Real estate gurus gazed into their crystal balls on March 27, 2013 to give conference goers their predictions on the future of California real estate. The conference was held at the Hyatt Century Plaza. Attendees included investors, brokers, management companies, attorneys and entrepreneurs. A few key pieces of wisdom include:
- Multifamily Property
- Good news for those invested in these properties - this market is hot and only going to get hotter. Panelists described how the wounded economy left a generation of young adults without the means to purchase single family homes. These adults are expected to turn to the rental market and boost rental amounts.
- The new crop of young adults described above are also more likely to include personalities who prefer to live in more expensive rentals in popular areas as opposed to more economical dwellings.
- Areas to look out for: Santa Monica, Playa del Rey and any community in the area dubbed "Silicon Beach." As technology companies move into this area, so will their tech savvy employees.
- Single Family Dwellings
- Experts expect to see a decline in the purchase of single family dwellings in favor of living in apartments and condominiums. While the economy is improving at a slow pace, unemployment remains high, so many are boxed out of affording mortgages in the single family housing market.
- Retail Properties
- The internet has had a dramatic impact on retail property. Some businesses like those who sell electronics, have been forced to desert their brick and morter stores after being undercut by online distributors like Amazon.com.
- The key to maintaining good vacancy levels and sales for retail clients, is to have the property manager take more of a responsibility in getting shoppers to the center and keeping them there. VP of Caruso Affiliated, Jackie Levy, emphasized how customer experience is their primary consideration when developing properties like The Grove or Americana at the Brand. Levy explained it is all about having events on the property, unique entertainment features like dancing water fountains, and finding the perfect combination of retailers and restaurants to keep customers on the property spending money for long periods of time.
- Office Properties
- The outlook for this market is still dismal. The advent of the internet has allowed many to work from home instead of a standing office.
- "Build-to-Suits" like units created for medical offices are still doing fairly well and are unlikely to see a decline as their services cannot be duplicated on the internet.
- Office dwellers are looking for developers to build horizontal properties, not vertical ones. Sky scrapers are giving way to more modern, expansive buildings.
- The emphasis on healthy living has found its way to the office place. Features like air filtration and shock absorbing flooring are becoming more desired and commonplace.
Real estate remains a viable industry despite the shaky economy. Investors will have to look beyond the Cap Rates of properties to the psychological impact their investments will have on future lessees.
For more information on the Real Share Conference, please visit: http://www.globest.com/events/