Residential and commercial real estate have slowed dramatically during the virus hysteria of 2020. Home sales and rentals have slowed to a crawl, while brick and mortar business space lease has all but stopped as more than 20% of retail shopping store tenants are either late or completely out of business.
“We have seen sale numbers across the board drop like I have not seen before,” said Jack Livingston, a research analyst at Avison Young.
In May $332 million of retail, office, industrial and apartment products sold in Los Angeles County, according to NKF data. That’s far below the $1.66 billion in sales last May as reported by the L.A. Business Journal.
For Downtown Los Angeles residential lofts and condos, the recent panic has placed the nail in the coffin, turning what was already a falling market into a blighted zone of tent encampments and exploding condo inventory. The L.A. Loft Blog shall delay the reporting of June DTLA sold home price market data. That report is expected to be released around Thursday July 9. Currently, the Loft Blog is preparing to add a unique series of helpful news about coming financial assistance for home sellers, buyers and renters, with various programs offering loans from $5,000 to $10 million. Those article are also expected to begin in July.
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Model and photographer with Downtown backdrop to dramatic Broadway bridge
REAL ESTATE NEWS — Los Angeles commercial real estate billionaire Tom Barrack has warned that our response to coronavirus is placing the entire real estate industry on the brink of collapse. He alerts that this cycle could cascade into chaos if it is not addressed properly. #realestate #collapse #losangeles #dtla
If the real estate market is not fixed quickly, Barrack says that “The economic impact, magnified by widespread total industry shutdowns throughout the American economy, could be exponentially worse than the economic effects of the 1987 crash, September 11th attacks and 2008 recession, combined.” He says that the long-term impact on the economy could be “catastrophic.” Stock traders have agreed with Tom as they’ve slashed the value of shares in REIT real estate investment trusts by 42%. Mall values have dropped by 61%.
Anyone can now see that the Fed is out of ammunition, and now has insufficient power to boost the economy. Even though the Federal Reserve lowered the rates it controls to basically zero amid this crisis, would-be borrowers have gotten zero benefits. In fact, the much-watched Freddie Mac index of 30-year, fixed-rate mortgages showed interest rates jumping from a record low 3.29% on March 5 to 3.65% two weeks later. | LOFT LENDERS
Barrack says that the unemployment lines have already grown, and he expects, the length of these lines to explode on April 1, as the rent checks and mortgage payments supporting the commercial real estate market come due amid a breakdown of public trust in the economy.
Mortgage lenders have lost trust in the economy, which is one reason why interest rates have not fallen in response to the Fed rate cut. Development of new real estate is in jeopardy of seizing as a significant chunk of American commerce shuts down and grinds to a halt.
Barrack’s message is further reinforced by the news that billion-dollar megaprojects like OceanWide Plaza in Downtown L.A. had already been unable to obtain funding before the recent crash. Right after they finally found a new owner, buyer SPF Capital International Limited, the coronavirus crisis happened, delaying the $1B sale of the incomplete project.
Barrack calls for a collaborative solution with support of federal government policy to ensure stability moving forward.
Reader Questions:
Q: Where is the basketball players loft? A: While most lofts have high ceilings appropriate for tall residents, Roosevelt Lofts on 7th Street Restaurant Row seems to have attracted the largest number of basketball players from USC, the Lakers and Clippers. If the question is about NBA player Dwight Howard, he put his incredible school conversion loft unit up for sale recently. Check out his Pierce School Loft in Washington D.C.
Q: What are the largest food companies based out of downtown los angeles? A: That’s a good question. The L.A. Loft Blog is not a food industry expert, but Downtown L.A. certainly has lots and lots of food companies. The Canton Food company has a huge warehouse open to the public. Grand Central market is a huge produce, food market and hip food court. Los Angeles Fish Company deals in tremendous amount of fresh seafood.
Q: What is happening with Los Angeles real estate and coronavirus? A: The L.A. Loft Blog has provided several updates on the health crisis and economic impact.
Q: What are little tokyo lofts skid row rent? A: Little Tokyo Lofts is a condominium loft building near Skid Row. The building has nice amenities, parking and 24-hour security. Prospective residents can find lofts for sale and for lease there.
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