Southern California Industrial Real Estate Blog

CLEANTECH L.A. AIMS TO LEAD THE GREEN DEVELOPMENT EVOLUTION

By Jodi Summers

As we move toward a more efficient world, collaborative alliances are the next wave of evolution. In the last administration, we saw the auto companies begin to share ideas. In leaner, greener times the Department of Energy created the Commercial Building Energy Alliance. Locally, our universities are pooling their knowledge through CleanTech Los Angeles, with goal of making L.A. THE city spearheading the green evolution.

“Los Angeles is leading the world with its commitment to reducing its environmental footprint and this collaboration will undoubtedly stimulate innovation in our region and provide opportunities to create and attract clean tech companies who wish to capitalize on the region’s enormous public demand for their innovative solutions,” said Bill Allen, CEO of the Los Angeles County Economic Development Corporation.

CleanTech Los Angeles, it is an alliance featuring prominent leaders from the City’s premier academic institutions, business community and local government. The big picture is to establish Los Angeles as a global capital of clean technology by leveraging the City’s strongest assets.

Publicly, the CleanTech L.A. Memorandum of Understanding was signed by Mayor Antonio Villaraigosa, California Institute of Technology President Jean-Lou Chameau, University of California Los Angeles Chancellor Gene Block, University of Southern California President Steven Sample, Los Angeles County Economic Development President Bill Allen, Los Angeles Business Council President Mary Leslie, and Los Angeles Area Chamber of Commerce President Gary Toebben.

“Broader recognition of Los Angeles as a global regional center of science and engineering research and clean technology development bodes well for its economic competitiveness in a rapidly changing world,” added Dr. Jean-Lou Chameau, President of the California Institute of Technology.

CleanTech LA will focus on four key areas: Testing, R&D, and Commercialization; Advocacy for Funds; Education and Outreach; and Economic Development Strategy. The partnership is currently working together on initiatives such as www.cleantechla.org, the California Climate Change Institute, the CleanTech Manufacturing Center, and theClean Technology Research Center. Planned future programs include the CleanTech Corridor, advocacy for federal and state funding, and greater collaborations and partnerships.

PARTNERS:

* City of Los Angeles

* University of California, Los Angeles

* University of Southern California

* California Institute of Technology

* Los Angeles Business Council

* Los Angeles Economic Development Corporation

* Los Angeles Area Chamber of Commerce

“Clean technology is one of the bright spots in our future economy,” said Gary Toebben, President & CEO, Los Angeles Area Chamber of Commerce. “The L.A. Area Chamber is pleased to work with the City of Los Angeles and other partners to help make Southern California the hub of the emerging clean tech sector and the jobs and economic growth associated with it.”

For more information visit www.CleantechLA.org.

http://www.ioe.ucla.edu/news/article.asp?parentid=3347

http://www.today.ucla.edu/portal/ut/la-to-become-the-capital-of-green-88893.aspx

http://cleantechlosangeles.org/

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http://valuecarpetonline.com/ucla-ar.jpg

http://blog.ingamenow.com/wp-content/uploads/2008/09/hot-usc-cheerleaderspcc3.jpg

HAVE INVESTMENT PROPERTY PRICES PEAKED?

HAVE INVESTMENT PROPERTY PRICES PEAKED?

The 2008 Real Estate Investor Outlook. Asked 1,000 investors with an average of 19 years’ experience in the industry and an average of  $36.6 million invested in real estate.

In your view, has the commercial real estate industry reached a peak in pricing?

OFFICE BUILDING TITAN GOSSIP UPDATE

Robert Maguire III, developer of many of the skyscrapers in downtown Los Angeles, has abandoned his last-ditch effort to buy the company that he founded and has been forced out as chief executive and chairman, according to people familiar with the matter.

The board of Maguire Properties Inc., under pressure from hedge-fund investors, voted Saturday to replace Mr. Maguire as CEO with Nelson Rising, a former Maguire executive who later ran another real-estate company, Catellus Development Corp., people said.

Read it all @

http://online.wsj.com/article/SB121096909950099407.html?mod=CommercialRealEstateMain_1

The~~ first article…

OFFICE BUILDING TITAN GOSSIP

We were reading the commerical real estate articles in the Wall St. Journal when we came across this interesting tidbit:

“Robert Maguire III, who built much of the Los Angeles downtown skyline, including the 72-story U.S. Bank Tower, is in danger of losing control of Maguire Properties, which he serves as chairman. A number of hedge funds have taken a sizable position in the real estate investment trust and have been threatening to put a new slate of officers up for election if the company is not sold or if the board does not take dramatic steps to forge a turnaround.”

read the whole article @

http://online.wsj.com/article/SB120959154985857475.html?mod=CommercialRealEstateMain_1

