Michael Lucarelli

A good read on financing housing production.

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MULTIFAMILY ACQUISITIONS ACCELERATE Private investors and developers continue to dominate multifamily sales activity in greater Los Angeles. However, last year there was a significant increase in transaction activity, more than any in recent history. Private buyers accounted for just over 90% of dollar volumes last year, the highest percentage in decades. In contrast, institutional firms trailed with just over 3% of dollar volumes in 2023. From 2010 to 2019, they accounted for around 12% of activity. Elevated debt costs have lowered sales volumes and impacted asset pricing. Average market pricing, $360,000 per unit, is down between 15% and 20% from a recent high of around $430,000 per unit. Additionally, since April 1, 2023, sellers in the city of Los Angeles have faced a 4% transfer tax for any sale above $5 million and 5.5% tax for any sale above $10 million. The new levies sit on top of the city's existing 0.45% transfer tax. As institutional buyers typically acquire larger assets than private buyers, the transfer tax likely impacted that buyer type more than private investors due to the prohibitive additional costs. In the last quarter of 2023, there were around 260 multifamily transactions under $5 million, above the roughly 185 transactions in the first quarter of the year which is a 40% increase. In contrast, fourth-quarter sales above $5 million in Los Angeles County was dropped almost 50% to hovered around 50 closings, well below the near 95 recorded in the first quarter. Given the additional cost, the transfer tax could continue suppressing transactions above $5 million this year. MARQUIS Commercial Properties sees continued opportunity in the multifamily sector even with these added costs. There are quiet offerings of properties that have sold at 10-15% discount to present value and up to 50% of after repair value (ARV). If you are interested in acquiring multifamily opportunities below current market value, contact us directly to gain access and insights. #innovation #business #banking #realestate #multifamily #marquiscommercialproperties

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Apartment rents are declining annually across California on Zumper right now It's a *demand* factor - net emigration from major cities & sluggish employment Many Sun Belt markets are also seeing rent declines, but there it's *supply* driven - record # of new units to market

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 Alice Leung is the Vice President for Platform and Product Strategy at Brick & Mortar Ventures. She began her career working on major construction projects in the San Francisco Bay Area, including UCSF Medical Center and Lucile Packard Children’s Hospital. During this time, she championed the use of construction technology to improve efficiency on project sites. Her experience working in the US and Singapore demonstrates her understanding of the construction industry on an international scale. On Wednesday 5th June, at Bricks & Bytes, we sit down with Alice for round 2! And we need your help. 𝐋𝐞𝐭 𝐮𝐬 𝐤𝐧𝐨𝐰 𝐲𝐨𝐮𝐫 𝐜𝐡𝐨𝐢𝐜𝐞 𝐨𝐟 𝐪𝐮𝐞𝐬𝐭𝐢𝐨𝐧 𝐢𝐧 𝐭𝐡𝐞 𝐜𝐨𝐦𝐦𝐞𝐧𝐭𝐬 𝐛𝐞𝐥𝐨𝐰 👇👇👇 QUESTIONS: A) What excites you most about the startups Brick & Mortar Ventures invests in? B) What surprised you most about the differences in the construction industry between the US and Singapore? C) Other (please post below)

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Is Seattle a Seller's Real Estate Market? Yes, Seattle is still considered a seller's market in 2024, though there have been some shifts. Here's what to consider: Low inventory: There are more buyers than available properties, which gives sellers leverage. Faster sales: While not as fast as in the past, homes are still selling relatively quickly. Price appreciation: Housing prices are still rising year-over-year. However, there are signs of a slightly less competitive market: More listings: Inventory is increasing compared to the height of the seller's market. Fewer bidding wars: While homes may receive multiple offers, it's not as common as before. https://lnkd.in/gntpZWV If you're thinking about buying or selling, the MLC Team is here to help. Reach out to us for expert guidance and support in this competitive market! 🌐 Website: https://lnkd.in/gvsRuemm 📧 Email: deal@mlcompanies.co 📞 Phone: (206) 322-3325 Visit us at 16400 Southcenter Parkway, Suite 206, Seattle, Washington, 98188 USA

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If you want to truly understand the problem with government being capital allocators for adding affordable housing, read how LA county in an ADU project started in 2018, has 3 completed. Private sector capital #impactinvestmenting is better.

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Funding for Bay Area AI companies surged to $10.6 billion for the 15 months from early 2023 through March of this year, according to Avison Young, just over half the total amount raised for all AI companies in the U.S. during that time. In response, San Francisco and Silicon Valley became the most active markets in the country for AI leasing by volume, each with more than 2 million square feet leased, according to CBRE. One key factor: AI companies may be just as likely as life-sciences companies to require in-office work #realestate #offices #labratories #AI #lifesciences #VCs #technology

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San Diego City real estate prices are up 173.26% since '10.... Have you ever felt that housing data moved too slowly? So did we at Parcl Labs. So we fixed housing data and brought it up to the speed of today through our industry leading price feeds. Now available in our API, our real time pricing layer for housing is accessible for a hundred markets around the country. Let's review the stats for the San Diego City price feed. % Change (30 Day): 2.18% 📈 % Change (6 mo): 8.50% 📈 % Change (YoY): 10.58% 📈 % Change (5 yr): 64.79% 📈 % Change (Since `10): 173.26% 📈 Annualized Volatility: 1.28% #realestate #realestateinvesting #realestateinvestor #dataanalytics #singlefamilyrentals #housingmarket #sfr #housinginventory

