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  #1  
Old Posted Jan 9, 2017, 11:04 PM
pizzaguy pizzaguy is offline
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Downtown Los Angeles hasn't seen this much construction since the 1920s

Quote:
Downtown Los Angeles is undergoing its largest construction boom in modern times — an explosion juiced by foreign investment that’s adding thousands of residences, construction jobs and a multitude of shops and restaurants.

Since 2010, according to real estate data firm CoStar, 42 developments of at least 50,000 square feet have been built — a figure that includes large adaptive reuse projects such as converting an aging warehouse into new offices. An additional 37 large projects are under construction.

The rapid pace means that by decade’s end, today’s boom should easily surpass the 1980s — a time when developers built office skyscrapers on Bunker Hill as part of an urban renewal effort that flattened the neighborhood’s Victorian mansions in the decades prior.
http://www.latimes.com/business/la-f...130-story.html
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  #2  
Old Posted Jan 9, 2017, 11:14 PM
ChargerCarl ChargerCarl is offline
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While I'm happy DTLA is booming it's not enough to keep up with demand:

http://www.abundanthousingla.org/201...ousing-growth/
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  #3  
Old Posted Jan 9, 2017, 11:59 PM
mhays mhays is offline
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The situation is similar in a variety of cities. We're seeing several huge booms.

Downtown Seattle, defined as a slightly gerrymandered 2,500 acres, is one of them. The current boom is something north of 22,000 housing units, 10,000,000 sf of office, 3,200 hotel rooms, a two-mile freeway tunnel, light rail extensions in two directions, and a streetcar for starters. This includes 19 buildings of 398' or taller by my count. Upcoming work will jump all of these numbers significantly.

Last edited by mhays; Jan 10, 2017 at 12:57 AM.
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  #4  
Old Posted Jan 10, 2017, 1:35 AM
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dc_denizen dc_denizen is offline
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Houston (Harris County) adds around 15,000-20,000 apartments units/year.

Quote:
ADS indicated that by the end of 2015, 20,187 units were under construction, and the occupancy rate was 90.6%. In 2016, expected deliveries are expected to total 18,327 units, and for the two year period of 2016 and 2017, 29,716 units. According to the REIS Apartment – 4th Quarter 2015 Metro: Houston report, “Because [the absorption rate] does not exceed the forecasted new construction, the market vacancy rate will rise by 120 basis points to finish 2017 at 7.0%. On an annualized basis through 2016 and 2017, asking and effective rents are projected to increase by 3.7% and 3.5%, respectively.”
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In Houston, apartment developers are going vertical to combat rising land prices. In 2015, four 20-plus-story high-rises were delivered and by year-end five were under construction. The Tomball/Spring submarket in north to northwest Harris County leads all Houston submarkets with 11 properties containing 5,847 units under construction. Completion of the ExxonMobil Campus to the north and upcoming Grand Parkway to Kingwood are factors driving apartment demand in the area. Other submarkets ranking behind Tomball/Spring for under construction projects are Montrose/Museum/Midtown (south of Downtown) with 3,623 units, Katy/Cinco Ranch (west Houston) with 2,729 units, CBD with 2,503 units. The Woodlands and Conroe combined submarket has 3,162 units under construction.
http://www.hcad.org/Reappraisal/2016...nds_Report.pdf

New York City has 301 large multistory buildings under construction, per emporis. around 80,000 units were permitted last year.

good times for US cities, hopefully trump won't spoil the party.
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  #5  
Old Posted Jan 10, 2017, 2:35 AM
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Quote:
Originally Posted by dc_denizen View Post
Houston (Harris County) adds around 15,000-20,000 apartments units/year.





http://www.hcad.org/Reappraisal/2016...nds_Report.pdf
Doubtful we'll see much more multifamily and office built for the next few years unless something major happens, especially office space. However, ~5k units in downtown and the surrounding areas bodes well for the long term future. Short term, it's a great time to get concessions on an apartment downtown or close by.