HOLLYWOOD LANDMARKS CHANGE HANDS – GRAUMAN’S CHINESE THEATER IS PURCHASED BY CIM GROUP

HOLLYWOOD LANDMARKS CHANGE HANDS –
GRAUMAN’S CHINESE THEATER IS PURCHASED BY CIM GROUP
We like landmarks. Just check out our website at www.santamonicalandmarks.com. So, we thought it was noteworthy, though not entirely relevant news when the historic Grauman’s Chinese Theatre was purchased by local real estate moguls CIM group.
Grauman’s Chinese Theatre is arguably the most famous movie theater in the world. Built in 1927, the Chinese themed theater has been the site of thousands of movie premieres and the destination of millions of tourists. Visitors spend hours identifying celebrity footprints, hand prints and hoof prints on the walkways near and on the theater’s courtyard.
 

The theater, one of Hollywood’s top tourist attractions, is a high profile addition to a growing portfolio of CIM Group properties in Hollywood. The CIM Group, which purchased the adjacent Hollywood & Highland Center in 2004, has long been interested in acquiring the theater property.
CIM Group acquired Grauman’s from the Damon Runyon Cancer Research Center and Barlow Respiratory Hospital. Built in 1927 by Sid Grauman, the theater has long been a showcase for Hollywood movie premieres. The 1,162-seat, 43,310-sf theater is operated under an existing long-term lease with Mann Theatres and remains one of the top venues for high-profile movie premieres. With more than 200 celebrity hand and foot prints, its Forecourt of the Stars attracts approximately 19 million visitors each year.
CIM calls its new acquisition “one of the most recognizable buildings in the world.” The building is known for its 90-foot pagoda-style entrance and a 30-foot high dragon carved from stone by Chinese artisans that Grauman enlisted to create the statuary for the theater.
CIM noted that the new acquisition is a complementary fit to the company’s adjacent Hollywood & Highland Center and the Renaissance Hollywood Hotel. The Hollywood & Highland Center comprises 387,000 sf of national and local fashion and luxury retailers, along with clubs, restaurants and the 3,400-seat Kodak Theatre.
 

Information courtesy of Bob Howard
http://www.globest.com/news/987_987/gsrwest/163833-1.html?type=pf
 

TECHNOLOGY AND THE DEMAND FOR COMMERCIAL REAL ESTATE

Research Brief - TECHNOLOGY AND THE DEMAND FOR COMMERCIAL REAL ESTATE
 

• Technology will be an increasingly important influence on the demand for commercial real estate, especially as tenant demands for different types of building technology evolve.
 

• Technology, as it drives overall growth in the economy, will have a generally positive impact on commercial real estate demand.
 

• The demand for intelligent building attributes will vary both by property type and geographic market.
 

THE STUDY
This study examines how technology affects the demand for commercial real estate in three primary ways: 1) on overall tenant demand by property type; 2) on tenant demand for particular buildings; and 3) on demand for properties by investors. The analysis in this study is based on
interviews and a review of articles, reports and databases addressing technology change and real estate demand.
 

FINDINGS
There are many attributes of an intelligent building. Depending on the intended use of any particular building, these characteristics will vary in importance. The most important attribute, in general across all property types, is the voice and data communications network. Other important
building attributes include energy efficiency, lighting and security.
 

Among the key conclusions of the report are:
 

• Relatively few industrial owners are interested in intelligent building technology and are instead focused on other characteristics that appeal to the widest possible range of tenants.
 

• The demand for intelligent building technologies for office tenants is in its infancy. Other factors such as overall costs and proximity to employees and customers still dominate.
 

• The most important technology attribute for multifamily is highspeed Internet access, while most other technologies are viewed as less important.
 

• Telecommunications and adaptability of space are key features for retail tenants although technologies that improve energy efficiency, security, and lighting can reduce owners’ expenses.
 

• The demand for many technologies is relatively undeveloped for hotel properties although it is generally not too costly to wire hotel rooms for high-speed Internet access.
 

The demand for intelligent building attributes as well as the overall influence of technology on commercial real estate demand will vary by geographic market.
 

Info courtesy of Scott R. Muldavin, The Muldavin Company, Inc.
 

*The complete report is available at www.realtor.org/research.nsf/pages/NatlcenterforRE
 

Commercial Strength Buffers Slowdown

Study: Commercial Strength Buffers Slowdown

What’s kept the economy perking during the housing slowdown? Look to the commercial real estate market says the National Association of Industrial and Office Properties.

A recent study conducted by Dr. Stephen S. Fuller, director of the Center for Regional Analysis at George Mason University, for NAIOP Research Foundation credits “the thriving commercial development sector” with buffering the slowdown in the residential sector.

