With Randy Johnson — Master Developer of Playa Vista
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What this conversation gets into
Randy Johnson, the real estate veteran who helped master develop Playa Vista from Howard Hughes land into a thriving 6000 unit neighborhood, joins Taylor Avakian on the No Vacancy podcast.
Randy Johnson, the real estate veteran who helped master develop Playa Vista from Howard Hughes land into a thriving 6000 unit neighborhood, joins Taylor Avakian on the No Vacancy podcast.
In this in depth conversation, Randy shares the full story behind Playa Vista: navigating 30 lawsuits, coastal commission battles, methane mitigation, massive infrastructure costs, multiple ownership changes, the Dreamworks saga, and turning wetlands into one of LA's most successful master planned communities.
He discusses lessons from 40 plus years in development, the 2008 crash, working with Brookfield, building Silicon Beach, affordable housing innovations, and why residential markets stay open longer than commercial.
Randy also covers current challenges in Pacific Palisades rebuilding after the fires, LA housing policy failures, the broken affordable housing model, veteran homelessness solutions, and advice for aspiring developers in today's tough regulatory environment.
Chapters:
00:00 Intro and Sponsor
01:42 Building Playa Vista: The Full History
08:49 Litigation, Recapitalization and Ownership Changes
11:36 Dreamworks, Silicon Beach Catalyst and Market Timing
16:23 What Randy Would Do Differently Today
19:14 Palisades Rebuilding After the Fires
26:46 Life Changing Impact and Affordable Housing Lessons
31:18 Surprises in the Development Process
34:52 Randy's Early Career and Path Into Real Estate
38:00 Working at Brookfield and Big Picture Trends
39:28 Helping Homeless Veterans and Fixing Affordable Housing
41:50 What Randy Would Change About LA Housing Policy
43:11 Advice for Young Developers Starting Today
47:10 Closing Thoughts
No Vacancy with Taylor Avakian is the leading podcast for multifamily and commercial real estate professionals in Los Angeles.
Proud am I ever great. I'm selling these for unbelievable amounts way north of the business plan. And then 2008 comes. Yeah. Randy Johnson is a real estate veteran with over 40 years of experience who helped build the Playa Vista neighborhood and is helping rebuild Pacific Palisades. The market on commercial, if you're comparing it to a baseball game, the market's open for maybe two innings. Residential, out of a nine-inning game, is open eight innings. I really think AI is going to have such a profound impact. You just name a profession where you need the education and it's going to get replaced. We have 3,000 homeless vets on the street and it's ridiculous. There should be zero. The Palisadians, they feel like the city turned their back on them. They let their homes burn.
And it's hard to fault that. If there was some young person wanted to become a developer, create their own path, what would you tell them? Well, I mean, I would This episode is sponsored by Loan Titan, a leading residential financing loan company specializing in both conforming and non-conforming mortgage solutions. Loan Titan offers Fannie Mae, Freddie Mac, non-QM, and private money, hard money loan programs helping borrowers who need flexibility beyond traditional lending guidelines or speed-driven financing solutions. Whether you're purchasing, refinancing, or investing, Loan Titan is known for smart structuring, clear communication, and reliable execution. Visit loantitan.com and mention Taylor Vekian to get started. Thanks for Loan Titan for supporting the channel. Welcome to the podcast. My name is Taylor Vekian and I am here with my esteemed guest, Randy Johnson. Randy, thank you for being here.
