https://therealdeal.com/la/2025/12/19/pimco-witkoff-firm-default-on-santa-monica-apartments-loan/
The 249-unit property, located at 500 Broadway in Santa Monica, contains both rental units and retail, opened in 2019. It has faced occupancy issues ever since. This is one of a number of rental and retail properties in Santa Monica which have faced distress in recent years.
It appears the property is a joint venture between the investment firm of Trump administration Middle East envoy Steven Witkoff, and Newport Beach-based investment giant PIMCO (with PIMCO apparently making up the majority of the ownership). Witkoff is no longer actively involved in investments, after joining the administration.
Who would have thought that studios starting at $4k/mo on a busy intersection wouldn't be a smash hit.
It’s busy but also near the rail. However, 4k is insane. Pricing on this and the brand new mega-Vons will probably have challenges too.
They need to start charging non-occupancy tax on these properties.
I'd be really curious on how a non-occupancy tax on commercial would impact all that empty commercial space we see. A lot of building owners would rather keep a commercial space vacant, because they want to hold out that either the market turns around and they can charge more for rent, or land a big name like a chipotle/sweetgreen/other chain restaurant/ex, than sign a lease and be locked in to cut losses for a period of time.
We have so many small/local businesses that can't afford market rents (no rent control for businesses), but so much visible vacant commercial space, there's got to be some form of targeted policy solution that gets at both
you'd see more bankruptcies.
it works like this: developer and investors sign loan papers in which they project rent. in this case clearly someone got greedy and wanted to paid muchomucho money before (hint: trump did this in chicago, too) and they had to put a per-sqf rental price in the loan application that made sense. if they charge lower rents than what they projected they are in default and the investors can call the loans. since private equity vultures and banks and such aren't good at renting properties they'll let it rot in the hopes that someone buys it for full or close-to money, instead taking the tax writeoff in the meantime, which still makes them happy. the corner meanwhile deteriorates and becomes another blight-ridden area.
I like the idea of punishing them with a non-occupancy tax but you gotta work out what to do next and how to still get people to renovate/build housing in LA. because, shocker, it's only the guys with money who can and they want only one thing ... moar money in return. it's not like we have sufficient public housing being constructed.
OK so if that’s the only other option to having an unlivable vacant city then I suppose let the giants fall and we’ll try to pick up some of their pieces at auction?
no, there are many options. public support for low-/mid-income housing construction (LA in particular has made that very, very difficult) and not gutting fannie&freddy would be a start.
Sounds like a good thing to me. It makes no difference to the average person if they go bankrupt or not. At least if they do there’s an opportunity for someone that cares to get the ball rolling on actually creating something.
I don't have the energy to explain how it affects "the average person." People not understanding details and thinking what their gut tells them is ultima ratio is how we got Trump.
Fuck me for wanting a functional economy instead of a ghost town of for lease signs up lmao. Dysfunctional anti free market capitalism is great guys, I swear!!
Edit: to make it clear that I understand too, I’ve worked with c suite people at Pac Life when they owned PIMCO. The returns they make on property like this is insane. A reduction in value isn’t sending anyone into bankruptcy.
we all want an economy that works for regular people but if you bite everyone who actually mentions the problems and goes into a bit of detail then those with the energy to actually work on the issues won't ever see them. you should be happy that this is being discussed.
The Venn diagram of people who will pay 4k a month for a studio and people who will ever set foot on public transportation is two circles.
This idea that unoccupied housing is the cause of LA's high housing costs always comes up.
Places with the lowest rates of unoccupied housing have the highest housing costs. LA doesn't have a particularly high rate of unoccupied housing, and driving it lower would make housing costs higher, not lower. The answer to the high cost of housing is building more housing, period.
Ding ding ding
Can you explain why charging an unoccupied unit tax would drive the cost of housing up? That seems counterintuitive to me.
It just seems crazy a development can have 100 empty 4k a month units, and not get some consequences from the city.
Perhaps if the tax was only levied on “luxury” units some % over median value it wouldn’t?
I love the idea of a non-occupancy tax!
Being near that train station is a pretty big negative tbh, the area around it isn’t always the safest to walk around and the city doesn’t do much to remove the crazy people.
A non-occupancy tax would ultimately drive up the rates to make up for the losses. I'd love to see some kind of consequence to vacancies but we'd be better off with rent control
Wouldn’t rent control do the same
Rail? Have you used it in SM? It travels at snail pace, and also works as a mobile homeless shelter
The train is great. I love using it to get to Santa Monica from downtown LA.
