Part 2 of 2
IRVINE, CA—Developers see growth opportunities in infill markets for almost every product type. That is according to 59% of respondents from a recent GlobeSt.com and Real Estate Forum survey as well as panelists at RealShare Orange County on Tuesday, an event which drew nearly 700 attendees.
According to panelist Ed Hanley, president of Hanley Investment Group, “There is a great hunger for taking old retail projects and creating something different.” But one thing to be mindful of is to make sure the city is ready for a certain component, he adds. Orange County isn't Seattle or San Francisco, he explained, so some things might not work here that do in others.
Angela Kralevec, VP of BlackRock, pointed out that infill and multifamily development are big needs in Orange County, but added that “you have to be selective to make it work.”
But Michael Dorsey, managing principal of Coldwell Banker Commercial Alliance, warned that although there are infill opportunities out there, they are limited and restricted.
When discussing one of the survey questions about LEED certification, and why it has taken so long for OC to see its first LEED-Platinum certification in a property, panelists agreed with respondents, that it is due to the value and cost. “Is it worth it one way or another?” asked Dan Kelley, SVP of governmental relations and corporate communications at Rancho Mission Viejo. “Essentially, people said no. Is it a surprise? No. Is it sad? Yes. But I believe we are on the cusp of a change. We will see customers who will demand higher degrees of sustainability in these buildings.”
But it isn't a question of sustainability, it is a question of the cost of certification to be LEED-Platinum, said panelists. Proehl noted that “A lot of companies are doing the things that would get the certification, but not all owners are not willing to use a consultant to actually get LEED certified.”
And one audience member noted that “The sustainability concept is more important than paying for the certification.”
Switching gears, panelists talked about industrial users in the county and how to keep them there when rents/purchase prices are high, land is scarce and the Inland Empire is so convenient. Kralevec said that “we shouldn't try to force industrial users into Orange County. Industrial of the past isn't the industrial of the future. We are moving away from our manufacturing roots.”
Proehl said that it is up to the Cities, not the developers, to keep industrial in the region. “If the cities want to keep it, then they need to keep the zoning entitlements industrial.”
One audience member said that industrial has simply evolved in Orange County and is now loaded with technological equipment and not people sitting behind sewing machines. “I do believe it will remain viable for smaller industrial users who are utilizing the technology today to use more with less space,” he said. “We are selling 40-year-old buildings for $200-per-square-foot. These business owners don't want to leave Orange County. There are lots of reasons other than the weather that people like to be here. Industrial isn't going away here, it is just evolving.”
The RealShare Conference Series is produced by ALM's Real Estate Media Group, which also publishes Real Estate Forum and GlobeSt.com.
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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.
