construct an additional floor, and combine and expand the ground-floor space to accommodate a single tenant, Erewhon, an organic market. The top three floors will be re-purposed as creative office space and the balance of the property will continue to operate as a garage.


  • Connect: Markwood Proceeds with West LA MXU

    Early Bird Alert: Connect Apartments is planned for September 28th in Los Angeles.

    Beverly Hills, CA-based Markwood Enterprises secured entitlements to develop a 45,420-square-foot mixed-use project at 11701 Santa Monica Blvd. in West Los Angeles. Located at Santa Monica Boulevard and South Barrington Avenue, the site will house a five-story residential and retail development, including a 3,047-square-foot rooftop deck garden amenity space and 53 rental units.


  • Urbanize LA: Apartments with Retail at Santa Monica and Barrington

    A new environmental report offers a first glimpse of a proposed mixed-use development in West Los Angeles.

    Markwood Enterprises, a Beverly Hills-based real estate firm, has proposed the construction of a new residential-retail complex at the northwest corner of Santa Monica Boulevard and Barrington Avenue.  Plans filed with the city describe a five-story building that would feature 53 apartments, five of which would be set aside for very low income households.  The project would also offer six live-work units and 1,500 square feet of ground-floor commercial space.

    Other elements of the proposed development include a rooftop deck, a fifth-floor terrace and a ground-level amenity room.  Parking accommodations for 80 vehicles and 55 bicycles would be provided in an automated subterranean garage.



  • Urbanize LA: Apartments with Retail at Santa Monica and Barrington

    A new environmental report offers a first glimpse of a proposed mixed-use development in West Los Angeles.

    Markwood Enterprises, a Beverly Hills-based real estate firm, has proposed the construction of a new residential-retail complex at the northwest corner of Santa Monica Boulevard and Barrington Avenue.  Plans filed with the city describe a five-story building that would feature 53 apartments, five of which would be set aside for very low income households.  The project would also offer six live-work units and 1,500 square feet of ground-floor commercial space.

    Other elements of the proposed development include a rooftop deck, a fifth-floor terrace and a ground-level amenity room.  Parking accommodations for 80 vehicles and 55 bicycles would be provided in an automated subterranean garage.


  • URBANIZE LA: Markwood Breaks Ground on Two Multifamily Residential Developments

    Beverly Hills-based developer Markwood Enterprises has started construction on two multifamily residential buildings in the Larchmont and Mid-Wilshire neighborhoods.

    Dunsmuir Row, a four-story building at 1233 S. Dunsmuir Avenue, will feature 14 residential units in addition to a rooftop amenity deck.  Plans call for a mix of townhomes, studio, one-, and two-bedroom apartments – including one unit of affordable housing.

    The second project – called Elmwood Row – is located at 4807 Elmwood Avenue.  The four-story edifice will feature an additional 13 apartments – including townhomes, studios, one-, and two-bedroom units – of which one will be set aside as affordable housing.

    The two developments will each feature semi-automated parking systems, according to CityLift Parking, with a mechanical system that “maneuvers vehicles in and out of a puzzle-like configuration, akin to a game of Tetris.”  Average retrieval time is 33 seconds.

    Both projects are being designed by R&A Architecture + Design.


  • Globe St.: Boutique Developers Push Boundaries

    Boutique developers are small and nimble enough to push boundaries in ways that larger developers can’t, and as a result, they are playing an integral role in pioneering innovation in new development. Modular housing and technology implementation like automated parking were some of the examples that experts on the Mixed-Use Panel: Successful Designs for Live/Work/Play discussion at RealShare Apartments gave last week. The panel discussion was led by moderator Adam Artunian, VP at John Burns Real Estate ConsultingDaniel Gehman, studio director at Humphreys & Partners, Architects; and Simon Aftalion, development director at Markwood Enterprises.

    “Boutique firms take on new practices with open arms, because we have to, and we are pushing the boundaries in a risk adverse way,” said Aftalion. Gehman agreed, adding that he is seeing more activity from boutique firms. “The exciting thing is that they will look at properties that bigger firms will pass over. They also bring patient capital and legacy properties,” he said on the panel, adding that they have different avenues of getting land sites than larger REITs and institutions and that they try new things that the larger players can’t because they are untested. “The boutique players break new ground, and it eventually gets incorporated into what everyone else is doing,” he said.

    Aftalion’s firm, for example, has incorporated automated parking systems into its development projects to accommodate the parking requirement in a denser footprint. On this particular site, adding a parking structure would have killed the deal. “We looked into other means, and automated parking operators approached us,” he said. “I realized this was the future, and I realized that people would have to embrace some form or automated parking.” The project was a success, and Aftalion believes that the proven success will drive more interest from capital. “I think equity will start getting behind that type of development because it is the only way that you can turn out development,” he said.

    Boutique developers also help to drive density by building on smaller sites that larger developers overlook. “I think boutique could be a boost to the overall affordability of housing,” said Gehman. Aftalion added that large developments are often “entitlement nightmares” and can take years before ground breaking. He believes that you will never grow the housing stock by taking years to build 200-unit projects.

    Aftalion and Gehman are also looking into alternative ways to build sites. “We have been building the same way for 150 years, so there is time for a change,” said Aftalion. One idea is modular projects as a way to expedite development and reduce costs. Gehman says modular can be scaled, much like a hotel development. “We have been looking into modular, and I think eventually we will have a site that works. It is a little tricky, and I think that we are going to get over these hurdles quickly.” Gehman added, “Modular is coming of age. There are rules, so it isn’t there yet.” But, it is coming and there are developers today looking at ways to use modular housing in multifamily.