Spent some time this morning looking back at all the deals we’ve done to see if I could learn anything about how we have historically sourced. Here are the numbers: Total deals done (as a buyer myself or as part of our fee-for-service business): 81 Of the total, number that were brokered: 74 Total number … Continue reading “Where our deals come from”
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The numbers are out of whack
Our business model allows us to generate yields which are consistently 200 basis points in excess of “market”. In other words, if any random ding dong can buy a 4% cap, then we can reliably create a 6% by doing what we do. But, right now, a 6% isn’t that great. Why? Well, interest rates … Continue reading “The numbers are out of whack”
Some love for Scott Weiner
As a housing supplier, it is in my financial interest for the government to continue to block development of new housing at a scale commensurate with demand. However, as an American who loves cities, in general, and Los Angeles, in particular, I am strongly in favor of loosening restrictions on development. More housing equals lower … Continue reading “Some love for Scott Weiner”
Very poor urban planning
Here are some pictures that drive me insane: These are pictures, respectively, of the Vermont /Beverly, Soto/1st, and Vermont/Santa Monica Metro stops. Why do they drive me insane? As a city, we are spending billions of dollars to build out our currently-woefully-inadequate public transportation system to turn LA into a normal city. The single … Continue reading “Very poor urban planning”
Some thoughts on negotiating
Repositioning an apartment building requires obtaining the consent of a huge number of people and institutions, from tenants to contractors to city inspectors and on and on. This consent doesn’t necessarily have to be enthusiastic. But you still need it, because not getting it can screw up your project massively. So, a big part of … Continue reading “Some thoughts on negotiating”
Another obstacle to in-fill development
Want to give you some insight into why, exactly, its so hard for LA to add more housing. Here’s a perfect example: We own a big, R3 lot in an improving area, bordered by two alleys. This ought to be a super easy lot to develop and, indeed, we are in the process of obtaining … Continue reading “Another obstacle to in-fill development”
Why the Fed’s growth forecast matters
If you follow macro-economic news, today was a big day. In addition to raising short-term interest rates, the Federal Reserve bumped up its estimate for economic growth in 2018, from 2.1% to 2.5%. The question for LA landlords is whether this increased growth rate will result in additional jobs / wage growth. Why should landlords … Continue reading “Why the Fed’s growth forecast matters”
Thinking about 2018
We’re coming to the end of deploying our current fund and, as usual, I’m considering several possible ideas for our next one. The most likely possibility is that we will do another round of rehab deals, this time ideally with a larger fund of (slightly) cheaper equity… say, in the 5% pref range, instead of … Continue reading “Thinking about 2018”
Surprised by the south Valley
Was looking at a deal in the Valley yesterday, was surprised by the rents, and came to a realization about apartment supply. The reason that I was surprised by the rents is that I’m used to thinking of the Valley as having considerably more supply than the city. There’s physically just a ton of land … Continue reading “Surprised by the south Valley”
Growth and land-use
Love this article in today’s NY Times. For the lazy: The article makes the case that America doesn’t have boomtowns anymore, because the cities with the most economic opportunity have put in place land0use restrictions that keep housing prices very high, blocking new workers from coming in. Now, as a developer with a growing property … Continue reading “Growth and land-use”