About PMI Properties

PMI is a thirty year old property investment company located in Beverly Hills/Bel Air that invests in commercial and residential real estate. Since its founding in 1978, PMI Properties has closed over $500 million in office, shopping center, industry and apartment properties throughout Los Angeles and San Francisco. PMI's most recent endeavors have focused on pioneering creative office suites in office buildings and converted warehouses.These properties have been primarily located in Los Angeles and recently in San Francisco. PMI had its roots in investing in apartments, but more recent investments have focused towards offices, creative offices and converted warehouses. PMI was the first to pioneer a new, creative suite in office buildings with its proprietary "lifestyle suites," which featured skylights, partial hardwood floors, designer lighting, raised ceilings, interior glass, and other upgrade features. PMI pre-built the suites in an efficient and generic floor plan that not only achieved a premium, but also rented faster than suites requiring build-to-suit modifications. PMI was also one of the first to convert warehouse industrial facilities into flex creative space prior to the Internet boom. Today, PMI's suites are some of the most coveted creative offices on the market. Subscribe to get our newsletter and blogs for free! http://eepurl.com/hG0V2

Imbellus Moves Into Coveted Creative Office Space in Culver City

PMI Properties is excited to announce that Imbellus, the company redesigning education standardized tests, has moved into a 8,700 square foot office space at 8673 Hayden Place. This creative office space with 22 foot high glulam beam ceilings and skylights  is located in the Hayden Tract in Culver City and is situated in between corporate offices for both Nordstrom and Beats Electronics and soon near HBO and Amazon. James Wilson and Dave Wilson of Lee & Associates West represented the landlord, and Michael Nieman of Savills Inc. represented the tenant for the four year lease.

 

8671 - 8673 Hayden with spec&rate

Imbellus is redesigning standardized tests to be more cognitive based and less knowledge based. These tests would evaluate the applicants problem solving and learning ability and have less emphasis on the applicant’s prior education. If successful, the test could be a substitute for the current SAT tests.

This office space at Hayden offers tenants prime access to all of Culver City and even Culver City Park.

Homeless housing tenants say AIDS Healthcare is ‘slumlord’ – Los Angeles Times

Michael Weinstein, the backer of proposition 10 and the new upcoming proposition to introduce radical rent control, bought through his Aids Foundation apartments in downtown Los Angeles and has run into problems.  He is learning it is not that easy to be a landlord. He should not be the one designing our rental housing laws.

Source: Homeless housing tenants say AIDS Healthcare is ‘slumlord’ – Los Angeles Times

Remote Work and a Distributed Workforce Can Be a Disruptive Tool to Solving Housing Affordability

The ability to create tools to allow more remote work and a distributed workforce can radically  help lower housing costs.  Just think if you could live in Tucson but work in Silicon Valley, San Francisco, or Los Angeles or New York .  Three trends work against remote work and a distributed work force:

  1.  Agglomeration Economies:  the efficiency gained from an industry coalescing into a few locations.  Employees go where the workers are, and the workers go where the employees are.  Dense infrastructures form to support the specialized industry. Think San Francisco/Silicon Valley for technology, Los Angeles for entertainment, and New York for finance.
  2.  Non-digital collaboration:  the belief that in person collaboration is stronger than digital collaboration.
  3. The movement of millennials into the large urban areas.

Now the cost of these trends have reached a point for business leaders to explore alternative strategies.The current Coronavirus outbreak is also causing businesses and institutions to explore and innovate digital and remote work, and this exploration could lead to wider adaption in the future.

The article below discusses how San Francisco firms are exploring such alternatives.  The above trends have caused housing costs in these urban centers to explode.  Technologies that advance remote work and a distributed work force can put people where housing costs are much less.

 

 

Source: Twitter CEO Jack Dorsey San Francisco comments a warning sign

RADICAL RENT CONTROL IS AGAIN ON THE BALLOT

The new measure again allows the expansion of rent control to owners of more than one single family home, corporate owners, and owners of apartment buildings over 15 years old. Further, rent increases on vacant units will be severely limited. This measure will cause a radical decrease in property values , discourage new construction and property renovation, create a shortage of available apartments, and raise the rents on non-controlled units.

This time though, the proposition will be more difficult to defeat. First, the new proposition has exempted most single family homes. Second, the voter turnout will be greater and more liberal. Third, rents have continued to increase.

On the positive side, CAA (California Apartment Associated) supported AB1482 which instituted a more moderate rent control statewide. We believe AB1482 will mute support among some for this new version of the 2018 Prop 10 radical rent control ballot measure. Also AB1482 should end the horrible headlines of tenant rents doubling or tripling overnight.

However, it is critical that all owners contribute to the campaign to defeat this new proposition. Don’t assume you can free ride off of large landlords. Blackstone has sold out their interest in single family homes.

