Curbed LA,
Real Estate Development: Where's LA Headed?
Tuesday, November 25, 2008, by Dakota
Last week, the Urban Land Institute, a nonprofit education and research institute, held its annual Emerging Trends Presentation, an event that invited local real estate experts to discuss the findings of two recently released ULI-Pricewaterhouse Cooper studies about the national and local real estate markets, respectively. Moderating the event, held at the Japanese American National Museum, was Robert Gardner, senior vp of Robert Charles Lesser & Co, a national real estate advisory firm. An exec associated with the event passed on his notes from one of the panels to us; they're after the jump. Both ULI studies (one is called "Emerging Trends," the other is called "State of LA Capital Markets") can be pulled off ULI's web site. Additionally, some slides from the local study are in the gallery. Overall, it would seem the same trends are emerging from these talks: Experts forecast more public sector involvement and more transit-orientated development. Also, there are "fortunes" to be made during these real estate downturns, according to the local study. That part is a little fuzzy to us. Elaborate, please.
Notes from talk with Katherine Perez, Executive Director, ULI Los Angeles; Percy Vaz, President, AMCAL; and Robert Gardner, Managing Director RCLCo, following Gardner’s presentation at: “Emerging Trends 2009” State of the Los Angeles Capital Markets,” by ULI Los Angeles, Thursday, Nov. 20, at Japanese American National Museum. Not quotes, but summary of ideas from the panel:
The new economic climate and what that means for development in the Los Angeles region:
Visionaries
In this new economic climate people of vision will always find a way to access capital to create real estate projects. They will find a way to buy the debt or secure the financing to develop new property.
Housing prices
Housing prices have fallen hardest in the I.E. and other areas; those areas may take 2-3 years to recover, while the coastal areas will fare much better.
New ways of building/living
The new economy will force architects, builders and developers to build project drastically different in design than we are used to in the Los Angeles region. The urban core and transit-oriented developments (TODs) are two of the directions that will be most significant in this new era.
- In many ways, architects will be among the most important figures to respond to this challenge, by coming up with new designs that put the highest possible degrees of livability into high-density development. Smaller square footages are what will pencil out for financing; they need to become attractive to consumers as well.
-- Changes in demographics (younger, more ethnically diversified population) will feed these trends. These populations are more accepting of higher densities.
Public sector
- Because many of these developments will be designed with much higher densities than has been traditional in Los Angeles, open space will be at a premium. This will require the public sector, in some ways, to provide the parks and open space that are otherwise lacking. In fact, government will need to contribute much more to all the positive elements of an urban environment, including schools and transportation.
- Also, because of the unavailability of financing, government participation in development will grow in importance. Public/private partnerships will be more prominent, with government often holding the land.
Per the ULI's web site, the following speakers took part in discussions: "John Menne, MetLife; John McClelland, LACERA; Scott McMullin, Holliday Fenoglio Fowler; Richard Neilson, Bank of America; Keith Rosenthal, Phoenix Realty Group; Rick Newman, Lowe Enterprises Real Estate Group, West; Kevin Ratner, Forest City Residential West; Percy Vaz, AMCAL; Jina Yoon, CRA/LA; David Waite, Jeffer Mangels Butlerf & Marmaro LLP; and Wayne Ratkovich, The Ratkovich Company."
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...it has a long way to go. I see small bits of progress, but we need to create an integrated city that allows easy flow of people to all of the major neighborhoods with the least amount of traffic and trouble...which obviously is not the case as of now. The point I think of the article was mainly to show that the market, at least commercially, could start a rebound here in LA sooner than many would have expected. If that can lead to investment in that region wide comprehensive transportation system...I am all for it. I think DTLA is in a unique position in that it could create a microcosm of what the city could be like if money is put into more trains, subways, cabs, and trolleys, street level developement, and cultural spaces.
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