In terms of strategy, Lapidus says the firm is bullish on Los Angeles' growing tech and media markets, and expects that some big leases—he mentioned Netflix in Hollywood specifically—will create excitement in the market. “We expect to see large users to entering the market and creating excitement. If you look at L.A., we feel very bullish about the city as a center for technology.”

Rodgers firm on the other hand is looking for unique opportunities in markets with above average job growth, but like Lapidus, isn't venturing into secondary territories. “We are focused on markets where we see job growth, and we aren't making market bets,” he says. He used the example of a value-add deal that the firm recently purchased in San Francisco. The property needed to be upgraded, but also had rents at 50% of the market rate. It was a compelling story, and the types of deals the company wants in this market. “That is a unique story, and when we were able to dig in, we went for it,” he adds. “As we proceed into the next years, we can keep our eyes open for interesting deals.”

Allen Matkins

LOS ANGELES—The office buyer pool is shrinking, according to investment sales experts at the ninth annual Allen Matkins View from the Top conference. Four experts—David Lapidus, managing director of acquisitions and development at Tishman Speyer; Devin Peterson, principal of real estate at the Blackstone Group; James Rodgers, EVP and head of acquisitions at KBS Capital Advisors; Kevin Shannon, president of West Coast capital markets at NGKF and moderator Tony Natsis of Allen Matkins—discussed the current investment sales climate and the shift in confidence that they are seeing this late in the cycle.

“The buyer pool is down dramatically. The difference between haves and have-nots is greater,” Shannon said on the panel. “If you have a deal in Playa Vista under $250, there is a huge buyer pool. But, for most of what we are selling, it is hand-to-hand combat. The bidding is thin is that we are in the 85^th month of the recovery; so, people are worried something is going to happen. This is a long recovery, and there have only been four recoveries that have gone this long.”

Peterson, whose firm is an active seller in the market, echoed the sentiment, emphasizing that demand for quality product in A locations are still seeing tremendous demand. “There is very much a bifurcation between haves and have-nots,” he said. “There is a substantial demand for core real estate in good locations good quality, and there should be; but when you look at assets selling in other secondary markets in L.A., there continues to be bifurcation.”

On the other end of the panel, Lapidus and Rodgers were discussing the buyer's perspective, explaining that they are still very aggressive in certain markets, but agreed that they are starting to shift their strategy and are becoming more selective. “We want to be very focused on buildings and projects in locations that are going to be competitive, and we are taking a longer-term view of assets,” says Lapidus. “We are looking for opportunities on a selective basis. We continue to be selectively bullish, and we aren't going to secondary markets. We also expect to see fierce completion from capitalized folks.”

In terms of strategy, Lapidus says the firm is bullish on Los Angeles' growing tech and media markets, and expects that some big leases—he mentioned Netflix in Hollywood specifically—will create excitement in the market. “We expect to see large users to entering the market and creating excitement. If you look at L.A., we feel very bullish about the city as a center for technology.”

Rodgers firm on the other hand is looking for unique opportunities in markets with above average job growth, but like Lapidus, isn't venturing into secondary territories. “We are focused on markets where we see job growth, and we aren't making market bets,” he says. He used the example of a value-add deal that the firm recently purchased in San Francisco. The property needed to be upgraded, but also had rents at 50% of the market rate. It was a compelling story, and the types of deals the company wants in this market. “That is a unique story, and when we were able to dig in, we went for it,” he adds. “As we proceed into the next years, we can keep our eyes open for interesting deals.”