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Today's Thesis Driven explores the rise of rewards and loyalty programs in multifamily. They're one of the few bright spots in proptech, with Bilt Rewards raising $200 million at a $3.1B valuation earlier this year. Loyalty and rewards are mainstays of hospitality and travel - can they translate to the multifamily sector? Investors and a handful of entrepreneurs clearly believe so. Bilt isn't the only player in the multifamily rewards space - this morning, cash back rewards company Stake announced its acquisition of Circa, a delinquency management and collections app. Unlike Bilt, Stake and Circa are focused on the "everyday renter" and are often found in workforce housing and garden-style properties. The rise of these rewards apps - which often include their own payments systems - puts property management systems like Yardi, RealPage, Inc., and Entrata in an awkward spot. While rewards apps are gaining popularity with owners, PMS players have historically owned the $750 billion in annual rent payments and aren't keen to give it up. Apps like Stake also may have a role in the future of financial services. Stake sees itself as becoming a sort of "renter's bank", offering financial services alongside its existing checking account, debit, and cash back options. Regardless, it'll be fun to watch the dynamics in this fast-moving sector. Full deep dive on Thesis Driven linked in comments!

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📉 #OrangeCounty's rental market is showing signs of slowing, with CoStar Group reporting flat rents in April and a 1.3% decline since the year's start. 🏠 Landlords are adapting, shifting focus towards tenant retention over aggressive rent hikes, crucial in a market influenced by economic pressures. 📈 Yet, challenges persist as new developments enter the scene. The influx of new properties in the next 12-18 months may further dampen demand unless they align with evolving renter preferences. 💼 My perspective? In an environment marked by inflation and financial strain, it's understandable why rent growth is moderating. People are seeking stability amidst rising costs, impacting demand. 💬 As your real estate partner, my team and I are committed to navigating these transitions with you. Let's connect and strategize for success in this evolving landscape. Don't hesitate to reach out – we're here to support you every step of the way.

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Despite all the changes affecting the multifamily sector since 2020, historical real estate fundamentals have been a reliable predictor of rent growth. In Seattle, the same neighborhoods that underperformed on rent growth in the 2010s have continued to do so in the current decade. #CBRE  https://bit.ly/3WmK3rn

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Despite all the changes affecting the multifamily sector since 2020, historical real estate fundamentals have been a reliable predictor of rent growth. In Seattle, the same neighborhoods that underperformed on rent growth in the 2010s have continued to do so in the current decade. #CBRE

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Citizens of Redwood City will face one of the most regressive rent control propositions in the Bay Area at the voting polls this November. This is not City led - this is the provocation of misguided tenant groups that would hamstring a city that has made incredible strides in building affordable housing, promoting smart development, and furthering sustainability goals. As written: - Annual rent increases would be restricted to just 60% of the local Consumer Price Index rise, with a maximum limit of 5% - Mandating that landlords offer relocation assistance equal to four times the monthly fair market rent or $8,000, whichever is higher, for no-fault evictions. - Charging landlords an annual fee to fund the administrative costs of this program. Rent control kills development, no development means no supply, and no supply leads to substandard housing stock and an accelerating lack of affordability. If you know of someone who rents in Redwood City, is a homeowner, owns rental property, or understands that only smart development can solve the housing crises please spread the word. https://lnkd.in/gPJyPApZ

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In case you are wondering how #C-PACE works, I wrote a piece for Thesis Driven to explain what C-PACE is and how it can be used in today's capital constrained environment.

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Everyone knows a business' favorite thing about operating in California is the generous abundance of regulatory compliance policy. Which is why institutional executives have been chomping at the bit for the first disclosures deadline of the California Climate Accountability Package. Companies doing any business in California with over a specified level of revenue globally will not only have to (or should I say, "get to") report their direct emissions, but also the indirect emissions that occur upstream and downstream of the company's core operations. This would include emissions from: - The production and extraction of raw material used by suppliers - Energy used in the manufacturing of goods purchased from suppliers - Inbound and outbound transportation - The use and disposal of the product by customers - and more Our team at Cushman & Wakefield has been navigating California's ever-changing commercial landscape for over 35 years. We can help advise your firm on how the new disclosure requirements may affect your real estate, opportunities to improve energy efficiency, and strategies for future compliance. We'd be happy to be a resource for you as you work toward future-proofing your California real estate. Let's connect! #California #ClimateChange #CRE #Sustainability

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What if your first rental property is a nightmare? 💀 In this episode, I interview Liam Delumpa, a Software Engineer turned real estate investor in the SF Bay Area. 🧑🏻‍💻 Liam reflects on his rollercoaster journey in real estate, starting with the nightmare of his first rental property. 🏚️ Through perseverance and resilience, Liam overcame the initial hurdles, honing his skills and knowledge as an investor. 🙌🏼 His eventual shift to commercial real estate highlights the importance of strategic evolution in response to market conditions, emphasizing the need for continuous learning and adaptation for success in real estate. 💡 Check out the full episode of the podcast below! https://lnkd.in/g8JGK3R3

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If you’re in the business of helping low-income communities save money through the energy transition, this is a must watch/listen. Funding is out there but it takes work to get it to people in need efficiently. #cleanenergyforall

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LA’s Westside, a hub for tech startups, is seeing a significant increase in sublease office space, with over 3.5M SF available. With recent tech layoffs directly impacting companies in the area, the submarket had an availability rate as high as 37.4%, per Savills. Do you think the office market in West LA will continue this downward trend? #CommercialRealEstate #Subleasing #LosAngeles https://lnkd.in/eSs9P7xR

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Brilliant move in the fintech mortgage space by Nick Liuzza and the Beeline team! Helping the hardest working people in America with homeownership is fabulous. The fact that “the largest segment of growth in homeownership is in the Hispanic market” is a perfect marriage. Looking forward to watching Miguel Vega and Colmena streamline the homeownership process. #FintechInnovation #Homeownership #HispanicMarketGrowth

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