What Materials Entrepreneurs Should Not Miss from the USC’s Lusk Center?

Bringing values for not only students but also community leaders and businesses within the real estate sector since the 1980s. The USC's Lusk Center is trusted as a savvy source for landholdings studies and research specialized for businesses.
Nadine Watt and Bill Witte in business council award
Source: LA Business Council
By | 7 min read

After more than eleven months of widespread uncertainty for coronavirus devastated entire industries, and brought incalculable financial loss. However, along with permanent closures for retail and hospitality establishments are the continuous expansion of e-commerce and online shopping, which has brought along industries that we were not thought of like the real estate sector.

This particular industry is reacting to new market trends as well as reevaluating its business strategies and models. Although this real estate sector is adapting to e-commerce and other online technologies, it will take time before the market is completely evolved. However, it is a promising prospect as the waves of digital transformation will for sure take over real estate industry.

With the University of Southern California’s Lusk center for Real Estate – quite of a specialist in town. Let us take a closer look at the two sector that is killing it and making great impact on real estate venture within the Southern region, California.

The Killing: E-commerce

Paralyzing and stuck on the sidelines is how everyone update their status, yet industrial tenants and warehouse landlords are nonstop full steam ahead, while nothing seems to derail this e-commerce train.

As it leads the way, last June, Amazon just sign a 155,700-square-foot contract right at the Santa Clarita Valley, not to mention $63 million the company just paid for the Orange County Register’s former printing plant, where it will create another last-mile distribution site.

CBRE forecasted that online returns will hit a record $70.5 billion after the holiday season. John Loper, associate professor of real estate at the University of Southern California’s Price School of Public Policy, told that the industrial market is more than set to take advantage of those returns — particularly in Southern California’s Inland Empire. Loper also pointed to the expanding transportation infrastructure in the Inland Empire, with major investment set for major highways to get trucks moving.

“When you’re in industrial, especially e-commerce, one of the most important things is getting your product to where your customers are,” he said. “If you have a transportation system that has improvements on the horizon, it makes investing in a warehouse more desirable.”

The Great: Soundstages and Studio

a meeting from USC Lusk
Source: USC Lusk

Unexpectedly Hollywood is another hub to found flow-in capital – despite the global pandemic, for soundstages and production space, 2020 will be remembered for the $1.7 billion joint venture between Hudson Pacific Properties and Blackstone Group, which underwrite an expanding of office and studio portfolio.

“Given the small size of the market, we have seen only a handful of transactions over the past few years, and the Blackstone/HPP deal easily dwarfs previous volumes,” said Eric Willett, regional research director at CBRE.

With the on-going streaming war, demand for content continue to boost rents and squeeze space, as it was not just Blackstone mining in this year. For 171,000 square feet in Burbank just leased by Netflix for its first animation studio this year, along with the rampant of the Santa Monica-based BLT Enterprises who made two studio acquisitions in Hollywood, one of which is the historic Television Center.

However, there will not be any new trend of studio sales to expect in upcoming years. Jeff Pion, CBRE’s vice chairman, said the opportunities are too limited.

“I believe there are buyers that would be interested, but a lack of sellers in the marketplace that are looking to divest,” Pion said.

Instead, CBRE expects users to tap into the industrial market to convert their own space as they are seeing increased interest from production companies within industrial conversion. And because when filming picks up again and social distancing restrictions are relaxed, there will be more activity is expected to see in such adaptive reuse space.

Zoom Out: What Entrepreneurs Should Take Note in Such a Hard Time for Real Estate Investment?

Recommended by the USC Lusk Center for Real Estate who have been around to advances real estate knowledge in the state of California since the 1980s, there are some core principles entrepreneurs better focus on to make the best of this real estate market!

#1 Latest Market Trends as the Utmost Matter

The first thing that you need to do is knowing the market. Evaluate the costs and the risks before making any investment. Get the hang of it and thoroughly acknowledge the trends in your area – where lands are hot, which neighborhoods are up and coming, look for the best hidden investment deals might be.

One thing that you should always keep in mind is that while you do need to research the market, you do not necessarily have to be an expert to get started investing in real estate. Becoming an expert takes time. Focus on one particular facet of the market—say, renting rather than buying or houses rather than condos—and master it before branching out into other things.

#2 Befriending with Local Investors

Try to get hold of experienced local investors for guidance or advice on how to break into the market, as well as take a look at their properties and how they handle buying and selling them. Especially, study on many real estate educational community or research sites, consult their numbers and data, for the realest status.

#3 Make Small but Long-Term Investments

Ironically, in such market besides making quick decisions, you also need to have some patience. Remember that making money in real estate takes time. So, look for smaller investments that will pay out over time would be a better deal than getting sucked into overspending on big, risky deals. Besides, renting all or part of your personal property is also another step before entering the bigger rental market.

What to Expect in 2021 from Southern California’s Real Estate Community?

Bill Witte in a ribbon cutting ceremony
Credit: Josie Gonzales

Has been a major force in the residential development of Southern California – the Lusk organization has represented as a savvy educational hub to put forward countless critical and time issues of real estate markets.

Just last week, retired after 18 years served as a chairman of the Lusk Center, the industry legend Stan Ross stepped down to appoint Bill Witte, chairman and CEO of Related California, as board chair and Nadine Watt, CEO of Watt Companies, as vice chair.

Since founding Related California in 1989, Witte has overseen both the company’s affordable and market-rate divisions. Today, the company is one of the largest developers of urban and multifamily housing in the State of California. The Related California portfolio includes tens of thousands of affordable and mixed-income housing units.

Nadine Watt share story in a talk
Source: CSQ

Watt has more than 20 years experienced in all aspects of real estate and is a widely respected industry and philanthropic leader. In her position as Chief Executive Officer of Watt Companies, she oversees day-to-day activities and strategic planning for all of its commercial investment activities, including acquisitions, development and asset management for the company’s more than 6-million-square-foot portfolio.

With the two real estate veterans’ combined expertise in both the public and private sectors and across multiple real estate types and regions, the Lusk Center’s status as a leading real estate research center now even more solidified for entrepreneurs to consult.

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