The study found that spending related to commercial real estate added $498.4 billion to the GDP in 2005. By comparison, the federal government’s contribution that year was $498.8 billion.

Spending on commercial real estate included:

• $228.93 billion on soft costs (architects, engineering, marketing, legal, management), site development, and tenant improvements
• $265.9 billion on the hard costs, or actual construction outlays
• $3.6 billion on maintenance

“By 2005, all sub-sectors of nonresidential construction were accelerating, helping to offset slowing residential building construction outlays in 2006 and 2007,” Fuller said. “This counterbalance kept the national economy from experiencing a sharper slowdown in the face of rising energy costs and lost output due to Hurricanes Katrina and Rita.”

Most recently, in March 2007, spending costs rose 2.4 percent, which according to Thomas Bisacquino, president of NAIOP, “more than makes up for the 1 percent drop in residential construction.”

Leading States for Commercial Construction Spending

The top 10 states for construction spending are:

1. California
2. Texas
3. Florida
4. Georgia
5. Illinois
6. Indiana
7. New York
8. Ohio
9. Virginia
10. Arizona

In terms of individual sectors, Texas ranked first for industrial spending, while California led the states in spending for office, industrial, warehouse, and retail categories.

— By Camilla McLaughlin for REALTOR® Magazine Online

Famous Quotes about Real Estate

Famous Quotes about Real Estate
 
 

“Ninety percent of all millionaires become so through owning real estate.”
Andrew Carnegie
 

“The major fortunes in America have been made in land.”
John D. Rockefeller
 

“I would give a thousand furlongs of sea for an acre of barren ground.”
Shakespeare
 

“The small landholders are the most precious part of a state.”
Thomas Jefferson
 

“He is not a full man who does not own a piece of land.”
Hebrew Proverb
 

“A man complained that [on] his way home to dinner he had every day to pass through that long field of his neighbor’s.  I advised him to buy it, and it would never seem long again.”
Ralph Waldo Emerson
 

“The best investment on earth is earth.”
Louis Glickman
 

“It is a comfortable feeling to know tht you stand on your own ground.  Land is about the only think that can’t fly away.”
Anthony Trollope
 

“My own recipe for world peace is a bit of land for everyone.”
Gladys Taber
 

“There have been few things in my life which have had a more genial effect on my mind than the possession of a piece of land.”
Harriet Martineau
 

 
Everyone says buying your first apartment makes you feel like an adult. What no one mentions is that selling it turns you right back into a child.
Anderson Cooper - Real Estate - Selling - Buying - Emotional

New Yorkers are predatory about real estate. When they sense softening, they move in for the kill.
Anderson Cooper - Real Estate - Competition - America

Selling your apartment in New York is like dating a manic-depressive.. you get used to cycles of elation and despondency. Every time someone would come to see the apartment, there was the thrill of the date. You want to be presentable, so you clean the place up, make sure it smells good, put on some mood lighting and mellow music.
Anderson Cooper - Real Estate - Selling - America - Emotional

Owning a home is a keystone of wealth.. both financial affluence and emotional security.
Suze Orman - Assets - Real Estate - Finance

I think selling techniques are basically the same in every country, except there are different cultures that have different methods of negotiating. But real estate is the same, whether it happens to be in Australia or if it happens to be in New York.
George Ross - Selling - Australia - America - Real Estate - Negotiation

It’s tangible, it’s solid, it’s beautiful. It’s artistic, from my standpoint, and I just love real estate.
Donald Trump - Real Estate -

Every day, you’ll have opportunities to take chances and to work outside your safety net. Sure, it’s a lot easier to stay in your comfort zone.. in my case, business suits and real estate.. but sometimes you have to take risks. When the risks pay off, that’s when you reap the biggest rewards.
Donald Trump - Business - Real Estate - Opportunity - Risk

Well, real estate is always good, as far as I’m concerned.
Donald Trump - Real Estate - Investing -

I’ve never lived in a building without my name on it.
Ivanka Trump - Branding - Rich - Real Estate

The property boom has made us all feel wealthy, but unfortunately it has lulled many of those nearing retirement into a false sense of security.
Noel Whittaker - Rich - Assets - Real Estate

I have developer’s disease. I love to sit at a drafting table and draw plans for hotels, wrestling with problems of traffic and the flow of people. That’s what turns me on.
Steve Wynn - Passion - Real Estate - Problems
 

It’s tangible, it’s solid, it’s beautiful. It’s artistic, from my standpoint, and I just love real estate.
Donald Trump - Real Estate -

Well, real estate is always good, as far as I’m concerned.
Donald Trump - Real Estate - Investing -
 

“It is a comfortable feeling to know that you stand on your own ground. Land is about the only thing that can’t fly away.”
-Anthony Trollope (1815-1882)

