Amazing Deals in DTLA Right Now

SOUTH PARK

Flower Street Lofts #123

A double-story, 1423sf loft with 2 bathrooms and 2 parking spaces for $439/SF. 

Unreal, this is like 2012 prices. Asking $626K.

KW, Joseph Iulucci

ARTS DISTRICT

Barker Block Lofts #131

Double story 2+3, 2830 super loft with 2 parking spaces. Priced at $521/SF.

Asking $1.475M

Compass, Thomas Atamian

SOUTH PARK

Market Lofts #412

2+2+Den, 2 parking spaces, 1460SF

Within 2 blocks of The Bloc, Whole Foods, 10 min walk to Crypto.com Arena, etc.

Asking $799K

ReMax, Art Avaness

FASHION DISTRICT

Cornell Lofts #602

1+1, 740sf, 1 parking space, Mills Act

Calstar, Jasmen Vartanian

FASHION DISTRICT

Textile Lofts #901

2+2, 1 parking space, 1 private storage unit, 1370SF, Mill Act

Stunning corner unit with massive factory pane windows

KW, Pete Buonocore

Where are the Deals?

Good luck, as there aren't many deals anymore, and even less in the foreseeable future. A good agent will let you in on interesting opportunities such as fixers, tenant-occupied props, and construction next door. The point is, good deals are not as easy to find in real estate as you might think. In a tough buyer's market, you need to ask yourself, do you like the property, and does it make financial sense? The agent should be able to help give you the rest of the picture.

Real Estate Forecast During COVID-19 + TBT to 2008-2009 Housing Crisis

Unprecedented craziness in the world. 2008-2009 seemed not that long ago, and at the time, it was ultimate craziness. Looking back, there were people who got massively wealthy and there were those who massively lost and there were those who were hardly affected at all. This time won't be too different in some ways.

I've been thinking about this a lot, because as we all know, big events tend to shake things up, and what you decide to do at the time can affect your finances (and usually life) for years to come.

The stock market is going crazy, up and down every other day. Real estate is at a standstill because it's an uncertain time, and government restrictions are in place. Oddly, prices in LA on average are only slightly lower (about 3-4% drop recently) than last year. And about 25% of listed properties are selling--while this is low for the Spring/Summer months, it's amazing to me that there is still activity at all. When I dug deeper, a lot of these sales were investor buys. This is telling me that people with cash or other leverage, are buying up properties. This is exactly what happened in 2008-2009, history repeating itself.

Who bought real estate and other depressed assets back in 2008-2009?  Warren Buffett, as an example. Couple weeks ago, he sold off hundreds of millions in stocks to amass some cash--clearly gearing to buy up things. Yes, WB has cash to burn, but is this something the little folks like us can and should do? Considering that we're going into inflation and cash will be worth less over the next several years, YES. Considerations are buying rent control properties (which are not good for landlords right now) vs non rent control. More on that later.

Who sold real estate back in 2008-2009? Panic-sellers and those who were stretched to the eyeballs in debt and sold to investors mentioned above. These same panic sellers are also selling stocks and gearing to unleash their assets. If you have lots of equity in your properties and have thought of selling in the next 2-3 years, you might want to sell now since selling activity will be slower for the foreseeable future. If you have no equity and are able to pay the bills, then you might want to hold and wait for the next rise, even if it's a micro-rise.

It's a strange time, but we overcame the 1918 Flu and the Great Depression, and we'll overcome this.

What to Look Out for in a High Market in DTLA

Gone are the days of just snatching up lofts because they were there for the taking.  The prices are going up and the inventory is still very low, keeping prices even higher. So many downtown homeowners are here to stay--with so much now at their doorstep, it's become one of the most exciting places to visit and live. The dilemma for most buyers is inventory is low, prices are high, and it's a risk to wait in case the market goes up.

