Saturday, February 4, 2017

Glut of Lease Only Buildings Will Make Condos More Valuable

The downtown skyline is full of cranes--nothing new. But a big part of what's being built are apartments for lease only. What about all the condos that people want to buy? All the investment in shopping centers (At Mateo, The Bloc, Fig 7th, Oceanwide Plaza, The Row, etc.) but few condos available.

A shakedown is going to happen. I feel it, and it's going to be a good one.

Condo owners will see continued appreciation over time due to basic supply and demand. Some of those condo owners who own property that's being rented out, will have rental competition to deal with. These folks are going not like the competition and unload their condos to the long line of buyers who want it to be their primary residence. (That said, there will always be investors in downtown because it is not under Rent Control Ordinances) This is going to create healthy appreciation with stakeholders who live in DTLA, which is the long term goal for a city center.