Is Los Angeles Important?

Watching the drama unfold this past week helped me to confirm my suspicion that Los Angeles or “LA” is important to the world. The public ceremony celebrating the life of Dr. Jerry Buss made me think of our fair city and what it means to so many. Dignitaries and business people came from all over the world to pay tribute to this amazing man. Some might call him simple, but there was nothing simple about Jerry Buss. But when you live right, and treat everyone with respect, it can seem that you are simple.

I had a good friend named Dr. Stan Walch. He was a buddy with Dr. Buss back in their school days. He tells a story of Dr. Buss as the smartest man he ever knew: “We played monopoly for real money and Dr. Buss always won! We played without tokens and without the titles. We played from memory and Dr. Buss had the best memory." I am sure Dr. Walch and Dr. Buss are playing Monopoly together again.

Then I watched the Oscar’s telecast and thought it was one of the best I've seen in my life. I liked the Captain Kirk bit a lot. During each break they played music from classic movies, conjuring up memories of the past with the music references. I loved Barbara Streisand. My only complaint was for the Jaws theme which played when speakers went overtime. Most of the show was classy. Congratulations to Argo for Best Picture and all of the other winners.

We are a city under siege. Money is pouring in from many different states and countries. Buyers from all over the world have descended on Los Angeles to purchase real estate. This starts in housing and gradually moves on to investment and commercial development properties.

If you look outside, the weather tells a great story. If you need more reasons, let’s discuss the notoriety of being in Los Angeles. We are Hollywood, the capitol of people’s dreams. Every young person growing up wants to live a life of Entourage, fast, fun, sexy etc. And they believe it can be found here in Los Angeles. They are not so wrong, but it comes at a price.

You need money to live in Los Angeles, the playground of the universe. Now New York, Amsterdam, Rio and other amazing places will argue that they are the center of the cultural universe of fun and excitement. They are right and so are we. We are the creators of Reality TV; a Pink’s chili dog can be on equal footing to a night at Spago; and living in Silverlake can be more prestigious than living in Beverly Hills. The artist sub-culture in Los Angeles is the envy of the world. The free LA Weekly newspaper is more popular than the Los Angeles Times.

How exciting to own real estate in Los Angeles. Growth and development is at an all time high. Demand for new shops and creative space is booming. There is a shortage of quality distribution space. So what does all of this mean? Where are the opportunities? Is it time to sell or buy?

If you read my previous posts, you know I always say that you should never sell real estate in Los Angeles. But for some, they need to sell. There is death, divorce, retirement, relocation and the inability to manage the property correctly. These factors create opportunities for someone else to buy in. If there is an offer that is too good to be true, and you can move the money into an exchange, then selling makes sense.

So I say: be a buyer. I would look into any single-story properties on major streets and thoroughfares. Check out the San Fernando Valley for all types of properties. I would be looking into distressed real estate in South Los Angeles as the demographics are changing and the need for basic services is growing too.

Current low interest rates allow everyone to participate in this real estate boom. The time is now for people to pool resources and get in the game. The inflation that will surely follow tomorrow will more than make up for what you pay today.

We just had a primary nominating election for mayor and many other offices. The two top mayoral candidates, Eric Garcetti and Wendy Greuel, will have a run-off election on May 21st. What I find sad is that only 16% of eligible voters actually voted, one of the lowest turnouts in memory. The apathy the population has for government tells a story of future distress. The city’s government is in an economic crisis and the city may be in a citizen crisis as well. Most citizens are living paycheck to paycheck or are on some form of government assistance. Of course, there are the wealthy that are in good shape, but they have to survive within a system of government too. The population is becoming more divided. This is not good and is outright scary.

Maybe that’s a real reason to sell?

I don't mind paying more taxes if it goes to support general services and helps people to get back on their feet. We are all in this together and need to sacrifice to make our home a better place. Real problems in our city, state and country will need real leadership and solutions if we are to thrive. We are a diverse city with a need to come together in many different ways to move forward and grow.

Meanwhile, I am still a buyer in this market.

The Year to Get Rich

The “Fiscal Cliff”, “Y2K”, the “Mayan End of the World” and “Black Monday”: all of these events and more have come and gone without an economic calamity unfolding. Fear is the greatest factor in markets and cycles.

Some of the fear factors have effects on the economy, but in the end the markets adjust and move forward. I am totally convinced that 2013 will be a dynamic year for real estate, stocks and other investment opportunities.

My predictions are as follows:

Real estate in the Los Angeles market will continue to be a safe and wise investment. Last I checked, they were not building any more land and Los Angeles is booming! Apartments, office buildings, retail stores and shopping centers and industrial properties are in high demand. There is a huge need for more and more space.

This is not a spec bubble, but real growth and requirements by end users. The biggest users are the apartment dwellers. Currently, there is a shortage of units in Los Angeles. The hipsters are looking for space in Downtown L.A. and surrounding areas.