In these times, you need to look out for the following if you're in the market to buy. If you can get 2 or more of the following ticked off, then you're doing well;

1. Units that have upside potential. Rather than buy a completely remodeled place, look for one that needs some rehab. New kitchen or new flooring perhaps. Or bathroom remodels. Even something as minor as new lighting. By you adding 10k-20k, you can add 50k in value.

2. Look for buildings with great amenities. There are a lot of new lease-only buildings on the market with top notch amenities. That is your competition. A building with amenities is going always have some value.

3. Buy in a building that offers parking. Enough said.

4. Buy a unit that has something unique and special, like a great city view, or overlooking the park. Or one that has an extra bedroom nook. Or that has a balcony. It's hard to get it all without spending over 1M, but if you can get into a unit that has one or two special features that other units don't have, it's going to add value.

5. Buy in a building that has good development around it. Meaning retail, office space, grocery stores, parks, hospitals, Metro access, etc.

The Upside of "Older" Properties in DTLA

One thing about those 10-year old condos and the 80-year old loft conversions that were done in the mid 2000s is that the square footage of what was selling was a lot larger than the average brand new home today. Nevermind that the price/sf has gone up all over the city. It's that now, 900sf is the size of a 2-bedroom and 1-bedrooms are more like 650sf.

However, back in 2004-2006 when so many lofts and condos were built/converted, the average 1 bedroom was about 800sf. What this means is that if you have a large 1 bedroom, you can think of converting these into 2 bedrooms later on, or marketing them as potential 2-bedrooms. Permits needed, of course.

The moral of the story? Buy a condo or loft that was built 10 years ago if size matters. 

Deals in DTLA

With prices averaging about $650/sf in downtown, it's hard to find a "deal" these days. Prices have been increasing since 2009 and are expected to increase a further 3-5% next year. That's unless the interest rates go up then things may finally plateau.

For now, the deals are basically anything under $550/sf. See below:

Flower Street Lofts #115 - 2 bed, 2 bath, 2 parking, 2149sf - $950k (or $442/sf)

Vero Condos #535 - 1 bed, 2 bath, 2 parking, 1120sf- $575k (or $508/sf)

Grand Lofts  #A602 - 2 bed, 2 bath, 2 parking, 1740sf - $920k (or $528/sf)

Elleven  #406 - 1 bed, 2 bath, 2 parking, 1700sf - $910k (or $535/sf)

Eastern Columbia  #M11 - 2 bed, 2 bath, 2 parking, 1830sf - $999k (or $545/sf)

Snatched Up Within the Last 30 Days

Things are moving in DTLA. Good stuff is moving fast. If you missed out, better luck next time.

Douglas Loft #4B

Barker Block #540

EVO #2304

655 Hope #1002

Eastern Columbia #1005

Biscuit Lofts #305

Gallery Loft #2

Luma #1102

El Dorado Loft #707

El Dorado Loft #1106

SOLD - Beautiful South-Facing Loft - Eastern Columbia #1005

This is a spacious south facing unit in the Art Deco Eastern Columbia building, developed by The Kor Group. The unit features beautiful banks of windows, polished concrete floors lots of sunlight from the east. Comes with 1 parking space, and building amenities include a 24-hour concierge, gym and fabulous rooftop pool. Walkable to Spring Street, Ace Hotel, Umami, Figaro, Alma, Pellicola, Sparkle Factory, Grand Central Market, and more. Listed for $699k with 1120sf of space. This building is also Mills Act approved.

Pros & Cons of Buying During the Holidays

Do I wait til 2015 or do I take the plunge now? Some pros and cons to buying at this time of year. Surprisingly, it's mostly pros.