So, the the property was purchased back in February of 1989, February 15th. And Summa Corporation, Howard Hughes, owned the property along with some other parcels in that area. And the they they didn't get the price that they wanted, so they ended up selling it to us for 256 million, but they sold land that had no entitlements. No one in their right mind today would buy a parcel that was such a hot button without a path to a to the building permits. The uncertainty there, Maguire Thomas at that time had the First Interstate Building downtown under construction. The gas tower is same thing, you know, the plans were set forward with that. They were feeling good, had very good relationship with the previous councilwoman, Pat Russell, but there was this new
councilwoman named Ruth Galanter that was coming in. The whole mood was completely different back then. You know, I in fact, I was at a LMU had this symposium last week, the 25th anniversary of Playa Vista. And Ruth was there. And so, we were talking and I was saying, "God, Ruth, you think you know, with the shortage of housing, do you think that we could get this thing, you know, the entirety of Playa Vista entitled easier than what we did back in 1989?" And there's plusses and minuses on that. But but to answer your question going through the history. So, the original partnership, 256 million, Summa left 120 of capital in the deal. Chase came forward, put 150 billion dollar revolver down. They drew about 86 for the purchase. Uh uh Maguire, Thomas, and
JMB put in 50 million. So, 50, 86 is 136 plus 120, there you go, there's your 256. After that, you know, they had to put together a plan, a master plan. So, you had all these great architects that had put together master plans for Howard Hughes. You had Skidmore came up with a plan and uh um different groups came up with different ideas. Um so, the guy who is most if you ask me whose vision was this, there was a guy named Doug Gardner who recently passed away. Uh great guy. Uh he was a uh I.M. Pei architect, but uh uh fabulous human. He brought together Buzz Yudell, Stefanos Polyzoides, Andreas Duany, Laurie Olin, Ricardo Legorreta at Mexico City. So, we had this this and I'm I'm sure I'm missing
a few, but the you had this great team that put together this vision. And, you know, the the there was a lot of different charrettes with the community. We Oh my god, I bet we did hundreds of community meetings and outreach.
Remember, the the driver here was Maguire Thomas and they're office developers, Right. and so office development is what they were gearing for. They really they brought me on for the residential, you know, type of thing. Got it. And so, the community said, "Well, we want the residential. We wanted this. We sure as heck don't want to see any regional mall here." So, just the the entirety of Playa. And Playa, you had four parts to it. You had the area that was south of Ballona Creek, east of Lincoln. That was called part D. So, that was the city of Los Angeles, no coastal. You go over to the west side of Lincoln and it goes all the way to the water and south of Ballona Creek. That was called area B. Area C was a option parcel north of Ballona Creek that was east of Lincoln, about 70 acres.
And then area A was really the prime piece. Area A was west of Lincoln, north of Ballona Creek, went all the way to the water and the idea was to bring the and bring it away out to Lincoln. So, you're going up and down Highway 1, you don't even know that you got the world's largest uh small craft harbor right there. Yeah. You know, so those areas, so area A, B, and C all had coastal and you know, commission that you would have to get and you'd have to, you know, prepare an local coastal plan and LCP, LIP, all that stuff. And I will tell you and, you know, I'm 70 and who knows how much longer I have, but it's sort of like there's no worse commission in the solar system. I'll, you know, forget LA. Forget California. Forget the United States. I'm talking they're the worst.
They're the worst. If you needed to get a coastal development and you were banking and you would never close on the land until it was there, you know, type of thing. You just wouldn't do it, you know. We bought it anyway, right? So, we we paid the 256, but a lot of that money was tied up with the uh call it a note, if you would, with Summa. So, we got the entitlements back in like '91, '93 for the first phase of area D. And that first phase was 3,246 units, million 250 of office, 35,000 ft of retail. Then the litigation started. And the litigation was just I mean, Playa is a story of how fouled up it is in California to be able to have 30 different NEPA, CEQA, unfair business act. And the issue
there is that the the plaintiff can basically sue you and if you lose, you got to go back to square one and redo the EIR or EIS, what have you. But if you win, all you, you know, you end up spending a couple of million defending these lawsuits. We had 30 of them, so you do the math. And all you get is administrative cost. And so, they've instituted all these slap, you know, lawsuit protections that preclude your ability to to do and it's the same people that are suing you on everything. So, Panning McFearson, Rex Franco, Kathy Knight, Marcia Hanscom. Oh my god. So, these people, you know, there's there's no value add there. I see them at our farmers markets, you know, at Playa and stuff like that.
And I'm going, "You shouldn't be." [Laughter] You're not welcome. You're not welcome. Go [snorts] home. So, the the project got entitled, the first phase. We went through that period where the defense contractors were uh you went through like a recession in the early '90s. And the Chase, the loan got up to 150, there was no way to re- really repay the debt. Uh you only had a small portion of the project approved. It was being litigated. We recapitalized the project. We had that point had about 400 million in it uh cuz we were buying some outparcels and stuff like that. Uh What do you end up doing? We sold it for 102 million.
