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Luxury Los Angeles Real Estate Advisor
Yes timing in real estate is important and market values do change. Since September 2012 to 2013 the median home price in Los Angeles has increased 50%. Sales on the upper end of the market is probably tilting the median price scale a bit, but nevertheless the market appreciation is real and values have increased.
Long in the making since 1999 and finally getting it’s wings. These projects all boast stunning city views and will bring new attractions to the Sunset Strip. Life on the strip has definitely moved beyond it’s rock and roll history…. read on.
See the article
http://www.latimes.com/business/la-fi-property-report-20130815,0,2157213,print.story
By Roger Vincent / August 14, 2013
A long-delayed real estate development at the heart of Sunset Strip has finally emerged as builders step on the gas along West Hollywood’s famous thoroughfare up and down the boulevard.
Demolition started this week on vacant structures at the busy intersection of Sunset and La Cienega boulevards to make way for an upscale hotel, apartments, shops and restaurants valued at more than $300 million.
The four-building project is part of the city’s plan to boost the appeal of what is already one of the region’s biggest leisure attractions for locals and tourists alike.
“The Sunset Strip is known internationally,” Mayor Abbe Land said, “and we want to live up to people’s expectations.”
The intersection of Sunset and La Cienega, however, has been a downer for about a decade. Buildings on the south side of Sunset were shuttered to make way for what is now called Sunset La Cienega. For years, it was known as the “Sunset Millennium,” and the development was approved by the city in 1999. But construction was postponed in part because of objections from neighbors, opposition lawsuits and, more recently, a weak real estate market.
The litigation is over and Hollywood developer CIM Group, which bought the property in late 2011, is launching the project as demand for hotel rooms and residences surges in Los Angeles.
Other projects in the pipeline along Sunset Boulevard include a hotel at Doheny Drive on a site occupied for decades by a fancy Scandinavian restaurant called Scandia. The 148-room hotel would be part of a mixed-use project with stores and 20 condominiums. The inn is expected to be operated by a division of Marriott called Edition that runs luxury boutique inns designed by hotelier-to-the-hip Ian Schrager.
“I believe the Marriott folks are pretty close to making something happen,” Land said.
Just a few blocks to the east near San Vicente Boulevard is a vacant lot that recently sold for $28 million to an unknown investor, market observers said. The James Hotel property, as it is known, has city approval for nearly 200 rooms, restaurants and spaces for meetings.
On the site of the House of Blues nightclub at 8430 Sunset Blvd., the city has approved construction of a 149-room hotel, 40 condominiums and a parking structure.
Interest in building hotels has been sparked by a recovery in the local hospitality business, which has climbed out of the deep hole it fell in during the last recession, said John Strauss, managing director of hotels for real estate brokerage Jones Lang LaSalle.
“The last five years have been one of the longest spells in slow- or no-growth in new hotels,” Strauss said. “Certain markets are now worthy of new development.”
Los Angeles is the second largest hotel market in the country after New York and room rates and occupancy in the region rose by double digits from 2010 through 2012. West Hollywood is one of the strongest local markets, attracting business travelers in the entertainment industry and tourists.
Well-known hotels on the strip include Chateau Marmont, Mondrian Los Angeles and the London West Hollywood. The strip also has popular watering holes such as Eveleigh and the Skybar and is home to famous live concert venues such as the Whisky a Go Go and the Viper Room.
The strip has had its ups and downs as a music mecca. But it has held its cachet as a business address, commercial real estate broker Christopher Bonbright of Avision Young said.
Rents for offices in Luckman Plaza on the edge of Beverly Hills can top $6 per square foot per month, rivaling the cost of choice oceanfront space in Santa Monica. The posh members-only Soho House club on top of the 13-story Luckman building has one of the top-grossing restaurants in the region, Bonbright said.
The strip also has smaller buildings attractive to firms in creative businesses such as entertainment and a brace of popular restaurants, but the thriving hotel business is bringing people to the strip and driving the latest burst of development, the broker said.
“The foam on the latte is all these new hotels coming out,” he said.
