Do you remember The Matrix, the amazing 1990s sci-fi flick with Keanu Reeves? In it, Keanu’s character learns to see the numbers behind the invented reality he inhabits. Why am I talking about this on a real estate blog? Because it occurred to me this morning as I was taking out the trash from our office that … Continue reading “Seeing the matrix”
Category: Development
History repeating?
Back in the 1980s, Japanese companies flush with cash acquired a ton of office buildings (and maybe hotels, too?) in LA at very high prices. In the recession of the early-to-mid-1990s, they got their asses handed to them. Now, there is a wave of Chinese developers flush with cash buying up office buildings, hotels, and … Continue reading “History repeating?”
The math behind discovering a new neighborhood
As prices continue to rise for the kind of beat-up, badly managed assets that are our bread-and-butter, we are spending more time looking at new neighborhoods. Am I going to tell you which ones I’m focusing on? No, because a bunch of people who compete with me read this blog. But I will share with … Continue reading “The math behind discovering a new neighborhood”
City growth, affordability and the decline of the middle class
The NY Times has an interesting piece today on middle class people leaving increasing expensive coastal cities (SF, NY, etc.) and going to more affordable cities in the interior of the country. The underlying dynamic is pretty straight-forward: Without the liar’s loans that were available in 2005-6, there’s no way for middle class people with stagnant wages … Continue reading “City growth, affordability and the decline of the middle class”
Airbnb and the Ellis Act
There’s a big fight brewing up in SF over landlord’s use of the Ellis Act to get into the short-term rental business. What’s the Ellis Act? Well, in CA, the law is that no one can force a landlord to remain in the rental property business. So, the Ellis Act creates a procedure whereby a … Continue reading “Airbnb and the Ellis Act”
Uber and real estate
Want to spend some more time today on an idea I mentioned briefly in yesterday’s post: That Uber (or something like) has the potential to radically reshape our city. To understand where I’m coming from, you need to take the following two pieces of information as given: Google or some other company will release a … Continue reading “Uber and real estate”
Grandfathered zoning
Got to thinking over the weekend about plumbing and electric. (Bored already? Sorry.) As you probably know, we almost always replace both systems when we renovate a building. Often, the last time the systems were replaced was sometime in the 1950s or 1960s. I was idly considering whether anyone would ever have to replace these … Continue reading “Grandfathered zoning”
What people want
Have been spending a lot of time looking at both apartment and single family home listings. In general, am absolutely appalled at both the properties on offer and the way in which they are marketed. Here is what people want: Clean, straight lines Open spaces Minimal detailing Many / large windows White walls Real materials … Continue reading “What people want”
A reminder
Sometimes I get wrapped up in thinking about buildings as financial abstractions. I think about the cost of buying and renovating them, the rents we can achieve, the likely operating costs, the expected yield, the value on exit, the transaction costs and the profit. I have the luxury of doing this because our very able … Continue reading “A reminder”
The deal size problem
Here’s something true about real estate: It is much easier to find highly profitable small deals than highly profitable large deals. Why is this true? Well, the smaller the deal, the more likely it is that the owner and /or listing broker are inexperienced / inept. Those kinds of decision-makers frequent screw up the management … Continue reading “The deal size problem”