This recent LA Times article provides more evidence that the economy is improving and in turn causing apartment rentals to improve. The article discusses new research showing that young adults who doubled up with their parents are getting jobs, leaving the nest, and renting apartments.
Other reasons cited for the apartment market’s strength include former foreclosed homeowners converting to rentals, potential new homeowners choosing to rent, and a movement back to the urban centers where renting is more convenient and economical.
However, the article shows that rental housing is strongly connected with the job prospects of young adults who have benefited more statistically from this recovery. It is a double edged sword. A reversal of the recovery could upend the rental market’s strength.
Check out the article on the LA Times website here.
The Otis College of Art and Design commissioned a report for 2010 which was compiled by the Los Angeles County Economic Development Corporation. The report shows a loss of 80,000 jobs in Los Angeles creative industries from 2007 to 2010. Only digital media employment managed to remain steady over the same period. Since creative workers occupy creative office, these statistics explain the absorption losses in L.A.’s Westside creative office market.
What about 2011? Our calculation of the Los Angeles creative industries (excluding informational services) reveals a gain of only 1,200 jobs from November 2010 to November 2011. This percentage gain, under one half of one percent, corresponds to the sluggish leasing recovery in the greater Westside creative office buildings. In constrast, information services alone gained 5,200 jobs– an increase of over 65%. This job explosion in digital technology has translated to a surging demand for creative office space, so far primarily in Santa Monica.
This article by Mike Boehm of The Los Angeles Times lays out all the findings of the Otis Report on the Creative Economy of Los Angeles and Orange Counties:LA Creative Jobs, LA Times Dec 20 2011.
The market for affordable rental properties in the greater Los Angeles area has become a tricky question with an increasingly problematic solution. If you are lucky enough to get a tip about a reasonably priced dwelling, chances are hundreds of other people did too– and you might just be too late. The demand for affordable housing in Los Angeles outweighs the quantity that is actually available. The lack of sensibly priced rental properties has become somewhat precarious for residents. Some people are going to extreme measures to provide what they consider as affordable housing. One the other hand, some disagree that these properties are too small and crowded. They feel that the landlords of these buildings are walking the line of illegal and immoral activities. Hopefully the L.A. Housing Authority will step in and prevent this from happening again.
There are people taking the lack of space in Los Angeles to a whole new level. A person converted a single family home into multiple apartments where 44 people lived for rents as high as $500 per month. This article explains the situation that occurred in South Los Angeles. Check it out to read the entire story from the L.A. Times.
Tech is quickly spreading profusely over Los Angeles. Northern California is no longer the only place where up and coming tech, web, and new media companies are calling home. The L.A. Times recently published an article detailing companies and new tech start-ups who have made chosen “Silicon Beach” over “Silicon Valley.”
Some start-ups are also searching for suites in Los Angeles that are flexible and easy to remodel to fit their needs as a company. One major tenant broker reported a flurry of requirements for companies that produce video content for the web. PMI has received interest from a few companies that require building several of these web video studios. PMI is trying to figure out how to best accommodate these needs by making the restoration of the space less expensive. The companies who are requesting restoration believe that the renovated studio will have additional value for the next company who will occupy it. However, in the event that the next company does not prefer the modifications previously made– maybe they are involved with a different type of business– the company will want the web video studio layout removed. Adding to the complexity of the situation, these companies also have different studio requirements; there isn’t an adequate generic standard these studios can be crafted by.
PMI is working to accomdate all of their tenant’s requests, and are happy to welcome new and creative companies at their properties. With the creation of Silicon Beach, we expect the creative office space demand to rise even further.
When PMI Properties helped invent the Los Angeles creative office business back in the mid-1990s, there was no institutional investment in creative office. The institutions thought creative office was a fad and didn’t really understand the business. Now Lionstone Group owns more than a million square feet of creative office space. Hudson, Kilroy, Alcion, Divco, and many others are now buyers and developers of creative office spaces.
PMI has it’s share of tech, new media and production companies residing at our creative offices and we are rapidly expanding and accepting more tenants month by month. To see the variety and scope of our tenants, click here.
The LA Times article here expands more on the creative office space boom.