LOCATION! LOCATION! LOCATION! AWESOME BEVERLY HILLS DEVELOPMENT SITE AVAILABLE…AGAIN

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.

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http://www.loopnet.com/xnet/mainsite/news/News.aspx?DocID=85599&Region=losangeles&intcpt=false&sourcecode=1lne0t006N20140424LN&linkcode=&utm_source=loopnet&utm_medium=emailmarketing&utm_campaign=LoopNews

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http://www.socalmultiunitrealestateblog.com/?p=2707

http://www.latimes.com/business/la-fi-property-report-20140424-story.html

http://www.socalgreenrealestateblog.com/?p=3407

http://www.e-architect.co.uk/images/jpgs/los_angeles/beverly_hills_candyandcandy030807_4.jpg

http://lovesiliconbeach.wordpress.com/2014/06/20/location-locat…availableagain/

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SOCAL MULTIUNIT REAL ESTATE SNAPSHOT – AUGUST 2014 – KEEP IT COMING

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.

Construction

■ 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.

**

http://www.inman.com/wire/rents-rise-for-18th-consecutive-quarter-amid-tight-credit-and-inventory-shortage/?utm_source=20140702&utm_medium=email&utm_campaign=dailyheadlinespm#.U7SaEbGf3Qs

http://www.socalmultiunitrealestateblog.com/?p=2730

http://www.marcusmillichap.com/research/researchreports/reports/2014/06/30/los-angeles-apartment-research-report

http://www.WestwoodDuplex.jodisummers.com

http://www.anderson.ucla.edu/centers/ucla-anderson-forecast/projects-and-partnerships/allen-matkins/summerfall-2014-survey

http://beachbumsrealty.com/wp-content/uploads/2011/01/Sold-3301-Ocean-Front-apartment-marina-del-rey.jpg

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WHEN HOUSING AFFORDABILITY IS LOW – APARTMENTS ARE STRONG

June 16, 2014 on 11:48 am | In Buyers, Charts + Statistics, Curious, Economy, Fascinating Information, Investment Opportunities, Market Snapshot, Of Local Importance, Trends, Uncategorized | 1 Comment

from Jodi Summers

Housing affordability is why you can never go wrong with multifamily properties in Los Angeles – only 23% of homes for sale are affordable to the middle class.

And our affordability is rather peachy compared to our sister city, San Francisco. Trulia notes that only 14% of homes for sale in San Francisco are affordable to the middle class, -even though median household income is higher in San Francisco than almost anywhere else in the country.

Notice that 7 of the 10 least affordable markets are in California. We are rounded out by New York, neighboring Fairfield County, CT, and Honolulu. As you might expect, in our coastal markets – Los Angeles, Orange County, Ventura County, and San Diego – less than one-third of homes are within reach of the middle class. But, everyone has to live somewhere – it might as well be in one of your buildings.

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http://www.trulia.com/trends/2014/05/middle-class-may-2014/

http://www.socalmultiunitrealestateblog.com/?p=2682

SOCAL MULTIFAMILY REAL ESTATE SNAPSHOT JUNE 2014 – DOWNTOWN RENTALS ROCK

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 | 6 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.

**

http://www.multifamilyexecutive.com/demographics/understanding-gen-y-neilsen-study-takes-a-deep-demographic-dive_o.aspx?utm_source=newsletter&utm_content=jump&utm_medium=email&utm_campaign=MFEBU_051514&day=2014-05-15

http://www.socalmultiunitrealestateblog.com/?p=2683

http://time.com/72281/american-housing/

http://www.multifamilyexecutive.com/demographics/striking-a-unit-balance-for-both-baby-boomers-and-gen-y_o.aspx?dfpzone=home&utm_source=newsletter&utm_content=jump&utm_medium=email&utm_campaign=MFEBU_051514&day=2014-05-15

http://www.socalgreenrealestateblog.com/?p=3395

http://www.loopnet.com/Los-Angeles_California_Market-Trends?Trends=SalePricesFS,TotalAvailableForSaleFS,NumberOfListingsFS,TotalNumOfUnitsFS,TotalSFAvailableFS,AskingRentsFL,NumberOfListingsFL,TotalSFAvailableFL&PropertyTypes=Multifamily

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YOUR OLD OFFICE? SOMEBODY LIVES THERE NOW. THE ADAPTIVE REUSE OF OFFICE BUILDINGS

May 14, 2014 on 8:55 am | In Charts + Statistics, Economy, Fascinating Information, Green, Historic Properties, Investment Opportunities, New Developments, Problem Solving, Trends, Uncategorized | 1 Comment

by Jodi Summers

You’ve heard about all of those fabulous loft conversions in downtown Los Angeles – old office buildings and factories that have been renovated into apartments and condos. That’s what’s happening with a lot of that extra office space…that’s in cool buildings.

