The event featured three long-time members of the Los Angeles real estate community as panelists: Stanley Moore, CEO of Overton Moore Properties; Ben Reiling, president, Zelman Development Co.; and Richard M. Cannon, CEO of the Watson Land Co.
Moore started the proceedings by proclaiming that Southern California was not suffering through the same recession that has been affecting the country for the last year. He did admit that Los Angeles was experiencing a flat job creation rate, which would not fuel demand for office space in the county. As an example, he said his operations in the South Bay 18 months ago had only six building available compared to 55 buildings available today.
Cannon echoed Moore's opinion, reminding those attending that in 2002 Los Angeles is predicted to experience its first job loss figures in eight years. Add to that the stress put on the industry by the events of Sept. 11 and the office market should expect a difficult environment in the short term. But he does believe that the real estate market has hit bottom and will begin to experience a turnaround this year.
Southern California is still enticing to retailers, according to Reiling. The long-term entitlement process for major retailers to start new products is an unexpected boon in these times and helps to keep the market strong, he added. These barriers to entry mean that when demand returns developers will not be able to avoid existing buildings.
Recycling old buildings will not be an effective business course, all agreed, until zone changes are legislated that will allow for change of use rather than the same use. Tax structures will need to be altered and communities will have to abandon "not in my backyard" thinking, the panel agreed.
Stanley Moore provided some levity at the session's close. When asked what advice he had for the next generation of real estate professions, he told them to get a 10-year subscription to La Opinion, the Spanish-language news daily.
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