Yeah but trying to sell an apt to the Santa Monica crowd and telling them they can conveniently go downtown doesn’t have the same ring to it.
You don't think a non-car commute to their job in downtown is appealing?
Not for people making enough to live in $4k/month 500 sq ft studios… Theres a 2 bed listed for almost $20k a month. These people aren’t taking the metro ever
exactly, its insane how much they are trying to charge there for what it is and especially where this building is located with all homeless shenanigans and screaming outside of its doors
Idk Howmany people do that though… I live in sawtelle/SM and most people here and plenty happy to never leave the west side. Morning traffic on the 10 is very heavy going west, pretty light going downtown, vice versa in the afternoon. So that says most people are commuting TO SM for work.
The only people who want that would be high earning young people who are new to the city. There are not many of those. Then you get older and want space and to be a bit further from the hustle and bustle.
There's this one development in Silver Lake that always made me laugh because getting in and out of it would suck and they're 4k a month studios.
All the people in this subreddit who bend themselves out of shape to argue that building endless “luxury” housing will inevitably trickle down to open more affordable units. Ignorant of the reality that the number of Angelenos who can afford $4000+ rent is much smaller than those who can’t. The people who can afford high rent aren’t going to pick dumpy studios, but instead of lowering rents, the corporations that own the units will let them sit vacant for years. Same thing they do with commercial real estate.
These companies have their heads so far up their asses with these rents.
Good. Hopefully it will be sold as short sale or as a foreclosure to someone willing to offer more realistic rent prices.
Normal housing cycle. Someone overpays and it blows up in their face. A buyer will come in and purchasae the building at a cheaper price and will allow them the leeway to reduce rental prices if they want to. The city takes a hit in property tax revenue when building's valulation drops.
where does it say it has occupancy issues.
I live close to it. I can see all the empty apartments with my eyeballs when I walk by.
Santa Monica redditors say it’s been, at most, 70% leased since it opened. (I believe they found this from their website)
Edit: I was mistaken! I honestly thought this was about The Park, since they’re also defaulting and the news came out this week as well. Same story, different wildly expensive apartment building.
Edit 2: Anyone else as stupid as I am? It is The Park 😅
It's wild how few redditors trust their own eyes. There are so many vacancies in the new construction across the Westside.
It's wild how many people think "they don't leave their lights on all night" means a unit is vacant lol
You can't tell how vacant a building is by looking at it from the street, but it's hilarious how many people think they can.
Its political motivated. These people dont want market rate housing and think non profits building 100 units a year is a better option and some kind of solution. 100 units aint helping anyone.
Its so weird.
You dont hear "lights being off or on" at these non profit buildings. Interesting
I think it's just regular old NIMBYism. It's in their interest to pretend the housing crisis is anything but a shortage.
Yea thats why theyre ok with only non profits. They know they dont have capital and won't build anything lol.
I want people to be aware of this. Cause it only hurts everyone.
Yes, no lights, few cars in the parking lot, no pedestrians ever, but sure, they're all fully rented, trust me bro.
Yeah I'm sure you're posted up all day long tracking how many people come and go. Very reliable intel thank you lol
Trust me bro, they're totally full. It's impossible for people to know anything about their own neighborhoods without being a certified realtor. There aren't any vacancies. That's why unfinished apartment towers downtown get bought up immediately and finished rather than turning into multi-story graffiti galleries. The demand for luxury apartments is just too strong bro, no vacancies.
According to another comment it's more than 80% occupied: https://www.reddit.com/r/LosAngeles/comments/1psahf0/249unit_santa_monica_luxury_complex_tied_to_trump/nv8nvgv/
Since they did 2 seconds of research I find that more convincing than someone who's admittedly guessing based on what they see from the street as they drive by.
I never even said it was full, I'm asking. If you can find literally anything reliable you can convince me but you're not even trying, you're just sarcastically saying "trust me bro" as if that isn't exactly what you're doing lmao
According to that, at least 30-40 apartments will be coming available. That doesn't mean the rest of the building is occupied. It could also mean the management know how terrible the optics are for a mostly empty building and how good a marketing tactic perceived scarcity is.
I mean, if you haven't seen how much relatively empty relatively new construction there is, just from driving around and using your own eyes and good judgment, I'm not sure I can help you.
