FROM WESTERN REAL ESTATE BUSINESS NOVEMBER 2018
By Dean Zander, Executive Vice President CBRE
The ratio of homeowners to renters across the nation has been on a steady decline over the last several decades. This has been particularly evident in Los Angeles and Southern California – and that is good news for multifamily REITs.
In predicting the future, Dean Zander, executive vice president with the brokerage firm CBRE, looked at previous opening waves and existing Downtown buildings. He noted that some properties offer concessions for new tenants, but not on renewals.
The retention rate for buildings a year after opening was 60%, he said, higher than in many other parts of Los Angeles. Zander said the vibrancy of Downtown, including a busy nightlife scene, is keeping many new inhabitants in the neighborhood.
“What’s kind of exciting about it all is when developers try to out-amenitize each other,” Zander said.
“Seacrest was already achieving very competitive rents within the submarket but by articulating and clearly defining a value-add strategy, we were able to demonstrate considerable upside,” said Zander. “Various investors underwrote a renovation ranging between $25,000 and $40,000 per unit or more in order to position Seacrest as the truly best-in-class housing option for a coastal Orange County location.”