The pro-radical rent control advocates will try to market radical rent control as a solution to the homeless crisis, which has arisen to the number one issue amongst Californians. Here are summaries of the upcoming 15 second pro-radical rent control commercials:

• ‘The Squeeze’ – a single take, slow motion close-up of a hand tightly squeezing an orange dry as a narrator V.O. says: “Corporate landlords are squeezing California renters dry. Seniors, veterans and working-class families are being priced out of their homes and neighborhoods and forced to sleep in cars and on our streets. Join the movement and stop the squeeze…”

• ‘Apocalypse’ – Several stark black & white tracking and drone shots of tents and the homeless on Skid Row in Downtown Los Angeles with a voice over narration: “The apocalypse is now. How did homelessness get so bad? How much worse can it get? Rising rents are driving thousands onto the streets. California needs to expand rent control. Tell your elected officials, we need rent control now…”
Owners need to get their side of the story out to the public. Contribute to the organization set up by the California Apartment Association to fund the opposition. Please send or wire your contributions to Californians For Responsible Housing, who is recommending a contribution of $10 per unit:

Please make all checks payable to: Californians for Responsible Housing – 2020

Mail checks to: Nielsen, Merksamer, Parrinello, Gross & Leoni, LLP, c/o Elli Abdoli
2350 Kerner Blvd., Suite 250, San Rafael, CA 94901

Los Angeles Councilmember Seeks to Eliminate 3% Floor for Los Angeles Rent Control Apartments and replace it with 60% of CPI

Los Angeles Councilmember Seeks to Eliminate 3% Floor in RSO
Call City Council Today and Tell Them You Oppose!
City of Los Angeles Councilmember Mike Bonin is proposing to eliminate the 3% floor that has been the backbone of the City’s’ Rent Stabilization Ordinance since 1978. His proposal calls for the elimination of the 3% floor to be replaced with a new calculation – 60% of CPI. This is part of a broader package of proposals related to housing.

The current allowable increase calculation was the result of compromise at the inception of the rent control program. The 3% floor has long existed as a safety mechanism for housing providers. It ensures they do not fall victim to costs that rise independent of the Consumer Price Index (CPI).

The CPI is a consumer index. It does not take into account rising operational expenses such as real estate taxes, insurance, the city’s gross receipt tax, utilities, water, sewer, waste franchise increases, pest control, repairs and maintenance, earthquake retro-fitting, painting, cleaning, landscaping, vacancies, management administration, advertising, legal costs and a whole host of other expenses incurred through operating rental housing. These costs are increasing significantly in the City of Los Angeles.

All housing providers must reach out to the council members. Tell them you oppose any changes to the allowable increase formula in RSO buildings. Let them know how it will negatively affect your ability to provide housing in the City.
Contact the City Council Today!

Fed’s Rosengren flags risks to economy in WeWork-style model

Sept 20 (Reuters) – The rise in co-working spaces like those offered by WeWork may be a source of financial instability that could make the next U.S. recession worse by sparking a run on commercial real estate, Boston Federal Reserve Bank President Eric Rosengren said on Friday.

“I am concerned that commercial real estate losses will be larger in the next downturn because of this growing feature of the real estate market, which could ultimately make runs and vacancies more likely due to this new leasing model,” Rosengren said prepared remarks that also explained why he dissented against the central bank’s decision earlier this week to lower borrowing costs for a second time this year.

Office-space sharing companies often use special purpose entities to lease space, in order to shield themselves in case of bankruptcy, he said. That puts more potential stress on the property owners themselves in case of a downturn. But shared office space often pays higher rent than other types of commercial offices, making it an attractive option for property owners trying to squeeze more yield out of their assets in a low-interest-rate environment, Rosengren said.

“It will not be until a recession that this evolving model will be truly tested,” he said.

Rosengren did not mention WeWork or any other company by name. But while commercial real estate valuations and lending standards have for Rosengren been a persistent worry, it is the first time he, or any Fed policymaker, has publicly focused specifically on risks from the rise of such flexible workspaces to the overall U.S. economy.

Wework’s swelling lease obligations, and the potential risk to revenues if tenants vacate during a downturn, have been one of several issues that have soured investors against the company’s initial public offering.

WeWork owner The We Company this week postponed its initial public offering of stock planned after weak demand for its shares forced it to dramatically discount its expected IPO value to between $10 billion and $12 billion, down from the $47 billion valuation it achieved in January.

“The fact that the shared office model relies on small-company tenants with short-term leases, combined with the potential lack of recourse for the property owner, is potentially problematic in a recession,” Rosengren said.

“Its important to think about the potential for runs on commercial real estate stemming from a situation where short-term leases might not be renewed in recession, and long-term leases are no longer economically viable.” (Reporting by Ann Saphir Editing by Chizu Nomiyama)

A Wave of New Apartment Construction Can Lower Rents

A wave of new construction is lowering apartment rents in Sydney Australia

Source: Heads Up, California: Sydney Has Figured Out How to Get the Rents Down – Reason.com

A supply glut also lowered rents in Los Angeles in the late 80s.  Combined with the recession in the early 90s, the oversupply kept kept rents down for almost a decade.  Los Angeles developers never produced the multifamily unit count achieved in the 80s.  A few years of 20,000 plus apartment deliveries would lower rents.

 

What It Is Like to Find a Rent Stabalized Apartment Without Vacancy Decontrol

Here is what it was like when New York allowed voluntarily vacated apartment rents to be increased by only 20% plus an allowance for renovation costs:

“At Thursday’s hearing, tenants described devoting hundreds of hours to finding apartments for their families only to be stymied by excessive upfront costs. In one example on the extreme end of the spectrum, a tenant who was renting a Manhattan apartment for $2,650/month who decided to go through with the lease said they paid $12,570 in fees before moving in—including a $4,770 brokers’ fee, a security deposit equal to one month’s rent, and a litany of other processing and application fees.”

Soon it will be virtually impossible to find a rent stabilized apartment in New York after the legislature revoked the landlord’s ability to raise rents when a tenant moves. In Los Angeles, you can find plenty of one bedrooms and even two bedroom rent stabilized apartments (and in some areas 3 bedrooms) for $2,650 by just looking in Craiglist, Zillow or any many other websites and Landlords compete for the tenant’s business.