SOCAL OFFICE REAL ESTATE BLOG NOVEMBER 2013 – THE ADAPTIVE REUSE OF OFFICE BUILDINGS

October 31, 2013 on 8:54 am | In Bravo, Fascinating Information, Green, Historic Properties, Investment Opportunities, Market Snapshot, Property Maintenance, Solutions, Trends, Uncategorized, Winning Properties | 3 Comments

by Jodi Summers

You’ve heard about all of those fabulous loft conversions in downtown Los Angeles – old office buildings and factories that have been renovated into apartments and condos. That’s what’s happening with a lot of that extra office space…that’s in cool buildings.

In 2012, nationwide, office stock shrunk in a third of the 54 top U.S. markets. Buildings worth saving are being converted, while lesser buildings are being demolished. The result is that the net inventory has dropped by about 21.6 million square feet > or 0.3% of inventory. In Los Angeles, available office space has declined by -16.2% according to Loopnet.

Over the next four quarters, approximately 11 of the top 54 U.S. metros and almost half of the 1,400 submarkets in those metros will have a net loss of inventory.

Conversion to residential usage is the most prominent reason that an office building is removed from inventory. Condo and apartment conversions comprise 34% of the lost office space, according to CoStar. Additionally another 13% of office space has been demolished to make way for new residential construction.

In high density urban areas where housing is needed, multifamily repositionings benefit both owner and user. The ideal conversion candidate – transit-accessible office structures built circa 1930 with 22,000-square-foot floor plates.

For more information please contact Jodi Summers and the SoCal Investment Real Estate Group @ Sotheby’s International Realty – jodi@jodisummers.com or 310.392.1211, and let us move forward together.

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http://www.costar.com/News/Article/Didnt-That-Used-to-Be-an-Office-Building-/153464?ref=/News/Article/Didnt-That-Used-to-Be-an-Office-Building-/153464&src=rss

http://www.marcusmillichap.com/Services/Research/Default.aspx#2

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http://www.loopnet.com/Los-Angeles_California_Market-Trends?Trends=TotalSFAvailableFS&PropertyTypes=Office

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http://www.citygro.ws/projects/ace-hotel-los-angeles/posts/the-building-is-totally-gutted

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PARKING FOR APPOINTMENTS GETS EASIER

September 22, 2013 on 6:34 pm | In Fascinating Information, Funny...Money, New Developments, Office Fodder, Solutions, Uncategorized | 2 Comments

by Jodi Summers

Don’t you just hate driving around looking for parking when you’re supposed to be in a meeting? A new automated garage, the kind of the future, is now being tried in Santa Monica. The “West Coast’s first automated parking garage” is moving cars around the UCLA Santa Monica Outpatient Surgery Center. Drivers can leave their cars at six bays, where a movable platform takes the car to a crane. The 8,000-pound crane then lowers the car onto one of six levels. Employees swipe their driver’s license or a badge to retrieve their cars, while the public will use a credit or debit card (the garage will open to the public when all the kinks are worked out). Usually the cars can be retrieved in two minutes and people seem happy with the system. “It breaks down sometimes, but when it’s working it’s really great,” according to one nurse.

One of the best aspects of the robot garages, other than never losing your vehicle or dealing with break-ins, is they hold more cars than a typical garage and can be built smaller. West Hollywood and Chinatown both have automated parking garages in the works.

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http://la.curbed.com/archives/2013/01/behind_the_scenes_at_samos_slightly_buggy_first_robot_garage.php

http://santamonica.patch.com/articles/debugging-santa-monica-s-first-robo-garage#photo-13012295

http://www.santamonicapropertyblog.com/?p=4802

SOCAL OFFICE REAL ESTATE SNAPHOT – SEPTEMBER 2013 – OPPORTUNITY ABOUNDS

August 30, 2013 on 8:04 pm | In Investment Opportunities, Lease Rates, Market Snapshot, Office Fodder, Solutions, Statistics, Trends, Uncategorized | 4 Comments

by Jodi Summers

The late summer lull in the Los Angeles office real estate market offers options for nearly all office investors. Savvy entrepreneurs are reaching for value-added strategies, while distressed office property opportunities continue to evaporate. Marcus & Millichap’s Third Quarter Office Research Report reasons that buyers are appreciating assets with breakeven revenue on current rent rolls and the potential for a 10% return, while loan underwriters remain squarely focused on current operating revenues.

