Many search for the answer of how to find success in real estate during a down market.  Well, to tell you the truth looking for the answer online isn’t going to solve your problems.  Those who are successful during a rough market and frigid economy are those who are innovative.  Thinking outside of the box is exactly what creates the next generation of progress in the marketplace.  New marketing approaches, innovative designs and effective property management are great starts to beating the bear market.  If you are looking for a different result than the guy next door start with a different approach.

This past week the heads of marketing, property management and accounting ventured to Santa Barbara of the annual YARDI YASC conference.  The conference provided valuable information to assist each department with stremlining their activities.  The additional training on the software has proven to be invaluable in years past.  In addition to extensive training, industry contacts were made in each area of management allowing Creative Environments staff to bounce idead off of individuals in similar positions with different companies across the United States.  While our staff met property managers from various types of buildings one thing we found out was that we CEH is unique inthat live work lofts and creative office space is not the norm even for many other Los Angeles based firms.  Creative’s loft concept is truly one of a kind.

So where do we go from here?  The irresponsible exuberance of the market has caught up with us and reversed course dramatically catching many by surprise.  Lenders have pulled in the reins and even solid properly underwritten residential and commercial loan transactions are having difficulty being funded.  It was just a matter of time until the bubble burst as indicated in my column dated Oct 2006 entitled “cooling markets and lower rates.” 

Recent employment figures indicate that there are some major cracks starting to appear in the economy.  Unemployment is reaching levels not seen in five years and deteriorating, oil is trading above $100 and gold has almost hit $1000 per oz.  The sole bright spot appears to be the weak dollar which is creating manufacturing jobs and improving exports as U.S. goods become less expensive globally.  Residential home foreclosures are at all time nationwide highs, commercial mortgages have held steady relative to residential loans but many large commercial transactions have been shelved due to lack of financing available in the market and its just a matter of time until we see cracks widen in the commercial markets as well.

So what do we do and how do we get out of this mess? First and foremost, we ignore the media as most of what’s out there is uneducated, lacks discipline and is primarily focused on increasing ratings through fear.  A perfect example is the percentage of media that still think that residential mortgage rates are tied to the 10 year treasury.  Next, a proper and complete assessment of our financial position must be made to determine ways to reduce exposure to the market and a further slow down in economic conditions.  A trusted advisor can assess your information and give you guidance on ways to create “holding power.”  The best approach to this type of market is to take a defensive position.  Solidify your positions, reduce risk and sit on the side lines for the most part to insure and protect your existing assets. 

With that said, economic downturns are tremendous buying opportunities.  There are opportunities to pick up distressed assets at severely discounted prices but you must be careful not to risk your entire portfolio by taking unnecessary risks or risks that you can’t handle if the market turndown lasts longer than expected or deepens.  Assets should only be acquired that fit your long term investment objectives and can be held in portfolio on a prolonged basis if necessary. 

Fannie Mae has recently rolled out guidelines for increased loan amounts that are based on 125% of the median home price not to exceed $729,750.00.  For duplexes the limits are $934,200, tir-plex $1,129,250 and four-plex is $1,403,400.  These higher limits will be a great tool to reduce mortgage risk associated to loans that are not properly structured and/or not in line with your investment objectives.  Additionally, I have located several lenders that are providing excellent commercial and residential loans and rates based on common sense underwriting.

Feel free to call in for a complete review and analysis of your specific situation and lets determine what options are available to reduce your risk in these economic times.

To an outsider—a passerby, the Westmoreland Lofts may be viewed as a successful restoration of a 1935 former fabric dyeing factory and warehouse. For an insider—a tenant or visitor, there exists a modern artistic community that exudes an aura of energy and creativity. It has a way of capturing your senses from the moment you walk through the galleried, polished concrete hallways. The light shines down perfectly through the skylights, spotlighting art and building, alike. Just the right combination of art, wood and glass juxtaposed with industrial concrete and steel provides an ambiance that can be trendy, functional and aesthetically pleasing all at once.Each step is a new inspiration. Each individual soaks it in, shares it and expresses it in his or her own extraordinary way.There is an instant respect and admiration for the uniqueness and individuality of every space as well as for the individual that occupies it. They could be an artist, a fashion designer, a writer, a florist, a photographer or even a fireplace maker. Few other places could there be such a distinctive collection and collaboration of talents. The energy extends through doors and walls and has the ability to form relationships that transcend familiarity or longevity. Strangers, visitors and neighbors are known to you before ever being formally introduced. Everyone is a friend and yet you can’t always be certain why.That feeling is as natural as the way in which each space seems to come together. The inspiration is infectious and the creativity appears to be endless. One would have to try to fight it off and that could very well be a futile effort. By day the lofts serve as each individual’s truest manifestation of their profession. At night those spaces are illuminated not as much through the physical electricity of the building, but more so by the energy manifested through their own creations.I am an insider.

