Emerging Trends in Real Estate 2009

Today I went to a co-sponsored event, Emerging Trends in Real Estate. It was hosted by the Urban Land Institute (ULI) and Price Waterhouse Coopers. In summary, there are major issues with jobs, housing, credit, manufacturing, and other sectors that will continue to hamper economic growth through at least the end of 2009. Large and small real estate development firms are not developing product right now because, among other reasons, replacement costs are higher than current sale prices, and the capital providers are basically making credit impossible to secure. The outlook is rather glum nationwide, however, the pain isn’t going to be as bad for Los Angeles as it will be for over 50 other large cities. Los Angeles moderate income multi-family is expected to perform fair. LA Live is expected to revitalize the downtown area. Moderate income multi-family assets that are close to downtown, or close to a major transportation line (i.e. metro rail), will perform better than higher-end multi-family. Transportation will continue to be a major factor in asset value. or those LA will ultimately into a Manhattan , along with about five other cities, will fair far better than all of the other cities. I am personally relieved about this information because a partner and I are developing a four unit multi-family apartment building near the corner of Normandie and Melrose in Los Angeles. It’s about 5 miles from LA Live. I’m happy we got a land acquisition, development, and construction loan for this project. We were hoping to sell the project in 2009, but now it seems likely we’ll wait until 2010 or even 2011. The good news is we’ll be cash flow neutral or positive so we won’t have a cash flow problem. http://www.jrealty.org http://www.qualitydevcorp.com http://www.cali-mls.net