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Old Posted Jul 19, 2016, 1:54 AM
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headcheckjj headcheckjj is offline
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I may be late in this realization, but hey, I'm nothing if not slow. Regardless, I was hoping to have a discussion on two points:

A. It seems that so long as downtown development is regulated to have adequate parking, we will not see infills in all the small lots throughout the neighborhood (I'm looking at you SE corner of 4th and Hill, 639 Olive, 735 Hill, 220 Broadway, all the remainders along Spring, etc. etc.) These lots cannot reasonably fit parking podiums, and deep underground construction is simply too costly.

This cycle of development is bound by parking regulations and thus is bound to large empty lots that can accommodate massive podiums. Infills may have to wait for changed building codes.

B. We talk a lot about "this cycle" and "the next cycle" of development in downtown and across Los Angeles. However, this may be a once-in-a-lifetime boom. That is not to say that construction will never come again, but we are in the midst of a perfect storm of factors that has caused this development bonanza.

First, interest rates are at historic lows and may never be so low again -- possibly for decades.

Second, coming out of the Great Recession, corporations are sitting on historically high amounts of cash and are looking for a place to invest.

Third, the American economy (though sluggish itself) is a bastion of economic stability amidst international turmoil (Brexit? China's Slump? Brazil's Implosion? Russia's Implosion?). All of this amounts to a climate of real estate investment eyeing large projects. Los Angeles is a large market with enough ample space and potential.

I'm sure there are further factors I'm not considering, but the point is that future cycles may be way smaller than what we're seeing today.

Thoughts?
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