For the first time in quite a while, one of L.A.’s oldest neighborhoods; Lincoln Heights, had reason to celebrate. A community’s energy has been restored. The new Lacy Studio Lofts provided the impetus for revitalization much in need. The grand opening gala embodied this renewed vigor as Lincoln Heights, if only for an evening, became the center of L.A.’s art world.

Hundreds, if not thousands, traveled from all over the city to partake and revel in the renaissance. The city became a destination, a desired location, a point of interest. Many travel through the city on their way to or from Downtown, Pasadena or Dodger Stadium. On this night these other places didn’t matter. For the first time in quite a while, Lincoln Heights did.

Works by 35 artists, uniquely displayed throughout L.A.’s most exciting new live/work lofts, brought together a dynamic and eclectic collection of individuals. The common thread and universal theme was the intrigue in discovering a new place filled with nothing but energy and potential.

The Lacy Studio Lofts have taken this potential and created an entire community that at its core embodies the long forgotten spirit of Lincoln Heights.

Manhattan on the West Coast?  With the creation of L.A. Live, downtown Los Angeles will become a hub of activity. Living, working and reveling in an urban downtown lifestyle is no longer merely a desire or a dream. It has now become a reality!

With this new development comes an excitement and energy that will completely revitalize the east side of Los Angeles. Theatres, clubs, plazas, studios, restaurants, museums, hotels and housing are all components of this project. These amenities will not only bring people to downtown—but also keep them there. L.A. Live affords a lifestyle that had previously been void for most Angelinos.

For a city evenly spread north to south and east to west; finally we have a centralized point, which will prove to be the anchor in providing stability for an ever growing city. In turn, as downtown becomes a center of activity, the surrounding areas will benefit tremendously. Suburbs bordering downtown that have, for most, long been forgotten are now being rejuvenated.

As the previously underutilized downtown becomes a draw for much of Los Angeles and the Hollywood Redevelopment Project continues to progress, East Los Angeles is undergoing significant cultural and economic growth.  

Silver Lake, Lincoln Heights, Echo Park, Glendale and Chinatown are shining examples of areas that exude the energy and creativity associated with this expansion. Galleries, studios; numerous businesses and architecturally unique buildings define these locales and embody the spirit of L.A.’s resurgence.

Westside living has long been desirable. Eastside living is now in demand. It is trendy, fashionable yet practical. It is stimulating and invigorating. For too long the Eastside has been neglected. The power of its renaissance and its widespread affect on an entire city can be felt from street corner to street corner.

Imagine the possibility of walking out your front door and down the block to the metro stop. Think about all the places you can go and things you can do. Ride the train downtown for a meal. Head uptown for a show. Take a late night ride to your favorite bar.  Now, you no longer have to imagine. For East Los Angeles and points beyond, a truly cosmopolitan lifestyle is tangible. Manhattan on the West Coast is here!

Creative Environments of Hollywood continues to add properties in their development department.  Spring/Naud promises to be an exciting project with roughly 250 new live/work loft units set to be built just north of downtown Los Angeles.  White Knoll, a ground up project, creating roughly 17 loft apartments in what promises to be an architectural masterpiece.  The Brand project in Glendale is a project true to CEH’s past project, a conversion of an existing retail building into high quality creative work spaces and retail storefronts. It truly is a great time for real estate development in Los Angeles and Creative Environments is taking the lead.

Thanks to Creative Environments of Hollywood I found the perfect loft space.  My new Los Angeles loft apartment has given me the flexibility to live and work out of the same space with all of my needs satisfied.  I had been searching for a creative space for my production company and wanted to have a home office.  The lofts I found through Creative Environments all had great character and design.  I visited their Cosmo Lofts, Beverly Union Lofts and Westmoreland Lofts and was impressed with each properties unique loft design.  I cannot thank CEH enough for their contribution to the Los Angeles loft community.

Cosmo Lofts is one of the best places I’ve ever lived at. We had an awesome roof party last weekend; the location is great, the building is great, and the atmosphere is awesome.