"The demand for furnished, flexible apartments is largely being driven by the same trends realigning multifamily markets, as Americans move away from big cities and the work-from-home movement takes root...
Those fundamentals will remain challenged by the continuing allure of work-from-home, which UCLA’s Ziman Center for Real Estate predicts will reshape the US housing market well into the future."
"But the effectiveness of reforms aimed at increasing transparency and public trust after this might not deter someone looking to do what Huizar allegedly did, said Eric Sussman, an adjunct professor in real estate at UCLA’s Anderson School of Management at the Ziman Center for Real Estate.
'If someone wants to be corrupt, they probably know very well they are breaking the law and are just going to behave in that way, thinking that they can get away with it or that they are somehow different,' Sussman said."
"But don’t expect houses in places such as the Westside and central L.A. to become cheap, said Stuart Gabriel, director of the Ziman Center for Real Estate at UCLA who forecasts rising prices for close-in areas of Southern California as well.
'The demand for those areas so far outstrips supply. It’s hard to imagine, even in the context of shifting preferences that benefit outlying areas, that [close-in locations] would not continue to be highly desirable,' he said."
"'I'm just sort of stunned at how thin it is in terms of supporting this $30 million valuation that seems to be almost pulled out of the ether,' said Eric Sussman, who teaches real estate and accounting at UCLA’s Anderson School of Management. He noted a lack of relevant comparable sales or financial analysis in the appraisal, but also pointed to the building photos. 'There are no amenities, no common areas. It looks like a very rundown motel. It doesn't even pass the smell test at a very superficial level.'”
"But, the market is unlikely to shift entirely away from traditional real estate agents and brokers, said Eric Sussman, a UCLA professor in accounting, finance and real estate. Technologies have long tried to replace the home selling process, but the number of people who actually take this route has been low.
'[For Sale By Owner properties are] I think, by and large, a very, very insignificant part of the overall transactional market. And I don't see that changing,' said Sussman."
“'This doesn’t mean DTLA is going to die as a viable economic unit,' says Stuart Gabriel, professor of finance at UCLA’s Anderson School of Management and director of the Ziman Center for Real Estate. 'Ultimately, this was happening anyway because it has simply become too expensive.'
Experts say the pandemic is less the cause of the decline in luxury rents and more an accelerant of forces in motion in L.A.’s economy.
'Pre-COVID, we were already starting to see the exit of both jobs and employees with those jobs, often in tech, from the most expensive markets to secondary tech hubs,' says Gabriel. 'People from Los Angeles were already moving to high-amenity, high-millennial-friendly cities like Portland, Austin, and Boulder. The difference is that now that no one is asking you to come into the office, destinations are much more dispersed. Pick your place.'”
"Eric Sussman, an adjunct professor of accounting and real estate at UCLA who has worked on a tenancy in common in the past, said the entitlement process and parking requirements 'can really limit' condo conversions."
"Paul Ong, an economics professor and director of UCLA’s Center for Neighborhood Knowledge, says there are more democratic forms of landownership, like community land trusts, which don’t exist to make a profit. Benefit corporations like Nico might set out to do good, he says, but 'in our market economy there are incentives and pressures to mold behavior around maximizing profit to the degree that your noble ideas become secondary.'
On the other hand, if you’re profit-driven alone, Nico’s holdings may ultimately be too small to make any significant returns for investors, says Eric Sussman, an adjunct accounting professor at UCLA and partner at Clear Capital LLC.
'I’ve never seen a real estate investment trust own so few properties,' he says. 'If this whole approach is to allow renters to get a piece of the action or somehow invest in their own units, I think there are less expensive, more liquid, better ways to go about doing it.'"
"Despite the crashing economy, anticipated demand for new residential units 'at all price points' will remain strong due to overall low supply, Stuart Gabriel, director of UCLA Ziman Center for Real Estate tells The Los Angeles Times."
"Housing development in L.A. has practically stopped during the pandemic, said Stuart Gabriel, director of UCLA Ziman Center for Real Estate. 'We are in desperate need of new supply at all price points.'
There is some risk, however, to urban high-rise development at a time when the pandemic is causing some people to consider living in less densely populated suburban neighborhoods instead of urban centers, Gabriel said."
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