Palmer Luckey’s recent purchase of a marina in Huntington Beach hasn’t gone over well with two brokers who claim they were stiffed on their commissions for a related portion of the transaction.
In May, the Business Journal broke the news that the 24-year-old co-founder of virtual reality firm Oculus VR bought Huntington Harbor Bay Club, a roughly 13-acre waterfront site on Warner Avenue about half a mile from the ocean.
Along with the marina, the transaction included the purchase of an entertainment venue next-door that’s under renovation.
Luckey, who Forbes magazine estimates to have a fortune of $730 million, paid about $34.5 million for both properties through an entity he owns called Zeal Palace LP, according to a reading of property records.
Concurrently with the purchase of the marina site, Luckey sold the entertainment venue to an affiliate of Irvine-based 24 Carrots LLC, a high-end catering and events company that works at some of Orange County’s most prominent wedding, corporate and other special event locations.
24 Carrots paid Zeal Palace about $13 million for the site, and got a $12.1 million loan from the seller to fund the deal, property records show.
The events center transaction has raised the ire of two area brokers who claim in court filings that the deal was made to cut them out of commissions they had earned.
Richard Reza and Keith Bohr allege that they were responsible for introducing 24 Carrots to the site’s former owners, Huntington Harbour Bay Club LLC, as a potential buyer for the events center property late last year, and that they had negotiated a deal for the catering firm to buy the events center directly from them.
After months of work on the deal, Huntington Harbour Bay Club abruptly changed course and sold the entire property directly to Zeal Palace, which in turn sold the events center to the catering firm, according to a lawsuit filed last month in Orange County Superior Court.
The lawsuit alleges “that there was no legitimate business purpose for such a simultaneous sale and that it was in fact for the purpose of depriving (the) plaintiffs of the commission earned,” which was set at 6% and due to bring in $804,000 for the duo.
Reza works with Huntington Beach Capital Partners Inc., while Bohr is with Team Real Estate in Irvine.
The June 23 lawsuit names Huntington Harbour Bay Club, 24 Carrots and Zeal Palace as defendants; none of which had responded to the suit as of press time.
The marina is the only commercial property that Luckey is known to own in OC; sources tell the Business Journal that he also owns a home on the water in Newport Beach.
The Long Beach native took sailing lessons in his youth at the Alamitos Bay Yacht Club, according to local news reports.
Oculus was based in Irvine until its 2014 sale to Facebook for $2 billion, and is now run out of Silicon Valley. Luckey left the company this year.
Broker Switch
The Irvine office of JLL has added one of the area’s most prominent industrial brokerage teams to its local operations.
The Chicago-based firm said that it has hired Wade Tift, Nick Carey and Byron Foss to work with both tenants and landlords. They will join JLL as executive vice presidents. The three were previously with Newmark Knight Frank’s local office.
Collectively, the team has completed more than 8 million square feet of transactions valued at $600 million since 2009.
“The Orange County industrial market is extremely tight with one of the lowest vacancy rates in the nation and very little new construction on the horizon,” said Jeff Ingham, JLL senior managing director, in a statement.
The new team members are “three of Orange County’s premier industrial brokers who will provide tremendous value for our clients,” he said.
JLL ranked No. 5 among area brokerages last year, with about $2.1 billion in OC transactions, while Newmark Knight Frank—which recently dropped the word Grubb from its name—was No. 4 with $2.6 billion worth of work here, according to the Business Journal’s April ranking of commercial brokerages.
