August 20, 2014 on 4:27 pm | In Buyers, Curious, Experts Say, Fascinating Information, For Your Purchasing Pleasure, Investment Opportunities, Of Local Importance, Uncategorized, WOW | 1 Comment

by Jodi Summers

Looking for your fantasy Beverly Hills mixed use development project? One of the most desirable pieces of real estate in the country —9900 Wilshire Blvd., is for sale again. Price in the mid-$300-million range for the 8-acre parcel.

“A truly rare circumstance in the highly regulated and supply-constrained city of Beverly Hills,” note the experts.

The site of the former Robinsons-May department store in Beverly Hills has been vacant for more than a decade and has changed hands a number of times. The current sellers, Hong Kong private equity firm Joint Treasure International, intended to complete an existing plan to build 235 condos on the site.

They had already navigated Beverly Hills’ arduous city planning process and were successful is getting approval on a mixed use complex design by Richard Meier, architect of the Getty Center.

“Upon transfer of ownership, the incoming buyer will leverage the value already created and be able to immediately commence construction — a truly rare circumstance in the highly regulated and supply-constrained city of Beverly Hills,” the selling brokers said in a statement.

The Meier plan includes 876 underground parking spaces and almost 21,000 square feet designated for office space, shops and restaurants.

The property at 9900 Wilshire Blvd. is, “one of the most desirable pieces of real estate in the country,” the L.A. Times writes. The paper notes that the property, located along Merv Griffin way, “has seen multiple owners who have so far been unable to bring a condominium complex designed by a famous architect to life.”

In 2010, Hong Kong private equity firm Joint Treasure International bought the parcel for $148 million. In 2007 the parcel sold for $500 million in one of the largest transactions in the history of Los Angeles County. The company that purchased it subsequently went bankrupt, which is how Joint Treasure International acquired the property.

Will you be the next owner developer for 9900 Wilshire?

For more information please contact Jodi Summers and the SoCal Investment Real Estate Group @ Sotheby’s International Realty – jodi@jodisummers.com or 310.392.1211, and let us move forward together.













August 5, 2014 on 9:52 am | In Buyers, Charts + Statistics, Economy, Experts Say, Fascinating Information, Investment Opportunities, New Developments, Of Local Importance, Rents, Sellers, Trends, Uncategorized | 2 Comments

by Jodi Summers

“Developers are saying that as they look forward to 2016 and 2017, they see no let up in this demand, so they’re out looking at new projects to build even more multi-family housing in the county of Los Angeles,” proclaims Senior Economist Jerry Nickelsburg in the 2014 midyear UCLA Anderson Forecast.

Here’s the hypothesis: the demand for multi-family housing stems from household formation. The rate of household formation in California was decimated by the Great Recession of 2008-09. The recent growth of jobs in the State (employment is now above pre-recession levels) induces new household formation as the kids are able to move out of their parents homes, friends out of friends homes, and Mom and Dad out of their children’s homes into their own space. An increase in the rate of household formation increases the demand for rental housing, particularly multifamily housing, thereby driving up occupancy and rents.

The Los Angeles multifamily market is regionalized. The Valley differs from Downtown, which differs from Mid-Cities, the South Bay and the West Side. Marcus and Millichap have done a grand job together compiling statistics from all areas…and here are some noteworthy highlights…

Housing and Demographics

■ In the first quarter, average rents at 2000s-vintage apartments were $41 less than the monthly mortgage obligation on a median-priced home. One year ago, effective rents were $370 per month higher.

■ The median home price soared 15% during the past 12 months to $418,900, while median household income inched up a modest 2% to $55,800.

Vacancy + Rents

■ The strongest rent growth over the past year was observed in 1990s-vintage apartments, where rents climbed 4.5% to $1,684 per month. At apartments constructed in the 1970s, effective rents advanced 3.9% over the last 12 months to $1,473 per month. Rental rates on new units have stalled. Rents rose 3.4% nationally for the 12-month period ending in June, according to the Wall St. Journal.

■ Over the past 12 months, vacancy declined across every vintage of unit, with the exception of those properties constructed since 2000. At 2000s-vintage assets, vacancy inched up to 4.3% as a combination of new construction and tenant resistance to higher rents impacted operations.

■ One-bedrooms are preferred – One-bedroom apartment vacancy was flat over the past year while the rate declined in both two-bedroom and three-bedroom units. Although the decline was modest, early signs that renters are “doubling up” are emerging.

■ Outlook: The impact of heightened competition will keep rent growth modest this year. Effective rents are projected to climb to $1,750 per month in 2014, up 2.3% from the end of 2013. Last year, effective rents advanced 2.8%.

Sales Trends

■ Average cap rates in Los Angeles County are in the mid-5% range, though first-year returns vary significantly by region. In the coastal communities, first-year returns are close to 4%.

■ Outlook: In Los Angeles County, buyers outnumber sellers by a large factor. Treasury yields are low, reducing the attractiveness of purchasing government bonds.


■ The construction pipeline has swollen to 14,500 rental units, including 12,200 market-rate units. At the end of the first quarter, nearly 29,000 rentals were planned in the county, which is roughly 50% higher than the number of units on the drawing board the year prior.

■ Outlook: “There’s going to be a very severe housing-shortage problem,” Moody’s Chief Economist Mark Zandi told WSJ. “People are going to be in very difficult situations. This is a problem that’s going to be increasingly severe over the next few years.”

Conditions in the Los Angeles apartment market have tightened significantly during the past few years, which would typically usher in a period of elevated rent growth. However, development activity will bring 2014 construction to 11,000 new units – the highest level in more than a decade. (Last year, builders completed 5,600 units in the county.) Subsequently, this will keep operators at existing properties cautious when considering lifting rents.