PROS

• Less competition with other buyers because many will wait until next year
• Interest rates are slated to increase in 2015
• Close before December 31, and get awesome tax breaks in time for 2014 taxes
• Spot things you might not otherwise see such as leaks due to rain
• Get deals on properties that have been sitting on the market
• Sellers can get desperate if they want to close before the end of the year

CONS

• Less inventory than say, spring or summer
• Properties may not initially look as good if the weather is drab or raining

DTLA Properties Under 500k

First-time buyers to DTLA are often wanting to "try out" the area with an investment property first. Here are available condos/lofts under the 500k range. With rental prices averaging about $2.75 and up per square foot, you can have a tenant pay for your property if you've got 25-30% to put down on a 30yr fixed. And this includes prop taxes and HOAs.

Douglas Lofts - 700sf - $465k - (Front desk security, 1 assigned covered parking space)
El Dorado Lofts - 848sf - $478k - (Front desk security)
Mura Condos - 810sf - $499k - (2 assigned parking spaces, storage unit, pool, gym, concierge, BBQ)
1100 Wilshire - 670sf - 499k -  (2 assigned parking spaces, pool, gym, concierge, media room, BBQ)
Market Lofts - 754sf - $469,900 -  (1 assigned parking space, pool, gym, concierge, media room)
Higgins Lofts - 750sf - $430k -  (rooftop deck)
EVO Condos - 750sf - 495k - (1 assigned parking space, pool, gym, lounge, concierge, BBQ)

DTLA Has a Long Way to Go

This sounds unlike what I normally say. But I mean it in the best way. When I started buying properties in DTLA a few years ago, there was only a fraction of the development and places to go...there's more than triple of that now, with lots more in the pipeline. In my opinion, downtown is only about 15% at its potential. Buying now is getting in early. Just ask someone from San Francisco or NYC why they're buying here instead of in Brooklyn or The Mission.

What's Up With All the Units at Bartlett? - #308, #309, #312, #509, #610, #803, #811

I've been flooded with questions about the Bartlett Lofts located at 215 W. 7th Street. Great building, historic pedigree, amazing central location between the historic core and the Financial & Jewelry Districts, anticipated to become a Mills Act building one day, etc. Basically, lots going for the building, but why so many units on the market?

A few reasons. Sales have picked up at the Bartlett this year, and sold prices have increased, which means that owners are happy to sell for a profit, which is why there are suddenly several units--7 to be exact--on the market right now.

The building has front desk security, beautiful rooftop with amazing 360 views, and a lot of the original historic charm intact. Think high ceilings and large windows. The only drawback is that the building does not have parking. This is a turnoff for some buyers.

Lastly, this is a slow time (Fall/Winter) to sell condos and lofts, meaning things tend to sit on the market for 30-45 days on average.

But as I've mentioned before, deals can be scooped up when the market has slowed down. There's always an upside to real estate, as Warren Buffet used to say.

Inventory Low in Downtown, Driving Prices Up in Nearby Areas

Inventory has been low in downtown for some time now. 2013 was when the momentum picked up from a lull and people started buying again, which has been keeping inventory low, especially in highly desirable buildings. As you can guess, in the less than desirable buildings, things have been sitting longer. Various reason for this, which I can go over with you another time.

But the overall effect is that inventory has remained low in downtown and has thus driven prices up. In fact, a couple of my clients with a budget who've had their hearts set on DTLA have been outbid and are now looking into the surrounding areas, which are incidentally on everyone's radar too. Namely, NELA, which covers Highland Park, Mt. Washington, Montecito Heights and others. While it's a Gold Line ride away from downtown, you can get more square footage for the price in NELA. With downtown prices at over $550/sf on average, NELA is still about about $465/sf on average.

Median Price from Sep 2013 vs Sept 2014

Stats are out: The median home price in California was $428,290 back in September 2013. The median home price in September 2014 was $460,940. That's a 7.6 percent increase. And need I say again that interest rates are at an unprecedented low?