Quote:
New York City has 301 large multistory buildings under construction, per emporis. around 80,000 units were permitted last year.

good times for US cities, hopefully trump won't spoil the party.
That's nuts and great for NYC.
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  #6  
Old Posted Jan 10, 2017, 2:39 AM
the urban politician the urban politician is offline
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I think this can be said about a lot of cities.
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  #7  
Old Posted Jan 10, 2017, 4:32 AM
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Yes, this is true that a lot of cities are experiencing massive booms, but this article literally means what the title implies. Here is a tidbit from a Curbed article re: this LA Times piece:

Quote:
the Times reports that the number of large projects since 2010 is the highest Downtown has seen since the 1920s. In all, 79 developments of 50,000 square feet or larger have been built or are under construction since the beginning of the decade. That compares to 64 projects in the ‘80s and 155 in the ‘20s.
Not disagreeing with what anyone said here, but this better specifies what the article was actually about. With that being said, I also think it's not nearly enough. Another bit from the same article:

Quote:
only about 25,000 new units were built in all of Los Angeles between 2010 and 2015. Meanwhile, well over 100,000 units were constructed in every decade from the 1940s to the 1980s.
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  #8  
Old Posted Jan 10, 2017, 4:38 AM
CastleScott CastleScott is offline
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That article was an interesting read and it looks like Asian investors have found LA to be a good place to invest (I gotta admit that if whats proposed is built in LA it could almost be a LA's version of Toronto's latest). Although it is true in other cities as well-NYC is-well off the charts, Seattle is really beginning to hum and Chicago's south loop is just catching fire!! Of course Miami is hot as Houston, Atlanta and San Fran boom right along...

Last edited by CastleScott; Jan 10, 2017 at 4:51 AM.
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  #9  
Old Posted Jan 10, 2017, 4:09 PM
Leo the Dog Leo the Dog is offline
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This is what 0% interest rates buys you.
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  #10  
Old Posted Jan 10, 2017, 5:31 PM
ChargerCarl ChargerCarl is offline
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Quote:
Originally Posted by Leo the Dog View Post
This is what 0% interest rates buys you.
Huh? So without 0% interest rates we would have zero construction in LA?
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  #11  
Old Posted Jan 10, 2017, 5:48 PM
Leo the Dog Leo the Dog is offline
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Quote:
Originally Posted by ChargerCarl View Post
Huh? So without 0% interest rates we would have zero construction in LA?
That's not what I said at all.

However, ZIRP/NIRP have fueled this boom, 100%. Just about every single city has experienced massive growth due to easy access to abundant, cheap money. Of course cities would've still experienced growth and development, but not at this level.
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  #12  
Old Posted Jan 10, 2017, 6:17 PM
ChargerCarl ChargerCarl is offline
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Quote:
Originally Posted by Leo the Dog View Post
That's not what I said at all.

However, ZIRP/NIRP have fueled this boom, 100%. Just about every single city has experienced massive growth due to easy access to abundant, cheap money. Of course cities would've still experienced growth and development, but not at this level.
I don't want to hijack this thread but you have a fundamental misunderstanding of monetary policy. An interest rate is just a price, it's not really best understood causal. It represents an equilibrium between supply and demand for capital. Right now we live in a world awash in savings with not enough investment opportunities to put those savings to good work, so we have a falling equilibrium rate which is why our rates are so low AND we have record low inflation.

If the Fed were to announce tomorrow that they're jacking up rates tomorrow it would slow construction, yes, but only by reducing national income.
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  #13  
Old Posted Jan 10, 2017, 6:30 PM
Leo the Dog Leo the Dog is offline
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Quote:
Originally Posted by ChargerCarl View Post
I don't want to hijack this thread but you have a fundamental misunderstanding of monetary policy. An interest rate is just a price, it's not really best understood causal. It represents an equilibrium between supply and demand for capital. Right now we live in a world awash in savings with not enough investment opportunities to put those savings to good work, so we have a falling equilibrium rate which is why our rates are so low AND we have record low inflation.

If the Fed were to announce tomorrow that they're jacking up rates tomorrow it would slow construction, yes, but only by reducing national income.
Ok, so you agree with me.
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  #14  
Old Posted Jan 10, 2017, 6:35 PM
ChargerCarl ChargerCarl is offline
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I mean, it would slow construction because it would slow all economic production via recession, so no I don't agree with the spirit of your comment.

