Socal Multiunit Real Estate

MULTIUNIT PROPERTY FORECAST

MULTIUNIT PROPERTY FORECAST

By Jodi Summers

Bravo to multiunit owners – of all the segments of the investment real estate market, Los Angeles area apartment building prices are the strongest. The Realtors Commercial Alliance predicts a vacancy rent of “just” 5.9%, and a predicted rent decrease of 1.5% (as compared to leasing drops of 15.3% for office, and 8.2% for both industrial and retail properties).

Notice this prospect is brighter than the national picture:

The multiunit market is the most stable segment of a commercial marketplace in turmoil. Thus far this year, virtually all commercial sectors throughout the country are down. (Someone prove us wrong please.) The economic shift has caused the demand for commercial properties to drop precipitously, bringing down prices and rents. Add to this scenario maturing commercial debt, with credit available to bolster the need for funds…and voila, you have a jump in delinquencies and distressed properties. Sellers outnumber buyers, vacancy rates are rising in all sectors.

Another positive note, this year it is multiunits and industrial properties that are gaining intention from investors. In 2Q, but sectors posted increased sales transactions compared with the previous quarter. Apartment investments were up 42.5% while industrial investments rose 53.3%. (Office and retail properties recorded declines in quarterly sales activity of 40.0% and 25.2%, respectively.)

With a lack of available funds, all-cash transactions have gained considerable ground, as have assumable mortgages and seller financing. In the first half of 2009, assumed debt has accounted for about 50% of acquisitions.

The Realtors Commercial Alliance seems to feel that we’re reaching bottom. Statistics are showing that the gross domestic product (GDP) declined only 1.0% in the second quarter of 2009. The move comes after a 6.4% decline in the first quarter of the year and a 5.4% decrease in the fourth quarter of 2008….so our economy is dropping at a less severe rate.

The NAR FORECAST: Commercial real estate will continue to face negative absorption, increasing vacancies for all property types and declining rents. Commercial debt continues to pose a major threat. Extension of TALF funds for commercial lending should provide liquidity, particularly in the CMBS market. Investments may rise due to distressed properties and lower prices.

Are you interested in knowing the condition of your local real estate market? Email jodi@jodisummers.com to receive a free market report for your LA county neighborhood.

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http://www.realtor.org/wps/wcm/connect/83575f004f476966b69ff74e813808c1/FullCREO09August.pdf?MOD=AJPERES&CACHEID=83575f004f476966b69ff74e813808c1

http://www.socalindustrialrealestateblog.com/?p=422

SANTA MONICA MULTIUNIT REAL ESTATE MARKET SNAPSHOT

SANTA MONICA MULTIUNIT REAL ESTATE MARKET SNAPSHOT

by Jodi Summers

If you’ve been thinking about buying multiunits in Santa Monica, now is the time. Check out this two-year market snapshot showing the trends of Supply vs. Demand chart for residential income properties in Santa Monica. It is a buyer’s market and there are great deals to be had.

Has your real estate market stablilized? Email jodi@jodisummers.com to receive a free market report for your LA county neighborhood.

Original post @ http://www.socalmultiunitrealestateblog.com/

TO LIVE AND BUY IN THE CITIES – URBAN DEVELOPMENT IS A NATIONAL REAL ESTATE TREND

By Jodi Summers

The Environmental Protection Agency has confirmed that the inner city is making a comeback.

The EPA analyzed residential building permit trends in the nation’s 50 largest metro regions from 1990 to 2007, offers quantitative evidence that city neighborhoods are growing in popularity.

“We’ve had anecdotal evidence for a while about successful infill projects, but we were curious to see how they fit into the big picture,” notes John Thomas, an EPA policy analyst and author of the report. “The big question was whether those examples added up to a fundamental shift in the geography of residential construction.”

Think of the development of the downtown L.A. loft district and consider that in Los Angeles, the number of housing permits issued for city lots jumped from 19% to 37% during the 18-year study period. More impressively (or because of less space) inner city redevelopment now accounts for more than half of residential new construction in New York, up from just 15% in the early 1990s. In Chicago, urban core redevelopment now accounts for 40% of all residential building permits in the region, up from 7% in the early 1990s.

In total, more than half of the markets in the study saw a dramatic shift away from exurban greenfield development and an uptick in urban core redevelopment over an 18-year period. In 15 of those markets, the central city more than doubled its share of housing permits, with the most accelerated spikes occurring in the past five years…

Among the cities posting notable downtown growth are Miami, Atlanta, Seattle, San Diego, Denver, Portland, Ore., Sacramento, and Milwaukee.

The study attributes these trends in reverse migration to continue to baby boomers and echo boomers – who are driving housing preferences. Additional factors weighing heavily on the shape and location of housing include increased immigration, smaller households, concerns over energy usage and climate change, and downsized consumer expectations in the wake of the current recession.

“…What you’re seeing now is the result of pent-up demand for mixed-use, urban housing near jobs, and transit. The market pendulum is swinging from drivable suburbanism to walkable urbanism,” observes Ed McMahon, a specialist on sustainable development at the Urban Land Institute.

