Kingsbarn Brings $105M Skims HQ Deal Back to Life

All’s well that ends well in Hollywood.

Kim Kardashian’s voguish shapewear startup Skims is mending the seams with its new Hollywood landlord, Kingsbarn Realty Capital, after the private equity firm brought a zombie deal back to life.

Kingsbarn finally rested its case against former lender, KeyBank, and co-sellers Oscar Englebert and developer J.H. Snyder to buy 1601 North Vine Street for $105 million, or $905 per square foot.

Hard money lender Hankey Capital provided a $52 million loan for the acquisition and additional financing came from Israeli firm IBI Volcano, according to a spokesperson for Kingsbarn and county property records. The terms of the loans are unclear, and a spokesperson for Kingsbarn did not provide further details.

Kingsbarn was prepared to fork over more than that — $1,054 per square foot — when the property first went into contract in December 2022. It was vacant at the time, since former tenant WeWork decamped in October that year. And Englebert — a friend and business partner of Jens Grede, who co-founded Skims with Kardashian and his wife, Emma Grede — was already in contract to buy a majority stake of the building from developer J.H. Snyder.

Things looked promising for all three parties, as J.H. Snyder and Englebert agreed to work toward a sale with Kingsbarn. They planned to close before Los Angeles’ 5.5 percent transfer tax, known as Measure ULA, went into effect in March 2023.

The cost of borrowing was meanwhile on the rise, and Kingsbarn hustled to secure $97 million worth of financing from KeyBank, which signed a term sheet for the loans a month before the closing date.

Then the Ohio-based lender got cold feet.

KeyBank reneged its offer at some point in the following weeks, and the deal fell apart in dramatic fashion.

Behind the scenes, Kardashian’s $4 billion fashion startup was working on a deal of its own to lease 116,000 square feet across the entire eight-story office building, and soon found itself caught in the legal crossfire of a real estate investment gone sour.

Skims’ 15-year lease was paramount to underwrite Kingsbarn’s debt, and Jeff Pori, the company’s CEO, described the startup in a statement as “the perfect Hollywood tenant.”

But to appraise the building and underwrite the deal, KeyBank needed Kingsbarn to prove that Skims wasn’t yet occupying the building, though it had signed a lease in January. And Englebert did everything possible to prevent Kingsbarn from gaining access to prove the property was still empty, the company’s lawyers later claimed in court.

Kingsbarn was quietly building its case as the deal unraveled. Last April, the Nevada-based company sued J.H. Snyder and Englebert for unfair business practices, hoping to recover its $2.5 million deposit toward the purchase.

Englebert, who could not be reached for comment, allegedly had trouble letting go of the building and its celebrity-linked tenant.

Englebert “turned Kingsbarn down and rebuffed Kingsbarn’s efforts to obtain entry to the building,” the company’s lawyers claimed in the April 17 complaint filed in California Superior Court in Los Angeles County. “Englebert did this in order to conceal the fact that Skims still, by that date, was not actively occupying and conducting business operations from at least 70 percent of the premises.”

And Kingsbarn didn’t stop there. Last July, the company sued its own longtime lender KeyBank for revoking the loan terms and sending the deal into a tailspin.

The wheels of justice turned in Kingsbarn’s favor. A Superior Court judge rejected Englebert and J.H. Snyder’s attempts to get the case dismissed and placed a lien on 1601 North Vine Street, according to court filings.

By December, the parties had reached a detente and reinstated the purchase and sale agreement, lowering the building’s price to $105 million from $122 million.

Spokespeople for J.H. Snyder and KeyBank did not respond to requests for comment and Englebert could not be reached for comment.

Pori, for his part, said in a statement, “This purchase, along with our ability to secure financing for the building, is further evidence that the office market is recovering.”

Kingsbarn will place the property into a Delaware Statutory Trust and offer fractional ownership to private investors for a 1031 exchange, according to the company.