Los Angeles County apartment tenants are having a harder time keeping up with rent increases due to stagnant income growth. This creates pressure for landlords who wish to increase rents. Real estate data firm Reis Inc. reports that the average price for an apartment in LA County reached $1,471 for the second quarter of this year.

Adjusted for inflation, Southern California’s median household income has dropped 11 percent since 2007. Reassuringly, this region has benefited from gaining back most of the jobs lost during the recession. However, because of slowing income growth, households (especially those in the lower-income bracket) are forced to remain as renters. Housing prices have continued to climb over the last two years whether one is looking to rent or buy.

Vacancy rates in the Southland remain at a low three percent, with tenants electing not to move up due to not having additional funds. Despite this trend, certain areas in Los Angeles are still seeing rental price hikes. Similar to Silicon Valley and San Francisco, the areas of Santa Monica and Venice are experiencing a tech boom with industry professionals able to afford increasing rents. The majority of renters have median household incomes of $40,000, which does not leave much room for housing expenses. According to a report filed by Harvard University’s Joint Center for Housing Studies, 33 percent of Southland renters spend at least half of their income on rent. Tenants are struggling to cut other aspects of their costs to compensate

Source: http://www.latimes.com/business/la-fi-apartment-rents-20140703-story.html

Studio City is a vibrant and desirable area in the San Fernando Valley area of Los Angeles. Here are some highlights –

Close Proximity to Studios: Entertainment professionals can benefit from settling near such studios as CBS, Universal, and being a short drive away from Warner Bros.

Convenient Access to Westside: Residents are able to easily access West Hollywood and the rest of the Westside via the major thoroughfares of Laurel Canyon Boulevard and Coldwater Canyon Boulevard. These scenic hillside routes are ideally situated to provide an option for LA entry other than the freeways.

Emergence of Fast-Fresh Food: Restaurateurs are realizing the value of opening new fast-fresh options in Studio City because of the population’s overall preference for healthy food dining. Franchises like Lemonade, Pizza Rev, The Counter, Umami Burger, Chipotle, and Tender Greens (coming soon) have emerged along Ventura Boulevard serving customers looking for fresh, mostly organic ingredients in their meals.

Walkability: Studio City is a relatively walkable area of the Valley. Residential apartment and condominium communities are available both north and south of Ventura Boulevard. This provides easy access to shops, particularly the stretch between Whitsett Avenue and Laurel Canyon Boulevard such as Urban Outfitters, Wasteland, and Pier 1 Imports.

Nightlife: Studio City is famous for excellent restaurant dining options (including “sushi row”), bars, music venues, specialty playhouses, and comedy clubs. Local restaurant favorites include Le Pain Quotidien, Mexicali Cocina Cantina, Iroha Sushi of Tokyo, Spark Woodfire Grill, and Laurel Tavern.

Based in Los Angeles, Rexford Industrial Realty Inc. announced a $15.4 million Burbank acquisition to add to its Valley property portfolio. The purchase was financed through a $10.3 million loan with the remainder being funded by the firm’s line of credit.

The firm purchased a 130,000 square foot two-building setup located at 2980 and 2990 N. San Fernando Blvd. The tenant that currently occupies the buildings is Senior Aerospace SSP – a high-pressure air duct manufacturer for planes. Senior Aerospace SSP is a long-term tenant having occupied the space for more than 50 years. The company currently has four years remaining on their lease.

Rexford has a hand in 74 properties totaling 8.1 million square feet. The firm also manages 20 other properties totaling1.2 million square feet.

Source: http://www.sfvbj.com/news/2014/jun/02/rexford-acquires-burbank-properties/

ROIC has announced that they will be purchasing the Fallbrook Shopping Center in West Hills, located on Fallbrook Avenue between Victory Boulevard and Vanowen Street, for an all-cash $210 million deal. The retail center has been owned and managed by General Growth Properties – owner of the Northridge Fashion Center and Glendale Galleria, among other malls. The deal, which provides a significant addition to ROIC’s shopping center portfolio, is slated to close by the second quarter of 2014.

The center was constructed in 1966 as an enclosed mall. It later positioned itself as a big-box retail center – one of the largest in the San Fernando Valley. ROIC reports that the center is home to approximately 1.1 million square feet of gross leasable area and is 98 percent leased. Stuart A. Tanz, ROIC president and chief executive officer showed enthusiasm for the acquisition stating that the center “is an excellent strategic fit with our existing portfolio, given its location and market position, as well as its diverse mix of tenants, many of which are necessity-based retailers.”

Fallbrook currently has many meaningful anchor stores including three supermarkets (Ralph’s, Trader Joes and Sprouts), and four major big-box retailers (Walmart, Home Depot, Target, Kohl’s).

ROIC has a portfolio of 55 shopping centers. Fallbrook will become one of their premier properties. ROIC, a real estate investment trust (REIT), has a track record for repositioning shopping centers and will look to employ those strategies along with a host of leasing a development initiatives.

Sources:

http://www.postperiodical.com/fallbrook-shopping-center-sold-for-210-million/

http://www.nasdaq.com/press-release/retail-opportunity-investments-corp-to-acquire-fallbrook-shopping-center-for-210-million-20140602-00081

The real estate market in Southern California improved for the month of April over March. This is a subtle positive sign that buyers are more encouraged to look for housing. The same factors that have been holding buyers back in the past are slowly retreating – poor inventory, overpriced options, allayed competition from investors, and difficulty obtaining favorable government loans.