Dropping a bomb on Los Angeles would also temporarily slow construction and depress prices, and yet you wouldn't advocate for the Federal government to discontinue it's policy of not dropping bombs on LA would you?
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  #15  
Old Posted Jan 10, 2017, 6:47 PM
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Steely Dan Steely Dan is offline
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Quote:
Originally Posted by mhays View Post
The situation is similar in a variety of cities. We're seeing several huge booms.
yep. nationally, we are currently in the biggest skyscraper building boom in our nation's history.

USA | Biggest Skyscraper Building Boom Ever!!!


it's great to see downtown LA making it's next great leap forward!
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  #16  
Old Posted Jan 10, 2017, 6:48 PM
Leo the Dog Leo the Dog is offline
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Quote:
Originally Posted by ChargerCarl View Post
I mean, it would slow construction because it would slow all economic production via recession, so no I don't agree with the spirit of your comment.
What don't you agree with? ZIRP being responsible for widespread borrowing/spending/investing creating a RE boom in both commercial and residential? (And stocks).

Boston Fed chief warns of commercial real estate speculation

Quote:
Low interest rates may be encouraging speculation in commercial real estate reminiscent of the New England bubble in the late 1980s, Eric Rosengren, president of the Federal Reserve Bank of Boston warned Thursday.

-----

Real estate experts said they are seeing surging demand for Boston properties from foreign investors, looking for a safer, long-term bet.

But some of that demand may be driven by the low interest rate environment, Rosengren said.

“One potential cost to keeping rates too low for too long is that doing so might encourage excessive risk-taking in commercial real estate — a sector likely to be influenced by low borrowing costs,” he said. He added that in New England in the late 1980s and early 1990s, when the bubble burst, borrowers defaulted, lenders were left with half-finished projects and empty towers, and several banks failed.

Interest rates have been at rock bottom since the financial crisis and lenders and investors chasing higher yields have turned to commercial real estate for potentially higher returns. The yield on 10-year Treasuries on Wednesday was 1.73 percent.
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  #17  
Old Posted Jan 10, 2017, 7:08 PM
ChargerCarl ChargerCarl is offline
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Theres nothing wrong with that, that's perfectly normal, rational behavior. The problem is we've handicapped the supply side of the market with zoning and other pernicious land use regs that translates any increase in nominal demand for real estate into higher prices. The solution isn't to blow up demand, like the Fed did in it's 2008 sept meeting, but to loosen regulations preventing housing supply growth.
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  #18  
Old Posted Jan 10, 2017, 8:04 PM
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I hope LA has learnt from Vancouver's experience of allowing Chinese developers to run amok in the downtown development. The Chinese bought thousands of houses and apts in the city but allowed them to remain vacant. They were bought only as investments to sit on and then flip at a later time. It has left Vancouver in a horrid place. With just 650,000 people the city has seen the destruction of 20,000 homes nearly all of which were perfectly good and destruction of thousands of heritage homes. Condos were bought and left empty so new downtown developments are dead. The city now has near zero rental vacancies, the highest real estate prices in NA and a staggering 10,000 empty homes. It's not a way to build a sustainable city nor a sense of community. Some entire blocks on the tony Westside have only 1 or 2 inhabited houses leaving the area dead with an abandoned feel and no sense of community. Seattle is currently studying Vancouver to make sure they DON'T follow Vancouver's lead.

To make a city truly liveable it must put it's citizens first and not development for the sake of development. A city is for people and not just a commodity and I hope LA keeps that in mind.
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  #19  
Old Posted Jan 10, 2017, 8:52 PM
ChargerCarl ChargerCarl is offline
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Vancouvers rents aren't all that high though. Less than the bay area or LA.

Correct me if I'm wrong though, I don't know much about Vancouver.
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  #20  
Old Posted Jan 10, 2017, 9:14 PM
ChargerCarl ChargerCarl is offline
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Also the problem that Vancouver's suffering from is similar to the one that just about every large American city is suffering: demand exceeding supply.

So why not deregulate and allow supply side to meet demand like Tokyo? In that case an increase in foreign demand --> more money for construction workers/firms/interior designers instead of higher prices for landlords.
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