L.A. Number One For Institutional Capital

LOS ANGELES—The L.A. investment market is on fire for both institutional and private capital, according to speakers on the State of the Industry panel at RealShare Los Angeles this week. Jodie Poirier, managing director at CBRE; Adam P. Christofferson, SVP of the Southern California Division at Marcus & Millichap; Jim Wiegandt, director of retail property lending at Luther Burbank Savings Bank; and moderator James Malone, VP of leasing at Brookfield Property Partners, discussed the investment market in Los Angeles, the submarkets with the most opportunity and why investors are coming to Los Angeles.

“CBRE survey shows that L.A. is the number one market for institutional capital placement.,” said Poirier on the panel, adding that the L.A. market has ranked number one for the last two years, and before that it was San Francisco. Private capital is also very active in the market, she said, with 57% of deals in the first quarter coming from private investors.

While the L.A. market is a place where investors want to spend, there was less activity in 1Q17, compared to the previous year. Wiegandt said that institutional and private capital has slowed spending. “We did see a slow own on institutional side,” he explained. “There has been a dip in the big deals, maybe even more than the private client side.” Poirier, however, said that the performance in Q1 is on par with 2015 and 2014, and that 2016 was an especially good year. This year, however, is still quite robust, she says.

In terms of submarkets, Poirier is most excited about the activity in the South Bay, while Christofferson says there is a lot to be excited about in the Arts District, which he says has “been hot for private capital.” In both markets, they are expecting more migration from tech tenants that will help to fuel the market.

While each of the panelists remained bullish on Los Angeles, potential legislation against developers was a major concern. “A lot of our clients were keeping a close eye on Measure S,” says Christofferson. While the measure didn't pass, he says that it revealed the outdated zoning maps.

Looking ahead, no one had a bad outlook for the market. “I think it is going to be very similar to what it is today. I don't think there is going to be much change in how things feel now to how they feel a year from now,” said Christofferson. “We are also seeing on the private client side more and more LA investment, and that is only a good thing for values.” Poirier added that the fundamentals remained strong and we will continue to see moderate and steady growth. Wiegandt said the there were so many factors to  consider, but is mostly focused on the upcoming tax plans and interest rates.

LOS ANGELES—The L.A. investment market is on fire for both institutional and private capital, according to speakers on the State of the Industry panel at RealShare Los Angeles this week. Jodie Poirier, managing director at CBRE; Adam P. Christofferson, SVP of the Southern California Division at Marcus & Millichap; Jim Wiegandt, director of retail property lending at Luther Burbank Savings Bank; and moderator James Malone, VP of leasing at Brookfield Property Partners, discussed the investment market in Los Angeles, the submarkets with the most opportunity and why investors are coming to Los Angeles.

“CBRE survey shows that L.A. is the number one market for institutional capital placement.,” said Poirier on the panel, adding that the L.A. market has ranked number one for the last two years, and before that it was San Francisco. Private capital is also very active in the market, she said, with 57% of deals in the first quarter coming from private investors.

While the L.A. market is a place where investors want to spend, there was less activity in 1Q17, compared to the previous year. Wiegandt said that institutional and private capital has slowed spending. “We did see a slow own on institutional side,” he explained. “There has been a dip in the big deals, maybe even more than the private client side.” Poirier, however, said that the performance in Q1 is on par with 2015 and 2014, and that 2016 was an especially good year. This year, however, is still quite robust, she says.

In terms of submarkets, Poirier is most excited about the activity in the South Bay, while Christofferson says there is a lot to be excited about in the Arts District, which he says has “been hot for private capital.” In both markets, they are expecting more migration from tech tenants that will help to fuel the market.

While each of the panelists remained bullish on Los Angeles, potential legislation against developers was a major concern. “A lot of our clients were keeping a close eye on Measure S,” says Christofferson. While the measure didn't pass, he says that it revealed the outdated zoning maps.

Looking ahead, no one had a bad outlook for the market. “I think it is going to be very similar to what it is today. I don't think there is going to be much change in how things feel now to how they feel a year from now,” said Christofferson. “We are also seeing on the private client side more and more LA investment, and that is only a good thing for values.” Poirier added that the fundamentals remained strong and we will continue to see moderate and steady growth. Wiegandt said the there were so many factors to  consider, but is mostly focused on the upcoming tax plans and interest rates.