Back to the Future
Though some economists fret that a market correction might occur in the short term, investors and brokers working in Hollywood don’t seem too concerned. “How deep is the market?” asks Jack Kyser, chief economist for the Los Angles Economic Development Commission. “That’s a significant question that nobody’s stopping to answer.”
But Ludwig isn’t worried about his investment. “Everybody in the world knows Hollywood,” he says. “It was a glamour spot for many years and it’s making a comeback. It’s not a here-today, gone-tomorrow market. And there are still a lot of good deals left.”
What to Consider Before Doing a Hollywood Deal
1– Learn the landscape. There’s a lot of new condo and mixed-use development in the pipeline, says Laurie Lustig-Bower, executive vice president for investment properties in the multi-housing group of CB Richard Ellis. “Investors need to have a good understanding of all the up-and-coming developments and renovations in the area and how each could affect their properties.”
2– Identify transit nodes. L.A.’s freeway congestion is legendary, and with at least 45,000 new jobs forecasted, it’s not going to get better. So Delores Conway, director of the Casden Forecast at the University of Southern California’s Lusk Center for Real Estate suggests looking for properties near transit areas. “Properties near transit nodes provide access and are more desirable,” she says. The Downtown subway transfer station is 15 minutes from most Hollywood stations, providing easy access to employers in the Central Business District, San Fernando Valley, and South Bay. “You can get demand from people who don’t want to commute on our congested highways.”
3– Consider the existing tenant base. While many developers will cater to higher-end tenants, there’s a real need for affordable housing, according to Helmi Hisserich, regional administrator for the Community Reinvestment Agency’s Hollywood and Central regions. “Only about 6 percent of the units proposed for development over the next couple of years are planned to be affordable. We’re doing everything in our power to encourage developers to include a reasonable number of units for very-low to moderate-income households.”