SOLD - Beautiful Artist Loft in Esteemed Mills Act Building - Biscuit Lofts #305

The jewel of the Arts District is Biscuit Company Lofts. This unique loft features 1112 square feet of open plan space. Stainless, modern kitchen, 16 foot ceilings, original windows and brick details are just some of the features in this historic loft. Once the famed Nabisco building, it also has the coveted Mills Act distinction and amenities include a fitness center, lap pool with outdoor deck area, 24-hour concierge and security. Walkable to Urban Radish local grocer, Church and State bistro, Pour Haus wine bar, Daily Dose coffee, Stumptown Coffee, Blue Bottle Coffee, Bestia, Little Bear, Urth Cafe, Bread Lounge and more. 1 bed, 1 bath, 1112sf. No parking included. Offered at $679k.

SOLD - North Facing Industrial Loft with Pool, Gym & Doorman - Toy Factory #413

Gorgeous loft with 11" ceilings, walls and floors of concrete in the heart of the Arts District. This live/work loft has original warehouse bones and huge windows that face north and towards the downtown skyline. The loft is spacious at over 1200sf. The building boasts a rooftop deck and pool, open air lounge deck, gym, doorman, and in-building parking. Located across the street from Church & State, Daily Dose, Pour Haus, Little Bear, Urban Radish, and just a couple blocks from Bestia and Blue Bottle Coffee, Urth Cafe, Zinc, Stumptown, Bread Lounge and more. Asking $625k for 1239sf of space. Has 1 bath and 1 covered, in-building parking space.

New Yorkers Investing in DTLA

$4.4 billion. That's the number of dollars New York investors spent on buying up real estate in our humble downtown since 2012. While DTLA has seen tons of change in recent years, it still has so much potential for growth that savvy investors are snatching up properties while they're still affordable. Investment since 2012 is up 23%.

According to Greg Vilkin of Related Cos., "Firms from New York show up and say, wow, I see the potential I saw in Hell's Kitchen a decade ago. I watched TriBeCa, and the High Line, and I see what's going to happen." Either get in while it's still early or pay the price once everything hits peak.

WITHDRAWN - Massive Industrial Live/Work Loft in Arts District - Molino Loft #217

True live/work loft for lease in the Molino building. Designed by The KOR Group, the building boasts a lovely rooftop pool, sundeck, gym, and in-building parking. The stunning oversized loft features nearly 3000sf of space, immaculate wood floors, upgraded appliances, built-in closets, separated rooms, and 1 assigned parking space. 2190sf of space. Asking $1,200,000. Low HOAs at only $574/mo. 

Courtesy of Ted Trentman, Realty Source

CANCELED - Investment at Eastern Columbia - Eastern Columbia #203

The Eastern Columbia building is one of the most adored buildings in downtown. It's located on one of the hottest intersections in DTLA. Within the past year, it has gained neighbors such as The Ace Hotel, Acne, Aesop, Oak, Om Nom, 1810 and more. And this is just the tip of the iceberg, which should translate to even greater upside investment potential. The stunning 1930s art deco masterpiece features the iconic clock tower and bluish patina on the exterior, with a beautifully rehabbed interior by The KOR Group. Being one of the few, Mills Act-approved buildings, you'll also save on property taxes. This 2nd floor unit has 940 sf of space, has a great L-shaped layout and faces east and looks onto Broadway. Includes 1 parking space. Priced to sell quickly at $499,900.

SOLD - Corner Warehouse Loft with Balcony - Toy Factory #519

Amazing spacious loft with 14" ceilings and polished concrete floors in the heart of the Arts District. This stylish live/work loft features endless upgrades that include custom-built room dividers , gourmet kitchen, custom-built closet and more. The unit also features a private balcony and 2 parking spaces. The building boasts a rooftop pool and gym--both with views for miles, lower rooftop courtyard and a full gym. Located across the street from Church & State, Daily Dose, Pour Haus, Little Bear, Urban Radish, and just a couple blocks from Bestia and Handsome Coffee. This pristine loft is listed at $819k for 1438sf of space. Has 1 bath.