What you do when land gets scarce / valuable

One of the things we do to most of our buildings is privatize outdoor space.

We do this because, as property prices and rents increase, you can’t afford to have land sitting around not generating rent.

Apparently, Singapore is in kind of the same situation: they’re running out of land to develop, so they need to make every last square inch count.

Their solution: Build underground cities.

 

Why I love Mid City

Let’s be clear about what I mean by Mid-City: Everything north of the 10, east of La Cienega, south of Wilshire, and west of Western.

Why do I love it? Because:

1. It’s central: The area I just described is roughly 10-15 minutes by car from all of the jobs on the Westside (in Beverly Hills, Santa Monica, Culver City, etc.) and also 10-15 minutes from all the jobs Downtown. And you can get to the nightlife in West Hollywood and Hollywood in 10-15 minutes, as well. As more and more people forsake the suburbs (and the awful commute), they are going to want to be in places like this, instead.

2. The housing stock is great: Most of the area was developed from 1900-1930. That means there is an interesting mix of old Craftsman homes and nicely-proportioned 1920s duplexes and fourplexes with parking. These buildings have good bones – with some dough and some effort, you can make them really nice.

3. The retail is going to improve: Drive along Washing, Venice, Pico and Olympic (the big east-west commercial streets in the area). You will see mostly crummy businesses and a ton of awful strip malls. However, if you look closely, you will also see that many older, beautiful buildings remain. You will also see the first shoots of gentrification… a Paper or Plastik here, a Bloom Cafe, there. Over time, you’re going to see more and more of these interesting stores / restaurants, because the new, more affluent residents moving in demand them.

4. It’s cheap: You can still buy large single family homes in this area for around $500k. And there are plenty of 2-4 unit apartment buildings that makes sense on a cashflow basis, but also cost less than $200 / ft. It would cost $200 / ft to build these buildings today, even if someone gave you the land for free. So, you’re buying good buildings at below replacement cost with good in place cashflow. Someone explain the downside… I can’t see it.

We’ve been doing an increasing amount of business in Mid City. And we’d love to help you do some, too. If you’re interested, get in touch.

 

My kind of bad

Late last week, Jon and I took the whole team to walk-through a real P.O.S. building in Echo Park that I’m very excited to try to buy.

Here’s a representative picture:

20130816_103803

Note the trash everywhere and the broken wall where someone stole the electrical wires to sell for drug money.

Obviously, I fell in love with it immediately.

About 20% of the time that I tell someone I fix up apartment buildings, s/he will make a joke about me being a slumlord. But anyone who reads this blog knows I buy the worst of the worst buildings (like this one) and make them amazing places to live. Sure, it’s a good living. But it’s also good for the neighborhoods in which we work.

Now everyone loves Silver Lake

Hat tip to Adrian over at Curbed for noticing that CNN Money ranked Silver Lake as one of the country’s best big city neighborhoods.

I think the CNN Money piece misses some of the most important things about the neighborhood:

  • The combination of relatively dense, multifamily zoning south of Sunset and relatively sparsely populated single family zones in the hills to the north;
  • The convenience of being situated between Hollywood and Downtown, with relatively easy access to the Valley;
  • The fact that there are relatively few, awful, suburban style strip malls along Sunset (though there are a few);
  • The legacy retail buildings, many of which lack parking, which creates a pleasant, walkable feel, at least in Sunset Junction;

And, finally, I think it’s worth pointing out that the history of the neighborhood, which saw a bunch of pioneering gay / artists types move into what had been a working class immigrant area beginning in the 1950s and 1960s, created a nice mix of interesting food, culture, people, architecture, etc. Over time, as property prices and rents increase, this mix is shifting and, arguably, getting less interesting. But that’s how gentrification works, for better and worse.

A bit of unwanted public art

The Eastsider recently published an article about a gang injunction being proposed for Echo Park and a few surrounding neighborhoods.

The comment thread got very heated, in part because there is at least one group that opposes the injunction as some kind of tool of oppression / gentrification. Other local residents responded that they’ve noticed an uptick in gang graffiti in the area and in the part of East Hollywood along Virgil (called Virgil Village).

Anyway, just in case you think our jobs here at Adaptive are super-glamorous, Jon and I spent part of the morning discussing this little piece of public art which was thoughtfully left for us at a newly renovated property by a local aspiring artist:

photo (4)

 

My dad’s an artist, so I can empathize with creative types looking to get exposure, but regular readers can probably guess how I feel about whoever did this.