Socal Multiunit Real Estate

CALGREEN – > CALIFORNIA NOW HAS THE COUNTRY’S GREENEST BUILDING STANDARD

By Jodi Summers

Bravo to us! California has adopted the greenest building standards in the United States…and the world.

The new code, called Calgreen, goes into effect next January 2011. It requires all builders to:

v Install plumbing that cuts indoor water use.

Mary Nichols, chairwoman of the California Air Resources Board, said the new building code would require developers to slash water use in their buildings by 20%, using more efficient toilets, shower heads and faucets.

v Divert 50 percent of construction waste from landfills to recycling.

v Use low-pollutant paints, carpets and floorings

v Buildings will be given certificates of occupancy occupied only after strict energy standards were verified.

In addition, for non residential buildings:

v Install separate water meters for different uses.

v Mandates the inspection of energy systems by local officials to ensure that heaters, air conditioners and other mechanical equipment in nonresidential buildings are working efficiently.

v It allows local jurisdictions, such as Los Angeles and San Francisco, to retain their stricter existing green building standards, or adopt more stringent versions of the state code if they choose.

“California should be proud… These are simple, cost-effective green practices. …” notes Tom Sheehy, acting secretary of the state Consumer Services Agency and chair of the California Building Standards Commission, which approved the standards. “This is (something) no other state in the country has done - integrating green construction practices into the very fabric of the construction code.”

While California’s largest metropolitan areas have adopted their own green building standards, these new regulations will be particularly useful for smaller jurisdictions that have been unable to develop their own green construction guidelines.

This is a positive alternative to LEED construction standards. Sites Sandra Boyle, an executive vice president of Glenborough, a developer, “The cost for owners to go through this rating system is astronomical — in a very challenging commercial real estate market.”

“You will have a whole bunch of cities that never would have included this in their building doing it, and doing it in a way that won’t kill the economy,” observes Matthew Hargrove, a vice president with the California Business Properties Association. “Outside the coastal areas it will be helpful - like in West Sacramento, where they looked into creating a green building code but balked because it’s cumbersome to develop and they didn’t have the resources.”

Buildings currently account for about one-quarter of the state’s total greenhouse gas emissions. These new standards are applauded as an important step in helping California meet its goal in reducing the state’s greenhouse gas emissions by 30 percent by 2020.

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http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2010/01/13/MNDR1BH9SA.DTL#ixzz0dJ9grkaW

http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2010/01/13/MNDR1BH9SA.DTL

http://www.latimes.com/business/la-fi-green-building11-2010jan11,0,1841989.story

http://www.thedailygreen.com/cm/thedailygreen/images/WA/Kohler-DualFlush-BR08-lg.jpg

LOS ANGELES 2010 - MULTIUNIT REAL ESTATE PREDICTIONS

Edited by Jodi Summers

The sun is shining again in Los Angeles. After two years of job cuts, payrolls are predicted to expand payrolls minimally in Los Angeles County in 2010, according to the 2010 National Apartment Index Report by Marcus & Millichap.

Los Angeles moves up two places this year to No. 13, thanks to perceived strengths in our marketplace. The hot spot is our sister city, San Diego, which rose four spots to No. 2 on the index due to expectations for resumed employment and household growth. (Washington, D.C., retained the top spot in the NAI for the second consecutive year, as ongoing government spending will fuel metrowide hiring and apartment demand.) New York City, which is the tightest apartment market in the country, finished in the No 3 spot.

Following are some of the most significant aspects of the Los Angeles Apartment Research Report:

* The local employment market is expected to stabilize in the second half. Following a loss of 115,000 jobs in 2009, payrolls are forecast to expand by 0.3 percent this year, with the addition of 13,000 positions.

* Rental completions will slow to 1,550 units in 2010, a 0.2 percent addition to inventory. Approximately 800 apartments are expected to come online in the San Fernando Valley due to continued job losses in the retail and construction sectors.

* Vacancy is forecast to tick up 20 basis points this year to 6 percent in response to ongoing stock additions.

* Lingering high unemployment will continue to pressure owners to lower rents. Asking rents are expected to fall to $1,335 per month in 2010, while effective rents will slip to $1,263 per month, respective declines of 2.8 percent and 3.6 percent annually.

Investors realize the current value of the Los Angeles, and there is a trend of cash-rich buyers shifting money out of the stock market and buying multiunit property with the intent of holding it for future generations.

“After watching the Los Angeles apartment market for years I have decided to move monies out of my stock portfolio and buy apartment buildings for my children,” noted one savvy investor.

A bolster for the multiunit market place is that Government-Sponsored Enterprise financing will remain available due to the GSE’s ongoing commitment to the asset class. (GSEs hold or pool approximately $5 trillion worth of mortgages.)

