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Why Build In Emerging Neighborhoods

WASHINGTON DC 05.16.2017

REAL ESTATE STRATEGIES FOR ASSOCIATIONS & LAW FIRMS

Demands, Drivers and Disruptors of Two of DC's Largest Tenant Groups

Tom Ikeler -- PN Hoffman
David Bevirt -- Brookfield
Dan Dooley -- Carr Properties

The Arts District, South Park and Koreatown are among L.A.'s emerging neighborhoods. Many developers consider them ripe for development.

L.A. State of the Market
Harley Ellis Devereaux Studio Leader Mitch Sawasy
and Carmel Partners SVP Development Neils Cotter

From Carmel Partners senior vice president of development Neils Cotter's perspective, the entire City of L.A. is somewhat of an emerging market. There are a lot of new jobs and many types of jobs coming to town, he said.

He said his firm looks for areas where there are interesting jobs and where mixed-use projects can thrive.

"I think there's a huge future here with the redevelopment of existing buildings," Cotter (right) said at this week's Bisnow L.A. State of the Market event.

L.A. State of the Market
Harley Ellis Devereaux studio leader Mitch Sawasy, Carmel Partners SVP Neils Cotter, 
Alliance Residential managing director Dustin Smith (center), Liner LLP Partner Jerry Neuman
and Solomon Cordwell Buenz Principal Strachan Forgan

Alliance Residential managing director Dustin Smith (center) said one of the attractive things about emerging markets is the lack of supply — and their potential.

When it comes to these neighborhoods, he likes to get a better understanding of them by parking and walking around and visiting neighborhood stores and restaurants.

L.A. State of the Market 2017
Carmel Partners SVP Neils Cotter and Alliance Residential Managing Director Dustin Smith

"It gives you a good context on what makes up that community," Smith (right) said.

Some developers said it is also important to hold community meetings and connect with local stakeholders to put them at ease when it comes to new development.

L.A. State of the Market
Harley Ellis Devereaux studio leader Mitch Sawasy, Liner LLP partner Jerry Neuman and Carmel Partners SVP Neils Cotter

Liner LLP partner Jerry Neuman said there is significant community resistance, especially on the Eastside, to any new projects coming into the area.

"Their view is that they're going to be out-priced and displaced from their neighborhoods," according to Neuman.

Solomon Cordwell Buenz Principal Strachan Forgan

The deep history found in emerging neighborhoods can be intriguing, according to the developers.

"In many ways, it's about peeling back the layers and really understanding that neighborhood," Solomon Cordwell Buenz principal Strachan Forgan said. "There may be architectural gems that could be used for inspiration initially or even rehabilitated."

He also said he sees the trend toward smaller units continuing, which helps maintain affordability.