How Foreign Investment's Reshaping LA
Whether you say dollars, dirham, yuan or euro, cash is king in any language. And overseas developers are bringing billions of it to LA, changing the skyline with mixed-use mega-projects. To find out where the dollars are, we're hosting Bisnow's Cash Infusion: Impact of Foreign Investment on SoCal Real Estate, Oct. 15, at the Luxe Sunset Boulevard Hotel, starting at 8am. Sign up today!
Our all-star panel will include CBRE EVP Laurie Lustig-Bower (with hubby, CBRE SVP Timothy Bower, and their daughter Katherine, 13). She's been at the table for notable foreign investment deals, having sold the Robinsons-May site (twice) in Beverly Hills and the Metropolis site in DTLA. Just last month, she closed the sale of 2300 Wilshire in Santa Monica to a publicly traded company on the Hong Kong Stock Exchange. Laurie tells us the most active buyers are large Chinese companies—some private, some partially state-owned. The trend started a few years ago, when China loosened its regulations so money could leave the country more easily.
Shanghai-based Greenland USA is under construction on Metropolis (above), a 1.6M SF full city block development. According to Laurie, the most popular requirement coming from Asia is ground-up condo development with or without a hotel component, primarily in well-known areas like DTLA, Santa Monica and Beverly Hills. That said, investors are starting to consider places like Pasadena: "They're getting more familiar with the LA Basin and are willing to branch out." Laurie sees conglomerate-type companies continuing to invest here, and smaller Chinese companies and even high-net-worth families are getting in on the action. "The momentum grows every quarter," she says.
Another of our panelists, Stephen Cheung (in Monterey with pups Mac and Scout), took over as president this year of the World Trade Center-LA, an affiliate of the LA County Economic Development Corp. He's tasked with revitalizing the organization, which works to support the development of international trade and business opportunities for SoCal companies and promotes LA County as a destination for foreign direct investment.
Education is a major component. According to Stephen, a lot of international delegations come to LA, but without a streamlined, centralized system they can get lost in the mix. WTC LA is collecting info on all 88 cities in LA County so companies can learn the differences between the City of LA and, say, Beverly Hills and Long Beach, each of which have different rules and regulations.
Stephen (snapped with same pups at Utah's Bryce Canyon) says connection is crucial for foreign companies to do business here. "I would never tell [a local company] to go to China, Japan or Korea and say 'good luck.' You need someone to help you understand the local dynamics." A WTC LA referral system will put them in touch with experts who can address their needs. While working in the LA Mayor's Office, Stephen became liaison to the Port of LA, where he gained an understanding of the power of international trade and the influence it has on this economy. (The LA Customs District reached $416B in two-way trade last year alone.)
Another panelist, Jessica Lall, is front and center in Downtown LA's foreign investment activity as executive director of the South Park Business Improvement District. She says the entitlement process in LA is very different than in Asia. "The key difference is that the community does have a lot of influence, even when a project is entitled."
What's drawing foreign investors to South Park? Laurie notes that DTLA obviously is undergoing a renaissance that's recognized globally, and South Park is the only real neighborhood left in DTLA that has large, blank-slate lots for developers with big visions. "Parking lots allow an architect and development team to come in and build something grand, bold, and tall from the ground up."
Also on our panel will be Wei Huang (at the Getty Villa in Pacific Palisades), VP of acquisition and asset management for LT Global Investment. As the US subsidiary of Hong Kong-listed LT Commercial Real Estate, LT Global specializes in urban mixed-use development with a focus on retail. Case in point is a lifestyle center LT is developing in Anaheim, which will include shopping, dining, entertainment, residential, hospitality, office and urban parks. The company believes the project will serve as the catalyst for Anaheim to realize a decade-long vision for vertical, mixed-use and energized communities in the heart of OC, Wei says.
Last year, LT purchased a community shopping center in West Covina that offers value-add opportunities, and is actively pursuing additional existing assets in SoCal. Wei tells us the company entered the US in 2013, attracted by the recovering economy, dynamic market, transparent info and diverse demographics. As a mom of two little boys, she enjoys every minute she can with family. Wei says her kids have inspired her to think deeply about the fundamental human needs for everyday life, which is very important to a real estate developer. "You need to know what people need, even before they know what they need." To learn more, please join us this Thursday, Oct. 15, for Bisnow's Cash Infusion: Impact of Foreign Investment on SoCal Real Estate, starting at 8am at the Luxe Sunset Boulevard Hotel (11461 Sunset Blvd). Sign up here!