In conclusion, Marcus & Millichap expects, “Long-term rates to remain low this year, mortgage rates to stay relatively stable and lenders increasingly opting to work out extensions or modifications for loans rather than taking near-term losses. Seller financing, or assumable debt, will also become a big factor in transactions this year.”

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http://www.marcusmillichap.com/aboutus/News/Current/020510_los_mm.asp

http://www.globest.com/news/1580_1580/insider/183133-1.html

http://www.uli-la.org/node/382

http://en.wikipedia.org/wiki/Government-sponsored_enterprise#See_also

MALIBU GOES GREEN UNDER PRESSURE

MALIBU GOES GREEN UNDER PRESSURE

By Jodi Summers

Malibu should be ashamed of itself, acting like conservation is not for the wealthy. Santa Monica has been heavily into the green movement for years – aiming to become a net zero city, Our mother city, Los Angeles, is very motivated to become one of the greenest cities. Meantime the gilded village of Malibu is only turning green because of upcoming deadlines for compliance with state-mandated sustainable development standards.

Under pressure by state mandates, Malibu is finally getting around to developing a sustainable development program. This comes more than a year after the City of L.A.’s green building ordinance to reduce the City’s carbon emissions by more than 80,000 tons by 2012. Motivated only by state regulation, Malibu is planning to require larger projects to be LEED certified. Money is green; Malibu will get the hang of it.

Grudgingly, in late summer, Malibu began to comply with mandated standards addressing water use for landscape irrigation. Additionally the fabled city on PCH will comply with other statewide requirements, such as weather-proofing, formaldehyde content in wood products, air conditioning refrigerants, and outside air ventilation, not to mention finally getting collection areas for recyclables. (Hello! If that’s an issue for you guys, just bring in some homeless, and they’ll recycle for you.)

As Malibu has been so late to get on board the green bandwagon, the city is panicking about meeting residential construction standards effective Jan. 1, 2011, benchmarks that are already in place in neighboring Santa Monica, Beverly Hills, West Hollywood and Los Angeles.

The January 2011 requirements call for sediment and runoff protection from construction sites; diversion of at least 50% of construction waste; low or no use of volatile organic compounds such as indoor adhesives, paints and coatings; low formaldehyde indoor finish materials.

Looking further forward, as of July 1, 2011, residential construction projects will be required to be more water efficient – insisting on a 20 percent reduction in indoor water use.

Not to be berated for being totally arrogant and antiquated, Malibu does already have mandates in place for water conservation landscaping – though some city residents are insisting that is not enforced.

“I think our biggest problem is water in Malibu,” planning Commissioner Regan Schaar noted, more than a year after Governor Arnold Schwarzenegger declared a statewide drought. “The issue of people submitting plans [development applications] without any landscaping plans is a way for them to get around the issue. We need to put landscaping plans in place and make sure they’re low water usage.”

Malibu has been an ostrich, hiding its proverbial head in the sand while other local cities have been proactive on conservation measures. Lifestyles of the rich and infamous.

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http://www.malibutimes.com/articles/2009/06/10/news/news3.txt

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LOS ANGELES COUNTY MULTIUNIT PROPERTY SNAPSHOT – FEBRUARY 2010

DISPARITY BETWEEN BUYERS AND SELLERS

By Jodi Summers

Multiunit investors are not getting the value that they’re seeking in the Los Angeles West Side apartment building market, and are pulling unproductive sale properties from the market. Look at a two-year comparison, from January, 2008 vs. January 2010 - the number of for sale properties in Los Angeles County is down 46% and the number of sold properties is up 1%, according to Clarus Market Metrics.

The Federal Reserve bank’s recent survey of senior loan officers for 55 US banks and 23 foreign banks shows that credit–while not becoming looser–is not tightening. Creative lending has become a viable means of securing a multiunit transaction, which is why that comparing Jan-08 vs. Jan-10 the number of under contract properties is up 102%

If you’ve applied for a commercial mortgage in the past two years, you know that banks have tightened lending standards for this real estate sector. The relative few who are buying in this sector are finding tremendous satisfaction, as the median price of sold properties is down 63%.

FYI - Residential investment spending boosted overall economic growth by +0.1 percentage point. In 4Q 2009.

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We would like your real estate business. If we can provide you with more detailed information, please contact the SoCal Investment Group through Jodi Summers, Jodi@jodisummers.com. We look forward to working with you in your next real estate transaction.

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http://www.cirbdata.com/

https://www.terradatum.com/

http://www.globest.com/news/1590_1590/washington/183353-1.html

http://www.globest.com/news/1590_1590/washington/183353-1.html

http://www.socalgreenrealestate.com

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