CIM Group’s Sunset La Cienega development will have a 290-room hotel in two 10-story towers on the southeast corner of the intersection. Negotiations with a New York hotelier to operate the inn are nearly complete, CIM co-founder Shaul Kuba said, but he declined to identify the likely operator. He expects the hotel, which will also have restaurants and shops, to earn a four-star rating.
On the southwest corner will be two eight-story towers with 190 residences and ground floor spaces for stores and restaurants. CIM is building the units as high-end apartments but may sell them as condominiums if the housing market is still strong when the project is complete in about 30 months.
Building at the intersection will be a challenge, Kuba acknowledged, because it is on a steep slope — and there is a lot of traffic. “It’s one of the busiest intersections in the county,” he said.
To help offset the increase in traffic the project will bring, the developers will widen Sunset to create a right turn lane going to La Cienega and widen La Cienega to create a right turn lane at Sunset, the city said.
The buildings designed by Skidmore Owings & Merrill and Lorcan O’Herlihy Architects will also have prominent “super graphic” billboards on Sunset Boulevard, Kuba said. The signs will be static and lit from the exterior.
The design of the project is intended to make walking along Sunset Boulevard more pleasant, said Francisco Contreras, the city’s senior planner. Large landscaped, public terraces will be built in the middle of both parcels that will extend from the street to the edge of the hill looking south to the city below.
“People will be able to enjoy views of the Los Angeles basin,” he said.
Coming down to make way for the project is a seven-story office tower built in 1960 at the southeast corner of Sunset and La Cienega. The Petersen Building housed part of the empire of Petersen Publishing, which produced magazines such as “Hot Rod,” “Guns & Ammo” and “Teen.”
Also being razed is the Tiffany Theater, which once occupied a place of prominence between singer Dean Martin’s lounge Dino’s Lodge to the east and the high-rise headquarters of Hugh Hefner’s Playboy empire to the west.
The Tiffany later became a movie revival house known for its midnight showings of the “Rocky Horror Picture Show.” It was also a legitimate theater and home to the Actors Studio before it closed in 2004 for the planned development.
Before being converted to a movie theater in 1966, the Tiffany building had been a modeling school and backdrop for scenes in a popular detective series that ran on ABC from 1958 to 1964, starring Efrem Zimbalist Jr. and Edd “Kookie” Brynes.
For years, passersby recognized it as the detective agency’s location in “77 Sunset Strip.”
Some are seeing the rise in home prices driven by PE money. Others see it as a shoring up of the bottom of the market so that there is a new base level of pricing support and this is the beginning of price appreciation. Either way the home real estate market has attracted worldwide money that is investing in American real estate, fixing properties, maintaining them and adding capital to improve them. Whether this is an artificial market or the commoditizing of houses is up for debate. Here is the article from the New York Times that lays out the information…
The last time the housing market was this hot in Phoenix and Las Vegas, the buyers pushing up prices were mostly small time. Nowadays, they are big time — Wall Street big.
Large investment firms have spent billions of dollars over the last year buying homes in some of the nation’s most depressed markets. The influx has been so great, and the resulting price gains so big, that ordinary buyers are feeling squeezed out. Some are already wondering if prices will slump anew if the big money stops flowing.
“The growth is being propelled by institutional money,” said Suzanne Mistretta, an analyst at Fitch Ratings. “The question is how much the change in prices really reflects market demand, rather than one-off market shifts that may not be around in a couple years.”
Wall Street played a central role in the last housing boom by supplying easy — and, in retrospect, risky — mortgage financing. Now, investment companies like the Blackstone Group have swooped in, buying thousands of houses in the same areas where the financial crisis hit hardest.
Blackstone, which helped define a period of Wall Street hyperwealth, has bought some 26,000 homes in nine states. Colony Capital, a Los Angeles-based investment firm, is spending $250 million each month and already owns 10,000 properties. With little fanfare, these and other financial companies have become significant landlords on Main Street. Most of the firms are renting out the homes, with the possibility of unloading them at a profit when prices rise far enough.
While these investors have not touched many healthy real estate markets, they are among the biggest buyers in struggling areas of the country where housing prices have been increasing the fastest. Those gains, in turn, have been at the leading edge of rising home prices nationwide.