We sold it for 102 is what it sold for. So, the debt was 150, just the debt. The equity got wiped. Wow. The equity got wiped. So, it was sold for 102. That's what Morgan Stanley, Mezrahf, Goldman Sachs, Whitehall You
The note needed to get serviced. But you guys were still able to to be the GPs. Maguire, we were still in it on a lesser basis. So, we formed a standalone company called Playa Capital Company. So, Playa Capital Company then developed it, got rid of the litigation on
phase one, moved into phase two, and also did a transaction where, you know, the peak capital if for land development you the economic indicator really is what's your peak capital. And we you know, we originally the original projections had the peak capital like 130 and it ended up being over 400 or something like that. So, it was it took a while. They came in in 1997 and they were in it until 2012. At that point uh we had phase two entirely in title and we went ahead and sold it to Brookfield for 265 million. And then Brookfield on the next day sold about 330 million worth of land. So, their peak capital was out for a day.
You know, type of thing. So, the Irvine Company bought a big chunk of the apartments uh on Jefferson and then a couple of months They No, they didn't flip the whole thing. They flipped a portion of it. They just flipped a portion and then they ended up building a lot of it,
trying I was trying to buy it, too. Okay. And and there were certain things that you know, uh surety bonds infrastructure that I needed a balance sheet and Johnson Family Trust doesn't have a balance sheet.
[Laughter] So, who is crazy enough to think that they were going to take on building a city in wetlands, marshlands? Like this was Steve and you had come together to build this or what was the No, this
is this is originally Maguire Thomas. So, so Maguire Thomas and as I said, the guy who really had the vision for the entire property was Doug Gardner. He created that master plan after which we just you know, we did change out product it to be market you know, we had to be responsive to what the market was telling us, but in 2005 and 7 I was kind of going, "Oh my god, am I ever great?" I mean, I'm selling these for unbelievable amounts way north of the business plan and then 2008 comes. Yeah. But we had we had already sold a good chunk of the the commercial at that point, too. We were in pretty good shape.
Yeah. And so, I mean, there's there's the litigation, there is the infrastructure. I mean, the infrastructure was almost a billion dollars worth of infrastructure that you were mitigating transactions. It seemed like you were going up to Portland, down to Tijuana, you know, doing traffic mitigation intersections. And you also were you know, creating what they call the ecological infrastructure where you had this drainage device on the west side of Lincoln south of Ballona Creek called the freshwater marsh and that would take the runoff and basically before it you know, found its way into the Santa Monica Bay, it would go into Ballona Creek, but it was cleaner than the water that was already in there. It'd go through this filtration process. So, we created that and there was a bunch of other I mean, the city floated some Mello-Roos bonds, but it doesn't cost them anything to do that,
Yeah. So, you were mentioning earlier the original Well, the original plan was 13,000, right? Wow. So, we sold all that land that area A, area B, area C, that was sold for like 135 million back in 2004. Okay? Because at that point you we just couldn't we made the determination because you needed to get a coastal permit, it just wasn't going to happen. You know, so the state wanted the property, but here's the issue. They bought it 20 years ago, it's still haven't done anything with it. No way. So, they wanted to restore the wetlands, but it's the same nutballs like Marcia Hanscom, Roy Vanderhook all those people that they're blocking it.
Okay, is is where that is. And most of the wetlands have been highly degraded. You know, but there is a plan uh you know, for that. And then area A is still a wonderful parcel and area C is a wonderful parcel. It'd be you know, but the state owns those.
So, can you walk me back through cuz I know there's been a lot of ups and downs and a lot of interesting stories. So, can we talk about DreamWorks and what that process looked like? So, in 19 what?
be 1995. There was an agent called I think his name was Jeff Allen. But at that time it was SKG Spielberg, Katzenberg, Geffen and the relationship with Maguire at first was a lovefest turned ugly pretty quick. And so, they had way more juice with the city council than we did. You know, and they just buried us, you know, type of thing. DreamWorks did? DreamWorks did. I mean, the city wanted DreamWorks, they wanted the studio built. We were selling a bunch of land that we later sold for over 200 million, we were selling to them for 27 million. Whoa. Yeah. And so, on the one hand it would have been a great catalyst. On the other hand, uh we ended up doing fine, you know, without them.
