LOS ANGELES—Knowing who your tenants are going to be as a developer is key to success. So said Dean Zander, senior partner at Hendricks-Berkadia. And according to Zander, there is a new generation of tenants out there … “the MILF generation.”
Zander recently served as a panelist on the multifamily breakout panel at RealShare Los Angeles, produced by ALM's Real Estate Media group. “The new renter generation are renters by choice who put extra value on being Mobile, Independent, Liquid and Flexible,” he said. “These renters are in no hurry to save money to put a down payment on a suburban home with a yard.”
According to Zander, we will see more multifamily product in Los Angeles developed to that generation. “They want to remain flexible in all parts of their lives, particularly where they live as they know their jobs may change, family members may relocate, etc.”
Demographics are clearly playing a significant role in the increased demand for rental properties. And according to fellow panelist Kevin Kaberna, managing director of investments at Greystar, things are still looking up on the supply and demand side in Los Angeles, but there are still some concerns on the supply side in some areas. “But fundamentally, we are bullish things are headed in the right direction.”
Alexa Mizrahi, loan originator at Lone Oak Fund, said that California is a special market and is different from what is going on on a national scale. “You are seeing a lack of supply in places like San Francisco for example… It is an urban area, and the same thing is happening in Los Angeles.” She said that in places like West L.A., for example, there isn't an excess amount of product available.
“Investors are just trying to find product,” Mizrahi explained. “And multifamily remains the preferred asset class for investors and lenders … there is a lot of capital that needs to be placed.”
Greg Campbell, director of acquisitions at TruAmerica, agreed, noting that there is “lots of capital chasing few deals on the investor side.”
The remand is fueled by overseas investors, added Mizrahi. “They are trying to get capital out of the market that they are in and see California as a safe-haven for investment. They are overpaying because it is still a better opportunity than they have abroad.”
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Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