Hint, if there are rows of apartment buildings immediately adjacent to lots of empty storefronts and restaurant spaces for lease, it's a pretty safe bet those apartment buildings aren't overwhelmed with tenants.
Thats so dumb. You're trying to predict the future. Using February in Mid December and oceanwide plaza in downtown reeks of desperation.
Still nothing if substance whatsoever. I'm tired of your baseless guesses and it doesn't seem like you'll ever post anything of value.
Those buildings in downtown have zero to do with la. It was a developer issue.
Trust me bro, the non profits will build us out of the housing crisis. Trusssst
"they'll build a record of 200 units in the next three years! isnt that great!! We dont need private developers, the city council told me they are bad" s/
According to the website its 84 percent occupied.
Do you wanna keep going now vacant it is?
It’s pretty obvious at The Park. Take a gander for yourself!
Santa Monica redditors arent all trust worthy. They constantly lie and fear monger. ive seen their posts. im convinced a good deal of them dont even live or work there.
I hybrid work in sm and there's a certain group on reddit tgat likes to talk about market rate apts being empty for their socialist views.
I dont trust it at all.
You’re certainly entitled to that opinion, I’ve seen some wild posts there. But I do live next to The Park. It’s visibly empty, particularly on the alley side.
Article linked is about The Park.
Jfc I’m so confused. That’s enough Reddit for today 😅
It doesn't mention occupancy.
You can simply go to their website (www.theparksm.com) and see that they have >40 units available right now, plus are advertising "Limited Time-Up to 8 Weeks Free!"
ok, so its 84 percent occupied at the moment?
That's not bad considering the rent.
Why are people trying to say how vacant it is lmaooooo
The article didnt mention.bad occupancy. Yet im guessing the Dsa crowd is trying to use this as dont build market rate apts?
Hilarious.
Article behind paywall.
I read it. It didn't mention occupancy issues.
Source: I made it up
This seems to be the theme with these "luxury complex apts", its like they want them to stay vacant with insanely high rates, while they know that housing is an issue. So then we end up with an empty 249 unit apt building and the same worsening housing problem. My only other guess would be money laundering.
City/state leadership is really asleep at the wheel on this issue.
I’m sure so Russian investors will bail them out soon enough
😅🤣😂😆🥰😄😁
I can hear all the graffiti dorks racing over on their bmx bikes to start tagging
That would be cute tho
Yea because thats the problem with this. Not these rich assholes destroying housing for regular people.
Ya know, you don't have to defend one group of low-lifes to denigrate another group of low-lifes.
They're both a net negative for society.
they both suck tho
lol but the kids on the bmx bikes are only doing the chicken scratches. i stumbled upon the instagram page of a guy who does actual huge hitups including all over LA and hes like a certified pro that travels around the world for his hitups. Like he will use actual climbing rope and harness to do this stuff and film it with drones. say what you will but you can't deny it is certainly a skill.
I can and will deny it
you don't think using harness takes skill? lmao alright bro go ahead and try and climb a sheer cliff without harness training i'll read about you in the obits.
I do that already it's called going to the climbing gym but I don't deface anything along the way
i'm not arguing the merits of it or whether its right or wrong. i'm saying that skill is used and to deny that skill is used is pretty fucking stupid.
I feel there's a decent chance that all of us will have the pleasure of bailing them out.
Witkoff is up to no good. I'd stay away from his projects.
Sounds like their problem.
Y’all wanted housing. Here’s the housing.
Anyways. I would rather it still be a Ralph’s. Everything on the westside I once knew is no more.
Yeah maybe these rich developers should be held in check a bit. The Pulte group did a great job with the pickwick condos in Burbank. They are asking so much nobody is buying. Construction has stopped for now. Its a shitshow and helps nobody with housing. And its not like its going to hurt his bank account so who gives a fuck. Everyone loses but Pulte.
nice play 😌
Where are all this subs transit supporters who keep saying of we build housing near transit, people will gladly live there? You could not have a better area in terms of TOD.
obviously it has to be at least somewhat affordable
Where's the proof it even has occupancy issues?
You can go to the leasing website. There are 31 units available now and 42 available by the beginning of February. And that is with significant concessions, it looks like they're offering 8 weeks free.
And more could be occupied by Feb. The article itself didnt mention occupancy being a problem.
Oh cool so over 80% occupied.
Are we supposed to feel like concessions are a bad thing? Do you think rent should be higher?
That means 30% of the units are turning over in less than 12 months. That seems like a lot.