That was when the whole Silicon Beach I was going to say. was happening. Lincoln Lincoln did a great job. Tishman Speyer did a great job. Bank of America did a great job.
You guys built You effectively built out Silicon Beach or were the catalyst for building Silicon Beach because I don't think those companies would have come if you guys hadn't started laying the the groundworks for what was going to be
possible. We were putting together the the framework for the merchant builders to build. I mean, so we've got over 25 different parks out there. Some of them were pocket parks, some of those are regional parks. They're all different sizes and programming. And uh they they like the feel of the campus, but there was a point in time we were looking at converting the entire 4.5 million feet into residential. I would tell you that the market on commercial if you're comparing it to a baseball game the market's open for maybe two innings. Residential out of a nine-inning game is open eight innings. You know, right? So, you either hit the window or you you don't hit the window. You know, the the other interesting thing would be just what would we do differently today than we had it. So, the big
catalyst uh on the planning side I would tell you that I would do a K through eight school. I'd allocate the land for that versus a K through five. I think that makes a big difference. When we did the first phase, we didn't think we were going to get that many kids. We have tons of families. Wow. And and we've got this great partnership with LMU on this school that it's a it's LAUSD, but it's you know, it doesn't have all of the LAUSD union issues. The bottom line is a community needs to endorse it and they did. Got it. So, the school is very important. The retail is huge. So, when Whole Foods opened, big pops in values, walkability to it big pop. I'd bring some of that retail on early and just subsidize it.
I mean, because in the end when Lincoln rented that out, I want to say the lease was only a buck a foot a month type of thing. There were some percentages in there, too, over the base, but the and that store rocks. I mean, it does very well.
But the in the end, the retailers need to make money. Yeah. So, that's where it it gets kind of tough because the merchant builders are looking to get you know, the last nickel on the lease rates and a lot of cases the restaurants just can't make it on that. And so, you almost have to look at how do we almost keep the retail, not sell it, do it ourselves so that it becomes no different than infrastructure. And you're creating place with this. And so, that we'd do a little bit differently, you know, as far as the residential goes, we were constrained a little bit on height. It would have been nice to be able to go up a little, but you know, we did I think the most we have out there is we maybe got there's maybe a seven-story building that's Belmont Senior Living.
The land is magnificent, you know, it's just in structuring the transaction you would never close on land without entitlements. You just wouldn't do it. Yeah. And when you're in the area where you do have a LCP LUP and you have to get the coastal if you have to get a coastal development permit, you better you make that a condition to close, you know, type of thing because it's just brutal. It's all like in the Palisades today where you've got 5,400 homes down two-thirds of those homes are in the coastal zone. Some of them have what they call categorical exemptions, But it's you know, if you have to modify your coastal permit, you know, good luck. Good luck. Well, you know,
I think the governor has done a great job in telling them, "Guys, don't be butt heads." You know, that type of thing. So, he's kind of laying the the law down and he's he gets so many appointees on the Coastal Commission. And I think they're all fairly pro-development, but there's still some of them in there just, you know.
Brookfield? Brookfield did very well. What was their What are the numbers on that? They bought it for 265. And they sold it for 300, but also the second
day they sold it. That's right. Yeah, they they did well. I'm not going to tell you the the They don't want that disclosed. But they did very well. Yeah, I mean their yield was incredibly good, you know, but the Aurora Thomas and JMB not so good. And and Goldman and Morgan were great owners, too. It was great. You know, those are They're good people. They as opposed to what most people think that they'd sell their mother, you know, that type of thing.
What What was your day-to-day like when you're dealing with all this stuff? Was it mostly litigation? I mean, you said 30 lawsuits. Like, were you What were you You were the CFO at the time, right?
I was CFO and then I was in charge of really the operating side. So, Patty Sinclair did the legal stuff, you know, the land use issues, and I did the development issues.
methane is Wherever you see oil drilling, you'll have methane. And it got politicized. Yeah. And a lot of the safeguards, I mean, okay, so we just had the 25th anniversary of Playa Vista.
