Small-scale, in-fill development blues

Everyone should read this article in today’s NY Times, which goes into great depth about the problems associated with in-fill development in coastal CA. My experience with the ground-up deal we just completed was similar. No lawsuits, but it did take nearly a year to get permits to add four units to an existing duplex, … Continue reading “Small-scale, in-fill development blues”

The math behind what we do

At this point in the cycle, when we consider a new deal, we spend a lot of time thinking about leverage. Mainly, we’re looking at how our pro forma unlevered yield (eg the cap rate we’re trying to hit post renovation) compares to the projected interest rate on the refinance we’ll do at that point. … Continue reading “The math behind what we do”

Another successful Adaptive deal

We just closed on the refinancing of an 11 unit apartment building. We bought the building two years ago for $2.65MM, then spent another $900k renovating it, bringing the total investment to ~$3.55MM. Our net loan proceeds on the refi are $3.54MM and we’ve accumulated ~$250k in cash from operations since lease-up. So, today we’re … Continue reading “Another successful Adaptive deal”

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?”

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”