LOS ANGELES—The major trend in brokerage this year: expansion. Already, we have seen several brokerage firms expand their market presence or expand into new markets altogether. Stepp Commercial is now joining those ranks with an expansion into West Hollywood and Hollywood. The multifamily-focused firm sees big opportunities and multifamily demand in these two thriving markets. To find out more about the impetus behind this expansion, Stepp's goals in these markets and why multifamily is still hot, we sat down with Kimberly R. Stepp, a principal at Stepp Commercial, for an exclusive interview.
GlobeSt.com: Why have you decided to expand your presence in the WeHo and specific Hollywood markets?
Kimberly R. Stepp: As many key Los Angeles-area communities continue to evolve and change, WeHo and Hollywood are two submarkets in particular that have taken on aggressive plans of development and redevelopment to provide more housing, amenities and infrastructure to their communities. Both have created a new wave of tenancies that have driven rental rates upward in recent years and therefore property values are increasing. Over the past five years, rental rates have grown approximately 30 percent and vacancy rates are at all-time lows – around 3 or 4 percent—in these areas.
GlobeSt.com: How have WeHo and Hollywood changed in recent years?
Stepp: Much like Downtown Los Angeles, job growth and infusion of real estate capital have been the major drivers for these two markets. WeHo and Hollywood have diversified, becoming two of the most desirable rental locations for young professionals who are willing to pay higher rents to live in a top-tier location.
WeHo's Sunset Strip in particular has seen a major transformation recently as it has been adding high-end hotels, mixed-used projects and luxury apartment developments. It is no longer just a place for metal bands and nightclubs, but is transforming into a high-end and highly coveted location for tourists, restaurants, businesses, and of course, Millennials.
Hollywood has been reshaping its classic identity over the past several years as well. The city is creating a rejuvenated community for entertainment and tech industries. There are dozens development projects that have recently completed or are slated over the next several years that will attract more renters who want to work and live in a hotbed of activity and amenities. There are in excess of 5,500 more apartment units either under construction or proposed for new development in the coming years here. The demand for housing seems somewhat insatiable as even with new inventory coming online, supply is still far behind.
GlobeSt.com: These markets have grown across asset classes. Why are you focusing on multifamily specifically?
Stepp: For more than 20 years, the principals of Stepp Commercial have been specialized in the multifamily investment sector. We have built on our success from a focused expertise on this product type in defined L.A. submarkets. Ultimately, this specialization in both sector and local markets allows us to properly service our clients by bringing specific opportunities to them and advising them on the true, street-level value of their assets.
GlobeSt.com: What are your goals in each of these markets?
Stepp: As we strategically and thoughtfully expand into the Hollywood and WeHo markets, our goals are to be a viable competitor and gain market share much like we have done over the years in the Santa Monica, Prime Westside and Long Beach markets. As our client base has grown, these investors are seeking additional key L.A. locations to expand their portfolios. By having boots on the ground in these new submarkets, we will not only be able to grow our market share from a sales perspective, we will be able to provide our existing clients with a deeper level of service and advisement. We will also be able to identify off-market deals faster, which is a benefit to potential buyers and our overall client base. Off-market opportunities are happening on a more frequent basis in my observations as the apartment market continues to be a favored sector for investors.
LOS ANGELES—The major trend in brokerage this year: expansion. Already, we have seen several brokerage firms expand their market presence or expand into new markets altogether. Stepp Commercial is now joining those ranks with an expansion into West Hollywood and Hollywood. The multifamily-focused firm sees big opportunities and multifamily demand in these two thriving markets. To find out more about the impetus behind this expansion, Stepp's goals in these markets and why multifamily is still hot, we sat down with Kimberly R. Stepp, a principal at Stepp Commercial, for an exclusive interview.
GlobeSt.com: Why have you decided to expand your presence in the WeHo and specific Hollywood markets?
Kimberly R. Stepp: As many key Los Angeles-area communities continue to evolve and change, WeHo and Hollywood are two submarkets in particular that have taken on aggressive plans of development and redevelopment to provide more housing, amenities and infrastructure to their communities. Both have created a new wave of tenancies that have driven rental rates upward in recent years and therefore property values are increasing. Over the past five years, rental rates have grown approximately 30 percent and vacancy rates are at all-time lows – around 3 or 4 percent—in these areas.
GlobeSt.com: How have WeHo and Hollywood changed in recent years?
Stepp: Much like Downtown Los Angeles, job growth and infusion of real estate capital have been the major drivers for these two markets. WeHo and Hollywood have diversified, becoming two of the most desirable rental locations for young professionals who are willing to pay higher rents to live in a top-tier location.
WeHo's Sunset Strip in particular has seen a major transformation recently as it has been adding high-end hotels, mixed-used projects and luxury apartment developments. It is no longer just a place for metal bands and nightclubs, but is transforming into a high-end and highly coveted location for tourists, restaurants, businesses, and of course, Millennials.
Hollywood has been reshaping its classic identity over the past several years as well. The city is creating a rejuvenated community for entertainment and tech industries. There are dozens development projects that have recently completed or are slated over the next several years that will attract more renters who want to work and live in a hotbed of activity and amenities. There are in excess of 5,500 more apartment units either under construction or proposed for new development in the coming years here. The demand for housing seems somewhat insatiable as even with new inventory coming online, supply is still far behind.
GlobeSt.com: These markets have grown across asset classes. Why are you focusing on multifamily specifically?
Stepp: For more than 20 years, the principals of Stepp Commercial have been specialized in the multifamily investment sector. We have built on our success from a focused expertise on this product type in defined L.A. submarkets. Ultimately, this specialization in both sector and local markets allows us to properly service our clients by bringing specific opportunities to them and advising them on the true, street-level value of their assets.
GlobeSt.com: What are your goals in each of these markets?
Stepp: As we strategically and thoughtfully expand into the Hollywood and WeHo markets, our goals are to be a viable competitor and gain market share much like we have done over the years in the Santa Monica, Prime Westside and Long Beach markets. As our client base has grown, these investors are seeking additional key L.A. locations to expand their portfolios. By having boots on the ground in these new submarkets, we will not only be able to grow our market share from a sales perspective, we will be able to provide our existing clients with a deeper level of service and advisement. We will also be able to identify off-market deals faster, which is a benefit to potential buyers and our overall client base. Off-market opportunities are happening on a more frequent basis in my observations as the apartment market continues to be a favored sector for investors.
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