CASDEN DEVELOPMENT SITE IN WEST LA SOLD FOR $50 MILLION

CASDEN DEVELOPMENT SITE IN WEST LA SOLD FOR $50 MILLION

San Francisco-based Carmel Partners snapped up a West Los Angeles development site for $49.5 million from a real estate investment firm headed by Beverly Hills developer Alan Casden, according to Real Capital Analytics.

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LA RENTS ARE GOING TO ‘SOAR’

LA RENTS ARE GOING TO ‘SOAR’

Even though there’s a lot of building going on, the countywide rent average is expected to shoot up over the next two years

Most non-millionaire Angelenos have probably come to terms with the idea that they will be delaying buying a home for a while (especially if they’re first-time buyers) and instead are now focused on trying to pay their ever-increasing rents. Bad but predictable news, guys: rents are expected to keep going up for at least another two years, according to an annual rental market forecast out from USC.
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Los Angeles County is becoming a renter’s paradise: Building permits for multi-unit properties in Los Angeles soars to meet renting demand.

Los Angeles County is becoming a renter’s paradise: Building permits for multi-unit properties in Los Angeles soars to meet renting demand.

People are surprised to hear that Los Angeles County is the most unaffordable location in the entire United States when it comes to renting.
Continue reading “Los Angeles County is becoming a renter’s paradise: Building permits for multi-unit properties in Los Angeles soars to meet renting demand.”

NORTHRIDGE APARTMENTS SOLD

NORTHRIDGE APARTMENTS SOLD

The Village at Granada Hills, a 152-unit apartment complex, has sold for nearly $31.2 million to a Beverly Hills investment firm.

The Village at Granada Hills, a 152-unit apartment complex, has sold for nearly $31.2 million to a Beverly Hills investment firm.
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SALES OF MULTIFAMILY IN 2015 BREAK RECORDS

SALES OF MULTIFAMILY IN 2015 BREAK RECORDS

JLL’s Preliminary Numbers Show U.S. YOY Volumes up 31 Percent; Further Growth Expected in 2016

There’s no business like the multifamily business, especially when it comes to commercial real estate investment in the United States. According to JLL’s preliminary research, the total volume of apartment sales in 2015 not only exceeded last year’s record-breaking number — it crushed it. Investors poured nearly $139 billion into multifamily product, trumping 2014’s $106 billion by a whopping 31 percent. And JLL predicts 2016 will keep up the pace.
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CIM to Build Tallest Condo Tower in West | Los Angeles Business Journal

CIM to Build Tallest Condo Tower in West | Los Angeles Business Journal

CIM Group of Los Angeles appears set to build the tallest residential tower west of the Mississippi River. CIM has closed on a $14.5 million purchase of nearly 2 acres in downtown Austin, Texas, the Austin American-Statesman reports.

Downtown Austin, TX

Along with Constructive Ventures and Aspen Heights, the Mid-Wilshire L.A. real estate company plans to build a 58-story tower. It not only would be Austin’s tallest building, according to the newspaper, the $300 million tower would be the tallest residential building in the West.

The tower, with 370 planned condos, could break ground early next year, the Statesman reports. The site was acquired from the City of Austin.

Source: CIM to Build Tallest Condo Tower in West | Los Angeles Business Journal

“LOS ANGELES APARTMENT GROSS RENT MULTIPLIERS REACH HISTORIC LEVELS”

Reposted from PMI Properties:

“LOS ANGELES APARTMENT GROSS RENT MULTIPLIERS REACH HISTORIC LEVELS”

Los Angeles Non Rent Controlled Apartments reached a milestone gross rent multiplier (GRMs) of 15 times rental at the end of the second half of 2015 according to the Hanes Company. Cap rates for all apartments fell to 4.66% at the end of the second half of the year. Since the reported expenses for most small apartments are unreliable, I have used the GRM as a more accurate index. GRMs on the Westside are reported at 17 to 21 times rental. My own comps that track Echo Park and Silver Lake show GRMs at between 14 to 15 times rental from 10 to 12 times rental a few years ago.  My research can find no GRMs this high or cap rates this low going back to the 1920s. A Los Angeles Times article from 1998 reports a Grubb Ellis Survey showing 1998 GRMs at 5.75 times rental.  The previous peak occurred in the second half of 2006 when GRMs reached 14 times rental, according to Hanes Company data.

We are at the apex of the perfect storm driving these yields. First, interest rates are also at historic lows. Investors are starved for yield. Second, we are witnessing the move of highly educated young people and tech/media/biomed companies to certain urban cores. “Unlike previous generations, today’s college graduates younger than 40 — the nation’s largest demographic — are moving in droves to neighborhoods in San Francisco, Seattle or New York, Portland economist Joe Cortright said. Companies are also increasingly setting up in or near city centers, offering well-paid jobs to those graduates, Cortright said. As more people move to urban cores, they’re competing for a limited number of rentals. Housing construction is still lagging behind pre-recession levels, data show. (Los Angeles Times , November 15, 2015).

However, despite these trends, one has to reflect whether to buy at these levels reflects value investing or shrewd marketing timing.