The Third Quarter Office Research Report also offers the following highlights.

■ During the most recent 12-month period, deal flow in the Westside Cities climbed by 28%, as activity in the Class A sector more than doubled. The average square feet per transaction rose by nearly 50%. The median sales price was $398 per square foot, representing a year-over-year price increase of 4%.

■ Healthy improvement in operations, along with rising prices, put downward pressure on cap rates. During the past year, average cap rates were in the low-6% range, down 30 basis points from the prior period.

Surprisingly, office rents in L.A.’s Westside Cities are more than 35% above the county’s other regions…

■ At midyear, average asking rents for available space were $39.69 per square foot. By year-end 2013, average asking rents in the Westside Cities will reach $40.36 per square foot, an annual climb of 2.4%.

■ Rents for available Class A space were $41.78 per square foot in the second quarter, a 1.6% gain from last year. Class B/C asking rents were quoted at $35.53 per square foot in the second quarter, up 3.6% from last year’s midpoint.

High prices in the Westside Cities encourages buyers to utilize leverage when acquiring properties. As a result, rising interest rates could have a more pronounced impact on sales in the region. This is a benefit to the owner-users marketplace, who are taking advantage of SBA loans with interest rates under 5%.

For more information please contact Jodi Summers and the SoCal Investment Real Estate Group @ Sotheby’s International Realty – jodi@jodisummers.com or 310.392.1211, and let us move forward together.

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http://www.marcusmillichap.com/Services/Research/

http://www.socalofficerealestateblog.com/?p=2424

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CALIFORNIA’S ECONOMY > GROWIN’, GROWIN’, GROWIN’

July 15, 2013 on 7:38 pm | In Bravo, Fascinating Information, Investment Opportunities, Market Snapshot, Solutions, Statistics, Trends, Uncategorized | 5 Comments

Edited by Jodi Summers

Bravo to us! California rates 6th on the list of the states with the fastest growing economies. Countrywide, gross domestic product (GDP) grew by 2.5% in 2012 after growing 1.6% in 2011. This is the most the economy has grown since 2006. Bravo to us! Nationally, manufacturing, trade and the finance and insurance industry made some of the biggest contributions to growth.

California, has been one of the most depressed economies in the country for years, has seen growth in its telecom, tech, financial markets and banks. But life is getting easier. Here is an update on our progress courtesy of 24/7 Wall St….

6. California

> GDP growth: 3.5% (tied for 5th highest)

> Real 2012 GDP: $1.75 trillion (the largest)

> 1-yr. population change: 0.95% (18th highest)

> 1-yr. employment growth: 1.99% (7th highest)

California has the largest economy of any state in the nation, at $1.75 trillion in 2012. The state also was among the most damaged by the housing crisis during the Great Recession. In 2009, California’s economy contracted more than 5%, and grew only 0.3% and 1.2% in 2010 and 2011, respectively. According to the Federal Housing Finance Agency, as of the first quarter of 2013, home prices in the state were down by more than 16% in the past five years, compared to 9% for the nation overall. While still high, California’s unemployment rate has declined in recent years, from 12.4% in 2010 to 10.5% in 2012. Also, through a mixture of tax hikes and spending cuts, California recently recorded a budget surplus. Just three years earlier, the state had faced a deficit of nearly $60 billion.

North Dakota wins the 2012 award with > GDP growth: 13.4%.

Read more: States with the Fastest Growing Economies – 24/7 Wall St. http://247wallst.com/2013/06/12/states-with-the-fastest-growing-economies/#ixzz2WCl6TxRK

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WINNERS SHARE THEIR VISION OF THE OFFICE BUILDING OF THE FUTURE

February 19, 2013 on 9:29 pm | In Bravo, New Developments, Office Fodder, Solutions, Uncategorized, Winning Properties | 2 Comments

by Jodi Summers

NAIOP, the Commercial Real Estate Development Association, has chosen four companies as winners of its inaugural Office Building of the Future design competition….and one is a local hero.

The winners of this competition are:

Gensler, Los Angeles, Calif.

Hickok Cole Architects, Washington, D.C.

The Miller Hull Partnership, Seattle, Wash.

Pickard Chilton, New Haven, Conn.

The Office Building of the Future submissions detailed each firm’s vision and concept plan for utilization trends, sustainability and new building technologies. Each company submitted site plan views and perspective sketches that highlighted future building features, materials, technology and trends, and hard cost budget estimates.