And the amount of the delays of the methane were just just punishing. You know, we helped with the LA code is, you know, for that. You know, but it's it was difficult. Yeah. Yeah.
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the the payoff is when you see families that had bought initial product, starter product, and they went to move up product. Now they're in luxury product. I mean, you've got different price points out there. We did I mean, we had a bunch of stuff. I mean, Ruth part of the conditions of approval that 10% of the labor would be at-risk youth. So, the at-risk youth These are guys that had an interrupted, you know, K-12 experience. And had never really worked, you know, in a job. And, you know, okay, you got to get here at 8:00, you got to work till 5:00, can't hit your boss, you know, can't smoke weed during the the you know, you know, stuff like that. You know, and the stories there were fantastic where they went from apprentices to journeymen in certain trades. Some guys they didn't make it.
They they they just didn't work for them. But a lot of them we changed a lot of lives, you know, with that. And everyone who was out there, you had a 10% of your labor was going to be at-risk youth. And so, let's do something other than just giving them a broom to hold. Let's teach them. You know, and And today for all of our kids, you know, when we look at it, college isn't really for everybody. And why I really think AI is going to have such a profound impact on, you know, engineering, coding, you just name a name a profession where you need the education and it's going to get replaced. Well, maybe it's maybe this is or something there to Hey, I'm going to be a HVAC repairman. I'm going to be a this or a that.
And and you know, our home back in New York, I mean, the plumbers are treated like royalty, you know, that type of thing. You know, they're Where's a plumber? I mean, no one could find one. You know, but it's the world's changing, you know, and I think that part was a very good condition. But we had other we had the first phase we had 15% was affordable. Third of that very low, third low, third mod. And then we had another interesting concept. And, you know, one of the things that's going on right now with housing is that you've got this missing middle where the all of the housing it just seems it it's for people that can pay four or five dollars a foot for rents or paying 800 to 1200 a foot for, you know, housing. We had this concept called price controlled units where
if you were a teacher, fireman, policeman, worked for the government, you worked within five to seven miles of of Playa, we had subsidized housing back in '93 at $195,000. And then it grew one and a half times the CPI. So, you would sell this to a teacher who worked at the school, and they paid $195,000. And then in 15 years after that purchase, they could sell it on the on the market. So, if you look at it, the stuff that we sold back in 2000 and even if it was 2006, you know, that type of thing. 2021, the resale control came off. At at that point, it was probably worth about 700 a foot for 1,000 feet and you only paid, you know, you know, a third of that. It was great to keep people who work in the community
and need to stay in the community. And the affordable there's no impact on affordable. It's like in Santa Monica, you could have a $3 million condo between Montana and and Wilshire. And you've got a very low-income dilapidated project next to it. This it doesn't impact this value over here, you know, that type of thing. And we found that to be true in the affordable. And a lot of the people that live there are great community members, you know, that type of thing. You know, so it's Yeah, they're they're It's more than numbers. It's more than how how do you do? It's, you know, what are the real stories there, you know, as far as whose lives are you changing?
And a lot of rooms with very established people who built incredible things. Was there something that you learned or you've taken away or from your experience being around that yourself in that environment that has really stood with you and something that maybe you've taught your kids or that you think has been one of the best learning lessons for you?
We had the best consultants in the world, you know, we just did, you know, and we had a lot of smart people. But in the end, if you have a passion for the business and you just want to know everything about it and be the best at it, you know, you have to you got to spend the time. You have to be humble, you know, and you have to be, you know, it's you never stop learning. I mean, I'm 70 and I'm I'm still learning, you know, and it's it's wonderful, you know,
Yeah. How do we, you know, like right now in the Palisades, all these people rebuilding, you know, gee, you know, the the insurance company's only giving them X and the cost is, you know, 7, 800 dollars a foot.
And how do we get that cost out? What are the components? How do we how do we do this? And that you're right now you have a new company Yeah. that you guys are building in the Palisades, right?
