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Welcome to our
3rd Quarter 2017 Newsletter
, highlighting the recent work of the firm; including trends in commercial real estate, the importance of housing initiatives in Los Angeles, the recent CRE Annual Conference in Montreal, our research into the effects of solar power on commercial property values, the potential effects of changing transportation trends on real estate, and "how to survive a hurricane".
Anytime we can provide you with market research information, consulting, or simply answering a question, just let us know; we are happy to be of help. That is why we are here.
Sincerely,
Steven R. Norris, MAI, CRE
Norris Realty Advisors
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UCLA Affordable Housing
Academic Advice for the Future of the City
The UCLA Ziman Center for Real Estate has produced an important Affordable Housing Policy Brief. For those who care about the vitality and future of the City around us, this is important read.
Los Angeles is one of the least affordable housing markets in the nation. About 6 in 10 renters in LA County are considered to be "cost burdened,"paying at least 30% of their income on housing, and with nearly one third of County renters paying more than 50% of their income on housing.
The key finding of the Policy Brief - Streamlining of the LA development process (read - Planning Department logjams) will provide definite benefits over the long term.
To learn more, see the UCLA Policy Brief
here.
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CRE Annual Conference
Montreal, Canada - Sept 24-27, 2017
The world of commercial real estate is under rapid change, and staying ahead of new knowledge is key to success moving forward.
Steven Norris recently participated in the Annual Conference of the Counselors of Real Estate in Montreal, where presentations outlined the pace of change occurring throughout the world in commercial real estate.
Topics discussed included public/private partnerships, capital flows in the low interest rate environment, how cities can reinvent themselves, and the ongoing public benefit efforts of
Of particular note was the retail marketplace, where massive change is underway as a result of the effects of online shopping.
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Does Solar Power
Affect Investment Property Value?
An Analysis of Sales and Current Market Data
The Norris Advisors team has
compiled a detailed research report for private investors on the effects of solar photovoltaic systems on commercial property values. Our research revealed that a critical benefit to solar valuation resides in the energy cost savings generated from investment. Benefits of installing solar panel systems, besides a reduction in operating expenses, include positive effects on potential overall asset quality as well as positive impacts on a business's recognition in the community and general goodwill.
There is
a publicly available photovoltaic valuation tool for quantifying the contribution of a solar photovoltaic array to any property. This algorithm tool can be accessed at www.pvvalue.com. It was developed by Energy Sense Finance, writers of financial algorithms, who worked with the Appraisal Institute to develop appropriate valuation standards for real estate, renewable energy, and energy efficient industries. The tool takes into consideration specific energy costs in the district where a specified property is located and measures it against the estimated energy production for installed or proposed solar panels.
Our findings concluded that there is not a consistent discernible effect from the inclusion of solar power installations on either commercial property values or yield rates. While there are marginal benefits to solar power inclusion in a given development, the broader market does not yet recognize solar power with a specific pricing premium, such as those found in highly preferred individual locations, properties, or sub-markets.
There are a number of factors leading to the determination of pricing in any given asset, thus to single out solar power as solely contributing to overall value enhancement is far too simplistic, given the complicated nature of even a single large investment grade purchase decision.
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Transportation Revolution
Norris Featured in Industry Publication
The future is coming. Are we ready for it?
Steven Norris, MAI, CRE was recently featured in the Appraisal Institute's Valuation Magazine offering comments on the potential effects of shifting transportation trends on commercial real estate development and the valuation profession.
Cars without drivers and the selection of ride-sharing services now available are already having an effect on city planning departments throughout the nation and the world, with lower parking requirements anticipated in future years. This may have the effect of increasing residential density in urban area, and may be a small part of the solution to the affordable housing crisis, also mentioned in this newsletter. Furthermore, utilizing more land for commercial building development may result in increased income stream and property value for owners in the future.
For more on the potential of big future changes in personal transportation, view the Valuation Magazine article
here.
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Collision Course with Hurricane Irma
A Lesson in Gratefulness
In Early September, one of our team members involuntarily extended their vacation as they were stranded in the US Virgin Islands after weathering a harrowing night during the passage of Hurricane Irma.
Banding together with others for a week to share food, water, and any information regarding rescue was certainly humbling. Being able to eventually return home to electricity and running water shed light on the misfortune of those who live on the decimated islands, many of whom have lost their homes.
Please remember our fellow Americans in Puerto Rico and the Virgin Islands in their efforts to rebuild their lives.
You can donate to The Community Foundation of the Virgin Islands through
www.usvirecovery.org
and you can donate to The National Puerto Rican Chamber of Commerce through
www.nprchamber.org
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Thank you for taking the time to review our Newsletter. We greatly value our relationship with clients, peers, and friends of the firm. Contact us directly with any questions.
Steven R. Norris, MAI, CRE 
Norris Realty Advisors
626-405-9922
steve@norrisadvisors.com
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