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Welcome to our
Third Quarter 2019 Newsletter
, which includes recent work of our firm; Somewhat Famous Mountain Tops, Major Development in Long Beach, We(Not)Working and current events of note to the commercial real estate community.
Anytime we can provide you with market research, consulting, help with family portfolio decisions, or simply answering a question related to commercial real estate, just let us know.
After all of these years, we know a wide array of professionals that can help, and we're honored to be of service.
Sincerely,
Steven R. Norris, MAI, CRE
Norris Realty Advisors
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Listing Price - $1 Billion, Sale Price - $100,000
Early this Summer, a massive property in the Bel Air Hills sold for $100,000 in the back courtyard of a Pomona courthouse. In the end, the most stratospheric of property prices came crashing to the reality of Earth, next to a fountain, some lawyers, and the usual courthouse real estate auction crowd in lawn chairs.
Norris Realty Advisors was well aware in advance of this pending situation, as we have been recently involved in the valuation of other, quite comparable unique mountain top sites in the Beverly Hills / Bel Air neighborhoods. All of these tasks involved Nondisclosure Agreements with our clients.
Our conversations with local brokers, planning officials, and other experts lead us to wonder if the previous $1 billion listing price had any moorings in the real world. As the story turns out, it didn't, and we had advised our client properly - allowing them to exit the pending escrow of a similarly astronomical priced property in the same area.
In the Greek myth about Narcissus, Narcissus is so prideful of his own beauty, that he sits staring at his reflection until he starves to death. it seems the prior owners of this property have suffered a nearly similar fate.
And for a fantastical quick view of this property, complete with stirring scoring, fit for Hollywood fantasy; look here.
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New Residential Tower Planned for Long Beach
Norris Realty Advisors has assisted a public agency in Long Beach with the disposition of a key parcel that is now proposed for a 40-story 756 unit luxury apartment development by Trammell Crow Residential.
Our firm provided both appraisal and consulting services to the seller of the site prior to the marketing period, in order to assist in determining the proposed listing price concepts from various brokerage firm.
This work in Long Beach continues our long-standing advisory services to both public agencies and private entities. Our goal is to provide reasoned neutral opinions of value and marketing strategies, in order to counsel clients toward the best possible outcome.
For more on the specifics of this planned development, go
here.
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WeWork. Well, It Isn't ..... WeWorking
Disruption. This has become a word that strikes fear in the hearts of many industries have been threatened by, and often dominated by new Internet-based startups.
The commercial real estate industry is not immune from this behavior. Over the past several years a number of new firms have emerged, promised the upending of traditions and a bright and shiny new world. Perhaps the most brash in the field has been WeWork, whose founder has turned out to be a rather, shall we say, high-flying charater.
For some time now, WeWork and the entire "open office concept" has been a topic of conversation, and a good amount of skepticism in our offices.
And just last week, the Boston Federal Reserve President had some interesting observations about the WeWork phenomenon.
As it turns out, maybe the disruption of WeWork might be actually disruptive to office markets, but not at all in the way the dreamers at WeWork had in mind.
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CRE Announces Top Ten Issues
The Counselors of Real Estate, recognized as among
the most respected real estate specialists in the industry, working on complex projects and important assignments, and known for innovation and creative problem solving have released
the list of both current and emerging issues expected to have the most significant impact on real estate in 2019 and 2020.
U.S. infrastructure and housing ranked as the leading concerns of the 1,100-member global real estate advisory organization.
Inadequate infrastructure creates a hard ceiling to economic development, and real estate values are tied to sustainable growth. We have experienced this issue in our own practice.
The U.S. must invest in infrastructure to compete globally, but right now it is lagging other nations on infrastructure investment. The report cites that roads, bridges, tunnels, railways, airports, the power grid, water systems, and levees are giving way with greater frequency. While the White House and Congressional leadership have discussed funding of up to $2 trillion, it remains unclear what action, if any, government leaders will take.
Housing in America ranked second on The Counselors' list, with the gap widening between increasingly expensive supply and the decreasing level of ability to pay. The underlying causes can be found both on the supply side and the demand side of the housing equation. Housing affordability is threatening the stability of the middle class, which will hit other parts of the economy as well, and again, this is substantial problem in all of California at present.
Weather and climate-related risks rounded out the top three issues of concern for The Counselors, as real estate investors are requiring that climate risk be assessed and factored into return projections and day-to-day decisions. The report states weather and climate-related risk has emerged as a new-and likely permanent-aspect of fiduciary duty and what it means to assess, disclose, and manage these risks for real estate investments. Real estate investors can no longer rely on historic performance to predict future returns. With the frequency and intensity of events increasing,
w
eather and climate-related events present physical and operational risks for real property.
Clients of Counselors seek unbiased, objective advice on the critical factors that will impact all property sectors today, as well as those issues that may affect their decisions over the next ten years. This thought leadership initiative is an invaluable service to those clients and to the real estate industry in general.
The Top Ten Issues Affecting Real Estate™ are developed annually by The Counselors of Real Estate's External Affairs Committee, with issues identified, debated, and voted on by the general membership. For additional information and perspective on each issue, visit here.
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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
[email protected]
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