Um well, it briefly, you know, we're we're raising the capital for it now, but we're looking at buying some lots out there and building product that Palisadians are going to want. And they're a picky bunch, you know, I mean, they they they're not going to want the cookie cutters. They want very high-end architecture, very whether it's the the design, whether it's the cabinet package, the window package, the stonework, the millwork, the landscape, and everything's going to have to be a notch above, you know, for this. And how many buyers are out there for, you know, five to 10 million dollar product? I mean, it's a it's a limited market.
Is your experience with dealing with maybe land or situations that other people might shy away from because there's a lot of hurdles that go into it? Did that lead you towards wanting to do the Palisades stuff cuz it it sounds like there's a lot of
similarities between Well, it's the reverse of a master plan community. In a master plan community, I'm controlling the infrastructure and I'm controlling what builders build where and what product they build. I've got I'm in control. Whereas there, the city is in control. I don't know if any city is built to deal with the the issues, but I mean, the Palisadians, they feel very like the city turned their back on them. They let the city burn. They let their homes burn. And it's hard to fault that. You know, I mean, you if you were up there and you hear the stories, it's it's it's hard to fault that. So, there's still there's still a lot of anger, and well well deserved, you know, anger. Um but there's this desire to come back, you know, for so many of them, you know, and there's guys that are in their
want to build back. to rebuild. Yeah. Yeah. That's crazy. Yeah, it is. It is. But it's uh it'll get done. I have no idea what Trump's order is, new executive order, the impact it's going to have. I just don't know. Uh we'll have to find out. But there's probably about 300 homes that are under construction right now out there.
Yeah, so you you got 5,400. They've had been probably been close to 400 lot sales. Uh there's uh uh probably over 400 building permits issued of which 300 under construction. And they a lot of these people are just getting through the uh the insurance issues. I mean they're it's taking a very long time, you know, for that to happen. Insurance is a very huge issue. Uh and now that we're a year past it, you've got the the loss of use provisions for some of these people as far as paying for your temporary living expenses running out. Yeah. You know, type of thing. So they're faced with gee, I got to pay my mortgage on a house that burned. I've got uh you know, this new house that I'm in, I got to pay the rent there. Um I think you'll see a lot more lot sales coming up in Interesting.
Yeah. Okay. Um what's something that maybe has surprised you and or would surprise people in terms of the process of actually getting something developed and done? Like what what do you think people don't understand when it comes to the process of being a developer?
Uh you know, it's it's the you know, developer is is an orchestrator. Uh he's coordinating the the design. Uh he is uh managing the general contractor based on the the type of product you're doing. Um he is involved as a developer in after it's built, so call it asset management. Um it's it's the full array. You're you're a conductor, you know, on this thing. And it's tough to make a buck in it today. Real estate, I mean, like you you know, how do you tell somebody that they should be investing in apartments in a city where we've got this ULA tax where, you know, it's I think it's 4% over 5.3 million Mhm. and it's 5 and 1/2% over 10.6.
So you're most commercial sales are going to get whacked. Yeah. And then the city making a decision to take a hundred million of this and to use it to fight evictions. And so you as a landlord you're just under continual siege that it's it's it's happening back in New York with Mandami where uh they view it as housing is you know, it should be public housing. Mhm. And that's not going to work. I mean, so there are challenges, you know, I mean, retail challenges there. Office is still so tough. And the funny thing is in office, if I'm in Manhattan I'm in uh Hudson Yards the rents are over 200 bucks a foot. I mean, they're just yeah, they're they're massive. Holy moly. Um some of the Midtown buildings are doing well, but
uh uh it's a tale of two cities. We have too much office. And then the the buildings downtown, like our downtown is a show, you know, type of thing. And uh um you know, even if you get the buildings at 125, stuff that cost 600 bucks a foot to build, that you're buying it for 125 a foot, it may not work. You may be better off demolishing that. You know, uh and starting anew. Makes sense. versus retrofitting all the seismic costs that you got to go through and everything and it's it's uh down our downtown is is challenged. And I and I worry about gee, we got the World Cup coming up. We got the Super Bowl in '27. We got the Olympics in '28. Uh what's our city going to look like and uh um yeah, it's it's a concern. And who's leading that effort?
It would have been nice to have Caruso uh cuz Rick I think could uh but Austin Beutner is is is good. Karen's a very nice person. She really is. Uh she's just not built for this.