The counties of Los Angeles, Riverside, San Diego, Ventura, San Bernardino, and Orange saw new and resale houses and condominiums reach a total of 20,008 contracts. This sales total is 13.4 percent higher than last month’s figures of 17,638 sales and down 6.6 percent from 21,415 sales in April of 2013. Dips in sales also occurred in Riverside County – 10 percent in April from a year earlier – and a 3.1 percent drop for San Bernardino County. Total homes sales in Riverside County came to 3,384, which is 376 less than April 2013. San Bernardino County had 2,512 total sales, which are 78 less than April 2013.

Although these sales figures are down from April 2013, they are still higher than numbers seen in 2012 and 2011. This is promising for the Southern California region, with quickening sales possibly indicating a significant upward trend in the housing market. However, more inventory is needed to bring more buyers to the fore. Many are on standby because of job insecurity, hurting credit score, and either very minimal or no income growth for their families. Prices continue to rise as distressed properties continue to leave the market.

Source: http://www.pe.com/articles/sales-694572-april-percent.html

Crippling student loan debt continues to loom over would-be buyers causing them to delay the purchase of a first home. The troubling reality is that some borrowers may never be able to buy. On top of student loan debt, young home buyers have to worry about increases in home prices, much stricter lending standards, and an uncertain job market. The prevalence of good well-paying jobs necessary to pay off large loans in a timely manner is more difficult than ever to obtain.

Student loan debt has been identified as the main deterrent for first-time buyers. This is troubling for the real estate industry since part of it relies on these new home buyers to eventually turn into move-up buyers – people selling their first home in order to purchase a newer property. The new trend is to delay significantly before making that initial purchase.

First-timers in the marketplace dropped to just 28 percent in California, with 38 percent being the typical turnout. Before the recent recession, college graduates were seen as the class of people most likely to buy a new house since those who hold a degree have the chance at higher paying jobs. Now, there are more 30-year-old homeowners with student debt than those without it. Those new home buyers that do hold good jobs in this economy are setting goals to have purchasing power to handle a down payment, even if that timeframe has been pushed.

The office market in Los Angeles is witnessing a steady resurgence that is benefiting landlords. The overall Los Angeles vacancy rate dropped to less than a percentage point while monthly rents increased five cents per square foot.

The rental market for offices steadied in the aftermath of the recession, but growth in this sector has not reached the levels of past economic recovery periods. However, current vacancy rates have reached their lowest point since 2008. The first quarter of 2014 just came to a close, and the vacancy rate in the counties of Los Angeles, Orange, Riverside, and San Bernardino has dipped to 17.3 percent from 17.9 percent one year earlier. Landlords are now asking $2.36 per square foot in rents, which highlight the 5 cent increase.

Los Angeles has shown promising gains in occupancy for office space, but it is behind other markets, such as New York. Orange County had two big vacancies recently – Fisker Automotive and AT&T left their buildings – pushing the vacancy rate for this region to 15.4 percent. The housing market is improving in Orange county which is causing a turnaround for local mortgage and financial services companies, as well.

Source: http://www.latimes.com/business/realestate/la-fi-office-report-20140420,0,2807796.story#axzz2zXgkvV1P

Southern California home foreclosure rates continued their decline for the month of March. There were a total of 8,438 foreclosures across all six counties in Southern California. This is a 23 percent drop from February figures. One in every 3,433 homes was in foreclosure during the month of March. Banks are now responding to foreclosures that have been put on hold due to an overwhelming new flood of foreclosure activity in recent months.

The foreclosure dips in the San Fernando Valley varied by area. Palmdale showed the highest numbers with one in every 438 homes entering foreclosure. The neighboring area of Lancaster also showed concerning numbers with one in every 438 homes entering foreclosure. More high figures include Sylmar (one in every 508 homes), Pacoima (one in every 582 homes), and Sunland (one in every 618).

San Fernando Valley communities with low foreclosure rates for March include Sherman Oaks (one in every 2,135 homes), Burbank (one in every 1,531 homes), and La Cañada-Flintridge (one in every 1,209 homes).

Source: http://www.sfvbj.com/news/2014/apr/10/home-foreclosures-fall/

The housing market in the San Fernando Valley, colloquially known as the Valley, remains slow continuing a trend from late last year. Distressed property sales are at a low, dropping 11 percent when comparing January 2014 numbers to those seen in the first month of 2013. Distressed property numbers, including short sales and foreclosures, are now diminishing. This January saw distressed properties account for only 15 percent of total property sales. This is a significant dip from 34 percent of total property sales for January 2013.

These changes indicate a potential return to a pre-recession status quo, influencing price improvements seen with houses and condominiums. The median home price that covers Toluca Lake through Calabasas grew to $485,000 this January from $420,000 in January 2013.

Default notices by lenders saw a rise of 41 percent this past January. Although this is cause for some alarm, default notices were at a high in 2012 and diminished significantly in 2013. This could prove to be a temporary surge. There is also a shortage of inventory that is hindering the number of sales. The current amount of homes and condominiums for sale are not allowing for a stabilized an even market. This can only be achieved a “six-month supply” pace while the market is lagging at just under a three-month supply pace.