The trend may be far more expansive than the EPA study, which is limited to new construction and does not include housing created through the rehabilitation or adaptive reuse of existing structures.

“There are deep expectations among Americans that this volatility [in fuel prices] will continue,” shares David Goldberg, communications director for Smart Growth America. “Combine that with an aging population and a drop in household size, and all signs point to a desire for more convenient locations with transportation options.”

http://www.builderonline.com/infill-development/housing-migrates-back-to-cities.aspx?cid=BLDR090319002

http://wwp.greenwichmeantime.com/time-zone/usa/new-york/new-york-city/images/new-york-city.jpg

http://blogs.venturacountystar.com/motorhead/epa.jpg

http://www.uoregonlaw.com/s/293/images/editor/PortlandOregon.jpg

http://www.neosmartgrowth.org/

BUY NEW GREEN PROPERTIES -THE ECONOMIC RECOVERY WILL DRIVE GREEN BUILDING

By Jodi Summers

Here’s a good statistic for you - the US market for “green” building materials generated sales of almost $57 billion in 2008. Enthusiastic pundits are predicting this market is projected to expand 7.2% annually to over $80 billion in 2013, outpacing the growth of building construction expenditures over that period. A solid conclusion, since green building is in the forefront of our economic recovery. The fact that the government is leading our green revolution is confirmed in Green Building Materials, a new study from The Freedonia Group, Inc., a Cleveland-based industry research firm.

Sure, green building materials are expected to account for an increasing share of materials used, but the growth of this market will be driven primarily by the recovery of the residential market through 2013 as it rises from its depressed 2008 level.

Among the products that are favored in our new, green recovery are interior products – like lighting, wall and floor coverings, and windows – as opposed to energy efficient renewables that are leading the change.

This trend is confirmed by a National Association of Home Builders survey of multi-family builders and developers made similar conclusions. While 74% of respondents said that their buyers and renters are willing to pay more for green amenities, the median additional amount that they’re willing to pay is just 2%. Some other stats of note: 89% of respondents (again, multi-family builders and developers, nationwide) said they are currently installing energy-efficient appliances and lighting in their projects, 79% are installing low-E windows, 64% are incorporating recycled materials, and 50% are installing greater insulation than required by local code (that figure jumps to 70% among respondents based on the West Coast).

The Freedonia Group report concluded that the largest source of green building materials demand in the next few years will come from green floor coverings. Green carpets and flooring include Green Label Plus-certified carpets and products made from rapidly renewable resources (e.g., bamboo and cork flooring).

Forest Stewardship Council (FSC)-certified wood products will sell out. As controlled forestry moves forward, FSC-certified lumber and wood panels are expected to be the fastest growing green product area. FSC-certified products are produced via environmentally responsible and socially beneficial forestry practices. As supply grows, demand for FSC-certified wood panels is projected to more than triple between 2008 and 2013, growing more than three times as fast as the overall market for wood panels.

Concrete made from recycled materials (e.g., fly ash, blast furnace slag) was the second-in-demand as far as green building materials sales 2008, accounting for over 15% of the market total. The use of recycled materials in concrete not only reduces the volume of waste sent to landfills, but often enhances the performance of the concrete. Going forward, demand for concrete made from recycled materials is forecast to grow 8.4% per year to $14.3 billion in 2013, accounting for an increasing share of total concrete used.

Other products expected to see fast growth through 2013 include water-efficient plumbing fixtures and fittings, and energy-efficient lighting fixtures. Demand for each of these products is forecast to grow at a double-digit pace through 2013, but account for only a small share of total green building materials market.

Sources:

http://www.transworldnews.com/NewsStory.aspx?id=78976&cat=1

http://www.greenbuildingsnyc.com/2008/08/28/green-building-statistics-demand-is-high-design-experience-is-low/

http://www.fypower.org/partners/ilg/statistics/green_building.html

http://greendevelopmentplaybook.net/database/images/display/sb4720d928d50d3.jpg

http://www.inhabitat.com/2009/02/05/is-it-green-concrete/

IF YOU WANT A HOME THAT ALLOWS AN ACTIVE LIFESTYLE, CHECK OUT WALKSCORE.COM

IF YOU WANT A HOME THAT ALLOWS AN ACTIVE LIFESTYLE, CHECK OUT WALKSCORE.COM

by Jodi Summers

We love a city like Santa Monica because there is so much to do. If you are looking for a vibrant location to live with lots to do within walking distance? Then be sure to check out http://www.walkscore.com/

Walk Score http://www.walkscore.com/ helps people find houses and apartments in walkable neighborhoods. Walk Score shows you a map of what’s nearby and calculates a Walk Score for any property. Living in a walkable neighborhood is good for the environment and good for your health.

Walk Score looks at the distance to walkable locations near an address, calculates a score for each location, and combines all of the scores into a single measurement. Lerner said research shows that the average person is willing to walk less than a quarter mile to destinations they visit frequently, such as a grocery store.

A Walk Score of 25 or less means you’ll probably need to get in the car to take care of the smallest errand, while a Walk Score in the 90 to 100 range indicates a “walker’s paradise” where just about everything is in walking distance and many residents get by without owning a car.