Right now, as an investor, the key question is: “How much longer does the present growth cycle have to run?” If we’re approaching the end of this cycle, then investors ought to batten down the hatches, de-lever, horde cash, and get ready to bargain-hunt. If, on the other hand, we’re still looking at 2, 3, … Continue reading “Predicting the next recession”
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Zell vs. Zeckendorf
Have just finished reading two excellent autobiographies, one by Sam Zell and the other by William Zeckendorf. For those who don’t know: Zell is a legendary investor, particularly in distressed assets. He created companies that, at one point, were the largest multifamily REIT, the largest office REIT, and the largest mobile home REIT. He has … Continue reading “Zell vs. Zeckendorf”
Preservation or affordability on Sunset?
Curbed LA has a story today about the possibility that the city will deem the Hollywood Reporter building on Sunset a Historic Cultural Monument and thereby prevent a developer from moving forward with plans to build ~300 hotel rooms, ~190 condos and and ~700 apartments on the site. I appreciate interesting architecture. But I think the … Continue reading “Preservation or affordability on Sunset?”
Where our tenants are coming from
Regular readers know that I approve all of our tenants personally. Why? Well, I’m the one who’s going to have to deal with going to eviction court if they turn out to be screw-ups, so it’s best that I sign off on them upfront. But there’s another reason, too: Reviewing all the tenant applications gives … Continue reading “Where our tenants are coming from”
Why we’re selling 2727 E 4th St.
Regular readers know I’m not a fan of selling LA real estate, particularly in improving neighborhoods. So, why are we selling 2727 E 4th St. in Boyle Heights? The fund that owns it has a structure which requires we meet a certain yield threshold to keep pace with the investors. To get the yield up above … Continue reading “Why we’re selling 2727 E 4th St.”
LA population growing faster than housing stock
Just like the prices for every other commodity, pricing for housing units (eg rent) is governed by supply and demand. Between 2016 and 2017, Los Angeles gained ~40,000 people (taking us above 4MM for the first time). The number of apartments delivered, in the midst of a historic boom in multifamily construction: ~13,000. Depending on … Continue reading “LA population growing faster than housing stock”
Restaurants, bars and gentrification
Bisnow has an interesting article today about the ability of a few pioneering restaurants to “spur development in underserved neighborhoods”. Now, before we dive in, we need to be clear that “underserved neighborhoods” are not empty places waiting for some new business to come in and put them on the map. Generally speaking, these neighborhoods are … Continue reading “Restaurants, bars and gentrification”
People are moving again
Bloomberg is out today with an article confirming that people are, once again, moving around the country. This is a big deal for the real estate business. The Great Recession essentially froze people in place, because they couldn’t sell their (underwater) homes and had little confidence in finding work in other cities. This was really … Continue reading “People are moving again”
Who passes on a 7% unlevered deal?
We just cancelled escrow on a deal that I thought was pretty likely to end up a 7% unlevered return. How do you pass up a deal like that, particularly in this market? I know this is going to sound crazy to long-time readers, but, sometimes, it’s not about the numbers. On this particular deal, … Continue reading “Who passes on a 7% unlevered deal?”
Heading to RealShare tomorrow
Tomorrow, am headed to RealShare, which is the premier LA multifamily event. Why? A huge part of doing deals is having the relationships necessary to get your offer picked over others’. Those relationships generally get created during deals. The more you close, and the better you behave, the more brokers like you. But it’s easy … Continue reading “Heading to RealShare tomorrow”