We believe that 2012 presents an excellent opportunity to acquire prime properties in our West Los Angeles submarkets. Prices for most investment properties in West Los Angeles are experiencing improving occupancy rates and upward pressure on rents coupled with historically low interest rates which is conducive to achieving positive operating results and significant profits from sales.
This submarket has begun to show signs of stabilization and in fact, recently has begun to benefit from a number of significant new leases. New leasing activity during 2011 was up substantially from a year ago and includes: Google leasing 100,000 SF in Venice, JP Morgan leasing 98,000 SF in Century City, Houlihan Lokey leasing 66,000 SF in Century City and Riot Games leasing 47,000 SF in Santa Monica. Data on the local economy indicates a slow recovery with improving fundamentals.
West Lost Angeles has always been a strong submarket, which at the height of the recession experienced an increase in vacancies and decrease in rental rates. Many tenants “coupled up” and some young singles moved home with their parents. With the improving economy and the expanding entertainment and technology employment base, this has changed, resulting in increasing occupancy rates and higher effective rents. We expect that this will continue throughout the period.
Interest rates are low and our access to financing is excellent. Utilizing our decades of experience and well recognized expertise, we intend to capitalize on the market opportunities by acquiring multi-family residential and commercial/retail properties.