According to Kaplan, the top choices for overseas investors are New York City; Washington, DC; Boston; Los Angeles; and San Francisco, with the first two cities grabbing the most money from investors’ pockets. But Kaplan noted that “there is a trend toward L.A. as investors look for the next frontier.” Outside of these five major metros, however, “equity is a desert,” he said.

And speaking of L.A., Kaplan spent a good deal of time talking about the office market there, which he said went from a 25 million square foot market to a 45 million square foot one in just five to six years. “It positioned us perfectly to take on the recession that hit in the early ’90s,” he joked. As a result, most of the decade was spent absorbing all of that space and, today, the market is “extremely supply constrained.”

Part of L.A.’s appeal is the port, which is the largest in the US. “There is also a huge education component, entertainment, medical research, healthcare, tourism, engineering and tech has moved down from Northern California,” Kaplan said. In addition, there are very few large tenants, with the average running around 20,000 square feet. “There are no real dominate tenants; everybody is included.”

As for Douglas Emmett’s portfolio, vacancy in 2006 and 2007 was around 4%, but that number deteriorated over the course of 2008. “We’ve had nine quarters of negative absorption,” Kaplan said. But don’t blame defaults. “Those are way down, but space reduction is continuing,” he continued. “Real rents, including concessions, are off about 25% to 30% from peak levels. But we need a few quarters of positive absorption before rents increase.”

Douglas Emmett is also bullish on buying. “There are good deals to be had,” Kaplan related, adding that his company racked up 28 million additional square feet during the recession.