LOS ANGELES—“In a Downtown multifamily deal, the risk is totally different.” That was according to Douglas Eisner, co-founder and managing director of the Calida Group, who spoke on a panel titled: “The New Downtown: Thinking Beyond Multifamily” here last week at RealShare Apartments.
“When you are looking at the downtown deals, you really have to look at other risks,” he said. “You have to look at the lead times, the speed to market etc. You have to mitigate other risks to accommodate the downtown risks.”
When asked about redevelopment versus new construction, Eisner said that the speed to market is much easier. “You have the ability to test units right away. If you are doing adaptive reuse, you are trading speed and visibility, but you are adding other types of construction that are harder to quantify.”
The consumer is evolving so fast, added James D'Argenio, principal of acquisitions at the Bascome Group LLC. “We are trying to discuss more details these days, even down to paint schemes.”
The consumer wants continuity between buildings, he explained, adding that the advantage in doing rehab versus going from raw land is that “you are able to try to evolve as quickly as consumers are.”
Switching gears a bit, the panel discussed how the definition of “downtown” has changed. “We always talk about jobs, and while it is important, I don't think you have to be right next to it…it is more about what amenities you have nearby,” explained D'Argenio.
Jim Andersen, SVP of Trammell Crow Co., added that the driver for Downtown L.A. for example was having interesting places to go, not jobs. “When all these super cool old spaces started getting converted and were reused, it kick started.”
Over 60 high-level speakers and nearly 2000 were in attendance at this year's RealShare Apartments event. 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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