Multi-Family in Southern California

Crankerr's picture
Rank: Monkey | 55

I have an interview coming up for an acquisition role with a MF developer in Southern Cal and SW US. I would love to hear some opinions and key trends in the market that would be helpful to talk about in the interview or as follow up questions. I know that SoCal has high barriers of entry in regards to regulation any insight on specific examples would be greatly appreciated.

Comments (6)

Mar 14, 2019

unentitled dirt in LA is too expensive..entitled dirt in LA is way too expensive.

Mar 14, 2019

Solid Banter.

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Most Helpful
Mar 14, 2019

How big are their projects? Do they look for TOD density bonuses? What kind of Dev Spread do they want to see? Are they trying to hold any of their projects or just build, stabilize and sell? Have they been seeing prices of QOZ land increase? Do they hire entitlement consultants or handle it in house? What markets are they looking in? Where are they seeing construction loans come in? Are they maxing out their leverage? Do they have in house property management?

Mar 14, 2019

Wow, thanks a lot this extremely helpful. Could you clarify on what entitlement consultants do and the value add they can provide.

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Mar 14, 2019

@ChangedMyName is actually correct

Land prices are sky high. Regulation is a pain. The California Coastal Commission (CCC) makes needles in the eye sound more pleasant than dealing with them.

For your interview: cap rate compression is a big hurdle. You're looking at deals where at 60% LTV they may not pencil. It's tough. Luxury hotel market is growing (might be over saturated at this point). Orange County is pretty interesting too, Dana Point is having their Harbor completely redone so expect more development near there. Other areas are being gentrified at fast rates.

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Mar 15, 2019