NONRESIDENTIAL CONSTRUCTION A MIXED BAG IN 2006

NONRESIDENTIAL CONSTRUCTION A MIXED BAG IN 2006

The preliminary 2006 data from the Construction Industry Research Board paints a mixed picture for nonresidential construction around Southern California. In Los Angeles County, permit values for industrial structures fell by 37.1% from the 2005 total, while retail was down by 12.7%. Office permits made a last minute surge to wind up 3.1% over the 2005 permit total. Orange County was up across the board, with industrial ahead by 232.6%, office up by 84.7% and retail up by 32.6%.
The final numbers for Riverside County were also all positive, with industrial up by 139.6%, office ahead by 31.3% while retail was up by 7.3%. In San Bernardino County for 2006, industrial permits values were up by 15.9%, office was ahead by 36.1% and retail was up by 26.7%.
San Diego County’s 2006 nonresidential performance was uneven, with retail up by 16.0%, while industrial declined by 9.9% and office dropped by 28.0%. It was a similar story in Ventura County, with office permit values up by a stout 126.6%, while industrial values declined by 5.0% and retail was off by 25.1%.
In the 9-county Bay Area, industrial permit values declined by 11.9% in 2006, despite surges in San Mateo and Santa Clara counties. Office permit values jumped by 165.6%, with the pace set by San Francisco, San Mateo and Santa Clara counties. However, retail permit values dropped by 7.9% from 2005.
A final note: 2006 turned out to be a decent year for hotel building in Southern California, with permit values in Los Angeles County up by 27.9% over 2005, while Orange County was ahead by 419.6%, Riverside was up by 287.5% and San Diego County rose by 186.5%.

(Jack Kyser)

2007 COMMERCIAL PROPERTY FORECAST

2007 COMMERCIAL PROPERTY FORECAST
 
The experts are predicting good prospects in commercial real estate in 2007…and even better news locally. Stan Ross, chairman of the board of the University of Southern California’s Lusk Center for Real Estate cites New York and Los Angeles among the “leading metropolitan markets” where properties will continue to command top dollar.
 
The Lusk Center also suggests that in addition to investing in traditional office, retail, industrial and hotel assets, speculators will examine alternative investments including urban infill, adaptive reuse and multifamily-retail developments near inner city transit centers.

Economists note that throughout 2006, sales and leasing were on a growth curve in the office, industrial, and multifamily sectors. They foresee these property types continuing to grow through 2007 and into 2008. The retail property market will be softer.

The expanding U.S. economy and an influx of institutional investment capital are keeping the volume of sales transactions high in the commercial sectors.
 
“Institutional investors have returned in a big way,” say NAR economic analysts.

Ross calls 2007 the “Year of Recycling” for real estate capital. The Lusk institute chairman explains that capital is not leaving property markets, but it is “being recycled into small equity funds, limited partnerships and alternative investments.” 
 
It’s believed that much of what is now evolving with capital investments is an outgrowth of last year’s privatization push - when some of the larger public Real Estate Investment Trusts went private.
 
Investors still have access to the inexpensive debt of recent years, which leaves room for potentially higher returns from real estate investments than other types of investments offer. With these factors at work, the USC Lusk Center chairman says, real estate “will continue its dominance as an asset class in 2007.” 
 
For all commercial sectors, lending volume is up and delinquencies are down. Construction costs are keeping speculative development to a minimum. Import and export activity continues at high levels, sustaining demand in warehouse and distribution facilities. Strong corporate profits are stimulating businesses to expand office and production space.
 
“The U.S. economy is proving very resilient, and that favors commercial real estate,” confirms Kenneth Riggs, CEO of Real Estate Research Corp.
 
The National Association of Realtors has spoken to those in the know and makes the following 2007 commercial property predictions:
 
Offices:
A minor rise in new office buildings in 2006 kept office vacancy rate relatively flat, but with healthy job growth, continued robust absorption levels, and moderate speculative development, the vacancy rate is expected to drop by the end of 2007.

Our country will continue to be appealing to foreign investors.  US property prices look competitive from a global perspective. “The weak dollar also has given global investors more buying power in America,” observes Ross.
 
The commercial market will be lucrative, but not as lucrative as in years past. “Investors will have to look for ways to enhance value,” concludes Riggs.
 
Jodi Summers negotiates investment properties for Sotheby’s International Realty. For your real estate needs, e-mail Jodi Summers at jodis@verizon.net, or call 310.260.8269. Visit her websites at www.SoCalInvestmentRealEstate.com or www.santamonicalandmarks.com.
 

Getting real estateinvestments to grow with some smart actions

 Getting real estateinvestments to grow with

some smart actions

As financial guru Suze Orman asserts, “You have to have a relationship with your money.”