UCLA Real Estate Wire

Greystone: "UCLA Economist: Market Outlook Post-Coronavirus"

"The COVID-19 pandemic, which has touched every corner of the world and impacted every industry throughout the United States, has left an indelible mark on the economy. Greystone spoke with David Shulman, a senior economist with UCLA Anderson Forecast, part of the University's Anderson School of Management, about his predictions for how COVID-19 may change the commercial real estate landscape.

Q. What is the outlook for CRE in 2020-21? Are there some sectors that will perform better than others?

A. The multifamily sector is better off than property sectors such as retail and hotels. Probably the one sector that may be most impacted is senior housing. The industrial sector is good so far, and for offices there are long-run questions about how businesses will change their configurations or allow more people to work remotely.

The multifamily sector came into the year strong. Rents were going up and most owners were happy campers. The big risk they were facing was regulatory issues such as rent control. The pandemic has exacerbated that with things like the moratorium on evictions New York City's legislature is considering extending the moratorium for the entire year."

[Graystone: 4/30/2020]

Mansion Global: "Buyers and Sellers Must Stay Up-To-Date on the Market Through the Covid-19 Crisis"

“'We already had low inventory, and not a lot of people selling or moving, so this is certainly going to exacerbate that reality,” Mr. Sussman said. “Will it move the needle materially in either direction? I don’t see that yet.'”

[MG: 4/10/2020]

GlobeSt.com: "UCLA Forecasts Sharp Recession"

"'This is unprecedented. This is a public health crisis morphing into a giant economic crisis,' David Shulman, senior economist at UCLA Anderson Forecast, tells GlobeSt.com. 'We are going to see massive layoffs, a record drop in quarterly GDP in the second quarter. The solution is more of a medical question than an economic question. You have to look at this as a public crisis that is giving a bog shock to the economy.'"

[GS: 3/23/2020]

Mansion Global: "With Global Markets Buckling, Luxury Property Faces a Different Set of Challenges From 2008"

"Last week’s and today’s dramatic stock declines may call up memories of 2008, but the parallels largely end there.

'This downturn is fundamentally different than what happened in 2008 and 2009,' said Eric Sussman, an adjunct professor of accounting at UCLA Anderson School of Management."

[MG: 3/16/2020]

Mansion Global: "Highly Anticipated New Developments—Filled With Amenities Galore—Opening in Los Angeles"

As far as price points that are doing well within the luxury market, the “$2 million to $5 million range is doing pretty well, with $5 million to $10 million not doing as well,” said UCLA Ziman Center for Real Estate professor and developer Paul Habibi.

“North of $10 million is still doing fairly well because there is a limited number of homes and a limited number of buyers,” he said.

International buyers have had a strong presence in the luxury market of late, Mr. Habibi said. “There has been a little bit of dearth of Chinese investment in L.A., but it hasn’t really made a dent in pricing yet.”

[MG: 9/26/2019]

The Real Deal: "Glass, steel and uncertainty: Stalled Oceanwide Plaza megaproject faces mounting challenges

"Chinese developers will likely face a 'much higher pressure' on their foreign investments as the country’s currency, the renminbi, depreciates and the Chinese government continues to increase capital controls, said economist William Yu. 'I don’t think it’s possible to find a way to move the money out of China right now,' said Yu, who focuses on the L.A. economy and forecasting at UCLA’s Anderson School of Management. That could require Chinese companies like Oceanwide to find alternate sources of financing.

"Adding to the uncertain economic environment is that lenders are more cautious about underwriting major projects, said Eric Sussman, a UCLA Ziman Center for Real Estate professor and real estate investor.

“Any amount of uncertainty in markets is going to have an economic impact, but we’re talking about [seven-month] delay now,” he said. “It sounds like there may be broader issues.

[TRD: 8/262019]

89.3 KPCC: "SoCal housing market: stabilizing prices, cooling demand, Chinese disinvestment"

"Home sales just hit their lowest levels since 2007. But it’s a different story in the commercial real estate market. Los Angeles is on its third year in a row of record sales for real estate like office buildings, retail, and housing complexes. The housing and commercial real estate markets have both seen a decrease in Chinese investment again this quarter. That makes it the third quarter in a row where Chinese investors sold more property than they bought. U.S. homes are more expensive. The dollar is getting stronger while China’s economic growth is slowing. Political tensions are rising between the United States and China. All of those factors tie into the national decline, but the trend is appearing in Los Angeles, too."

GUESTS:

Lawrence Yun, chief economist and senior vice president of research at the National Association of Realtors

Michael Longo, first vice president of capital markets at CBRE, a commercial real estate and investment firm based in Los Angeles

Eric Sussman, adjunct professor in accounting and real estate at UCLA Anderson School of Management

[KPCC: 1/31/2019]

Financial Times: "Prices of houses in Los Angeles hit a new high"

"Paul Habibi, professor at the UCLA Ziman Center for Real Estate, says an increase in foreign buyers interested in LA property has helped ramp up prices in the county even further. “We have long been a lower-cost housing market compared with other world-class cities,” he says. “But there has been a big influx of Chinese money, which, together with the tech boom and a chronic housing shortage, is starting to make prices look much more like New York.” According to the National Association of Realtors, in the 12 months to the end of March, foreign buyers purchased $35bn worth of property in California. During the same period last year, that figure was $27bn. Among them, buyers from Asia and Oceania increased from 51 per cent last year, to 71 per cent this year."

[FT: 11/10/17]

Mansion Global: "Geopolitical Events Have Immediate Impact on Luxury Market Activity, Not Pricing"

"Like other investment types, “geopolitical events affect real estate markets virtually instantaneously,” said Paul Habibi, a professor of real estate at the UCLA Ziman Center for Real Estate. “But unlike other investment types, we don’t always see the messaging right away.” What he means by that, Mr. Habibi said, is that with stocks, you can see the knee-jerk reaction to a negative event, like terrorism, or an unexpected outcome, like the Brexit vote, almost immediately, as stock prices drop. A stock market surge can be just as swift when an event like the U.S. election of President Donald Trump inspires investor confidence, he said. But with real estate, the timeline is stretched out, as the buyer’s decision to purchase a property is the start of a long process, which includes them making an offer, having it accepted, going into escrow and completing inspections and contingencies."

[MG: 7/21/17]

South China Morning Post: "What mega-rich homebuyers get for their money (in Hong Kong, less space)"

"Still, as far as straightforward investments go, there are probably smarter places to park your money, says Paul Habibi, a professor at the UCLA Ziman Centre for Real Estate. “At that end of the spectrum, when you’re dealing with the uber-wealthy, I don’t know if they’re making decisions with their best economic interests in mind,” he says. “There is such a thing as overconsumption, which this falls into..."

[SCMP: 2/14/17]