That's right. Well, this one was I couldn't hit the curve. Uh I mean, I graduated with an accounting degree and uh my first job was back in '76 with Coopers & Lybrand. It was one of the big eight firms at that point. And I had shitty grades. I mean, I was I did fine in accounting, but the rest of them I was more of a B, C, D. Accounting was A and B, but the the other stuff was probably B and C and I enjoyed myself in college. And so they they So I got my big break there and I was making $13,000 back in '76 and I go, "God damn, that's that's really good money." Living with my mom and dad and, you know, and life was good.
You know, but then I end up coming out to California in '79 and started work for developers out here at that point. And then the rest is history from that perspective. Yeah, well, it just it just you just, you know, you get in it and uh it is fascinating uh to create the creativity that that goes behind it. Uh all the people that are involved in the development, it's fun. I've enjoyed it. I've been lucky, very fortunate.
You've I mean, you've again, you built a city, right? Or a quote-unquote city. Um I'll call it a city, but it's incredible to see because I'm so I'm multifamily broker and through that process I've I've seen a lot of what goes into the housing market and I've seen all the good and all the bad and the fact that you've been able or you guys were able to provide through many means, you know, thousands and thousands of homes where a city that's plagued with uh a supply-demand issue, right?
And people keep saying that say that, Taylor, but if you look at our population we were going down, now we're flat. All of these regional housing needs assessments that SCAG puts out there you got to ask yourself, well, if you're not really growing why are we housing? Why do I mean, is it the obsolescence factor? Uh you know, is that what's driving this? There is a segment of our population though where I mean, it's the affordability index here is ridiculous bad. You know, This is for homes. Yeah. For homes it's it's it's a for rentals, I mean, rentals, I mean, you do a new project. If I'm downtown, we had when I was at Brookfield, we did the last one was like a 60-story building we did down there. Uh Bowdry. And uh I want to say the rents were a little north of five bucks a foot.
by the way. Yeah. And that was the architect, Leo, Leo Marmol, Marmol Radziner. They did a great job on it. And uh Patrick Rose actually built that. He did a very good job, too. But it's five bucks a foot. And I'm going, "Who lives downtown?" Oh, what do they do? Well, this was a social influencer.
What's a social influencer? You know, and how do they make their money? You know, type of thing. I'd much rather live in Playa, just to be honest with you. What was it like working at Brookfield?
Oh, it's a huge company. I mean, the company and and the very top, I mean, Bruce Flatt is an amazing person. I mean, all big money asset alternative asset managers, they hate development. They just do. They like real estate or existing income property, but they'll actually put limitations when they raise funds. Hey, I won't do any more than 15% development beyond that type of thing. real estate, renewables, they look at Trump's doing the renewables or how he views wind energy. Oh God, he's Yeah, infrastructure, huge, you know. Uh I mean, the data centers are just fascinating. It's fascinating, you know, the the power requirements. It's not really real estate. It's more of power related, you know, and you've got credit is huge. You know, so Brookfield, it's a it's a behemoth. It's a well-run company.
You get to see deals no one else sees. So any of the big trade I mean, we bought for a city, we bought Millan, we bought General couldn't have bought General Growth at a worst time. You saw like buy high, sell
Well, it's it's it's So I was um um doing a couple things. I'm representing uh the homeless vets uh with Steve Soboroff Yeah. um on um uh the West LA property and doing, you know, housing and it's like I mean, it it's so satisfying. These guys did everything for us. We have 3,000 homeless vets on the street and it's ridiculous. There should be zero. And the VA, instead of taking the approach that what do we need to do to do the right thing for these guys so that they
can heal, they can, you know, cuz when you say, "Oh, I'm going to get them a job." They're not ready for that. These guys are you know, they need to heal. Yeah. and and some of them may never heal. Yeah. You know, but the least we can do is get them housing. Yeah. That is the very least, you know, and I think the whole affordable housing model is absolutely broken. I mean, the the VA, I mean, the you know, when they do these deals with the affordable housing developers for the permanent support of housing, they're they're it's like a million bucks a unit for on a ground lease, you know, and you're kind of going, "Why is this?" Yeah. It's cuz I look at the material costs cuz the material costs for these buildings shouldn't be any more than, you know, 150 bucks a foot. This is the material.
