If you don't see images, click here to view
Story Ideas  .  Events 
Facebook Twitter LinkedIn More...
 
To ensure delivery, please add newsletter@bisnow.com to your address book, learn how
Real Estate Bisnow
The largest commercial real estate publication in the United States.
   
JANUARY 23, 2012 
 
 
 
WD LTile LA

Multifamily Monday: Bump, Set, Spike, Sell It


In two days: Bisnow's 2nd Annual Los Angeles State of the Market. Jan. 25. Beverly Hills Four Seasons. See preview below, then sign up today!

 

No, this isn’t a particularly young developer with Allen Matkins real estate department chair Tony Natsis, but his daughter Marialexa, who is a standout on her club volleyball team. (More on that later.)

 

This is adding up to a robust Q1 for Tony, who's moderating our Bisnow LA State of the Market Summit Wednesday at the Four Seasons Beverly Hills. Deals he’s working on now include a large REO retail center in Orange County that will close this quarter in the $100M range. He’s got another $100M office complex acquisition in the works in Seattle, and two MOB deals in San Diego that’ll close this month for about $150M. Although not a lot is coming to market, Tony says, there’s lots of money chasing deals because it’s the beginning of the year, and people have money they need to get out. He anticipates things being extremely competitive on a bidding basis for the next three months. Speaking of competition, at the moment, Tony’s No. 1 hobby is girls’ club volleyball—Marialexa plays middle blocker. “You have to get up at 5:30 in the morning for all these tournaments,” like the one yesterday at Cal State Fullerton. “It’s exhiliarating and exhausting simultaneously, but I really enjoy it.”


Bisnow
REPLACING REDEVELOPMENT
 

Recently we asked Kosmont Cos’ Larry Kosmont how the demise of California’s redevelopment agencies will affect affordable housing, and the news isn’t good. He tells us affordable housing is “one of the fatalities of extinguishing redevelopment,” and it won’t be revived unless there’s an alternative. Redevelopment tax increment has been part of the puzzle of funds, matched with things like New Market Tax Credits and Low Income Housing Tax Credits, and without it, there’s "no way" we’ll be able to generate the 30,000 or so affordable housing units that redevelopment has produced. But affordable housing won’t be the only victim. Redevelopment agencies provided cities with a defined public purpose of real estate, giving it the tools to engage in transactions to generate new jobs and taxes.

We snapped Larry last year at the IREM LA forecast—he’ll be moderating a panel at this year's forecast on Thursday. He says that without a redevelopment mechanism that declares RE and public finance a public purpose, economic development in California is severely limited. In addition, he tells us redevelopment has been carrying the burden on staffing for projects throughout the state. The people who will be laid off are project people—folks who do building inspections, process plans, design review, etc.—and “entitlement processing will slow down significantly.” One of the things the Kosmont Cos is recommending to its clients is to enter into reimbursement agreements before those folks leave City Hall, so that the private sector can support staffing—at least until projects are completed.


Bisnow
BIG PRESSURES AHEAD
 

For another view on affordable housing, we spoke with Arjun Nagarkatti, president of AMCAL Multi-Housing, which uses federal tax credits to fund its projects. He tells us that regardless of what happens with RDAs, affordable housing developers are facing tremendous pressures these days. State and federal monies are being depleted due to budget crises—if the RDAs close down, that’s going to worsen the pressure. He sees cities requiring developers to do more work than they otherwise would have themselves. Arjun also hopes agencies relax some of their requirements to help developers reduce costs and get more units funded. With greater availability of dollars, he says, they’ve put more and more conditions on projects, such as distance to amenities or green features.

Not scary enough for ya? AMCAL plans to renovate Boyle Heights’ long-vacant, reputedly haunted historic landmark, Linda Vista Community Hospital (as seen on Ghost Adventures and other paranormal TV shows), for a $37M, 100-unit seniors housing project. (Are there any abandoned hospitals that don’t have skeletons rattling around in them?) Construction on Phase 1 begins next month. Despite all the pressures, the company had a busy 2011, ramping up staff by 20%, and looks to have another full plate in 2012. On Dec. 30, AMCAL broke ground on another seniors complex in Fresno, and earlier that month opened Mosiac, a 56-unit affordable project in the Pico-Union District. Arjun says the company aims to develop the same number of units this year but is looking at each individual cost, building smaller projects, which are easier to fund, and doing more cost-containment to produce the same amount of housing.

 

 
What’s spooking you in 2012? Let us know: Julie@bisnow.com.
 
 
 
 
 
CBRE (Multihouse2) LA
 
Carr Workplaces
 
Bisnow LA SOM
 
Arent Fox Sports LA
 
Bisnow One LA
 
CBRE (Multihouse2) LA
 
CONTACT EDITORIAL                             CONTACT ADVERTISING                              CONTACT GENERAL INFO

 

This newsletter is a journalistic news source which accepts no payment for featured interviews. It is supported by conventional advertisers clearly identified in the right hand column. You have been selected to receive it either through prior contact or professional association. If you have received it in error, please accept our apologies and unsubscribe at bottom of the newsletter. © 2010, Bisnow on Business, Inc., 1817 M St., NW, Washington, DC 20036. All rights reserved.

Subscribe
Real Estate Bisnow Sent Using iContact