Was at a panel discussion on development recently and rising construction costs came up. Everyone wants to know why it costs like 30% more to build a building than it did two years ago. There are lots of theories, including: All the sub-contractors retired in 2008 Lots of laborers went back to their home countries … Continue reading “Why construction costs are so high”
Category: Development
SROs: A new, old idea
I read a TON about business, in general, and real estate, in particular. So it’s fairly rare for me to come across an idea that’s genuinely new to me. But I came across one last night, during a conversation with a much more experienced owner-operator, that I’d like to share. We were discussing the housing … Continue reading “SROs: A new, old idea”
The other LA tech story
Everyone interested in LA’s tech sector has been talking up Silicon Beach for years. SB is the constellation of tech companies, including SnapChat, Google, Facebook and others which are located on the Westside, mostly in Santa Monica and Playa Vista. But I think all the attention paid to SB has obscured the most interesting story … Continue reading “The other LA tech story”
Going into lease-up on a big project
We’re in lease-up on a wonderful complex in East Hollywood. Have posted some pics below. If you’re interested in a beautiful 2 bedroom apartment walking distance to Sunset Junction and the Red Line with parking and private outdoor space, reach out to Krystal [at] adaptiverealty [dot] com.
A little thought experiment
Thought experiment regarding American population dispersion: Imagine you picked up all of the people who live in the United States, then allowed them to pick where you put them down, with no regard to where they lived before. How many would choose to be set back down in the Northeast and Upper Midwest? How many … Continue reading “A little thought experiment”
Finishing up another one
We’re just finishing a 6 unit deal in an area where we’ve done a ton of business, and thought you guys would like to see pics. The ads went up this past Monday (so, seven days ago) and already 5 of the 6 units are spoken for. Think the unlevered yield on this one is … Continue reading “Finishing up another one”
The most important variable
In a recent email to investors in Adaptive Realty Fund 4, I wrote: “In our business, there are three types of variables (of varying degrees of magnitude): Things we can’t control… Things we can control… Things over which we have some, but not total, control…” Spent the rest of the letter discussing the most important … Continue reading “The most important variable”
How rising construction costs impact affordability
Everyone knows LA is in a housing crisis and everyone is talking about up-zoning as a potential fix. But, recently, a big part of the problem is that construction costs are skyrocketing… and that’s what I want to discuss today. What’s going on? The wipeout of 2007-9 crushed a lot of subcontractors (plumbers, framers, roofers, … Continue reading “How rising construction costs impact affordability”
How increasing replacement costs imply a widening investment moat
Experienced real estate investors know to keep an eye on replacement cost when considering rehab deals. The idea is to try to ensure your property will have a cost advantage vs. its neighbors. The thought process is pretty simple: When considering doing a project, you want to look at what it would cost a competitor … Continue reading “How increasing replacement costs imply a widening investment moat”
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”