Some see the emergence of Wall Street buyers as a market-driven answer to the nation’s housing ills. Investment companies are buying up rundown homes at a time when ordinary people can’t or won’t.
Nationwide, 68 percent of the damaged homes sold in April went to investors, and only 19 percent to first-time home buyers, according to Campbell HousingPulse. That is helping to shore up prices and create confidence in the broader markets.
“When people write the story of this housing recovery, these investors will be seen to have helped put the floor under the housing market,” said David Bragg, an analyst at Green Street Advisors. “In some of the key markets, that contributed to the recovery.”
The story, though, often looks more complicated on the ground. Joe Cusumano, a real estate agent in Riverside County, Calif., said that in recent months 90 percent of his business had been for companies like Invitation Homes, a Blackstone subsidiary. Home values in Riverside County have risen by 15 percent in the last year, according to CoreLogic.
But Mr. Cusumano said he wondered if faraway investors would properly maintain the homes they buy. He said that Invitation Homes had been willing to put money into the properties, but he was not so sure about the other players. He also worries what will happen when these investors start selling, as they inevitably will.
“The thing that scares me is the values going up so quickly,” said Mr. Cusumano. “That’s what happened before and that’s what’s scaring me. Is this going to happen again?”
The idea of investors’ buying homes and renting them out is nothing new. But in the past, landlords were almost always local. Now big investors are using agents like Mr. Cusumano to stake a claim to entire neighborhoods.
In a sign of the potential peril ahead, some of the investment firms have recently taken the first steps to cash out.
The investment fund financed by Colony Capital filed last week to go public, the second firm to do so in May. Another early player in the business, the Carrington Holding Company, said last week that prices had risen too far, leading the firm to begin selling some of its holdings.
Fitch Ratings warned last Tuesday that prices for single-family homes in the regions with the biggest housing rebounds had been outpacing the growth rate in the local economies and “could stall or possibly reverse” if big investors start selling.
“We see economies that continue to struggle — we don’t see them recovering enough to justify this drastic increase in prices,” said Ms. Mistretta at Fitch.
Despite the recent gains, housing prices remain well below their precrisis highs. In Riverside, for example, home values are still down more than 40 percent from their 2006 records, according to CoreLogic.
To the extent that the housing rebound is becoming overheated in some pockets, it does not carry the most significant risks of the real estate boom that came crashing down in 2008. The new investment groups are not heavily indebted, making them less vulnerable to small movements in real estate values, and the risks are not spread as widely through the financial system.
Nearly all of the big investors have insisted that they plan to rent the houses they are buying for years to come. The Blackstone unit, Invitation Homes, has opened 14 offices across the country to serve the homes it has bought, a spokesman for the firm said.
At American Residential Properties, which went public in May, the chief executive, Stephen G. Schmitz, said that if other firms start selling their houses, “we’ll step up our buying.”
He added: “We still think that we’re in a buyer’s market.”
Yet some investment companies are already pulling back in the markets that have had the fastest growth. In Phoenix, the percentage of all house purchases involving investors fell to about 25 percent in March from a high of 36 percent last summer, according to the Campbell HousingPulse Survey. The same survey shows that investors have been increasing their presence in new areas like Florida and California.
All of this has made it hard for house hunters like Jeff Martin, who is looking to buy a fixer-upper in Riverside County. Mr. Martin, 58, has made offers on 15 houses over the last year. Last Wednesday, he received his latest rejection. On most of the houses, Mr. Martin has lost out to investors offering all cash.
Mr. Martin, a retired Navy veteran, puts much of the blame on banks that have been holding onto empty houses, lowering the supply of available homes. He said he has trouble faulting the investors, given that he was involved in real estate financing during the last boom. But he is worried that if mortgage rates begin to rise he will lose out on his opportunity to buy. Rising mortgage rates could also lead to a broader slowdown in the real estate recovery.
Mr. Cusumano said that the investors he works for have been trimming back their purchases in the area. His agency closed on three houses for investors in May, down from eight in February.
But the fevered pitch of the market has not died down.
In late May, one of his clients closed on a house just a month after it went on the market. There were eight bidders, despite a listing that said “NEEDS TLC!!” Mr. Cusumano’s client won the house only after agreeing to go $500 over the asking price of $194,500.
