Hollywood Sees $6B in Development

Development in the Hollywood market is booming. In the last decade, the Hollywood market has seen $6 billion in development activity, and it is only growing. The bulk of the new development is residential development of both for-sale and for-rent product. Ron Barnes, principle of Vine Street Advisors, was integral in selling the 133 private residences at the W Hotel in Hollywood. To find out more about development in the market, we sat down with Barnes for an exclusive interview.

GlobeSt.com: What is driving this $6 billion of development activity in Hollywood?

Ron Barnes: There has been a lack of residential development in Hollywood, both rent and for-sale properties. That is why we have seen a huge influx of vertical luxury apartment development. Aside from our project, there is no other for-sale residential in the Hollywood area, either under construction or planned. There is very limited for-sale construction in the market. I am very partial to Hollywood, and it is truly L.A.'s walkable, dynamic community. You don't see other markets like that.

GlobeSt.com: Is there a limited supply and a limited pipeline because the market is land constrained, or because it is difficult to develop there?

Barnes: The vertical luxury apartments have taken off because there is a huge lack of demand, and that is because developers are looking to create an asset that creates an incomes stream. If you look at the pipeline for for-sale development, it is also very difficult to secure land at a price that will pencil. It is expensive and difficult in Hollywood, and there are so many constrictions.

GlobeSt.com: Why were you attracted to the Hollywood market?

Barnes: I came in after the crash because the money behind the W Hollywood wanted to create the condos. Nothing was sold, and when I looked at it, I saw that Hollywood had really great potential to be a pedestrian-oriented urban atmosphere that I couldn't see anywhere else in L.A. I really wanted to elevate the project and participate in the dialogue of where Hollywood is going. We have brought 5,000-square-foot perfectly designed units onto the market with a price tag of $9.7 million per unit. That is a West Hollywood price point.

GlobeSt.com: What is interest like in the project today?

Barnes: The interest is great. It is a full-service building, which is hard to come by in Hollywood. Hollywood and the W attract a really interesting buyer. You could parse it a million ways, but there is only one unifying truth, and that is all of them are fiercely independent people that want to create something out of nothing.

GlobeSt.com: How do you think that this development is going to change the market?

Barnes: I think the market is going to continue to grow, and it will grow organically. The interesting thing for me is that the market is and will hopefully retain a certain amount of its grit. That is where it is authentic. It has a much stronger presence of individuality. I hope that continues. I would hate to see anything about it become homogenous.

Development in the Hollywood market is booming. In the last decade, the Hollywood market has seen $6 billion in development activity, and it is only growing. The bulk of the new development is residential development of both for-sale and for-rent product. Ron Barnes, principle of Vine Street Advisors, was integral in selling the 133 private residences at the W Hotel in Hollywood. To find out more about development in the market, we sat down with Barnes for an exclusive interview.

GlobeSt.com: What is driving this $6 billion of development activity in Hollywood?

Ron Barnes: There has been a lack of residential development in Hollywood, both rent and for-sale properties. That is why we have seen a huge influx of vertical luxury apartment development. Aside from our project, there is no other for-sale residential in the Hollywood area, either under construction or planned. There is very limited for-sale construction in the market. I am very partial to Hollywood, and it is truly L.A.'s walkable, dynamic community. You don't see other markets like that.

GlobeSt.com: Is there a limited supply and a limited pipeline because the market is land constrained, or because it is difficult to develop there?

Barnes: The vertical luxury apartments have taken off because there is a huge lack of demand, and that is because developers are looking to create an asset that creates an incomes stream. If you look at the pipeline for for-sale development, it is also very difficult to secure land at a price that will pencil. It is expensive and difficult in Hollywood, and there are so many constrictions.

GlobeSt.com: Why were you attracted to the Hollywood market?

Barnes: I came in after the crash because the money behind the W Hollywood wanted to create the condos. Nothing was sold, and when I looked at it, I saw that Hollywood had really great potential to be a pedestrian-oriented urban atmosphere that I couldn't see anywhere else in L.A. I really wanted to elevate the project and participate in the dialogue of where Hollywood is going. We have brought 5,000-square-foot perfectly designed units onto the market with a price tag of $9.7 million per unit. That is a West Hollywood price point.

GlobeSt.com: What is interest like in the project today?

Barnes: The interest is great. It is a full-service building, which is hard to come by in Hollywood. Hollywood and the W attract a really interesting buyer. You could parse it a million ways, but there is only one unifying truth, and that is all of them are fiercely independent people that want to create something out of nothing.

GlobeSt.com: How do you think that this development is going to change the market?

Barnes: I think the market is going to continue to grow, and it will grow organically. The interesting thing for me is that the market is and will hopefully retain a certain amount of its grit. That is where it is authentic. It has a much stronger presence of individuality. I hope that continues. I would hate to see anything about it become homogenous.