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Will Second and Third Ring Office Parks Have a Chance?

LOS ANGELES—Sources at the recent RealShare Los Angeles conference here look very carefully at migration patterns and discuss location, millennials and what the future holds for third ring office parks.

By Natalie Dolce | nataliedolce | | Updated on April 14, 2016
RealShare L.A. investment outlook panel RealShare L.A. investment outlook panel
LOS ANGELES—In looking at the multifamily space, there has been a shift across the country, said Susan Tjarksen , founder of KIG . “It is still location driven and price per square foot driven but in major markets we are seeing a shake in concessions.” Tjarksen recently spoke on a brokerage panel at RealShare Los Angeles , where she said that “We aren’t selling on trend anymore, we are selling on stabilized.” And over on the day’s investment panel , sources said that they wouldn’t be surprised to see the apartment market slow. According to Doug Metzler , managing director of Hines , “In the US, we feel like the apartment market is more mature than other sectors, so we wouldn’t be surprised to see it slow.” On the office front, the discussion was about chasing tech tenants and millennials and their behavior. “What we haven’t seen, is many of them [millennials] transition and have kids,” said Metzler. “As much as people want to be in transit rich environments, I think that climate rich environments like Southern California will have increasing demand from younger people that have interest in having a single-family home with a backyard.” Stan Iezman , chairman and CEO of American Realty Advisors , agreed, noting that we can expect the move to the suburbs to be dramatic. But then the question remains, what will be the impact on the downtown L.A. stock, for example? “It will be very hard for the first level of Millennials moving forward to go out into Valencia, CA, for example, as their first step out of downtown,” said Iezman. “They will go out to the first ring…similar to Brooklyn from Manhattan.” He added that “You have to look very carefully at the migration patterns and what you think will occur. I am concerned about second and third ring office parks.”

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