“It’s just a strange market,” he said. “We are in uncharted territory.”
This article was printed in the Los Angeles Times and is a great take on the challenges and difficulties in finding both a neighborhood you want to live in and a school for your children. Read on….
See original article at “The Real Race to the Top”
L.A. Unified’s grade-school game
Getting your child into the L.A. Unified elementary school of your choice involves a lot of planning, patience — and luck.
By Leslee Komaiko
December 14, 2011
Want to send your child to a well-regarded LAUSD elementary school? Get your notepad ready, and maybe some aspirin too.
If money is no object, move — simply purchase or rent a home near your desired school. Residential property. An office where you’re writing a novel won’t do. And don’t take the real estate agent’s word that the school a block away is your home school. Just because you can hear the tether balls being whacked, it doesn’t mean your child is destined to hit those tether balls. (Double-check addresses for home schools here:
Oh, and if the school you want is a magnet or, in certain cases, a charter, disregard the above. For that, even money won’t help. You have to amass points.
And you may still have to move. What you’d be looking for is a house in an area with a crummy home school, a school that’s overcrowded, without enough books and desks. That gives you points. So does a PHBAO home school. No, that’s not one that serves PH-balanced pork-filled dumplings to its charges. It stands for “predominantly Hispanic, black, Asian or other.” (Never mind that every school is predominantly Hispanic, black, Asian or other. Hello, LAUSD — “other” means everyone else.)
Now submit your application to your desired magnet or charter the winter before your child can begin kindergarten. (The application deadline for the 2012-13 school year is Dec. 16.)
And don’t forget about race. If your child happens to be of mixed race, be flexible. Find out which one is underrepresented at your school of choice and go with that; it could increase your odds of success.
If it all works and your kid gets accepted into the magnet or charter of your dreams, congratulations and please don’t gloat too much in front of your less-fortunate friends. And if your kid is rejected, you’re out of luck, at least for kindergarten. Maybe you could try home schooling — you don’t have anything else to do, right?
And remember there’s still good news in the form of those much-coveted Los Angeles Unified School District points. A kindergarten rejection will move your child up the list when you apply for a spot the following year.
And of course if the magnet (or program) of your dreams doesn’t start until first grade, what you want is a kindergarten rejection. So study the numbers carefully in the Choices guide, which has moved online this year and which should really be called the You Wish guide. It will reveal the schools that are most in demand, the ones that therefore have the stinkiest odds. That’s where you should apply to kindergarten, because remember, rejection and thus points are the goal here. Confused yet? I thought so.
Maybe you’d like to try something less duplicitous? Find a charter that operates on a lottery system (some use the point system, some don’t), which means your kid will have essentially the same chance of getting in as any of the hundreds of other kinder vying for those few garten spots.
Or here’s a seldom used but effective strategy: Siblings get preference at charters and magnets, so adopt a third-grader at your school of choice. Now your little kindergartner-to-be has more points, and in the case of some schools, automatic enrollment. On the flip side, you have another PB&J to make every morning and, well, another kid.
What, you’re still not happy? Clear out a little more time on your calendar because you’ll need it to fill out open enrollment applications. Yep. Open enrollment. Sounds nice, doesn’t it? Hopeful. You apply for the few empty seats that might appear at the schools you prefer. You may have to wait until school has begun to find out if you’ve won the game of musical chairs. But cheery persistence, they say, can be effective. So put on a smile before you dial.
Had enough? If not, try one more angle: special circumstances that can get your kid transferred into a better school. Like SAS programs. That’s Schools for Advanced Studies programs, for which your smarty-pants kid may be eligible if your home school doesn’t have one. Or you may qualify for a PWT (Permits Without Transportation), a child-care permit or an “intra-district and inter-district parent employment-related transfer permit” (if ever a permit was in need of an acronym…).
Alas, last I checked, there’s no MHIATEJTIJK permit. That’s the My Head Is About To Explode Jeez This Is Just Kindergarten permit.
Leslee Komaiko got a magnet rejection letter for her son for kindergarten, but now she is the very satisfied parent of a first-grader at an L.A. Unified charter school.
Copyright © 2011, Los Angeles Times