In 2012, nationwide, office stock shrunk in a third of the 54 top U.S. markets. Buildings worth saving are being converted, while lesser buildings are being demolished. The result is that the net inventory has dropped by about 21.6 million square feet > or 0.3% of inventory. In Los Angeles, available office space has declined by -16.2% according to Loopnet.

Over the next four quarters, approximately 11 of the top 54 U.S. metros and almost half of the 1,400 submarkets in those metros will have a net loss of inventory.

Conversion to residential usage is the most prominent reason that an office building is removed from inventory.  Condo and apartment conversions comprise 34% of the lost office space, according to CoStar.  Additionally another 13% of office space has been demolished to make way for new residential construction.

In high density urban areas where housing is needed, multifamily repositionings benefit both owner and user. The ideal conversion candidate – transit-accessible office structures built circa 1930 with 22,000-square-foot floor plates.

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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http://www.costar.com/News/Article/Didnt-That-Used-to-Be-an-Office-Building-/153464?ref=/News/Article/Didnt-That-Used-to-Be-an-Office-Building-/153464&src=rss

http://www.marcusmillichap.com/Services/Research/Default.aspx#2

http://www.socalgreenrealestateblog.com/?p=2983

http://www.loopnet.com/Los-Angeles_California_Market-Trends?Trends=TotalSFAvailableFS&PropertyTypes=Office

http://www.socalmultiunitrealestateblog.com/?p=2563

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http://www.citygro.ws/projects/ace-hotel-los-angeles/posts/the-building-is-totally-gutted

http://www.youtube.com/watch?v=Rx28g0aqfIk

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SOCAL MULTIFAMILY REAL ESTATE SNAPSHOT MAY 2014 ~ RENTS AS BIG AS A MORTGAGE

April 29, 2014 on 9:11 pm | In Buyers, Charts + Statistics, Economy, Fascinating Information, fUNNY...mONEY, Investment Opportunities, Market Snapshot, New Developments, Rents, Sellers, Trends, Uncategorized, WOW | 5 Comments

by Jodi Summers

See all those new units going up around town? They’ll soon be for rent. So, although Los Angeles apartment owners will continue to enjoy relatively tight vacancy in 2014, new construction will be applying pressure on operations in the western stretches of the county by the end of the year.

The new canyons of Marina del Rey are something to ponder as research firms like Marcus & Millichap expect top-tier rental demand to be lower than the pace of construction. New apartment development around Los Angeles will see 6,000 rentals finished – a 0.6% stock gain for the 2nd year in a row.

A plethora of high priced units are expected to lift the overall vacancy rate around town and push management to offer concessions to attract elite renters. It is anticipated that vacancy rates will rise 4.3% this year. By year-end 2014, effective rents will reach $1,726 per month, an annual rise of 1.2%.

Expect job growth in the county to accelerate bringing overall payrolls within reach of the pre-recession level for the first time in 7 years…so tenants can hypothetically afford those lofty rents…or not so much. ..

Rents in L.A. are close to a mortgage payment. Investment savvy Millennials who don’t have a half-million to spend living at the beach are going east to Culver City, Mar Vista and the historic Village Green – owning their homes, building their financial portfolios. Los Angeles zip codes like 90034, 90066, 90025, 90230, 90016 and 90046 are well-located equity-building locations.

For investors, average cap rates are near historical lows, which means we could see more inventory; but keep in mind, the current West Side buying frenzy is attributable to unproductive alternative investment vehicles rather than property fundamentals. An abundance of cash, fear of a stock market correction, and low interest rates favor the acquisition of low-yielding apartments. When interest rates move higher, the experts expect investors to rethink the current strategy and explore alternative options.

Additionally, first-time investors are drooling to get into the Silicon Beach multifamily market, and are willing to accept early returns below 5% in long-term hold plays.

Stiff competition is driving desirable buildings are going into multiple offer scenarios, driving down cap rates, leaving many investors reliant on Southern California real estate renowned rapid appreciation.

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.

**

http://www.marcusmillichap.com/research/researchreports/reports/2014/01/06/los-angeles-apartment-research-report

http://www.socalmultiunitrealestateblog.com/?p=2678

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