I think that there are hidden deals and one place I recommend is the San Fernando Valley. WOW! Who would have ever thought that I, a Downtown expert, would be touting the valley. When I was single, I would not date a valley girl as it was geographically undesirable (sorry girls). Today, the valley is one development away from a similar boom as Downtown. Ventura Boulevard is an amazing street that has an unending collection of fascinating businesses that will demand growth. There is a great need for shopping and various attractions that will make the area a second Downtown (development-wise). It just needs a smart developer to bring the vision. Like AEG brought Staples Center (and the Lakers and Kings) to Downtown. Like Rick Caruso built the Americana in Glendale.

Part of the success of any vision is a cooperative business-friendly government. We have a big election coming in March and Jan Perry is a proven commodity for Mayor. She provided the foundation for the city support for the entire AEG empire development, and will champion the same type of growth for the San Fernando Valley.

 

I think President Obama should meet Jan Perry and discuss how she guided Downtown Los Angeles back into amazing prosperity. It's a blueprint for cities across America!

 

The stock market will have its annual correction, as that is how it works. But I think we will see a 15,000 or better Dow Jones industrial average in 2013. I am not an avid investor in stocks (I just own some Apple and a little real estate investment trust called Two Harbors). I also have a small amount of gold and silver. I see $2,000/oz. gold and $40+/oz. silver, but as always, check with your professional advisors and don’t rely on my opinion.

In regard to real estate, I recommend that you buy, buy and buy, as Los Angeles will continue to boom. We had a banner year in brokerage last year and 2013 is looking to be as good. We saw warehouse prices go back up to $100-$150 per sq.ft., and mass investment/speculation on land for development of apartments.

The driving force is demand and that is supported by cheap money. The opportunity to own something with a cheap loan is amazing. I suggest you buy something in the area and hold. It will multiply over time for sure. Don't over leverage yourself. You should have six months in reserve, just in case your tenants can’t pay the rent. And don’t forget to set aside money to pay the real estate taxes, as they can sneak up on you. Now is also a time to look at your portfolio and investigate refinancing. Rates are very low and you can save money and make money by lowering your interest rates.

May 2013 be a prosperous year for you!

Jan Perry Gets It!

When one decides to run for Mayor in Los Angeles, they are basically asking to live life in the proverbial "fishbowl". It is a daunting task to run a city with a hundred different nationalities and multiple groups or associations pulling on your shirttails promoting their special interests. Then, you have to balance the desires of those groups and the demands of big business with regular citizen’s basic needs for food, shelter and quality of life. There’s also dealing with the tendency of government to expand and tax, labor and union disputes, and the private sector’s desire to build and grow their companies in the most dynamic city in the world.

So how did Jan Perry, as Councilwoman for the 9th District, manage to successfully work with non-profits and the homeless, government, private business and union labor, making Downtown Los Angeles the envy of the world?

By leadership! Back in 2009, when she was acting Mayor, Councilwoman Perry knew that when Michael Jackson passed away, she had to act. Rallying the business and entertainment community, a selfless decision to stage a public tribute at Staples Center at the City’s expense was made. Hundreds of millions of fans around world shared the mourning of a legend, and Los Angeles did the fallen icon proud.

Jan Perry gets it!

We live in a world economy and the world is watching. Leadership is needed and decisions have to be made in good times and bad.  If you think about Los Angeles, we had our Rodney King riots, we had O.J., and we continue to make headlines with celebrity arrests as well as more horrible murders and tragedies. We all live in a giant fishbowl and whoever leads us for the next term or terms as Mayor needs to be ready to handle the potential issues that can inflame a community quickly, and not add fuel to the fire.

The next Mayor needs to have the sensitivity to make intelligent choices, and to celebrate with the world when the Clippers, Lakers or Kings win a championship. The next Mayor needs to be able to support the business passions of AEG as well as firms that want to call Los Angeles home, which helps to bring billions of development dollars and future tax revenue to the City. The next Mayor needs to nurture the growth and prosperity of the entire City, from the Pacific Ocean to the San Fernando Valley, from East LA to the Ports of Los Angeles.

Jan Perry has a track record of these accomplishments. She also has the drive and passion to bring this type of leadership so all of Los Angeles, so all can prosper, as well as feel safe in any neighborhood.

Our city is the envy of the world. Billions watch us on TV with the hope of one day living the American Dream. People come to Los Angeles with dreams of a better life, meeting stars and starting fresh. It takes real leadership to balance all of the differences that make Los Angeles so unique, and to responsibly lead us into the next phase of growth. 

If you are a resident of the City of Los Angeles and a registered voter, you have a choice to make this coming March 5th. Here are three things you can do to help Jan Perry be the next Mayor:

1. Vote                             

2. Send this message to your friends

3. Send a contribution www.janperry.com