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The OC Market Recovery Could Stretch Even Longer Under Trump

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While things are going smoothly in Orange County, some CRE experts are weighing the "Trump factor," as Mill Creek Residential managing director Michael Genthe calls it, for what the future holds.

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Berkadia managing director Jackson Cloak, The Bascom Group managing partner Jerome Fink, LT Global Investment CEO Max Yang, Mill Creek Residential managing director Michael Genthe and Bellwether Enterprise SVP Jason Krupoff.

Genthe said Mill Creek is taking a wait-and-see approach. He is predicting moderate growth.

This is historically the longest recovery cycle we have ever had, and most think we are late in the cycle, he said.

"[But] there are scenarios under the new regime that it could be extended beyond the current six to eight years that we've been enjoying," he said.

The proposed changes to Dodd-Frank would have a huge impact on CRE, he said.

The Dodd-Frank Act was created in 2010 after the financial collapse by the then Democrat-controlled Congress to help avoid another financial crisis. It is being reworked after being criticized for limiting funding options for consumers, hurting economic growth and putting too much of a burden on lenders.

The Bascom Group Managing Partner Jerome Fink

The Bascom Group managing partner Jerome Fink said most of Orange County is in great shape.

He said his firm expects the biggest rent increases to be in Garden Grove, Westminster, Fullerton and Placentia because they are lacking in construction and have the highest occupancies.

OC State of the Market Event
LT Global Investment CEO Max Yang and Mill Creek Residential Managing Director Michael Genthe

Genthe said the OC is also enjoying good job growth, which is a driver for demand.

China is still heavily investing in the U.S. because of the strong economy here despite the political turmoil, LT Global Investment CEO Max Yang said.

His firm is very bullish about the Platinum Triangle area, which has a lot of apartments in the pipeline.

LT Global Investment is building a $500M, 14.8-acre, transit-oriented, mixed-use project in Anaheim’s Platinum Triangle near Angel Stadium. It will include a 200-room hotel, office space, retail and apartments.

OC State of the Market Event

Bellwether Enterprise senior vice president Jason Krupoff said it will be interesting to see how the rest of the year goes.

Given that 2007 was the largest CMBS origination year to date, and it is now a decade later, "we should have a tremendous amount of debt growing, assuming the loans weren't already paid off," Krupoff said.

As a result, he expects there to be a lot of liquidity events where owners will consider whether they will sell or refinance their assets.