We all know that Beverly Hills has “The Real Housewives of Beverly Hills,” featuring none other than WeHo restauranteur Lisa Vanderpump. There are rumors that a reality TV show is in the works about the West Hollywood City Council (“The Real Lords of WeHo”?) And if you listen to what Citigroup’s Dan O’Donnell said to American Banker recently, perhaps another reality TV show could be titled “The Billionaires of West Hollywood.”
“Über wealthy clients of Citigroup are financing construction on a long-delayed 4.5-acre project set on West Hollywood’s Sunset Strip,” American Banker reported. The banking newspaper said that Citi’s private bank clients not only are behind CIM Group’s $300 million-plus Sunset La Cienega project, but also backing construction of what will be the tallest apartment building in New York City and a 60-story residential building and hotel in Boston.
“”I’m looking for fully capitalized, shovel-ready, zoning-ready projects with equity and debt funding locked up,” said O’Donnell, who is global head of private equity and real estate for Citigroup’s private bank. “We are ring fencing 25 to 50 billionaire families together for these funds.”
Of course the billionaires that O’Donnell is corralling aren’t actually located in West Hollywood — no surprise given that most of the money invested in the city’s commercial and residential real estate (and in the City Council members who have to approve such projects) comes from outside WeHo.
O’Donnell told American Banker that the billionaires he’s harnessing get a good return on the $500,000 to $1 million minimum investment they make, earning their money back by the fifth year and from then on enjoying the substantial profits. American Banker said participants in Citi’s investment “clubs” realize returns of 15 to 20 percent.
interesting point, Ned Baum. i thought the rate of allowable rent increase was tied to inflation as dictated by the CPI? maybe renter’s security deposits should be allowed (if tenant requests) to invest in WeHo municipal bonds, they would pay about 5% a year. tax free.
a security deposit would double in less than 15 years and triple in less than 24 years.
the city pays at least 8% in interest and fees on their debt, some of that might as well go back to the residents. just saying.
Same Citigroup that can’t afford to pay interest on renters’ held security deposits, along with other hard-luck cases Bank of America, Chase and Wells Fargo, as determined by the city of West Hollywood, even though they’ve all made record profits in the years since the crash they caused. At the same time, our city’s representatives, who determined that landlords didn’t have to pay interest on the security deposits they held because banks refuse to pay interest on deposits, also determined landlords were entitled to raise their rents, because the economy is doing so well — for bankers and landlords and… Read more »
Yes, thank you Hank.
seriously, if it wasn’t for Wehoville, how would those of us who don’t have a subscription to “American Banker” know about what really goes on in WeHo?