You know, so and the other part is just the capital stack. The capital stack is you got like six sources, you know, of of different layers of capital for these affordable housing deals. So, it's like a game with the developers where they piece together these these grants and tax credits and the bond financing and the ching ching ching ching. I mean, it's it's it's broken. And the ULA tax, God almighty, it's brutal.
I would get that cost down. I would look at where can we do more development that makes sense. You have to look at everything. You know, our planning department, you know, I mean, the zoning in in Los Angeles is so freaking complicated. You know, it just it just is. I mean, when we're looking at the Palisades, I'm looking at, you know, well, okay, I don't have an LCP approved. The basements don't count against square footage. You end up having to be this this master of okay, I can do a detached ADU, an attached ADU, and an attached JADU, you know, to this building.
I mean, all of our density for LA is downtown. I mean, I don't think there's another answer. They they just you know, we're going to put everything there. Well, that's that's not a great answer. I mean, if you go up and down any of the boulevards, Pico, Olympic, you know, any of those, where you see two-story buildings and everything, Jesus, that that should all get up-zoned, you know, type of thing where you're, you know, stick the housing closer to the jobs. I mean, somehow you got to make it easier than what it is today. It's just it's just so hard. Yeah.
It just is. From everything that you've you've learned and everything that you've been a part of, if if there were some young person in their 20s wanting to go tear up the world, become a developer, create their own path, what warnings, lessons,
tips would you tell them? Well, I mean, I would listen to all of the quarterly REIT and home builder earnings calls. I would use whether it's Claude or chat GPT or Gemini, you know, any of the AI tools. Teach yourself, you know, learn how to build. Learn materials, you know, all of the different sides of the whether it's the architecture, the engineering, the you know, just everything that goes in. Be a sponge, you know, learn as much as you can and listen. Mhm. You know, don't always open your mouth. Listen. You know, and attend as many of the ULI events that you can or the BIA events. Some of these are going to be
hokey. Some of those are going to be value add. Form a network with other people that you're constantly throwing stuff off. And and they, you know, maintain good relationships with the brokers. You know, did you hear about this?
I mean, you have to do that. I mean, like I've got my own little network and, you know, Carl Ballestero is is a good friend and he's I mean, he's got very interesting perspectives on everything. He's a great guy, you know.
Well, the smartest developer I've ever run into was Colin Shepherd at Hines. So, Colin, Hines is a step up, you know, they just are, you know, and Colin was one of these guys where he he could actually look at the structural calcs that most of the time these guys are either Indians, they're you know, they're they're Chinese. Nobody could understand the structural calcs. I mean, he could tell you whether you've got too much steel in this particular I mean, he was he was incredible. Wow. And he's a good dude on top of it. So, having somebody that he was he was formidable. Yeah, he was. But I mean, I ran into, you know, Jerry Speyer, Neil Bloom. We ran into, you know, all of these guys. A lot of it is are they that much smarter? They got a break somewhere, right?
And and they they made some dough and they're they're smart about how they leveraged it, but there's a lot, you know, Maguire. Maguire basically was a billionaire at one point almost, you know, with Maguire Properties. Yeah. Not maybe not a billionaire, but but way up there. Totally. Over 500. Yeah. And you can lose it just as quick, you know, type of thing, but it was a great group when I look back at the Maguire Thomas people. You know, I mean, whether it was we just had great people, great people, you know.
Who's one developer, investor, owner, real estate person who you would love their story to be told or that you would be so curious as to understand that story? Is there anyone that comes to mind?
So, I know most of the story. I mean, Gerald Hines was great story. Trammell Crow, great story. The guys that did Century City, Zeckendorf? Zeckendorf. Bill Zeckendorf. Yeah. Yeah. Yeah. Yeah. That was an interesting one. And a lot of these guys are New York you know, the New York guys that came out here or that were in New York, you know, that developed there that are just fascinating fascinating guys.
This has been incredible. I really appreciate you. I know we got a deadline here. So, I appreciate you sharing the story. I mean, you've done some pretty incredible that again, not many people on Earth have been able to say they've been able to do. So, thank you for sharing