The winners identified several common themes that will drive change in what is considered an “office” in 2020. The biggest change is from personal technology, employees more capable of completing service and information-based tasks wherever they choose. The advantage of the office of the future is that it will provide an array of flexible workspaces.

Gensler – Los Angeles’ own Gensler Architecture has the vision of a “hackable” building which they define as “an existing structure that has been updated beyond recognition and that incorporates a diverse mix of multiple uses within a building.” According to Gensler, “Hacking is a culture, not a technology. We believe it represents the most dynamic, pragmatic and sustainable vision for the future of office buildings and the future of work.”

Hickok Cole Architects – According to Hickok Cole Architects’ winning submission, “No one is tied to a desk and there are ample opportunities for diverse work environments, such as lounge work areas, communal tables, benching areas, hive configurations, individual work stations, and shared office amenities.”

The Miller Hull Partnership – The Miller Hull Partnership’s b(HIVE) concept represents “a building that becomes a part of an agile, adaptable business machine, somewhere between a hands-on community and the raw edge of technology.” Their vision includes 1) flexible, open space that is fast and inexpensive to build; 2) collaboration space that is carefully customized for tenants and easy to reconfigure; and 3) retail space on the ground floor with a diverse mix of uses.

Pickard Chilton – Pickard Chilton’s approach identifies three distinct principles. 1) Human qualities: A healthy workplace that is conducive to the productivity and well-being of employees, with qualities such as abundant natural light, access to fresh air, customizable work areas and greater collaboration spaces; 2) Business objectives: Innovative design and construction, efficient floor plates and multipurpose spaces support the owner’s business objectives; 3) Sustainability: The office building of the future incorporates an advanced system monitor to track, measure and display data about building performance to allow potential tenants to make informed decisions about their workplace and enable a high-performance building to stand out within a highly completive real estate market.

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http://www.naiop.org/en/About-NAIOP/News/NAIOP-News/2012/091812-NAIOP-Inaugural-Office-Building-of-the-Future-Design-Competition.aspx

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http://www.washingtonpost.com/business/capitalbusiness/reimagining-the-hoover-building-on-pennsylvania-ave/2012/10/26/d45141ca-1fac-11e2-9cd5-b55c38388962_gallery.html#photo=1

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http://www.naiop.org/~/media/eLibrary/Development/1180peachtree_symphonytower.ashx

THE OFFICE OF THE FUTURE

February 9, 2013 on 8:25 pm | In Fascinating Information, Green, New Developments, Office Fodder, Solutions, Uncategorized | 4 Comments

by Jodi Summers

Corner offices and cubicles are so last century. The new millennium workspace is versatile, with options for focused, individual work and also fully equipped to support collaborative groups, team projects and social interaction.

NAIOP, the Commercial Real Estate Development Association, recently held the Office Building of the Future design competition. The winning designers identified several common themes that could drive changes in how we “office” in the future. The biggest driver for change is personal technology, which has untethered workers from by providing the capability of completing service and information-based tasks from wherever they choose. An individual with a laptop can work from home, or at a wi-fi equipped location, or any variety of locations along the road.

The company of the future doesn’t have one grand office rather they have several smaller hub locations, closer to their workforce and rapid transit. This will result in a reduction of the average size of any individual office location, but shouldn’t impact demand.

“Office design is changing rapidly and our industry needs to position itself ahead of the curve,” offers Thomas J. Bisacquino, NAIOP president and chief executive officer. “This unique competition opened the door to thinking about what an ‘office’ may look like in the very near future.”

On the green side, the office building of the future should also be more affordable to build and operate, thanks to advances and cost reductions in construction materials and systems. Sustainability will become financially viable. Net-zero buildings will meet the demands of tenants as well as the improved building performance sought by building owners and developers.


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http://www.naiop.org/en/About-NAIOP/News/NAIOP-News/2012/091812-NAIOP-Inaugural-Office-Building-of-the-Future-Design-Competition.aspx

http://www.youtube.com/watch?v=XRv46VioM-Y

http://www.socalofficerealestateblog.com/?p=2297

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http://naiop.dev.berndtgroup.net/~/media/eLibrary/Development/officeoffuturebostonconsulting.ashx

http://www.costar.com/News/Article/Mixed-Use-20-The-Office-Building-of-the-Future/143317?ref=100&iid=306&cid=383F14EEE265B182474DA2442BACBBBF

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