Dear Friends and Family,
As Los Angeles hotels struggle to stay afloat, these properties could become the next favorite asset class for apartment conversions. We take a deeper dive into Proposition 15 and the catastrophic effect it could have on the California real estate industry. COVID defies the classic real estate motto of “location, location, location”. All while we examine how lowering rents and offering concessions is not enough to keep tenants from relocating or moving back in with their parents.
Hotels Could Present an Opportunity for Apartment Conversion
https://www.globest.com/2020/10/23/hotels-could-present-an-opportunity-for-apartment-conversion/
Los Angeles is known for being one of the top markets for apartment conversion projects. In other words, dated or out-of-use buildings in Los Angeles are often transformed into apartment units—a highly in-demand asset class in the market. Following the pandemic, which has substantially hampered hotel revenues, hotel properties could become the next favorite asset class for apartment conversion projects.
Prop 15: Everything You Need to Know About the Property Tax Ballot Measure
https://therealdeal.com/la/2020/10/28/prop-15-everything-you-need-to-know-about-the-property-tax-ballot-measure/
Proposition 15 supporters and opponents agree on one thing: The commercial property tax measure on the Nov. 3 ballot would upend the California real estate industry. The two sides have spent millions of dollars to campaign for their cause. Here is everything you need to know about the initiative, called the California Schools and Local Community Funding Act of 2020.
The Covid Effect on Real Estate: Why Good Deals Have Replaced Good Locations
https://www.forbes.com/sites/ryanserhant/2020/10/12/the-covid-effect-why-good-deals-have-replaced-good-locations/?sh=65ac263876d3
Remember when finding a home close to your office, in a trendy neighborhood, or zoned to a specific school district was a top priority? These days, things are different. In this post-pandemic world, the classic real estate motto of “location, location, location” is no longer what’s driving buyers. Now, it’s all about “deal, deal, deal” instead.
Rents Plummet on Urban Apartments
https://www.nreionline.com/multifamily/rents-plummet-urban-apartments
Thousands of apartments stood empty in August 2020 that had been occupied only a few months before in urban cores across the country, including in previously white-hot markets like San Francisco and New York. Desperate owners have been dropping rents and offering eye-popping concessions and optimizing on-site amenities in attempts to lure tenants. But it’s not nearly been enough to offset the trend of residents relocating to more spacious and less expensive markets as well as others, including many young renters, who have lost jobs and moved back home to live with their parents.
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As always, please respond with your questions, comments, and thoughts. Until next time, hope you have a great rest of your day!
