Around LA in 60 Minutes
Whether you're a buyer or seller, or focus on office, industrial, or retail, chances are you heard optimistic news in CBRE and Allen Matkins' sixth annual Real Estate 360 in 60 Spring Outlook. (It's like Twilight for people who don't spend most of their time wearing a backpack.)
The video webcast was hosted by CBRE executive managing director Lew Horne and Allen Matkins partner Tony Natsis, who introduced four top-name panels, immediately followed by a Q&A session. But first, Lew gave Tony a walking tour of CBRE’s new global HQ in Downtown, designed by the firm’s workplace strategy group in partnership with Gensler. (They're snapped in front of the "liquid galaxy" wall.)
By now, you’ve heard about the concepts like free-addressing and neighborhoods, and the firm's sit-stand desks (left). Fun fact: as part of CBRE’s wellness program, the firm introduced 1,200 plants into the space and takes germs seriously—spritzing an antimicrobial spray over workstations and an ultraviolet light across the desks each night to kill bacteria. (That's more precaution than the majority of places you eat.)
According to CBRE’s Todd Doney, several office transactions last year, including Nestle’s 400k SF renewal, validated Glendale’s position as a good location for corporate America. Also of note: Avery’s relocation from its long-time home in Pasadena. Historically, once office tenants left Downtown, they didn’t return. But close to 800k SF of tenants have migrated to Downtown from environs like Santa Monica, Century City, and Universal City. Jeff Pion points to LA's 9% office rent growth last year and overall positive direction. Look for landlords to try to push the needle as vacancies tick down. Rick Sherbourne says recycling of ownership and the dominance of the Irvine Co has kept rents from moving in OC.
Tony moderated the capital markets panel, in which CBRE's Val Achtemeier said that debt’s available across the capital stack at competitive pricing and lenders are moving up the risk spectrum. Kevin Shannon says the West Coast office investment market is on fire—sales records set in Seattle, Denver, and LA, properties coming off the shelf, and most core deals all-cash. In the best coastal markets, you’re seeing spec construction. With prices above replacement cost, developers are building to core. Darla Longo adds that industrial has become the new darling in terms of where capital wants to buy. She sees a huge increase in foreign capital—unusual for that sector.