Buyers will outnumber sellers through the end of 2014 as low interest rates keep financing obtainable and equity remains prevalent.

For more information please contact Jodi Summers and the SoCal Investment Real Estate Group @ Sotheby’s International Realty – jodi@jodisummers.com or 310.392.1211, and let us move forward together.










May 28, 2014 on 10:47 pm | In Charts + Statistics, Experts Say, Fascinating Information, Green, Investment Opportunities, Market Snapshot, New Developments, Of Local Importance, Rents, Trends, Uncategorized, WOW | 7 Comments

by Jodi Summers

Young people are interested in a different kind of lifestyle than earlier generations, thus

Americans are experiencing an urban renaissance of unanticipated proportions. Realizing that now is the time for experience, college graduates are moving to cities. Now, multifamily properties account for 40% of all new construction. It’s time for you to get in the game.

Recently released census data shows that in 2014 metropolitan areas across the country grew at a faster rate than the rest of the country, with cities like Austin, Texas and Seattle, Washington growing quickly.

In Los Angeles, according to Loopnet, multifamily property sales prices have risen +1.6% in the first quarter to a median price of $177,256.80 per unit. This is a +15.8% rise from 1Q 2013.

“There’s been a surge in urban apartment building,” says chief economist for the National Association of Homebuilders, David Crowe. “The 25- to 34-year-old age group is focused on living near their peers. They want be socially engaged and live near work. They want to reduce their automobile use. All of those things aim at high-density, urban-type living.”

Nielsen Research’s latest whitepaper on Gen Y and Millennials shares these key findings:

Those aged 18 to 27 have a median income of $24,973; meanwhile, older Millennials (28 to 36) make closer to $48,000.

  • Currently, 36% of Millennials rely on parents for financial support.
  • Millennials are the most racially/ethnically diverse generation: 19% are Hispanic, 14% are African American, and 5% are Asian.
  • 62% of Millennials prefer to live in mixed-use communities.
  • Green is still in. A whopping 60% of Millennials are willing to pay more for a product if they think it’s good for the environment.

And more curiously…

  • This generation makes up about 14.7% of Americans with assets of more than $2 million.
  • 8% of Millennials own their own business.
  • Washington D.C. is home to some of the most wealthy Millennials (those earning more than $100,000 per year), followed by San Francisco.
  • Only 21% of Millennials are married.

“Unlike their parents, who calculated their worth in terms of square feet…this generation is more interested in the amenities of the city itself: great public spaces, walkability, diverse people and activities with which they can participate,” observes Ellen Dunham-Jones, a professor of architecture and urban design at Georgia Tech.

With student-loan debt hampering their opportunities for homeownership, this demographic will continue to hold sway on the apartment industry for years to come. There are currently more than 77 million Millennials across the nation, a number just about on par with Baby Boomers.

For more information please contact Jodi Summers and the SoCal Investment Real Estate Group @ Sotheby’s International Realty – jodi@jodisummers.com or 310.392.1211, and let us move forward together.










March 30, 2014 on 9:19 pm | In Charts + Statistics, Curious, Economy, Experts Say, Fascinating Information | 1 Comment

by Jodi Summers

By taking a population-weighted computation of local sales tax rates and combining it with the prevailing state rate, the Tax Foundation has computed the combined sales tax rate for each U.S. state.

Oregon, Delaware and New Hampshire are the only three states without either state or local sales taxes. The five states with the lowest average combined rates are Alaska (1.69%), Hawaii (4.35%), Wisconsin (5.43%), Wyoming (5.49%), and Maine (5.50%).

Curiously, Tennessee takes the biggest toll, with the highest average combined rate of 9.45%, followed by Arkansas (9.19%) and Louisiana (8.89%). Other states in the top five for the greatest sales tax burden for consumers include Washington (8.88%) and Oklahoma (8.72%).

Keep in mind states with low or no sales taxes often have high income taxes. Oregon is an example. On the other hand, the Tax Foundation notes that Washington State has high sales taxes but no income tax.






March 3, 2014 on 11:41 pm | In Buyers, Charts + Statistics, Experts Say, Fascinating Information, Investment Opportunities, Market Snapshot, Rents, Sellers, Trends, Uncategorized | 2 Comments

by Jodi Summers

Experts agree, the multifamily market will continue to remain suitably tight to allow landlords to continue to raise rents. Currently, for regions on the western half of Los Angeles County, vacancy is in the low-3% range, allowing operators sufficient leverage to lift rents more significantly than the pace of inflation.

Current Los Angeles market trends data indicates an increase of +16.2% to $169,156 per unit compared to last year’s prices in the City’s more desirable areas – for the properties that are available. The number of multifamily properties for sale in Silicon Beach neighborhoods like Culver City, Mar Vista, Marina Del Rey, Venice, Santa Monica and Westwood is way down, forcing prices up, yet again.

Of the 12,500 units currently beyond the groundbreaking stage, nearly 12,000 are in the western part of the county, observes Marcus and Millichap’s most recent Apartment Market Research Report.

“Some of these units will hit the market in 2014, putting additional downward pressure on effective rents,” according Luis Mejia, CoStar’s director of U.S. research, multifamily.

At the current pace of demand growth, pundits believe vacancy will rise to close to 4% next year as new supply competes with existing units.

National housing vacancy rates in the fourth quarter 2013 were 8.2% for rental housing and 2.1% for homeowner housing, according to the Department of Commerce’s Census Bureau. The rental vacancy rate of 8.2% was 0.5 percentage points lower than the rate in the fourth quarter 2012.

For more information please contact Jodi Summers and the SoCal Investment Real Estate Group @ Sotheby’s International Realty – jodi@jodisummers.com or 310.392.1211, and let us move forward together.





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